North Korean authorities recently implemented an experimental measure in Pyongyang aimed at increasing the state’s collection of electricity fees to pay for the opening of a major tourism zone, Daily NK sources in Pyongyang reported on Jan. 10.
“An order handed down to parts of Pyongyang, including residences located near the Mirae Scientists Street, on Jan. 4 compels households who use more electricity than normal to pay a set fee for the privilege,” one source told Daily NK.
Pyongyang sources reported that the National Electricity Regulatory Committee, which is under the Cabinet’s Ministry of Electrical Industry, now requires households in parts of Pyongyang to pay a monthly fee of USD 50 for using extra electricity.
In addition, households must pay at least six months’ worth of electricity in advance to cover “maintenance and application fees,” sources said.
“The government needs more foreign currency so that’s why they are requiring people to pay in USD,” another Pyongyang source explained. “From the government’s perspective, they’re killing two birds with one stone: they increase control over how electricity is used and also collect more foreign currency.”
Daily NK sources also suggested that the new measure reflected North Korean leader Kim Jong Un’s orders during the country’s year-end Workers’ Party of Korea plenary session for the Cabinet to strengthen control over various enterprises in the country’s economy.
MANY PYONGYANGITES LITTLE IMPACTED BY NEW MEASURE
In the past, North Korean households paid low, state-subsidized fees for electricity, but from 2017 North Korea began requiring households to install electricity meters. This allowed the government to collect electricity fees on all of the electricity the households used.
Severe electricity shortages, however, prevented most households in Pyongyang from receiving much electricity and the impact of this progressive electricity tariff system was minimal.
Facing shortages in electricity, North Koreans with the financial means began paying bribes to obtain electricity from power stations that normally supplied electricity to factories or the military. North Koreans have long called this practice “pirating electricity.”
The crack down on this practice will have little impact on many North Koreans in Pyongyang; the illicit payments for electricity they paid will now simply enter the coffers of the state instead of local managers at power stations.
“North Koreans living in central Pyongyang have long participated in a progressive electricity tariff system so the new measure doesn’t mean much,” one source said. “Although they now have to pay slightly more, this doesn’t really matter because most of them are high-level officials. Some of them have noted that things have actually become more convenient because their payments are now above board.”
NEW ELECTRICITY FEES TO FINANCE OPENING OF MAJOR TOURISM ZONE
Daily NK sources also reported that the regime’s change in policy appears to be part of hurried efforts to raise enough money for the opening ceremony of the Wonsan-Kalma Coastal Tourist Zone, which is expected to be held on or around April 15, Kim Il Sung’s birthday.
“The foreign currency collected by the National Electricity Regulatory Committee will be put to use immediately in constructing the Wonsan-Kalma Coastal Tourist Zone,” another Pyongyang-based source told Daily NK. “The authorities seem to have raised electricity rates on Pyongyang residents just to get more funds for the construction.”
Sources suggested that North Korea may expand the electricity measure to other parts of the country if it succeeds during its “test run” in Pyongyang. The provincial Party committees in Ryanggang and Jagang provinces have reportedly expressed interest in similar pilot programs.
Some Daily NK sources expressed ambivalence that the program will be expanded outside of Pyongyang.
“North Korea has only a limited supply of electricity so it will be difficult for the state to provide all households with the electricity they need,” one source said, adding that “The measure likely will face obstacles in expanding nationwide because the advance payment the National Electricity Regulatory Committee charges [USD 50 per month] is prohibitively high for most North Koreans.”
*Translated by Violet Kim
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