“KEPCO announces plan to reorganize electricity rate system into positive … target price ↑”

[한국금융신문 홍승빈 기자] KEPCO received positive reviews for its announcement of a plan to reform its electricity rate system.

On the 18th, Seong-Hyun Hwang, a researcher at Eugene Investment & Securities, predicted that KEPCO may achieve stable results in the future, as KEPCO confirmed and announced a plan to reorganize the electricity rate system. Consequently, we increased KEPCO’s target price by 34.3% to KRW 43,000. We maintained our BUY rating.

The day before, the Ministry of Commerce, Industry and Energy confirmed and announced a plan to reform the electricity tariff system. The cost and external costs were reflected by separating the fuel cost adjustment fee and the environmental climate fee separately in the electricity rate system, which was comprised of the existing base rate and energy rate.

Researcher Hwang analyzed that “a stable medium to long-term performance is expected with the application of the electricity tariff reform plan.”

“The difference in the cost of fuel compared to the cost of fuel last year is reflected in the quarterly rate,” he explained. “The upper and lower limits can be adjusted within the range of 5.0 won / kW.”

He also said: “In the future, the total cost of electricity bills will be revised to include changes in environmental and climate costs.

Furthermore, he said, “In addition to the change in supply cost, 3% will be administered as an upper limit.”

Cuts in power rates will take place through the first half of next year, but rate increases are expected to reflect the recent increase in costs as the second half progresses.

Researcher Hwang said: “Considering the positive impact of reducing the discount on compulsory use deductions for housing and the introduction of seasonal rate plans, the impact of the reduction in electricity rates in the first half of the year will not be significant. “Additional.

Reporter Seungbin Hong [email protected]