Consumers forced to pay price for policy blunders
Starting next month, around 9.1 million households will have to pay 2,000 won ($1.80) more in utility fees per month for using the same amount of electricity. This is because the discount rate will be halved for households using less than 200kWh of electricity a month, according to the government’s supply plan drafted last December.
This will enable the government to collect an additional 220 billion won per year. Starting next year, the burden on consumers will increase further as the discount rate will be totally abolished. Electric vehicle owners will also need to pay 50 won to 100 won more per kWh as the minimum discount rate will be lowered to 25 percent from the current 50 percent.
The Ministry of Trade, Industry and Energy said the move was inevitable to reduce the portion of “undue” benefits. Yet, as a matter of fact, it is an attempt to pass on the growing burden of power generation, arising from the Moon Jae-in administration’s nuclear phase-out policy, to consumers. The government has already decided to mobilize the Electric Power Industry Basis Fund to compensate state utilities for losses stemming from the shutdown or operational suspension of nuclear power plants.
Some 1.4 trillion won from the fund, which is raised by setting aside 3.7 percent of electricity bill payments collected to finance the utility industry, will be funneled to Korea Hydro and Nuclear Power to offset its losses caused by the nuclear phase-out policy. The burden on consumers will likely increase further in the latter half of the year as prices of liquefied natural gas and oil are predicted to go up on global markets. Starting this year, the government has begun to enforce a power rate system linked to the fluctuations of fuel prices.
The Moon administration came up with the 9th Basic Plan for Long-term Electricity Supply and Demand 2020-2034 last December, vowing to keep utility rate hikes under 10.9 percent through 2030. But Wood Mackenzie, a global energy consulting firm, said Korean consumers will have to pay 24 percent more for utility costs in 2030 compared to now.
In a report released June 2, the firm said that coal and nuclear energy will give way to natural gas and renewables in Korea over the long term. But what still matters is the lower efficiency of alternative energy sources. In fact, utility rates in Denmark and Germany, both heavily dependent on solar and wind power, are triple those of Korea. This could mean that Korean consumers will inevitably shoulder a higher burden for electricity use.
Despite the government’s all-out efforts toward renewable energies, related businesses have largely failed to generate jobs and revenue. The Moon administration has only proven that it is a pipe dream to push for the nuclear reactor phase-out policy without raising electricity costs. It is sad to see that consumers are forced to pay the price for the government’s ill-conceived energy policy. Moon and his policymakers should admit their blunders and change course before it’s too late.
Starting next month, around 9.1 million households will have to pay 2,000 won ($1.80) more in utility fees per month for using the same amount of electricity. This is because the discount rate will be halved for households using less than 200kWh of electricity a month, according to the government’s supply plan drafted last December.
This will enable the government to collect an additional 220 billion won per year. Starting next year, the burden on consumers will increase further as the discount rate will be totally abolished. Electric vehicle owners will also need to pay 50 won to 100 won more per kWh as the minimum discount rate will be lowered to 25 percent from the current 50 percent.
The Ministry of Trade, Industry and Energy said the move was inevitable to reduce the portion of “undue” benefits. Yet, as a matter of fact, it is an attempt to pass on the growing burden of power generation, arising from the Moon Jae-in administration’s nuclear phase-out policy, to consumers. The government has already decided to mobilize the Electric Power Industry Basis Fund to compensate state utilities for losses stemming from the shutdown or operational suspension of nuclear power plants.
Some 1.4 trillion won from the fund, which is raised by setting aside 3.7 percent of electricity bill payments collected to finance the utility industry, will be funneled to Korea Hydro and Nuclear Power to offset its losses caused by the nuclear phase-out policy. The burden on consumers will likely increase further in the latter half of the year as prices of liquefied natural gas and oil are predicted to go up on global markets. Starting this year, the government has begun to enforce a power rate system linked to the fluctuations of fuel prices.
The Moon administration came up with the 9th Basic Plan for Long-term Electricity Supply and Demand 2020-2034 last December, vowing to keep utility rate hikes under 10.9 percent through 2030. But Wood Mackenzie, a global energy consulting firm, said Korean consumers will have to pay 24 percent more for utility costs in 2030 compared to now.
In a report released June 2, the firm said that coal and nuclear energy will give way to natural gas and renewables in Korea over the long term. But what still matters is the lower efficiency of alternative energy sources. In fact, utility rates in Denmark and Germany, both heavily dependent on solar and wind power, are triple those of Korea. This could mean that Korean consumers will inevitably shoulder a higher burden for electricity use.
Despite the government’s all-out efforts toward renewable energies, related businesses have largely failed to generate jobs and revenue. The Moon administration has only proven that it is a pipe dream to push for the nuclear reactor phase-out policy without raising electricity costs. It is sad to see that consumers are forced to pay the price for the government’s ill-conceived energy policy. Moon and his policymakers should admit their blunders and change course before it’s too late.
![[Reporter’s Notebook] Reasons why Lotte hired Shinsegae CEO](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vGiy-UeEI-ZuczprKfcaAtD-HiZRvqGkaOqtGHtKnBq-5aMoZ2yRTBbZf6hzI33OgDXldzHFplZW0zHGtpB9oR78QF4RkhopVj3dJxFN0ChFhAIg0ZmLyglGpSEVKYcsX2AhZhA_taVHTU5lHua_gAvuhuIVQXnVWdQhNssN4AlKFre6Y9i80h2xFXFD3cZyZzJMZxeEjJbJE=w100)
0 Comments