KEPCO CEO nominee faces daunting tasks of normalizing debt-ridden utility firm

A general shareholders' meeting is held at Korea Electric Power Corp. headquarters in Naju, South Jeolla Province, Monday, to nominate the company's new CEO. Yonhap

By Ko Dong-hwan

A general shareholders' meeting is held at Korea Electric Power Corp. headquarters in Naju, South Jeolla Province, Monday, to nominate the company's new CEO. Yonhap

Kim Dong-cheol was nominated CEO of KEPCO in Monday's shareholders' meeting. Yonhap

The nominee for CEO of Korea Electric Power Corp. (KEPCO) is facing a range of daunting tasks as the public utility firm grapples with snowballing debt as a result of selling electricity at lower prices than its production costs, according to industry officials, Monday.

The nomination of former politician Kim Dong-cheol was approved at the firm's extraordinary shareholders meeting to fill the top executive post that has been remaining vacant since May. Kim, who had served four terms as a lawmaker, now awaits final approval from President Yoon Suk Yeol as the minister of trade, industry and energy is set to forward the appointment to the president.

The nominee has a bevy of issues to resolve, including the astronomical debt, which has grown to 200 trillion won ($151 billion), and an upcoming power rate hike that is feared by the public but appears inevitable. How he will tackle the company's alleged irregularities discovered in recent state audits regarding local photovoltaic panel businesses and an investment in a newly established university also remains open to debate.

Currently, the biggest problem for KEPCO is the debt. The company announced last May it would save 25 trillion won in an internal financial reshuffle by selling non-essential assets and delaying new facility construction projects for the next three years. Following the announcement, the company has been hinting at raising the rate for distributed electricity throughout the country as a main solution to reduce debt.

Kim is also expected to take control of the company employees after state audits and police investigations last July alleged some members of the company illegally received government subsidies reserved for photovoltaic panel business operation. As a punishment, the company reduced wages for executive-level employees. The measure met a major objection from lower-level employees who refused to accept it. The company-employee negotiation over the measure has been in progress at a rather slow pace, according to observers.

He will likely take measures regarding the controversial Korea Institute of Energy Technology, which received investments worth hundreds of billions of won from KEPCO while the company's debt was ballooning. Critics said the company neglected to take care of its own debt by excessively investing in establishing the university that is dedicated to energy-related engineering technologies in March 2022 in Naju, South Jeolla Province ? the location of KEPCO headquarters.

KEPCO's top post has been vacant since May when then-CEO Cheong Seung-il quit, holding himself responsible for the company's financial losses.

Last year, KEPCO suffered a record-high operating loss of 33 trillion won, more than quadruple from a year earlier, due mainly to high global energy prices and limited hikes in electricity rates. As of last June, KEPCO's total debt was 201.4 trillion won, the biggest among all listed Korean firms, according to government data.

Kim had mostly been affiliated with centrist parties and served as floor leader of the now-defunct People's Party and Bareunmirae Party.