Connecting utility fees to the movement in international oil prices is one idea the Korean government and ruling party would be considering as part of options to restructure the electricity billing system that is being criticized for being favorable towards the industry at the expense of consumers.

An unnamed source at the Saenuri Party said on Monday that the ruling party will take the initiative to form a task force to rationalize the electricity billing system with the government.

The government lately offered to temporarily ease the six-stage progressive tariff system for household power use for a 20-percent discount between July and September to help ease the electricity bill for consumers amid unprecedentedly lengthy sizzling summer. But the action drew criticism in its effectiveness as most of the households would be hardly relieved by the makeshift action. The progressive surcharge rate system solely applied on consumers was institutionalized in 1970s during oil crisis to save energy at households to allow more leeway in power use at industrial sites.

“The entire billing system should be revised as the amending the household sector alone cannot solve the overall problem,” the source said.

One feasible idea being floated is reflecting the movements in international fuel prices in utility fees. Since July last year, city gas and district heating bills have been adjusted every other month to reflect international prices.

When applied to power supply, electricity bill would go up and down depending on the international fuel price. Many countries including the U.S., Japan and China have such flexible billing system.

Utility fees could significantly go down, given the soft oil prices, said Cho Sung-bong, a professor at Soongsil University.

The industry and energy ministry said various options would be discussed once the task force is formed.

By Ko Jae-man

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