Plan to Integrate Five KEPCO Power Generation Subsidiaries

Ahn Ho-young and North Jeolla Lawmakers Propose New Bill
Merging South-East, Southern, East-West, Western, and Midland Power into Korea Power Corporation
Headquarters and 32 Trillion Won Renewable Energy Transition Division to Be Established in North Jeolla

National Assembly members from the North Jeolla region are set to propose a bill that would merge five power generation subsidiaries under Korea Electric Power Corporation (KEPCO) into a single entity, with the unified corporation's main headquarters and renewable energy transition division to be located in North Jeolla.

Ahn Ho-young, a lawmaker from the Democratic Party of Korea, announced on August 23 that together with around 10 other North Jeolla lawmakers, he will sponsor the “Korea Power Corporation Act” on August 24. The bill aims to consolidate Korea South-East Power, Korea Southern Power, Korea East-West Power, Korea Western Power, and Korea Midland Power into a new entity called the Korea Power Corporation.

Currently, these five power generation companies are each responsible for power generation and electricity resource development. The bill’s purpose is to bring the divided public power generation functions under one corporation, so that expanding renewable energy and converting existing power sources can be promoted within a unified framework.

The division of the five power generation companies began with power industry restructuring in 2001. At that time, the generation sector was separated from KEPCO, splitting off five thermal power companies and Korea Hydro & Nuclear Power, and introducing competition to the electricity market. Since then, merging the power subsidiaries has been discussed several times. In 2006, labor unions at the power companies even went on strike demanding consolidation, and in 2010, a Korea Development Institute (KDI) study considered both maintaining the five-company system and partial consolidation.

This year, at the government level, merging the five power generation companies into a single corporation has emerged as a major restructuring plan. It would be the first overhaul of the power generation subsidiary system in 25 years since the division in 2001.

The new bill focuses on providing a legal basis for these changes and establishing North Jeolla as the base for the integrated power corporation.

According to the bill, the Korea Power Corporation’s main office and “Renewable Energy Transition Headquarters” would be located in North Jeolla Special Self-Governing Province. The Korea Power Corporation would be responsible for electricity resource development and power generation, expanding and deploying renewable energy generation, conducting related research and technology development, overseas projects, and investment and contribution projects.

Specifically, the Renewable Energy Transition Headquarters would be dedicated to expanding renewable energy and converting existing power sources. Its accounting would be separated from the rest of the corporation’s finances, so that funds required for the energy transition could be continually allocated to relevant projects.

For North Jeolla, a key point is the opportunity to connect projects such as the Saemangeum renewable energy initiative and the hydrogen and carbon industries with the unified power corporation’s capabilities. Ahn stated that through this, North Jeolla would be established as a hub for renewable energy and the future electricity industry.

The bill sets the capital of Korea Power Corporation at 32 trillion won, with the government required to contribute more than 51 percent of the capital. This is designed to ensure government responsibility as a public institution. Profits and special reserves generated by the Renewable Energy Transition Headquarters for the purpose of energy transition would be used for renewable energy facility investment and related research and development.

The bill also addresses employment issues that may arise during the dismantling of coal power plants or conversion of power sources. It requires measures to ensure employment stability and job transitions for workers impacted by plant closures or conversions, and allows the state and the corporation to provide support for job training, career changes, and re-employment.

To prevent any gaps in business operations or staffing during the transition, the bill stipulates that the new Korea Power Corporation will succeed to all assets, rights, obligations, and debts of the five current power generation companies, as well as take over current employees and ongoing projects.

If the merger goes ahead, major tasks will include not only organizational restructuring, but also harmonizing wage and benefits systems, managing labor relations, and relocating the headquarters. Recently, related discussions have highlighted the need to unify wage and welfare systems of the five companies and to reorganize the labor force, which amounts to about 10,000 workers.

Representative Ahn Ho-young stated, “To respond to the climate crisis and ensure a stable electricity supply, there is a need to bring together the currently fragmented public power generation capabilities. We will make Korea Power Corporation a national implementation body responsible for expanding renewable energy and converting existing power sources.”

He added, “By situating the headquarters and the Renewable Energy Transition Headquarters in North Jeolla, we will be able to link the Saemangeum renewable energy project with North Jeolla’s hydrogen and carbon industries. This will serve as an opportunity for North Jeolla to become a center for energy transition and the future electricity industry.”

This content was produced with the assistance of AI translation services.