Pledges to cut electricity rates are emerging ahead of the June 3 local elections in Korea, as upward pressure on power prices mounts due to the Middle East crisis. The promises are aimed at resolving complaints from local businesses while serving as incentives to attract corporate investment. Some critics point to the rate cut pledges, alongside the rush to build domed stadiums, as a new form of populism.
According to the National Assembly's bill information system on the 20th, Rep. Min Byung-duk proposed a partial amendment to the Electric Utility Act to lower electricity rates for the steel industry concentrated in areas such as Pohang. The amendment's core provision creates a legal basis to reduce electricity charges for national key industrial facilities such as steel mills, provided they meet certain conditions specified by presidential decree.
Rep. Min, a member of the National Policy Committee, proposed the amendment because he is supporting Park Hee-jung, a candidate for Pohang mayor. Park has argued that "an electricity rate cut is not a policy to be implemented if possible, but a minimum safety mechanism to protect employment and the regional economy in crisis areas," adding that "the binding force of the law must be strengthened so that it actually works on the ground."
Min Hyung-bae, the Democratic Party candidate for mayor of the Jeonnam-Gwangju Integrated Special City, announced a pledge to set industrial electricity rates at 100 won. "Current industrial electricity rates average around 170 to 180 won, and structurally lowering this is the key issue," Min said. "Through a 'power portfolio model' combining Jeonnam's abundant renewable energy, energy storage systems (ESS), and the existing power grid, we will lower electricity prices for industrial complexes to around 100 won."
The government is currently pushing to overhaul the electricity rate system, including regional differential pricing. "Once the government's proposal is prepared, legislative discussions at the National Assembly level will also begin," a Democratic Party official said. "The longer the Middle East crisis drags on, the more inevitable it becomes to pursue a reduction in industrial electricity rates."
However, critics note that lowering industrial electricity rates would inevitably widen losses at Korea Electric Power Corp. (KEPCO) and could trigger trade disputes, making it inappropriate to use the issue indiscriminately as a campaign pledge. "Lowering industrial rates becomes a factor in tightening the progressive tariff system for households over the long term," a political insider said. "In addition, lowering rates for a few large corporations with high electricity demand creates equity issues with other industries."
Electricity rate cut pledges are not unique to Korea. In the United States, with midterm elections approaching, electricity rates are expected to take center stage in the campaign. "It is hard to find a precedent in modern history for electricity rates rising to the level of a national political agenda," said Joshua Basseches, an energy policy expert at Tulane University. "It is the issue voters care about most."
The U.S., however, is focusing on cutting residential rather than industrial electricity rates. President Donald Trump has stressed on social media that "I never want Americans to pay higher electricity rates because of data centers," adding that "Big Tech companies building data centers should bear the costs themselves."
