The chief of the state-run Korea Electric Power Corp. (KEPCO) on Thursday called for the government to normalize electricity bills to reflect the rise in fuel prices, as the company continues to struggle with financial challenges.

“KEPCO has been struggling to minimize rate hikes, but the company can no longer deal with the accumulated losses by itself,” Kim Dong-cheol, the president of KEPCO, said during a meeting with reporters.

“I urge the government to make a minimal adjustment to electricity rates, as it is absolutely necessary,” Kim added.

His remarks came as KEPCO posted a combined loss of 43 trillion won (US$31.9 billion) from 2021 to 2023, as the company had not been able to raise electricity bills enough to cover high fuel costs amid the COVID-19 pandemic and high inflation.

The company’s debt totaled 203 trillion won as of the end of last year, with annual expenditures on interest payments reaching 4.5 trillion won.

KEPCO’s earnings showed some signs of improvement recently, with the operating
income for the January-March period reaching 1.29 trillion won, compared with a loss of 6.17 trillion won a year ago.

But Kim said uncertainties remain, considering the high global fuel prices coupled with the foreign exchange market volatility.

“KEPCO has been working to minimize inflation and ease household burdens by acting as a buffer against the factors driving pressure to raise electricity rates,” Kim said.

The KEPCO chief noted that without normalizing electricity rates, the company will face challenges in securing funds to maintain its infrastructure. This could harm the electricity sector and ultimately impact the country’s industrial competitiveness.

Source: Yonhap News Agency