9.1 million households including one and two people, electricity bills will rise from next July

View larger-From next month, the electricity rate system will be reorganized in 7 years, with the electricity rate periodically changing according to fuel prices such as oil. The discount system given to households that use less electricity will be phased out, and the cost of climate environment will be notified as a separate item on the electricity bill.

On the 17th, the Ministry of Trade, Industry and Energy and the Korea Electric Power Corporation announced a plan to reorganize electricity rates. The government emphasized that electricity rates can be adjusted according to fluctuations in oil prices, so that consumers can benefit from electricity price cuts during low oil prices.

However, it is pointed out that with the abolition of the discount system, rates for 9.1 million households, including one or two households, will rise right away from next year, and there is a high possibility that electricity prices will increase in the future depending on the rise in international oil prices or the rate of nuclear power plant and coal de-coaling. .

○ Electricity bills will drop next year, but may rise significantly in the future.

The’fuel cost indexing system’, which directly reflects fluctuations in fuel prices such as petroleum, coal, natural gas, etc., used for electricity production into electricity rates, will be reintroduced in 10 years. The government decided to adjust the electricity rate by reflecting the price change every three months. Accordingly, it is predicted that four-person households using an average of 350 kWh of electricity per month will cut their electricity bills by up to 1050 won per month from January to March next year, reflecting the current low oil prices. The government expects a total cut of 1 trillion won in the first half of next year. However, when the global economy escapes from the aftermath of the novel coronavirus infection (Corona 19) and enters a full-fledged recovery, international oil prices will inevitably rise and electricity rates will inevitably rise. Even in 2011, an attempt to introduce an indexed system failed due to rising international oil prices. International oil prices, which are currently in the high 40-dollar level per barrel, are predicted to rise to the mid–60-dollar level by 2022. In addition, the’Essential Use Deduction System’, which offered a 4,000 won discount on monthly electricity bills for households with electricity consumption less than 200 kWh per month, will be phased out. Until now, 9.91 million households have benefited, but the discount will be cut in half from July of next year, and from July 2022, only 810,000 households of the vulnerable group have benefited. This means that the rates for 9.1 million households, including one or two households, are rising.

○ Separation of environmental costs is also a factor in raising electricity bills

The climate environment cost included in the current electricity bill will be separately announced from next month. Subsidies for renewable energy and transaction costs for greenhouse gas emissions are specified separately. The climate environment cost next year is 5.3 won per kWh, accounting for 4.9% of the electricity bill. To this, the cost of stopping coal power generation (0.3 won per kWh) has been newly added to reduce fine dust. A government official said, “A separate notice is made to increase consumer awareness and transparency about environmental costs.”

However, in the mid to long term, the cost of climate and environment will inevitably increase due to the expansion of new and renewable energy and reduction of greenhouse gases, so electricity prices are expected to rise as well. The cost of climate and environment has already increased from 1 trillion won in 2015 to 2 trillion won last year. Some point out that it will be a means of passing on the increasing costs to consumers due to the anti-nuclear and coal-free policies. Professor Jeong Bum-jin of the Department of Nuclear Engineering at Kyung Hee University said, “If environmental costs increase rapidly due to the effects of nuclear power plants, it will inevitably be a burden for KEPCO. The separation of environmental costs is a pavement to convert these costs to the people.”

Sejong = Reporter [email protected]Go to reporter page>