From the rice cooker switch to the bill — five stops on the road of one kWh

A weekday evening in September, 7 p.m. You come home from work, turn on the hall light and press the switch on the rice cooker. One button takes less than 1 second.

In that 1 second, 1 kWh of electricity (the unit that counts how much electricity you used, the same one printed on your bill) sets out from a power plant somewhere far away, gets a price in the market, and comes back a month later as one line on your bill. The road behind one switch fits on a single map with five stops. Once you have drawn that map, you can see which stop a number in the power news is talking about.

Where did this 1 kWh come from?

The moment you press the switch, a generator at a power plant somewhere far away works that much harder. At the plant, electricity is raised to a high voltage and rides the transmission lines. Near your neighborhood the voltage is lowered, and the power reaches your home by way of the utility poles. It is a road much like parcel delivery. Goods leave the factory, run down the highway, pass through a distribution center, and a small delivery van in the alley drops them at your door.

Unlike a parcel box, though, electricity does not carry the sender's address. Power from many plants mixes in one web. What is certain is this: this 1 kWh was not stored anywhere in advance. It was made at the very moment the rice cooker came on.

What changes because it is 7 p.m.?

The same 1 kWh has a different market price depending on the hour you use it. On the 2026 September mainland average, 1 kWh at 4 a.m. was 97.6 won (won is the Korean currency), and at 7 p.m. it was 137.8 won (each hour is labeled by when it ends, so "7 p.m." is the value for the hour from 6 p.m. to 7 p.m.).¹Source 1Korea Power Exchange (KPX), *System Marginal Price and Demand Forecast OpenAPI* (「계통한계가격 및 수요예측 OpenAPI」, Public Data Portal 15131225; unofficial translation)2026 September mainland hourly averages, Renuary calculation. Each hour is labeled by when it ends.See in sources →1 Korea Power Exchange (KPX), *System Marginal Price and Demand Forecast OpenAPI* (「계통한계가격 및 수요예측 OpenAPI」, Public Data Portal 15131225; unofficial translation) — 2026 September mainland hourly averages, Renuary calculation. Each hour is labeled by when it ends. It is the hour when people come home and switch everything on at once, so the market had to turn on even the expensive generators.

That price is set by the last generator switched on in that hour. Cheap nuclear plants and expensive gas plants get the same price in the same hour: the SMPSMP (System Marginal Price) SMP is the energy price set for each trading hour in the power market. It is the highest generation price among the generators eligible to set the price in that hour. Glossary → (system marginal price), the wholesale price set every hour. The 1 kWh at 7 p.m. passes through the market carrying the price of the last single unit switched on in that hour.

Is that price all a power plant gets?

The money a power plant receives is not just the SMP. For busy moments like 7 p.m., generators that sit idle most of the time are kept ready too. So there is separate money paid for keeping them ready: the capacity paymentCapacity Payment (CP) A capacity payment is paid for the available capacity a generator bids, apart from its output. It covers fixed costs, such as construction, that SMP alone can hardly recover. Glossary →.

Some generators, on the other hand, receive less. Coal plants owned by KEPCO's subsidiaries, among others, get the same SMP, but a settlement adjustment factorSettlement Adjustment Factor It adjusts the settlements of generators at KEPCO majority-owned companies and of central-dispatch coal units. The rules place it among measures for power price stability. Glossary → shrinks the part of their money that goes beyond fuel costs (what is left after fuel costs are taken out). Which plants the factor covers, and why, is not worked out in this piece. There is one market price, but the money each plant takes home differs. That is because each plant has its own amounts added on top of the market price and taken away from it.

Who buys that 1 kWh, and who sells it to whom?

The buyer of electricity priced this way in the market is usually KEPCO (Korea Electric Power Corporation). KEPCO then sells it on to your home. It is like a shop that buys wholesale and sells retail.

But this shop cannot set its selling price as it likes. The selling price is set not by the market but by government approval. KEPCO writes the terms of supply, which list the tariffs and supply conditions. The Electricity Regulatory Commission looks at them first (review), and the minister gives permission (approval).²Source 2Ministry of Government Legislation, National Law Information Center, *Electric Utility Act* (「전기사업법」), Art. 16approval of the basic terms of supply and review by the Electricity Regulatory Commission.See in sources →2 Ministry of Government Legislation, National Law Information Center, *Electric Utility Act* (「전기사업법」), Art. 16 — approval of the basic terms of supply and review by the Electricity Regulatory Commission. So even when the market price at 7 p.m. is 137.8 won, the price your home pays for 1 kWh does not go up because it is evening. The buying price swings every hour; the selling price is tied to an approved table and does not move hour by hour. Only the fuel cost adjustment line in that table changes, every three months. This mismatch is the background to "KEPCO deficit" headlines. This piece does not work out how much is gained or lost.

How does it show up on the bill?

Take a household that uses 300 kWh a month (an assumption). The 1 kWh at 7 p.m. is added in as one of that month's 300 kWh. The residential (low voltage) tariff this piece works out is charged not by what hour you used power but by how much you used in a month. The 7 p.m. tag disappears the moment it reaches the bill.

300 kWh is on the second step (201–400 kWh) of the progressive tariffProgressive tariff A progressive tariff charges a higher unit price for the extra electricity used as consumption rises. Glossary →. In any month other than July and August (the July–August steps are not covered in this piece), the tariff table in use since November 9, 2023 gives a basic charge of 1,600 won, 120.0 won for each of the first 200 kWh, and 214.6 won for each of the 100 kWh above that.³Source 3Korea Electric Power Corporation (KEPCO), *Residential Power (Low Voltage) Tariff Table* (「주택용 전력(저압) 요금표」, effective 2023-11-09; unofficial translation)basic charge 1,600 won (201–400 kWh), energy charge 120.0· 214.6 won/kWh.See in sources →3 Korea Electric Power Corporation (KEPCO), *Residential Power (Low Voltage) Tariff Table* (「주택용 전력(저압) 요금표」, effective 2023-11-09; unofficial translation) — basic charge 1,600 won (201–400 kWh), energy charge 120.0· 214.6 won/kWh.

• Basic charge → 1,600 won
• 200 kWh × 120.0 won → 24,000 won
• 100 kWh × 214.6 won → 21,460 won
• Basic charge plus energy charge → 47,060 won (not yet the bill total; the lines below are added on)

On top of this comes the fuel cost adjustment chargeFuel Cost Adjustment Charge A bill item that passes changes in generation fuel prices through to electricity bills. Each month it adds usage multiplied by the fuel cost adjustment rate. Glossary →, shown as a separate line on the bill since 2021.⁴Source 4Ministry of Trade, Industry and Energy, *Cost-Linked Tariff System* (「원가연계형 요금체계」, 2020-12-17; unofficial translation), press releaseintroduction of the fuel cost adjustment charge.See in sources →4 Ministry of Trade, Industry and Energy, *Cost-Linked Tariff System* (「원가연계형 요금체계」, 2020-12-17; unofficial translation), press release — introduction of the fuel cost adjustment charge. It is a line that follows fuel prices and changes every three months. At the Q4 2026 rate of 5.0 won, it is 1,500 won for 300 kWh.⁵Source 5Korea Electric Power Corporation (KEPCO), *Fuel Cost Adjustment Rate for Q4 2026* (「2026년 4분기 연료비조정단가」, 2026-09-21; unofficial translation), noticefinal rate 5.0 won/kWh.See in sources →5 Korea Electric Power Corporation (KEPCO), *Fuel Cost Adjustment Rate for Q4 2026* (「2026년 4분기 연료비조정단가」, 2026-09-21; unofficial translation), notice — final rate 5.0 won/kWh. Then the Electric Power Industry Basis Fund levy of 2.7% and value-added tax of 10% are added on top.⁶Source 6Ministry of Government Legislation, National Law Information Center, *Electric Utility Act* (「전기사업법」), Art. 51· Enforcement Decree of the same Act, Art. 36 (Electric Power Industry Basis Fund levy, 27 per 1,000 of the electricity bill)· KEPCO Basic Terms of Supply, Arts. 67 and 82 (tariff components, separate billing of the fund; unofficial translation).See in sources →6 Ministry of Government Legislation, National Law Information Center, *Electric Utility Act* (「전기사업법」), Art. 51· Enforcement Decree of the same Act, Art. 36 (Electric Power Industry Basis Fund levy, 27 per 1,000 of the electricity bill)· KEPCO Basic Terms of Supply, Arts. 67 and 82 (tariff components, separate billing of the fund; unofficial translation). There is one more line this piece does not work out: the climate and environment charge. It charges what KEPCO has paid in climate and environment costs, which include the cost of meeting the renewable energy supply obligation, the cost of meeting the emissions trading scheme, the cost of running coal plants less under policies such as the seasonal fine dust management program, and the Energy Cash Back support payments for households that save power.⁷Source 7Korea Electric Power Corporation (KEPCO), *Guidelines for Operating the Climate and Environment Charge, Appendix 7 to the Terms of Supply* (「전기공급약관 별표7 기후환경요금 운영지침」, Cyber Branch posting, last supplementary provision 2023-05-15; unofficial translation)the four cost items. Whether later amendments are reflected was not confirmed.See in sources →7 Korea Electric Power Corporation (KEPCO), *Guidelines for Operating the Climate and Environment Charge, Appendix 7 to the Terms of Supply* (「전기공급약관 별표7 기후환경요금 운영지침」, Cyber Branch posting, last supplementary provision 2023-05-15; unofficial translation) — the four cost items. Whether later amendments are reflected was not confirmed. So a bill has six lines. The lines this piece works out are the basic charge, the energy charge and the fuel cost adjustment charge. For the Electric Power Industry Basis Fund levy and value-added tax it gives only the rates, and the climate and environment charge it leaves unworked. Inside these six lines, the 1 kWh at 7 p.m. and the 1 kWh at 4 a.m. cost the same.

What should you watch for when using these numbers?

• 97.6 won and 137.8 won are simple hourly averages over the single month of September 2026. The 7 p.m. price on any one day can be quite different.¹Source 1Korea Power Exchange (KPX), *System Marginal Price and Demand Forecast OpenAPI* (「계통한계가격 및 수요예측 OpenAPI」, Public Data Portal 15131225; unofficial translation)2026 September mainland hourly averages, Renuary calculation. Each hour is labeled by when it ends.See in sources →1 Korea Power Exchange (KPX), *System Marginal Price and Demand Forecast OpenAPI* (「계통한계가격 및 수요예측 OpenAPI」, Public Data Portal 15131225; unofficial translation) — 2026 September mainland hourly averages, Renuary calculation. Each hour is labeled by when it ends.
• The SMP is the wholesale price a power plant gets in the market, not the price a home pays for 1 kWh. If you set the two side by side and work out "how much KEPCO keeps" straight away, you will get it wrong. In between sit capacity payments, settlement adjustments, and the transmission and distribution costs of building and maintaining lines and substations.
• The 300 kWh household sum counts only the basic charge and energy charge. The climate and environment charge is left out, and the fuel cost adjustment, the fund levy and VAT are written up separately.

Which stop on the map is a number in the news?

Follow one 1 kWh at 7 p.m., and the map comes out like this.

• The road: power is used the moment it is made, and carries no tag saying where it came from.
• The market price: the last single unit in that hour sets the price, and it is high on busy evenings.
• The money a plant receives: payment for being ready and factors that take money away change what each plant gets.
• The price KEPCO sells at: the buying price swings, and the selling price is tied down by government approval.
• The bill: steps and add-ons set the price of a month.

When you read power news, first ask which stop on this map the number is about. Is it a story about the power plant, about the market price, or about one line on the bill?

The road is still under construction. The way renewable energy is grown and the way tariffs are set are still changing. But even when the names change, the frame stays the same. Electricity is hard to store, the last unit sets the price, plants are kept ready for the busiest moment, and tariffs are set by government approval. Once you know the frame, you see only what has changed.

Tomorrow at 7 p.m., when you press the rice cooker switch, you may see a little of the long road behind that 1 second. And then the very first stop starts to make you curious. How long is that wire, and why is the voltage raised so high only to be lowered again?

Words in this piece

• SMPSMP (System Marginal Price) SMP is the energy price set for each trading hour in the power market. It is the highest generation price among the generators eligible to set the price in that hour. Glossary → — the wholesale price of electricity, set every hour. It is set by the price of the last generator switched on in that hour.
• capacity paymentCapacity Payment (CP) A capacity payment is paid for the available capacity a generator bids, apart from its output. It covers fixed costs, such as construction, that SMP alone can hardly recover. Glossary → — money paid, separately from the price of electricity sold, for plants kept ready to run at any time.
• settlement adjustment factorSettlement Adjustment Factor It adjusts the settlements of generators at KEPCO majority-owned companies and of central-dispatch coal units. The rules place it among measures for power price stability. Glossary → — a factor that shrinks the part beyond fuel costs in the money received by coal plants owned by KEPCO's subsidiaries, among others.
• progressive tariffProgressive tariff A progressive tariff charges a higher unit price for the extra electricity used as consumption rises. Glossary → — a residential tariff method where the unit rate for the part above each step goes up as use climbs past the steps.
• fuel cost adjustment chargeFuel Cost Adjustment Charge A bill item that passes changes in generation fuel prices through to electricity bills. Each month it adds usage multiplied by the fuel cost adjustment rate. Glossary → — a bill line that reflects the rise and fall of power plant fuel prices every three months.

¹Source 1Korea Power Exchange (KPX), *System Marginal Price and Demand Forecast OpenAPI* (「계통한계가격 및 수요예측 OpenAPI」, Public Data Portal 15131225; unofficial translation)2026 September mainland hourly averages, Renuary calculation. Each hour is labeled by when it ends.See in sources →1 Korea Power Exchange (KPX), *System Marginal Price and Demand Forecast OpenAPI* (「계통한계가격 및 수요예측 OpenAPI」, Public Data Portal 15131225; unofficial translation) — 2026 September mainland hourly averages, Renuary calculation. Each hour is labeled by when it ends.: Korea Power Exchange (KPX), ^*1More precisely *1System Marginal Price and Demand Forecast OpenAPI**1 System Marginal Price and Demand Forecast OpenAPI*(https://www.data.go.kr/data/15131225/openapi.do) (「계통한계가격 및 수요예측 OpenAPI」, Public Data Portal 15131225; unofficial translation) — 2026 September mainland hourly averages, Renuary calculation. Each hour is labeled by when it ends. ²Source 2Ministry of Government Legislation, National Law Information Center, *Electric Utility Act* (「전기사업법」), Art. 16approval of the basic terms of supply and review by the Electricity Regulatory Commission.See in sources →2 Ministry of Government Legislation, National Law Information Center, *Electric Utility Act* (「전기사업법」), Art. 16 — approval of the basic terms of supply and review by the Electricity Regulatory Commission.: Ministry of Government Legislation, National Law Information Center, ^*2More precisely *2Electric Utility Act**2 Electric Utility Act*(https://www.law.go.kr/법령/전기사업법/제16조) (「전기사업법」), Art. 16 — approval of the basic terms of supply and review by the Electricity Regulatory Commission. ³Source 3Korea Electric Power Corporation (KEPCO), *Residential Power (Low Voltage) Tariff Table* (「주택용 전력(저압) 요금표」, effective 2023-11-09; unofficial translation)basic charge 1,600 won (201–400 kWh), energy charge 120.0· 214.6 won/kWh.See in sources →3 Korea Electric Power Corporation (KEPCO), *Residential Power (Low Voltage) Tariff Table* (「주택용 전력(저압) 요금표」, effective 2023-11-09; unofficial translation) — basic charge 1,600 won (201–400 kWh), energy charge 120.0· 214.6 won/kWh.: Korea Electric Power Corporation (KEPCO), ^*3More precisely *3Residential Power (Low Voltage) Tariff Table**3 Residential Power (Low Voltage) Tariff Table*(https://cyber.kepco.co.kr/ckepco/front/jsp/CY/E/E/CYEEHP00101.jsp) (「주택용 전력(저압) 요금표」, effective 2023-11-09; unofficial translation) — basic charge 1,600 won (201–400 kWh), energy charge 120.0 · 214.6 won/kWh. ⁴Source 4Ministry of Trade, Industry and Energy, *Cost-Linked Tariff System* (「원가연계형 요금체계」, 2020-12-17; unofficial translation), press releaseintroduction of the fuel cost adjustment charge.See in sources →4 Ministry of Trade, Industry and Energy, *Cost-Linked Tariff System* (「원가연계형 요금체계」, 2020-12-17; unofficial translation), press release — introduction of the fuel cost adjustment charge.: Ministry of Trade, Industry and Energy, ^*4More precisely *4Cost-Linked Tariff System**4 Cost-Linked Tariff System*(https://www.motir.go.kr/kor/article/ATCL3f49a5a8c/163646/view) (「원가연계형 요금체계」, 2020-12-17; unofficial translation), press release — introduction of the fuel cost adjustment charge. ⁵Source 5Korea Electric Power Corporation (KEPCO), *Fuel Cost Adjustment Rate for Q4 2026* (「2026년 4분기 연료비조정단가」, 2026-09-21; unofficial translation), noticefinal rate 5.0 won/kWh.See in sources →5 Korea Electric Power Corporation (KEPCO), *Fuel Cost Adjustment Rate for Q4 2026* (「2026년 4분기 연료비조정단가」, 2026-09-21; unofficial translation), notice — final rate 5.0 won/kWh.: Korea Electric Power Corporation (KEPCO), ^*5More precisely *5Fuel Cost Adjustment Rate for Q4 2026**5 Fuel Cost Adjustment Rate for Q4 2026*(https://www.kepco.co.kr/home/media/newsroom/notice/boardView.do?boardMngNo=14&boardNo=2759) (「2026년 4분기 연료비조정단가」, 2026-09-21; unofficial translation), notice — final rate 5.0 won/kWh. ⁶Source 6Ministry of Government Legislation, National Law Information Center, *Electric Utility Act* (「전기사업법」), Art. 51· Enforcement Decree of the same Act, Art. 36 (Electric Power Industry Basis Fund levy, 27 per 1,000 of the electricity bill)· KEPCO Basic Terms of Supply, Arts. 67 and 82 (tariff components, separate billing of the fund; unofficial translation).See in sources →6 Ministry of Government Legislation, National Law Information Center, *Electric Utility Act* (「전기사업법」), Art. 51· Enforcement Decree of the same Act, Art. 36 (Electric Power Industry Basis Fund levy, 27 per 1,000 of the electricity bill)· KEPCO Basic Terms of Supply, Arts. 67 and 82 (tariff components, separate billing of the fund; unofficial translation).: Ministry of Government Legislation, National Law Information Center, ^*6More precisely *6Electric Utility Act**6 Electric Utility Act*(https://www.law.go.kr/법령/전기사업법/제51조) (「전기사업법」), Art. 51 · Enforcement Decree of the same Act, Art. 36 (Electric Power Industry Basis Fund levy, 27 per 1,000 of the electricity bill) · KEPCO Basic Terms of Supply, Arts. 67 and 82 (tariff components, separate billing of the fund; unofficial translation). ⁷Source 7Korea Electric Power Corporation (KEPCO), *Guidelines for Operating the Climate and Environment Charge, Appendix 7 to the Terms of Supply* (「전기공급약관 별표7 기후환경요금 운영지침」, Cyber Branch posting, last supplementary provision 2023-05-15; unofficial translation)the four cost items. Whether later amendments are reflected was not confirmed.See in sources →7 Korea Electric Power Corporation (KEPCO), *Guidelines for Operating the Climate and Environment Charge, Appendix 7 to the Terms of Supply* (「전기공급약관 별표7 기후환경요금 운영지침」, Cyber Branch posting, last supplementary provision 2023-05-15; unofficial translation) — the four cost items. Whether later amendments are reflected was not confirmed.: Korea Electric Power Corporation (KEPCO), ^*7More precisely *7Guidelines for Operating the Climate and Environment Charge, Appendix 7 to the Terms of Supply**7 Guidelines for Operating the Climate and Environment Charge, Appendix 7 to the Terms of Supply*(https://cyber.kepco.co.kr/ckepco/front/jsp/CY/D/C/CYDCHP00408.jsp) (「전기공급약관 별표7 기후환경요금 운영지침」, Cyber Branch posting, last supplementary provision 2023-05-15; unofficial translation) — the four cost items. Whether later amendments are reflected was not confirmed.