SEOUL : Korea Electric Power Corp (KEPCO) said on Wednesday it plans to raise the industrial electricity price for larger companies and sell off more assets after its debt hit 201 trillion won (US$154 billion) at the end of June.

However, the South Korean state utility said that it will keep electricity prices unchanged for the public and smaller companies.

Analysts said such a partial measure falls short of hikes needed to bring KEPCO's debts down to a sustainable level, and is likely driven by political considerations before South Korea holds general elections in April.

Although energy prices soared last year after Russia's invasion of Ukraine, South Korea's government was slow to pass on higher costs to consumers and businesses grappling with inflation.

As of June, KEPCO had reported nine consecutive quarterly operating losses of 47 trillion won combined.

Although a profit is forecasted in the July-September quarter due to a recent dip in global energy prices, analysts expect a swing to losses again in the fourth quarter on volatile oil prices.

"KEPCO's financial crisis, which began with soaring international energy prices, has reached a limit financially that is difficult for a company to withstand," CEO Kim Dong-cheol said in a statement.

State-backed KEPCO, which has issued about 80 trillion won in bonds to help plug snowballing losses, said it plans an average hike of 10.6 won per kilowatt hour (kWh) for the industrial electricity price for larger companies starting on Thursday.

Industrial electricity accounted for about 49per cent of total electricity usage in 2022.

But such a hike is still not enough to fully return KEPCO's finances to a manageable level, and at this rate KEPCO may exceed its bond issuance limit next year, analysts said.

KEPCO calculated electricity bills should rise by 45.3 won per kWh this year, up 38per cent from the 2022 average of 120.51 won per kWh, to help return its balance sheet to health.

But the government only approved less than half of that, or 19.4 won per KWh combined, during the first half of this year.

KEPCO also said it plans to sell a 20per cent stake in unit KEPCO KDN, its 38per cent stake in a solar power plant in the Philippines and real estate in Seoul, on top of existing plans to cut costs and sell assets to save more than 25 trillion won by 2026.

(US$1 = 1,304.4500 won)

(Reporting by Joyce Lee; Editing by Ed Davies and Kim Coghill)