KEPCO to see record loss 2022 on slower power tariff hikes

Korea Electric Power Corp. (KEPCO), the state-run utility, is set to suffer a record operating loss this year with a shortfall mounting to the second-largest level ever in the third quarter as its electricity tariff hikes couldn't match rising costs amid surging energy prices.

KEPCO on Friday logged an operating loss of 7.5 trillion won ($5.7 billion) in the July-September period, more than eight times the deficit of 936.7 billion won a year earlier. The latest quarterly loss was slightly less than a record shortfall of 7.8 trillion won reported in the first quarter of 2022.

Such poor performances boosted the company’s operating loss in the first three quarters to 21.8 trillion won, more than triple the deficit of 5.9 trillion won in the same period last year.

The country’s monopoly power distributor spent 24.3 trillion won on fuel in the first nine months of 2022, up 80% on-year, while its costs on electricity purchases nearly doubled to 30.1 trillion won.

POWER PURCHASE PRICES KEEP RISING

On the other hand, KEPCO’s income from power sales rose 12.8% to 48 trillion won during the period, causing such a massive loss.

KEPCO’s operating loss for this year is expected to top 30 trillion won, given ballooning power purchase costs in the fourth quarter.

The system marginal price (SMP), the price that KEPCO pays to electricity producers, currently hovered around a record high of 270.2 won per kilowatt-hour (kWh) hit on Oct. 13.

The SMP has been increasing with its weighted average in September more than doubling to 234.8 won per kWh from 98.8 won a year earlier, according to data from the Electric Power Statistics Information System operated by the Korea Power Exchange.

Write to So-Hyeon Kim at alpha@hankyung.com
Jongwoo Cheon edited this article.