Kepco Shares Plunge After It Refrains From Raising Power Prices

(Bloomberg) -- Korea Electric Power Corp. shares headed for their biggest loss since early last year after it refrained from raising power charges, threatening more financial strain at the utility. 

The state-owned electricity distributor, known as Kepco, said it will freeze the fuel adjustment price, which is a component of the bill for consumers that moves depending on the cost of gas and coal imports, for the quarter ending December. A Kepco spokesperson said there is still a chance other components of the power bill could increase for the period.

Kepco fell as much as 8.9%, and a close at that level would be the biggest drop since January 2023.

Holding the price runs counter to comments from Chief Executive Officer Kim Dong-cheol, who emphasized the need to normalize Korean power bills in a recent Bloomberg interview.

Kepco was hit by a record operating loss in 2022 after it refrained from substantially raising electricity rates despite a surge in its cost of importing coal and gas. The utility is still struggling to boost profits because it’s selling power below its fuel costs in an effort to shield consumers from rising living expenses.

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