The government will gradually lower the upper limit on heating fees to reduce the burden on users of district heating. For businesses that charge the same level as the Korea District Heating Corporation (KHDC), fees must be reduced by up to 5% moving forward.
The Ministry of Trade, Industry and Energy announced on the 6th that it will administer a revision of the 'Standards and Upper Limits for Determining District Cooling and Heating Heat Fees' starting on the 7th and will receive feedback until the 21st. The revision focuses on adjusting the upper limit on heating fees for district cooling and heating businesses.
Currently, district cooling and heating businesses set their fees based on their own costs, with the option to charge at the same level as KHDC (100%) or up to a maximum of 110% of KHDC fees by submitting supporting documents.
According to the revision, the upper limit for fees applied by businesses with the same fee level as KHDC will be lowered to 98% this year, then to 97% in 2025 and 95% in 2027, gradually decreasing. However, businesses with high costs can still set their fees up to the current upper limit of 110%.
The Ministry explained that this adjustment is in response to criticism that the expense reduction effects arising from the large-scale combined heat and power generation and diversification of fuel procurement sources are not being reflected. It is expected that, following the revision of the announcement, heating costs may actually decrease in some areas.
Support for small and medium-sized district heating businesses will also be expanded. The support for expenses related to efficiency improvement and safety management will be broadened to include 'all necessary applicants,' and investment will be encouraged for securing low-cost heat sources and replacing old heat transport pipes.
Additionally, for small businesses entering the development of new towns at an early stage, an exception clause will be established to allow them to be recognized at KHDC-level fees, considering their initial investment burden. The fixed cost reassessment cycle reflecting price fluctuations will be shortened from the current two years to one year, and adjustments to the investment return rate for small businesses will be pursued to improve their management conditions.
An official from the Ministry noted, 'This revision of the announcement is aimed at reducing consumer burden while promoting efficient investment by businesses,' adding, 'We plan to strengthen support so that small businesses can also build competitiveness.'