The Democratic Party of Korea signaled a willingness to actively review business leaders' request for "differentiated electricity rates for corporations that relocate to the regions." Attention is on whether debate over differentiated rates, as a policy tool to ease the saturated power grid in the greater Seoul area and to induce corporations to move to the regions, will kick into full gear.
On the 16th, Democratic Party Spokesperson Kwon Hyang-yeop said in a background briefing right after a meeting between the party leadership and the Korea Chamber of Commerce and Industry that "the most difficult condition for doing business in the regions is the electricity rate issue," adding, "there was a request to ease the saturation of the greater Seoul power grid and to differentiate electricity rates for corporations that have moved to the regions." The business community is said to have requested the introduction of differentiated electricity rates that reflect regional power conditions.
In response, the Democratic Party noted that the current legal framework allows for the system to be introduced and pledged to review it. Spokesperson Kwon explained, "Article 45 of the Electric Utility Act contains a provision allowing the introduction of regionally differentiated electricity rates," adding, "the party strongly agrees on the need, and as detailed plans are being studied by an external professional institution, we will consult as soon as it is finished and actively review it."
Differentiated electricity rates aim to reflect differences in power supply conditions and cost structures between the greater Seoul area and non-capital regions in rates, dispersing demand in areas with heavy grid burdens and encouraging regional investment. As large power-consuming industries such as artificial intelligence (AI) data centers and semiconductors have clustered in certain areas, issues over costs for grid expansion and more have been consistently raised.
The Democratic Party also said it would actively discuss a request to introduce a production tax credit to strengthen the competitiveness of renewables such as solar power. Spokesperson Kwon said, "The domestic manufacturing solar ecosystem has slumped significantly, and to revitalize it, a production tax credit (a system that deducts part of the taxes on domestically produced and sold products) is needed," adding, "based on research results currently underway at the Ministry of Economy and Finance, we will discuss active support measures."
At the meeting, the ruling party and business leaders chose "regional development" as the theme and focused on ▲ building a sustainable power system ▲ ways to promote corporations' regional investment ▲ special zone policies for regional development. Corporations also requested the swift passage of the special act for renewable energy self-reliant cities and the expansion of infrastructure for zero-carbon power supply in the regions.
Regarding the policy tasks raised, including differentiated electricity rates, Representative Jeong said, "We will do what we can, and for what is difficult, we will explain why it is difficult to remove uncertainty," and promised, "we will consult with government ministries and provide feedback within a month," according to Spokesperson Kwon.
Earlier in his opening remarks at the meeting, Representative Jeong said, "As the ruling party, we must responsibly discuss the areas where the business community is struggling, draw up alternatives, and, if necessary, craft policies and legislate," adding, "the Lee Jae-myung administration and corporations are a community of shared destiny for national development."
It has been three months since the meeting between the Democratic Party leadership and KORCHAM in September. It is seen as a continued "focus on the economy" following a town hall meeting on legislative tasks with the Korea Federation of Small and Medium Enterprises the previous day. From the party, attendees included Representative Jeong; Policy Committee Chair Han Jeong-ae; Kim Won-i, secretary of the National Assembly Trade. Industry Energy. SMEs. and Startups Committee; and Kim Ju-young, secretary of the Climate, Energy, Environment and Labor Committee. From the business community, Chairman Choi attended along with presidents of major groups including Samsung, SK, Hyundai and LG.