The South Korean government is seeking to fix the progressive electricity billing system for the peak summer season in July and August to reduce the burden on households and simplify the charge structure.
Under the three-stage progressive rates, Korean households using less than 200 kilowatt hours (kWh) of power a month are charged with 93.3 won ($0.08) per kWh, but the unit price rises to 187.9 won for monthly power usage of 201 to 400 kWh and 280.6 won for more than 401 kWh.
The Ministry of Trade, Industry and Energy announced Monday that it was studying several options – to revise up the electricity use ceilings of the first two stages of the progressive rates or to cut the three stages to two; or to scrap the progressive billing system altogether.
About 40 percent of households use more than 401 kWh of power during the summer peak season, said Park Jong-bae, an electric engineering professor at Konkuk University and head of a task force team established for the electricity bill revision under the energy ministry.
If the government temporarily upgrades the ceilings to 300 kWh for the first stage and 450 kWh for the second during the summer, total residential electricity bills would be cut by 15.8 percent or 284.7 billion won, according to the ministry.
The government has fixed the progressive electricity charging system several times since it was first adopted in 1974. The latest revision was made in 2017 when the five-stage billing for residential use was cut to three.
The ministry will finalize the plan after a public hearing next week. Once the state-run utility Korea Electric Power Corp. and the energy ministry grant approval, the revision will go into effect next month.
By Lim Sung-hyun and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]