KEPCO to raise power prices for big firms, sell assets amid mounting losses

The state-run Korea Electric Power Corp. (KEPCO), the dominant electricity supplier in the nation, said Wednesday it will increase power prices for big companies and sell some of its assets as it is struggling with mounting losses.

KEPCO said, however, it will freeze electricity prices for households and small and medium-sized firms amid concerns about high inflation.

The new rates, effective Thursday, will increase the average cost by 10.6 won (US$.01) per kilowatt-hour (kWh) for “large-capacity” industrial uses, the company said in a statement.

Kim Dong-cheol, chief executive of KEPCO, told reporters that the company “deeply apologizes for the burden caused by the electricity rate hike. KEPCO will continue to implement bone-crushing self-rescue measures.”

“The debt of KEPCO, which currently exceeds 200 trillion won, is not just a crisis for KEPCO but a threat to the entire electricity industry,” Kim said.

The company has been under pressure to increase electricity prices as it has suffered accumulated deficits of 47 trillion won.

The company earlier raised the electricity rates by 5.3 percent on-year for households in the second quarter, or 8 won per kilowatt hour (kWh), following a 13.1 won increase per kWh in the first quarter.

As part of its cost-cutting measures, KEPCO has additionally disclosed its plans to offload assets, which will include properties and stakes.

KEPCO will sell 20 percent of the stake in its wholly owned subsidiary KEPCO KDN Co., an ICT service provider, as well as its entire share of 38 percent in the Philippines’ Calatagan solar energy project.

The company added it will also sell its 640,000-square-meter plot in northern Seoul, including its education and training facility.

Additional cost-cutting measures involve optimizing the organizational structure by merging similar divisions and downsizing the workforce by 700 employees by 2026.

The latest self-rescue measures came on top of the previous plan announced in May to save 25 trillion won over the next five years.