Private power companies consider legal action over regional pricing plan

South Korea plans to lower wholesale electricity prices outside the capital region to reduce power costs for businesses and encourage them to move to provincial areas.

The proposed system, called the Locational Marginal Pricing system, would set lower prices where more electricity is produced.

Eight private coal and LNG power companies are considering legal action, saying lower prices could make it harder to recover the costs of running and building power plants.

An estimate based on 17 major private generators outside the capital region put their annual lost electricity sales revenue at about 648.3 billion won.

The government has proposed that Korea Electric Power Corporation cover 1.3 trillion won of the 2.8 trillion won needed each year for the regional discounts, with lower wholesale prices providing the rest.

The companies want safeguards to recover their costs, including possible payments through settlement or fixed-cost compensation.

They plan to raise these concerns at a government briefing, and the energy ministry says it will consider reasonable proposals.

If the pricing plan is approved after a review expected around December, the companies are discussing seeking an injunction.