KEPCO Freezes Fourth-Quarter Electricity Rates as Fuel Costs Rise
South Korea’s state-run power utility will hold electricity rates steady for the October-December quarter, even though its fuel-cost formula indicated a larger increase and its combined debt remains above 210 trillion won.
South Korea’s state-run Korea Electric Power Corp. will keep electricity rates unchanged in the fourth quarter despite rising fuel costs and continued pressure on its balance sheet.
KEPCO said the adjusted fuel-cost component of electricity bills will remain at 5 won per kilowatt-hour for the October-to-December period. That is the maximum allowed under the quarterly adjustment mechanism and marks the 18th consecutive quarter at the same level, a run that began in the third quarter of 2022.
The fuel-cost adjustment is one part of the electricity tariff and is calculated using recent prices for energy inputs including coal and liquefied natural gas. The mechanism permits a quarterly adjustment within a range of minus 5 won to plus 5 won per kilowatt-hour. KEPCO said the latest formula indicated that the component should rise by 7.3 won per kilowatt-hour in the fourth quarter, but the cap limits the amount that can be reflected in customer bills.
With the fuel-cost component unchanged and no separate increase announced for other tariff elements, households and businesses will not face a broad electricity-rate increase at the start of the quarter. The freeze may help contain near-term utility expenses for consumers and companies, but it also leaves KEPCO absorbing costs that cannot be fully recovered through current rates.
The utility’s financial strain dates back to the surge in global energy prices between 2021 and 2023. During that period, prices charged to electricity users did not rise enough to match production costs, contributing to large losses and a steep accumulation of debt.
KEPCO and its electricity-generating subsidiaries had combined debt of 210.7 trillion won, or about $152.1 billion, at the end of the first half of 2026. The company’s debt burden makes the gap between fuel expenses and regulated tariffs a continuing concern, particularly when international commodity prices increase.
The fourth-quarter decision therefore balances two competing pressures: shielding electricity users from an immediate rate rise and preventing further deterioration in the finances of the country’s dominant power supplier. Because the adjustment component is already at its ceiling, any sustained increase in fuel costs would leave policymakers and KEPCO with fewer options inside the existing quarterly formula.