Electricity rates for the third quarter (July–September) will remain at the current level.
Korea Electric Power Corporation (KEPCO) said on the 22nd it will keep the third-quarter fuel cost adjustment rate, applied from July through September, at 5 won per kilowatt-hour (kWh), the same as now.
Electricity bills consist of a basic charge for infrastructure operations, a usage-based energy charge, a climate and environment charge, and a fuel cost adjustment charge.
Among these, the fuel cost adjustment charge is determined by synthesizing changes in fuel costs over the past three months for bituminous coal, liquefied natural gas (LNG), and Bunker C oil (heavy oil). This is a system to reflect fuel cost fluctuations in electricity rates. However, the quarterly adjustment range for fuel cost changes is limited to ±3 won from the previous quarter and ±5 won for the year.
The fuel cost adjustment rate is decided by a process in which KEPCO applies to the Electricity Commission under the Ministry of Climate, Energy and Environment for an appropriate level, and the Electricity Commission approves it after consulting with the Ministry of Economy and Finance. After Russia's invasion of Ukraine, KEPCO raised the third-quarter 2022 fuel cost adjustment rate by 2 won, from 3 won/kWh to 5 won/kWh, and has kept it at 5 won/kWh for 17 consecutive quarters to date.
KEPCO said, "We were notified by the government to continue applying +5.0 won/kWh, the same as in the second quarter, considering KEPCO's financial situation and the sizable amount of unadjusted fuel cost adjustments," and added, "We were notified to thoroughly carry out self-help efforts for KEPCO's management normalization."
On a consolidation basis for the first quarter of this year, KEPCO posted sales of 24.3985 trillion won and operating profit of 3.7842 trillion won. Its liability and borrowing fund stood at 206 trillion won and 128 trillion won, respectively.