Households bombarded by surging electricity bills

By Yoon Ja-young

Many households had been worrying that their electricity bills for August could surge due to the increased use of air conditioning amid a record summer heat wave — and their fears have come true.

Nearly 3 million households paid more than double their usual rate this summer, with many charged much more.

According to KEPCO data submitted to Rep. Lee Chul-woo of the governing Saenuri Party, 2.98 million households were charged more than double for power for August compared with their rates for June. This means a household that was sent a 100,000 won electricity bill in June paid more than 200,000 won for August.

Among them, 240,000 households were billed more than five times their usual rates, and 19,000 households paid more than 11 times their June bills.

The snowballing bills were anticipated this summer as more households resorted to air conditioning to escape the record-breaking heat. This triggered controversy over the progressive electricity-billing system for households.

Under this six-tier system, those consuming below 100kWh of electricity are levied only 60.7 won per kWh, while the price rises to 125.9 won for those consuming between 100 and 200 kWh. It reaches 709.5 won per kWh for consumption exceeding 500 kWh, 11.7 times the minimum rate.

Amid growing complaints, the government decided to allocate an extra 50 kilowatts to each energy consumption bracket, which will be applied temporarily for three months between July and September. However, it doesn’t seem to have been much help, as many households were hit by an electricity bill bomb.

While the progressive billing system was adopted in the 1970s to induce households to save energy, those demanding the scrapping of the system point out that it is outdated in an era where diverse home electronics have become essential. They also criticize that the progressive system is applied only to households, not industrial facilities.

Those who are cautious about overhauling the progressive billing system, however, point out that KEPCO had been suffering a deficit for the past few years before global oil prices fell. Moody’s also said the government’s temporary tariff cut would be negative for KEPCO.

“It is like demanding too much sacrifice from the general public. They were afraid of turning on their air conditioners despite the sweltering heat due to high electricity rates,” Rep. Lee said.

“The problems of the progressive rating system will be examined at the Assembly audit, to provide the right direction for an overhaul.”

The government and Saenuri Party launched a task force to reform the electricity billing system last month, to prepare a plan by November.