Fuel Cost Adjustment Charge
fuel cost adjustment rate · fuel cost pass-through · 연료비조정요금
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.
Under KEPCO's Basic Supply Terms, an electricity bill is the sum of the basic charge, the energy charge, the climate and environment charge, and the fuel cost adjustment charge. The fuel cost adjustment charge is usage multiplied by the fuel cost adjustment rate.
The fuel cost adjustment rate is set by multiplying the gap between the actual fuel cost of recent months and the reference fuel cost by a conversion factor. Fuel cost is measured with trade-statistics prices for power-generation bituminous coal, natural gas and bunker-C oil. The rate is set every quarter, has a ceiling and a floor, and the government can defer its application when fuel costs swing sharply.
News-reading tip: a 'frozen fuel cost adjustment rate' does not mean the fuel cost burden has gone away. The guideline treats amounts beyond the cap and floor, and deferred amounts, as items to be settled later. It is also a retail bill item, a different price from the wholesale SMP.