KEPCO Freezes Electricity Rates Amid Financial Strains

KEPCO, South Korea's state-run electricity provider, has announced that it will keep electricity rates frozen for the fourth quarter despite higher raw material costs and financial difficulties. The company stated that the adjusted fuel cost, a key component of electricity rates, will remain at the maximum level of 5 won per kilowatt-hour (kWh) for October-December.

This decision is expected to further weigh on KEPCO's finances, which are already strained due to its history of supplying electricity at prices below production costs when global energy prices surged between 2021 and 2023 following Russia's invasion of Ukraine. KEPCO's debt has increased significantly, with the company and its power-generating subsidiaries having a combined debt of 210.7 trillion won ($152.1 billion) as of the first half of this year.

The adjusted fuel cost is set before each quarter within a range of plus or minus 5 won per kWh, based on energy prices, including coal and liquefied natural gas (LNG), over the previous three months. KEPCO said rates were due to rise by 7.3 won per kWh in the fourth quarter under the fuel cost adjustment formula.