GAS, ELECTRICITY FEES TO BE RAISED IN 2023

[Anchor Lead]

Due to the freezing weather and heavy snow, electricity usage in Korea hit an all time high on the 22nd. But interestingly, the more power is used, the higher the loss sustained by the Korea Electric Power Corporation, as they pay more to power generators than what they charge the public. Therefore the government plans on increasing next year's electricity and gas prices.

[Pkg]

Electricity usage in Korea soared on Thursday due to the freezing weather and heavy snowfall. Looking at the time where electricity usage reaches its highest point, power use peaked during the day to around 93 GW. It breaks the previous record set in July this year and is the highest record to date regardless of the season. But the more power is used, the higher the losses sustained by the Korea Electric Power Corporation. It records losses of 35 won per kilowatt when the amount it pays to power generators is compared to the price of electricity it actually charges in the market. KEPCO's accrued deficit this year is predicted to surpass 30 trillion won. The situation is similar at the Korea Gas Corporation. The outstanding amount it has yet to receive from the private sector, which buys gas for a cheap price, is expected to approach 9 trillion won this year. The government has vowed to raise electricity and gas fees to a more realistic level in phases.

[Soundbite] Choo Kyung-ho(Deputy Prime Minister for Economy) : "We will raise gas and electricity prices to a more realistic level next year in phases to cover the accrued deficit by 2026 and improve the financial soundness of energy-related public corporations."

To cover KEPCO's accrued deficit and KOGAS's uncollected amount by 2026, electricity fees would have to be raised to 50 won per kWh and gas fees to more than 10 won per MJ. Raising the fees is inevitable to make up for the losses, but what matters is how much they will be raised in each phase.

[Soundbite] Prof. Yoo Seung-hoon(Seoul Nat'l Univ. of Science & Technology) : "Raising prices three or four times next year is going to be inevitable. Doing it in phases will be less burdensome, because there is time to adapt."

KEPCO was set to announce an increase in electricity prices for the first quarter of 2023 two days ago, but the announcement was delayed due to disagreements among the relevant ministries. The increase in gas and electricity prices for next year will likely be announced next week.