South Korea’s state-run utility, Korea Electric Power Corp. (KEPCO), announced Monday that **electricity rates** will remain unchanged for the third quarter, spanning July to September, despite indicators suggesting a potential reduction. This decision comes amidst the company’s persistent **financial challenges**.
Specifically, the **adjusted fuel cost**, a critical element of national **power tariffs**, will be maintained at its maximum ceiling of 5 won per kilowatt-hour (kWh) for the upcoming July-September quarter, according to KEPCO.
This 5 won **fuel cost adjustment** has been consistently applied by the utility since the third quarter of 2022, marking an extended period of stable pricing.
The **adjusted fuel cost** is typically calculated quarterly, fluctuating within a range of plus or minus 5 won per kWh. This calculation considers global **energy prices**, particularly those of essential commodities like **coal** and **liquefied natural gas (LNG)**, observed over the preceding three months.
A recent KEPCO report indicated that, based purely on **fuel cost adjustments**, **electricity prices** could have been lowered by 3.4 won per kWh. However, the South Korean government intervened, directing KEPCO to uphold the current rates, primarily due to the utility’s precarious **financial situation**.
Furthermore, the government has urged **Korea Electric Power Corp.** to rigorously pursue measures aimed at bolstering its long-term **financial health** and operational efficiency.
KEPCO’s significant **financial difficulties** stem from a period between 2021 and 2023 when it consistently supplied **electricity** at rates below its production costs. This occurred despite a dramatic surge in **global energy prices**, largely driven by the geopolitical impact of **Russia’s invasion of Ukraine**.
