President Kim Jong-kap of Korea Electric Power Corp. speaks at a forum hosted by Rep. Lee Jang-sup of the ruling Democratic Party and organized by the Korea Electric Association (KEA) on Nov. 11.

President Kim Jong-kap of Korea Electric Power Corp. demanded the overhauling of the electricity tariff system such as the indexing fuel costs and reflecting costs of expanding photovoltaic power and wind power.

President Kim made the proposal at a forum hosted by Rep. Lee Jang-sup of the ruling Democratic Party and organized by the Korea Electric Association (KEA) on Nov. 11.

President Kim’s demand may be construed as the government’s efforts to discuss a possibility of raising electricity tariffs to reflect costs related to carbon neutrality and weaning the nation off nuclear power.

At the forum, titled “Transparent, Predictable Electricity Tariff System,” at the National Assembly Parliamentarians’ Hall, President Kim said, “We no longer delay the timing of introducing a future-oriented electricity tariff system.” President Kim concurrently serves as chairman of the KEA.

President Kim said most advanced countries have introduced an electricity tariff system indexing fuel costs on top of adding climate change response costs.

His remarks may be interpreted as a need for making up for part of costs for distributing photovoltaic power and adjusting electricity rates floating crude oil price hikes.

His remarks came in the context of KEPCO’s announcing a plan in June to come up with a revamped electricity traffic system and obtain the go-ahead on it this year.

Such a change of the electricity tariff system would be forced to raise electricity tariffs on a regular basis. But a KEPCO official said now that international crude oil prices have plunged under the influence of the spread of the COVID-19 pandemic, electricity tariffs would right now drop.

The state-run Korean Energy Economics Institute (KEEI) stressed a need for introducing a fuel cost indexing system and imposing additional climate change response costs.

Chung Yeon-jae, a researcher with KEEI, said Korea’s electricity rates for the non-industry sector dropped from 130.46 won in 2015 to 130.33 won last year per KWh, too low abnormally.

Korea is the sole country to have no fuel cost indexing system in place among the top 30 countries by GDP. Countries such as UK and Germany have imposed climate change response costs.

Some experts made a similar case for introducing a fuel cost indexing system during the follow-up discussion session.

Lee Seong-beom, a lawyer with the law firm Yoon & Yang, said KEPCO’s electricity charges are too low, enough to be mistaken for giving subsidies.

Reflecting electricity supply costs and proper investment compensations in electricity tariffs would stave off possible troubles in the perspective of international commerce relations, he said.

Experts from political, academia, and other circles of society are engaged in discussions on how to overhaul an electricity tariff system at a forum. (Photos: KEPCO)