Electricity Rates

[Anchor Lead]

The government and the political parties are expected to announce measures to cut electricity fees as early as this weekend or early next week. The measures will likely seek to adjust the progressive rate for electricity charges or surcharge refunds rather than abolishing the progressive rate altogether.

[Pkg]

The government has begun looking for ways to lower electricity fees in earnest. First off, it is considering providing refunds on electricity surcharges. Currently, households have to pay a surcharge amounting to 10 percent of the basic electricity fee and the used amount of power. The government plans to return electricity surcharges to households that use less than 500kWh of electricity a month. This will benefit everyone evenly and will not incur significant losses on the Electric Power Corporation. Those whose monthly electricity bill amounts to 100,000 won will receive benefits worth 8,000-9,000 won. The government is also considering adjusting the progressive rate on electricity fees... by raising the limit for stage 2 progressive rate from the current 400kWh a month to 500kWh. A family of four living in an urban area uses around 350kWh of electricity a month on average. The new measure seeks to alleviate the financial burden of such families stemming from the use of air conditioners during hot spells. However, such benefits mostly target middle-class households and higher rather than low-income families. In this case, the Electric Power Corporation could sustain losses of around 400 billion won. The public wants the authorities to abolish the progressive rate on electricity charges so that people pay solely for the amount of electricity that they use. But for now it's the last option, as in this case households that use less than 200kWh of electricity a month will have to pay more, which will likely affect low-income households the most. An official from the ruling party said that the government must reach a conclusion before the July electricity bills are calculated and that the new measures will likely be announced this weekend or early next weekend.