State-run Korea Electric Power Corp (KEPCO) will leave electricity rates unchanged for the fourth quarter, extending a tariff freeze even as rising fuel costs and heavy debt weigh on the utility's finances, according to the company.

KEPCO announced on September 21 that the fuel-cost adjustment charge, a core component of power bills, will stay at 5 won/kWh ($0.0036/kWh) for the October-December quarter, the upper limit permitted under the existing pricing framework.

This charge has remained capped at this level for 18 straight quarters since the third quarter of 2022.

The quarterly fuel-cost adjustment is calculated based on coal and LNG price movements over the prior three months, with a permitted band of minus 5 won to plus 5 won/kWh.

KEPCO noted its pricing formula would have dictated a 7.3 won/kWh hike for the fourth quarter, yet the regulatory cap blocks this increase.

The tariff freeze will further strain KEPCO's finances. The utility booked massive losses after selling power below production costs during the global energy price spike from 2021 to 2023, triggered by the Russia-Ukraine conflict.

Combined debt at KEPCO and its power generation subsidiaries reached 210.7 trillion won, equivalent to roughly $152.31 billion, at the end of the first half of this year.