Gov't to lower progressive power rates for households
Minister of Trade, Industry and Energy Paik Un-gyu speaks during a press conference at the Government Complex in Seoul, Tuesday. / Yonhap
By Nam Hyun-woo
The government has decided to ease Korea's progressive electricity pricing this summer, following public concerns over heavy electricity bills amid a heat wave that is blanketing the country.
The Ministry of Trade, Industry and Energy and the ruling Democratic Party of Korea agreed Tuesday to reduce electricity bills by an average of 19.5 percent per household by expanding the first two stages of the progressive pricing system for July and August.
“By expanding the first and second stages by 100 kilowatt-hours, households can save 276.1 billion won ($245.2) or 19.5 percent each in energy costs for the peak summer season,” Minister Paik Un-gyu said during a press conference.
“We will apply this plan as soon as possible to bills for July and August. For households which have already received July's bill, additional cuts will be made retroactively to August's bill.”
Currently, the country applies progressive rates in three stages. The first stage covers those who use up to 200 kilowatt-hours a month; the second stage is for between 201 kilowatt-hours and 400 kilowatt-hours; and the third, over 400 kilowatt-hours.
A household which uses 450 kilowatt-hours in a month should pay the first rate up to 200 kilowatt-hours plus the second rate for the next 200 kilowatt-hours, and the third rate for the remaining 50 kilowatt-hours. However, the third rate will be eliminated for the two months reducing the amount paid to about 70 percent of normal.
The temporary reduction will affect the electricity bills of 15.12 million households.
The move comes after growing public concern and criticisms over the progressive rate, as the country applies it only to households and puts a heavier price on electricity for households than that for industries.
As concerns mount, President Moon Jae-in said Monday the government will adjust the rates to ease the burden on households.
“After analyzing the electricity bills of 4.19 million households, we found the bills did not increase as much as we expected,” the energy minister said. “Though the number of days of the heat wave more than doubled this year from last, the bills did not increase that much, leading us to assume that much of the public refrained from using air conditioners because of the cost.”
According to the ministry, 89 percent of 4.19 million households which receive their July bill this week will see a decline in the amount due compared to last year, or a slight increase of less than 10,000 won. Only 1 percent of them will see an increase of more than 50,000 won.
On concerns about the country's power supply, Paik stressed that “there will be no problem over power supply, as the government has reserved 6.81 million kilowatt-hours extra resources by requesting a reduction in demand from industries and enhancing the output of power plants.”
Paik said the temporary plan was “an emergency measure to cope with the disastrous heat wave,” and the government will discuss with the National Assembly fundamental improvements to the electricity billing system including the progressive rate.