*아래는 위 기사를 구글 번역기로 번역한 영문 기사의 [전문]이다. [Below is the [full text] of an English article translated from the above article with Google Translate.
KEPCO confirms reasonable electricity bill system reform plan
Dec. 17, 2020, confirmed and announced the plan to reorganize the electricity rate
[The story of the case / Reporter Park Yeon-pa] = The Ministry of Trade, Industry and Energy (Minister Sung Yun-mo, hereinafter the Ministry of Industry) and the Korea Electric Power Corporation (President Kim Jong-gap, hereinafter KEPCO) confirmed and announced a plan to reorganize the electricity rate system on December 17, 2020.
As the government has unveiled in the 3rd Basic Energy Plan (June 2019), this reorganization plan enhances the connection between △ cost fluctuations and electricity rates, while △ separates and announces climate and environment related costs to ensure transparency. In addition, △ electricity rates for houses and other system improvements are included.
The current electricity tariff system has not been able to reflect changes in cost such as oil prices in a timely manner and has been operated without adjustment since 2013, and climate change-related costs (renewable and GHG reduction, etc.) have not been clearly disclosed.
As a result, problems have been raised, such as the price signal of electricity bills are not properly transmitted to consumers, the predictability of rate adjustment is lowered, and consumers are not properly aware of climate and environmental costs.
On December 16, 2020, KEPCO submitted an amendment to the terms and conditions of electricity supply reflecting the reorganization plan to the Ministry of Industry, and on December 17, after deliberation by the Electricity Committee, the approval was completed by the Ministry of Industry, and the reorganization proposal was confirmed.
◇ Cost-linked electricity tariff system: Effective from January 2021
Fuel cost adjustment fee
·Main Contents: The “Fuel Cost Adjustment Fee” item was newly added to reflect the change in fuel cost on a quarterly basis (= standard fuel cost-actual fuel cost) to the electricity bill on a regular basis (3 months).
Consumer protection device: A triple consumer protection device is provided to prevent consumer damage and confusion caused by rapid increase or decrease in rates or frequent adjustments.
Restriction on adjustment range: Under the premise that the standard fuel cost remains the same, the adjustment fee can be changed only up to 3 KRW compared to the previous rate within the range of ±5 KRW/kWh.
·Non-adjustment standard: Fine-adjustment when fluctuations within 1 won/kWh per quarter → Prevent frequent rate adjustment
Government reservation clause: Establish a basis for the government to withhold rate adjustment in the event of exceptional circumstances such as a sharp rise in oil prices within a short period of time
Benefit
As fuel cost fluctuations are periodically reflected in electricity bills, the price signal function is reinforced, and it is possible to induce rational electricity consumption by improving the predictability of consumers for adjusting electricity rates.
The effect of lowering electricity rates for a certain period of time due to the recent decline in oil prices
Considering that oil prices in the second half of 2020 are reflected in the fuel costs of the first half of 2021, the fuel cost adjustment rate is expected to decrease in the first half of 2021 (January-March, -3 won/kWh → April-June, -5 won/kWh, total KRW 1 trillion Cut expected)
After 2H2021, the fuel cost adjustment rate will be fixed according to changes in oil prices and exchange rates, but the cut effect is likely to continue given the oil price forecasts of major institutions.
Meanwhile, if oil prices continue to rise in the future, there is also a possibility that the fuel cost adjustment fee will increase.
Climate, environmental rate
Main contents: Separate climate and environment related expenses included in current electricity bills, notify consumers, and provide relevant information transparently
Review the necessity and level of adjustment, including changes in climate and environmental costs, in the process of calculating the rate adjustment factors according to the total cost of electricity bills in the future
·Expected effect: Like major overseas countries, climate and environment related expenses should be separately notified from electricity bills to raise consumer awareness of related expenses and to create conditions for voluntary participation in expanding eco-friendly energy.
◇Improvement of the residential electricity rate system: Applied from July 2021
Mandatory use deduction discount system for housing
Contrary to the original purpose of the introduction, by improving the mandatory use deduction discount system for housing, which provides benefits mainly for upper-middle income (81%) and one or two households (78%), support for electricity bills for the vulnerable is further expanded, but to general households. Discounts applied to Korea will be gradually reduced (discontinued in July 2022).
The remaining financial resources that will be secured by the reduction in mandatory use deductions are actively used for other public interest purposes such as energy efficiency improvement and investment in new and renewable access facilities.
Optional rate plan by time for housing
Main contents: Introduced seasonal and time-specific rate plans introduced and operated for other purposes such as industrial and general use for residential use.
Considering the nationwide residential AMI penetration rate (42.7%), it will be implemented first in Jeju, where the penetration rate is close to 100% (from July 2021), and phased expansion of the applicable area will be considered.
Benefit
Depending on the power usage pattern, it is possible to select a progressive or time-based rate plan, expanding consumer options and alleviating complaints about the progressive system.
Households who choose the hourly rate plan generate incentives to transfer or reduce demand according to the rate gap by time slot → contribute to reducing system peaks
◇ 2020 sunset discount special system maintenance: effective from January 2021
Renewable discount for private cars: 3 years extension for facilities below 10kW, sunset for facilities exceeding 10kW
Renewable discount special application For facilities with 10kW or less, which account for 88.7% of consumers, the discount special case will be extended for three years to continue expanding the supply of small-scale new and renewable facilities and strengthen management of peak demand. However, for facilities exceeding 10kW, even if the discount special is not applied, it is possible to generate revenue through various methods such as market transaction, surplus power offset transaction (cash settlement), PPA, etc., so discount special will be set.
ESS Discount: Increased discounts during peak hours and extended special cases for business sites that are out of operation
The'basic rate 1x discount', which will be applied from January 2021, will be improved to provide additional incentives for discharge during peak seasons (3 hours). In addition, workplaces that have stopped operating ESS in accordance with the government's recommendation will extend the existing discount special case for a period later recognized by the ESS Loss Compensation Committee.
Promote high-intensity management efficiency of KEPCO and strengthen government management and supervision
Along with the reorganization of the electricity rate system, the cost of electricity supply is drastically reduced through high-strength management innovation of KEPCO and the power group companies, and the factors for raising electricity rates are minimized by strengthening the management and supervision of the government.
Setting the upper limit of power supply cost
Overview: Unlike fuel costs, KEPCO and its power group companies set an annual increase limit for power supply costs, such as personnel costs, sales and management costs, and facility investment costs, which can be managed internally, and expenses incurred beyond this are not reflected in electricity rates.
Detailed implementation plan: By managing the increase rate of electricity supply cost within 3% every year for the next 5 years, the cost of about 7~8 trillion won will be saved.(The increase rate of electricity supply cost for the last 5 years (2014~2019): 5.3%)
· Set power supply cost as a key performance indicator (KPI) and reflect it in internal department evaluation
· Establishment of the “Management Innovation Committee,” where external experts participate, to constantly monitor efforts to reduce power supply costs and disclose the results to the outside.
In order to evaluate cost reduction performance more objectively, compliance with the upper limit of power supply cost and efforts to reduce savings are reflected in the management evaluation index of public institutions.
Strengthen government management and supervision
Overview: The verification of the total cost of electricity bills, which the government currently carries out once a year, is regularly conducted and private experts are involved to enhance the expertise and objectivity of verification.
Detailed implementation plan: Establishment and operation of the'Electricity Bill Overall Cost Verification Group' in which private experts participate, commissioning members by January 2021 and completing the composition of the committee, and for the '2021 electricity bill calculation report' scheduled to be submitted in June 2021. Applied from verification work
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