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Starting next year, the ‘climate and environment’ cost will be separated from the electricity bill.
The Ministry of Commerce, Industry and Energy and the Korea Electric Power Corporation (hereinafter KEPCO) confirmed and announced a plan to reorganize the electricity tariff system on the 17th.
The highlight of this reorganization plan is to separate and report the ‘climate and environment’ expenses that have been paid along with the electricity bills, and reflect the oil price index on the electricity bill.
The Ministry of Commerce, Industry and Energy pointed out that there was a problem that consumers were not adequately aware of, saying: “The current electricity tariff system has not clearly disclosed costs related to climate change, such as supplying new renewable energy and greenhouse gas reduction “.
The cost separation will take effect from January 2021 and will be charged in three categories.
➀ Cost of meeting renewable energy obligations (RPS): 4.5 won / kWh
➁ Greenhouse Gas Emissions (ETS) Transaction Cost: 0.5 won / kWh
➂ Reduced cost of coal power generation due to implementation of seasonal fine dust management system: 0.3 won / kWh
This is about 4.9% (5.3 won) of the total electricity bill, and the RPS and ETS costs previously charged and the energy reduction costs of coal were added.
On the basis of a four person household (use 350kWh, 5.5 million KRW per month), around 1850 KRW is charged as climate and environment expenses.
The Ministry of Commerce, Industry and Energy and KEPCO also created a ‘Fuel Cost Adjusted Pension’ element, which reflects fuel costs, that is, changes in the prices of oil, gas and coal used as fuel. for thermal energy generation, in electricity bills every three months.
Regarding the adjustment range, under the premise that the standard fuel cost remains the same, the adjustment rate is limited to being variable within the range of ± 5 won / kWh, up to 3 won compared to the previous rate. . For example, based on the same household usage of four people as before, it can only increase from 1,050 won per quarter to a maximum of 1,750 won.
The authorities said that “as fluctuations in the cost of fuel are periodically reflected in electricity bills, it is possible to induce reasonable consumption of electricity by consumers.”
In addition, the government announced that it will abolish the ‘required residential use deduction discount system’ by 2022, which reduces a certain amount for households using less than 200 kWh.
Criticism of the government shakeup has been raised as to whether the tax burden on green policies like decoking is imposed on consumers.
Consequently, the government announced that slight fluctuations in oil prices will not be reflected in the increase in electricity bills and, in particular, if an exceptional situation occurs such as a rebound in oil prices, it will retain the adjustment of electricity rates.
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