A person passes by the headquarters of Korea Electric Power (KEPCO) in Seoul, Aug. 16. 2022. Newsis

The state-run Korea Electric Power Corp. (KEPCO) said Wednesday it will raise electricity rates for industrial use while freezing those for households starting this week amid global energy price volatility and escalating financial strains.

Under the decision, the electricity rate for industrial use will rise 9.7 percent on average Thursday, while those for households and small stores will remain unchanged.

"The adjustment reflects rising production costs, while taking inflation and the livelihoods of the people into consideration," KEPCO said in a statement.

"It is also inevitable to raise the rates to maintain and repair essential infrastructure, and build foundations for cutting-edge industries, including chips and artificial intelligence," the company added.

In detail, the rate for large businesses will rise 10.2 percent, and that for small and medium-sized companies will increase 5.2 percent.

KEPCO noted that the decision will affect 1.7 percent of total users, which account for 53.2 percent of electricity demand.

KEPCO posted a combined loss of 43 trillion won ($31.05 billion) from 2021 to 2023, as the company had not been able to raise electricity bills enough to cover high fuel costs amid the COVID-19 pandemic and rising inflation.

The company's debt totaled 202.9 trillion won as of June, up 440 billion won from the end of 2023.

"KEPCO has been adjusting electricity rates in steps to address the accumulating losses and secure funds to invest in the power grid," the company said, noting it will also continue to thoroughly roll out self-rescue measures to normalize its financial health. (Yonhap)