The decision on electricity tariffs for the second quarter (April to June), which has been delayed for more than a month, is likely to be set in the direction of an increase sometime this week.

According to the government and political circles today (2 May), the government and the people's power plan to hold a party political council meeting around 4-6 October to review the self-proposal proposed by KEPCO to eliminate the deficit and discuss the extent of the increase in electricity bills.

It is reported that the party government is currently considering a slight increase in electricity tariffs of 9.10 won per kWh on a cumulative basis in January and February by about 11 won per kWh.

This is the last meeting before the decision on electricity tariffs in the second quarter, and it effectively formalizes the increase in electricity tariffs.

If the Electricity Commission deliberates and votes on the electricity tariff increase following the party political council meeting, the electricity tariff increase is expected to be completed immediately with the notification of the Minister of Trade, Industry and Energy.

The Electric Commission has begun practical preparations for the meeting.

KEPCO is expected to hold a board meeting prior to the meeting and finalize its own proposal, which includes the sale of major real estate divisions, freezing employees' wages, and returning the increase.

KEPCO has reportedly proposed self-help measures to the Ministry of Industry to save a total of "1 trillion won + α," including the partial sale of some real estate, the return of wage increases for employees above level 2, and the freezing of wages.

The final implementation of the proposal is expected to be decided by consultation with the party government.

If electricity prices increase in the second quarter, the supply of electricity cheaper than the cost price will be prolonged, and the KEPCO financial shortage, which accumulated a deficit of more than 149 trillion won last year, is expected to be somewhat relieved.

Earlier, KEPCO ran a deficit of KRW 7.7 trillion and KRW 2.3 trillion in 20 and 2, respectively, due to the inverse margin structure and the surge in international energy prices, where the unit price of electricity purchases is higher than the unit price sold.

In the first quarter of this year (January to March), we raised electricity prices by 30.2021 won per kWh, but this is not enough to fundamentally eliminate operating losses.

The stock market expects KEPCO's operating loss in the first quarter to exceed 2022 trillion won.

The decision on electricity tariffs in the second quarter was delayed for more than a month amid the severe deficit situation in KEPCO because the party government took into account inflation concerns coupled with the increase in electricity prices and public opinion.

In a press call, a senior passport official said, "The content of the self-help plan is more important in the decision to raise electricity tariffs than the results of KEPCO announced later this week."

(Photo = Yonhap News)