KEPCO blames Korean govt for woes

KEPCO is putting the blame on the Korean government for its operating loss of US$2.75 billion and current net loss of US$2.215 billion. The deficit is the first for the company in its history.

Not able to increase electricity rates, the company is unable to cope with the soar in operating expense to US$26.74 billion, and rise in oil and soft coals prices, which brought up the purchasing price of electric power from US$17.34 billion won to US$22.2 billion.

A KEPCO statement emphasized that when fuel imports account for more than half of their budget, energy prices surge but electricity prices are capped.

"This is a combination that puts KEPCO in the deficit. By tightening the belt, our company saved 1.2 trillion won (US$916.8 billion) in expenses, but unless no fundamental solution is identified, our efforts will go only so far in curbing worsening balance sheet. There are concerns that the current electricity billing system will lead to a far bigger loss in society and nation," said the statement.

"The government recognises the flaw in electricity tariff, but it has been reluctant to raise the tariff," it added.

KEPCO's solution is to persuade the people and build consensus on a hike in electricity prices.

"At this point in time we need to persuade a nation and share social sympathy. To raise electricity rates before it's too late, we need to let people understand why the electricity pricing system should be adjusted and we have to make more efforts to achieve social consensus," the company explained.