KEPCO Optional Tariffs I, II and III: Load Factor Decides Which Wins

On a factory electricity bill there is a marking next to the contract type such as "Optional I" or "Optional II". This is not a value KEPCO assigned you but a value the customer chose, and if you have no memory of choosing it, it was set when the electricity supply contract was first signed and has been rolling on ever since. Use the same electricity in the same quantity, and this single character still changes your annual total.

What is the optional tariff?

The optional tariff is a scheme in which the customer chooses the combination of unit prices within the same contract type. Article 67(7) of the Basic Terms of Supply (in force 1 July 2026) provides that an optional tariff is applied, at the customer's wish, to customers supplied with electricity at high voltage or above. Your contract type (Industrial (A) or (B)) and your supply voltage (high-voltage A, B or C) are determined by your equipment, but Optional I, II and III are changed by the customer applying.

Put another way, this is one of the few lines you can touch without investing in equipment. Without changing a single habit of use, the charge changes if you simply redo the arithmetic. But once you choose, you are locked in for a year — read "Can we change it straight away if we want to?" below first.

How many choices does our contract type have?

It differs by contract type. Article 67(7), item 1 of the Terms provides as follows.

What is the difference between Optional I, II and III?

The basic charge unit price and the energy charge unit price differ. As the number goes up, the energy charge gets cheaper and the basic charge unit price gets dearer. For Industrial (B) at high-voltage A, the basic charge unit prices are these.

Move from I to II and you pay KRW 1,100 more a month for every 1kW of billing demand. On a 1,000kW contract that alone is KRW 1.1 million a month.

The energy charge moves in the opposite direction. The unit prices differ by season, so the seasons have to be read together. Below, all three seasons are laid out (per kWh).

This is for Industrial (B) at high-voltage A, on the basis of Appendix 1 of the Basic Terms of Supply (the monthly electricity tariff table). The energy charge under Optional II is exactly KRW 5.5 per kWh lower in all nine cells across the three seasons. The price of that is the difference in basic charge unit price above.

In other words, the optional tariff does not become favourable by picking a season or a time band; it is a straight trade in which you pay more basic charge and less energy charge.

Can we change it straight away if we want to?

No. A year has to pass from the date of application before you can change to another optional tariff (Article 67(7), item 3 of the Terms). The optional tariff you apply for takes effect from the date of the change application (item 2 of the same paragraph), so once you choose, you are locked in for a year from that day.

There are exceptions. Article 48(7) of the Implementation Rules provides that where one of the following applies and the customer wishes it, a change can be made within the year as well.

So this is not the kind of judgement you overturn on the spot after looking at one month's bill. It is a decision in which you feed in all of the last 12 months' records, compare annual totals, change once, and then carry the result for a year.

What do we judge the better option by?

Load factor. The basic charge is a fixed cost that goes out even with the equipment standing idle, while the energy charge is a variable cost that goes out only as you use it — so the longer you run relative to the capacity you contracted for, the more the side with the cheaper energy charge wins.

The order therefore runs like this. (1) Look at how much you actually use against your contract power → (2) look at whether your operating hours are concentrated in the off-peak, mid-peak or peak band → (3) put those records straight into the unit prices of each optional tariff and compare the totals.

Can't we just decide on monthly operating hours?

We would not recommend it. A break-even figure such as "over so many hours a month, go to II" is worked back from the unit prices, so when the unit prices change, it moves with them.

On 16 April 2026 the Industrial (B) unit prices did change. Off-peak went up and peak came down, so there is no reason a break-even figure built on the pre-reform basis still holds. What changed and how is set out in the time-of-use tariff reform explained.

Does our plant even have an optional tariff?

Sites supplied at low voltage have no optional tariff. That is because Article 67(7) of the Terms confines the application of optional tariffs to customers supplied with electricity at high voltage or above. If the supply voltage on your bill says low voltage, the judgement in this piece does not apply to you, and you would do better to look at contract power and the structure of the basic charge first.

You can find out whether your site is Industrial (A) or Industrial (B) in the difference between Industrial (A) and Industrial (B).

Where do we get the data the judgement needs?

Two things are enough to do the arithmetic. How to obtain them is set out in how to obtain KEPCO usage data.

How much difference does choosing wrongly make?

Looking at the energy charge side alone, it is the unit price difference above (KRW 5.5 per kWh, on the summer and spring-autumn figures) multiplied by your consumption. As an example, for an Industrial (B) high-voltage A site using 100,000 kWh a month, the energy charge difference between Optional I and Optional II is KRW 550,000 a month, or KRW 6.6 million a year.

But this is a figure that looks at one side only. Optional II has a basic charge unit price KRW 1,100 per kW higher, so the actual gain or loss is that amount less the increase in the basic charge. In the example above, if the billing demand is 500kW, the basic charge rises by KRW 550,000 a month and the difference becomes KRW 0.

So for a plant with low consumption this calculation turns over the other way. There is necessarily a point at which the extra paid on the basic charge exceeds the money saved on the energy charge.

And once you have changed, you cannot go back for a year. If the arithmetic is marginal, not changing is the safer side.