Second Vice Minister Lee Ho-hyun to chair panel with executives from five power companies and industry experts; committee to discuss merger roadmap ahead of special legislation

Minister of Climate, Environment and Energy Kim Sung-hwan (center) poses for a photo with executives and union members from five state-owned power companies — Korea South-East Power, Korea Southern Power, Korea East-West Power, Korea Western Power and Korea Midland Power — at a meeting on the integration plan held at Korea Electric Power Corporation's Southwest Seoul headquarters in Yeongdeungpo-gu, Seoul, on Sept. 4. [Yonhap]
Minister of Climate, Environment and Energy Kim Sung-hwan (center) poses for a photo with executives and union members from five state-owned power companies — Korea South-East Power, Korea Southern Power, Korea East-West Power, Korea Western Power and Korea Midland Power — at a meeting on the integration plan held at Korea Electric Power Corporation's Southwest Seoul headquarters in Yeongdeungpo-gu, Seoul, on Sept. 4. [Yonhap]

South Korea's Ministry of Climate, Environment and Energy said Wednesday it has launched a preparatory committee to merge the country's five state-owned power generation companies, formally kicking off work toward creating a single consolidated entity.

The Power Public Enterprise Integration Preparatory Committee, chaired by Second Vice Minister Lee Ho-hyun, held its inaugural meeting at the five companies' joint cooperation headquarters in Gangnam-gu, Seoul. The five firms are Korea South-East Power (KOEN), Korea Southern Power, Korea East-West Power, Korea Western Power and Korea Midland Power. The meeting covered the committee's operating rules, a merger roadmap and plans for a post-merger integration management consultancy.

The government announced Sept. 4 that it would consolidate the five companies into a single entity to be called Korea Power. It cited overlapping investments and a lack of economies of scale resulting from the firms operating as separate legal entities.

The merged company will establish a renewable energy division to handle large-scale projects such as offshore wind, and a just-transition division to oversee the phase-out of coal-fired generation. Three to four regional divisions will also be set up to manage local renewable energy projects including solar and onshore wind, with 25 percent of total staff distributed across those regional units.

The government has decided not to set separate targets for workforce or financial restructuring following the merger, drawing criticism that the public institution reform effort may fall short.

The committee's launch follows the government's announcement of the integration plan. Before relevant special legislation is enacted, the panel will discuss key matters including the merged company's organizational structure, staffing arrangements, operating systems, integration procedures and overseas business operations. Members will include government officials, vice presidents from each of the five power companies, and private-sector experts in energy, power, finance, labor, law and information technology.

The ministry also plans to meet with labor organizations representing workers at the state power companies — including the National Federation of Power Industry Trade Unions, the National Federation of Public and Social Services Workers' Unions and the Korea Power Industry Workers' Union — to share the results of the committee's inaugural meeting and discuss ways to support the establishment of a regular labor-management communication channel.

"Integrating the state power companies means restructuring the five firms' capabilities and business systems to fit the future energy landscape," Second Vice Minister Lee said. "What we are aiming for is not simply a larger power company, but a stronger energy enterprise that stably and efficiently supplies electricity while leading the way on carbon neutrality and energy security."

Lee added that the committee would carefully examine the key issues in the integration process and ensure thorough preparation to achieve those goals.


oskymoon@heraldcorp.com