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| Panelists speak during an open hearing on the government's proposed reforms to the progressive electricity pricing system in Gwanghwamun, Seoul, June 11. Korea Times file |
By Kwak Yeon-soo
About 16.3 million households are likely to benefit from the government's relaxed progressive electricity billing system and save 10,000 won ($8.43) a month during summer, according to the Ministry of Trade, Industry and Energy, Tuesday.
The new billing system, which will push up the ceiling on the first two pricing tiers, offers discounted rates for July and August only. This system is likely to incur 280 billion won in additional costs for KEPCO.
Lower utility bills for households mean lower revenue for KEPCO, which has already been reeling from mounting losses over the past two years amid the Moon administration's anti-nuclear energy policy.
Despite the snowballing losses, the government has not set aside any money to financially support KEPCO yet.
The trade ministry said that the taskforce to overhaul the current electricity billing system has advised the government and KEPCO to raise the electricity use ceilings of the first two stages.
"The taskforce agreed on maintaining the progressive billing structure despite modifications," a trade industry official said in a statement. "Users can pay less than in the past even if they consume power extensively to run their air-conditioning during the summer."
Currently, the electric billing system is divided into three stages, in which the heaviest users are billed at a rate three times greater than the lowest users.
Many households and businesses complained over high electricity bills last year, given that the summer of 2018 was the hottest in 111 years.
The government created the joint taskforce, consisting of industry experts, scholars and government officials, in December 2018 to discuss permanent changes to the system.
Earlier this month, the taskforce held a panel discussion and a public hearing to decide upon three proposals, all of which point to lowering utility charges for households during the summer.
The three suggestions were to scrap the progressive billing system; or raise the electricity use ceilings of the first two stages; or cut the current three stages to two.
"The policy is moving in the opposite direction from what it should be," said Jeong Yong-hoon, a professor at the Korea Advanced Institute of Science and Technology (KAIST), criticizing the government's move to lower electricity bills in summer.
"Given KEPCO's mounting debts, the government will have to raise household electricity costs and households will have to pay higher bills in the future."
Jeong added that the government's plan to hike industrial electricity prices to lessen the burden on households is absurd, as Korea is already the second-highest paying country following Mexico.
