South Korean industry braces for more expensive electricity

Higher charges could come in November.

State-run utility Korea Electric Power Corporation (Kepco) said said it’s considering increasing electricity charges for industrial users due to massive losses as part of a government initiative to control inflation. Kepco was hit by US$12.1 billion in losses from 2008 until the first half of 2013. It said it has been charging electricity and gas tariffs on industrial users at well below cost in recent years in an effort to help curb inflation.

Asia's fourth-largest economy, which imports almost all of its energy resources, has been levying Kepco officials have been quoted in local media as saying electricity tariffs should reflect costs, and have given hints of price hikes as early as November. Korean media have reported that higher power rates for industry are inevitable after a working group recommended against plans to boost nuclear power capacity to 41% of energy output by 2030, capping it at 22% to 29% by 2035.

According to Kepco data, industrial users were charged 93.2 won per kilowatt hour in 2012 compared to 112.5 won for commercial users and 123.7 won for residential users.