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Ministry of Industry · KEPCO confirms the terms of the electricity supply linked to costs to be implemented next year
Restrictions on changes in the cost of fuel are reflected each quarter … Environmental expense separation notice
Experts “Need to improve the determination and process of electricity bills and become an independent institution”
Fluctuations in the price of coal, gas (LNG) and oil, which account for most of the cost of electricity, are reflected in the tariff every three months, but the upper and lower limits of the adjustment range are limited and the government reserves adjustment if necessary. While it is easy to cut rates when oil prices are low, it is pointed out that it will be difficult to reflect them when oil prices rise.
KEPCO announced that the proposed amendment to the terms and conditions of electricity supply with these details was finalized after the approval of the Ministry of Commerce, Industry and Energy on the same day as the deliberation of the Electricity Committee on the 17th. With this change in the terms and conditions, the drop in fuel costs for the second half of this year, of around 1 trillion KRW in the first half of next year, is expected to be reflected in the rate.
7 years have passed since November 2013 (average increase of 5.4%), and this is the first time that the system of non-linking of fuels has been applied to electricity prices.
The cost-linked rate system, implemented next year, is a system that calculates the difference between the average fuel cost (realized fuel cost) for the previous three months (realized fuel cost) and the average fuel cost ( standard fuel cost) for the last year each quarter, and reflects the value (adjusted charge) of electric bills.
The cost of fuel is based on the customs clearance price for coal, LNG and oil announced by the Korea Customs Service, and the calculation method of the tariff and fuel cost will be disclosed on the website from KEPCO.
However, the government has also prepared quarterly adjustment limits, no-adjustment standards, and reserve provisions to avoid rapid rate increases or frequent rate adjustments. Under the premise that the standard fuel cost is maintained, the adjusted rate is limited to ± 5 won per kWh, and the fluctuation does not exceed 3 won compared to the previous rate. Also, when the quarterly fluctuation factor does not exceed 1 won, the rate is frozen and when oil prices increase in a short period, the government can reserve the rate adjustment.
Under this standard, the maximum rate fluctuation for a household (based on 350kWh per month) per quarter is 3,150 won.
An official from the Ministry of Industry said: “As fuel cost fluctuations are periodically reflected in electricity prices, the price signal function will be strengthened and we hope that it will be possible to induce a rational consumption of electricity by improving consumer predictability. for electricity price adjustments “.
The climatic and environmental costs included in the electricity bill are separated and notified to consumers, and in the second half of 2022 the deduction system for mandatory use for housing will be abolished.
In this way, in the case of a house that uses 350 kWh per month, the electricity consumption rate that includes the cost of RPS (renewable supply obligation) and the transaction cost of the GHG emission rights have been paid. 4.6845 won per month, but starting next year, the cost of the fine dust (carbon reduction) season management system. Cost) added to the climate / environmental cost of 1,855 won and the electricity charge of 45,095 won, respectively.
It has been pointed out that existing electricity bills that only report the total amount there is a problem that consumers do not recognize the part of environmental and climate costs. The government decided to review the need or level of adjustment for changes in climatic and environmental costs in the process of calculating overall cost adjustment factors for electricity bills in the future.
Germany Renewable Energy Charge (EEG), Japan Renewable Power Generation Promotion Charge, and New York City in the US are reporting the cost of energy efficiency improvement and renewable energy by separate from electricity bills. The climate / environment charge, which will be applied in January next year, is 5.3 won per kWh, which is approximately 4.9% of the total electricity bill.
The Ministry of Industry said: “We hope to increase consumer awareness of related costs and create conditions for voluntary participation to expand green energy by separating the cost of climate and environment from electricity bills as well as abroad.”
The maintenance of the mandatory home deduction discount system, which has been delayed, will be repealed from July 2022 after reducing the discount by 50% from 4,000 won per month to 2,000 won per month beginning in July next year. Contrary to the original purpose of the mandatory use deduction discount system, it has been noted that benefits mainly return to middle and high income households or 1-2.
Additionally, the government has a policy that only Jeju Island, where AMI has been distributed, can select a time-based rate system, such as for residential use and industrial use, and the peak reduction ESS recognizes the amount peak reduction of up to 1.34 times when discharged at a specific time to maintain minimal commercial viability. be be.
The Ministry of Industry said: “In order to strengthen government supervision, the annual verification of the total cost of electricity bills, which takes place once a year, has formed an electricity bill verification team in which private experts participate until January next year, and it is scheduled to be presented in June next year. “We plan to entrust the verification work of the ‘rate calculation report’.”
Regarding the reorganization of the electricity bills, the experts responded that the direction is desirable, but the transparency and independence of the billing process are still insufficient.
Electricity Chairman Kang Seung-jin (professor at Korea Polytechnic University) said: “Electricity is a natural product that increases the rate when the cost increases, but somehow it becomes excessively politicized and it is difficult to increase it. the price is determined according to market conditions, the tariff can give a price signal to the consumer so that demand is controlled ”, he advised.
President Kang said: “In the future, the process and procedure for determining electricity rates should also be improved. Instead of being in the hands of the government as it is now, the political burden on rates should be made public and transparent through Consultations between producers, sellers, consumers and experts. It will reduce and increase consumer acceptance. “
Soongsil University professor Cho Seong-bong said: “The direction of reflecting the environmental cost in the rate is positive, but the key is how reliable it is.” I wonder if I can lift it. “Professor Cho said,” Now, we need an independent institution for rate regulation, not a (overhead) verification team. (The government) has adopted an uncomfortable bonding system because it does not want to ignore rate regulation. ”
Reporter Lee Sang-bok [email protected]
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