You press the switch and the light comes on. We do this dozens of times a day and think almost nothing of it — until the moment comes when the light does not. It is the same when you turn on the boiler on a winter morning. A blue flame rises quietly, the room warms, and we burrow back under the covers. Not many people wonder where that flame came from, or how it found its way here.
In the last story I wrote about walls. The wall the state builds with law, and the expressions Kangwon Land and KT&G wear as they live inside it. Today's wall is of a somewhat different kind. What built this one is not law but something closer to nature. To be precise, it might be better to call it the logic of things.
Think of power lines. Or of the gas mains running beneath the city. Nobody lays a second power grid across a country, or buries a second layer of gas pipe. That would simply be waste. So a business like this can only ever be one, from the very beginning. Not one because competitors happen to be absent, but one because a second makes no sense at all. Economists call this a natural monopoly. A wall built by nature. The two companies most at home inside that wall are KEPCO and Korea Gas Corporation.
And here something slightly odd happens. These two companies enjoy the most perfect monopolies in the Republic of Korea, and yet in recent years they have lost more money than anyone else in the country. The wall is this sturdy. So why?
A Monopoly That Cannot Set Its Price
Kangwon Land raised its own betting limit. KT&G sets its own cigarette prices. That, at bottom, is the privilege of living inside the wall. The customer has nowhere else to go, so the price is yours to call. KEPCO does not have that privilege. The one who sets the price of electricity is not KEPCO but the government.
The company's entire fate is folded into that fact. KEPCO buys coal and LNG to make electricity. The price of that fuel is set not in Seoul but far away in international markets, lurching without rest to the rhythm of war and weather and exchange rates. The cost, in other words, is set by the market. But the selling price — the electricity rate — is set by the government. For fear of stoking inflation, for fear of the burden on ordinary households, sometimes because an election is near. The reason changes with the occasion, but the conclusion is always the same. A company whose costs are set by the market and whose prices are set by politics. The gap that opens between the two is left, in its entirety, for KEPCO to carry.
In 2022, that gap opened as wide as it would go. Russia invaded Ukraine, and international energy prices went mad. Fuel costs climbed into the sky while electricity rates stayed pinned in place. KEPCO sold electricity for less than it cost to make — a business that lost money with every sale, conducted against an entire nation. Its operating loss that year came to 32.7 trillion won. As a loss posted by a single company in a single year, it was a number this country had never once seen.
| Year (consolidated operating profit/loss) | Amount | The scenery at the time |
|---|
| 2021 | -5.8 trillion won | The gap begins to open |
| 2022 | -32.7 trillion won | Largest loss on record |
| 2023 | -4.5 trillion won | Rate hikes slow the bleeding |
| 2024 | +8.4 trillion won | Back into the black |
| 2025 | +13.5 trillion won | Largest profit in company history |
Over the three years from 2021, the losses KEPCO piled up came to 43 trillion won in all. The money borrowed to fill that hole snowballed until the debt passed 200 trillion won. The interest to be paid runs on the order of 10 billion won a day. The company running the safest monopoly business in the world was shouldering the heaviest debt in the world.
The story of 2025 is a little different. International fuel prices settled down, and the rates that had been raised bit by bit finally took effect. KEPCO posted an operating profit of 13.5 trillion won. The largest surplus in its history. At first glance, a perfect reversal. And yet I cannot quite bring myself to applaud the number. This profit did not come from KEPCO suddenly getting good at business. Fuel got cheaper, and rates went up. Neither was KEPCO's doing. A company whose losses and profits alike are decided outside its own hands. Only the direction of the earnings has changed; the company's situation is exactly what it was. And even in the year of its largest profit ever, the debt still hovered around 206 trillion won.
A Wound Named Receivables
On Korea Gas Corporation's financial statements there is a line item you will rarely find at other companies. In the space marked receivables sits the number 13.8 trillion won. In the ledgers of accounting, a receivable is an asset. Money owed to you; money that will someday find its way into your pocket. But look closely at this 13.8 trillion, and it turns out to be a rather strange asset.
Here is how it happens. Every winter, city gas rates are held below cost — out of fear of the words heating-bill bomb making the rounds of the news. KOGAS then writes the gap between cost and rate into its books, as a promise that rates will someday rise and pay it back. That is the receivable. Put another way, this asset is the heating bills we have underpaid all this time. And it is also the heating bills we will someday pay again. It is the whole nation's tab, carried on KOGAS's back in our place.
| Indicator (2025, consolidated) | Figure | A note in passing |
|---|
| Revenue | approx. 35,727.3 billion won | Unit sales price -8.3% on lower oil prices |
| Operating profit | approx. 2,101.2 billion won | -902.2 billion won vs. prior year |
| Net profit | approx. 132.3 billion won | -89% vs. prior year; interest swallowed the earnings |
| Residential fuel-cost receivables | approx. 13,864.9 billion won | In effect, the nation's tab |
In 2025 KOGAS posted an operating profit of 2.1 trillion won. Look only at that number and everything seems fine. But go one line down and net profit shrinks to 132.3 billion won — 89% less than the year before. The interest charged on its debt swallowed most of the earnings. The debt ratio stands at 397%. Improved, they say, and still a dizzying number. And through it all, the 13.8 trillion won in receivables sits nearly undiminished, waiting quietly on the ledger to heal. For a wound like that to close, several more winters will be needed.
The Wall Does Not Protect the Profits
Kangwon Land and KT&G, in the last story, were comfortable inside their wall. The wall kept the competitors out, the price was theirs to call, and so the money came in. The wall around KEPCO and KOGAS is different. This wall, too, keeps competitors out perfectly. It simply does not protect the profits as well. If anything, it is because they are inside this wall that they cannot run away, however hard things get.
Stop and think about it, and the structure is strange. Electricity and gas are things that must not stop. You cannot cut the heating in midwinter, and you cannot bring down the lights in a hospital. So these companies cannot stop supplying, no matter how deep the loss. When international fuel prices explode, the shock ought, by rights, to arrive on each of our utility bills. But the government does not load the whole shock onto the rates. Instead, KEPCO and KOGAS stand in between and absorb most of it with their own bodies. The 43 trillion won in losses and the 13.8 trillion won in receivables are, in truth, other names for the cold we never had to feel, winter after winter.
So when you look at these two companies, you have to look past the top line of the income statement to the people standing behind it. Their profits are not entirely theirs, and their losses are not entirely their fault. A monopoly inside the wall that cannot set its price. A company perfectly protected and, at the same time, perfectly pinned in place. In companies like these I sense something like a lonely dignity. The back of a giant, standing in a place where no one says thank you, silently taking the country's cold in its stead.
The Place They Call a Workplace of the Gods
How snug it is inside a fence like this, you can tell from how long the people stay.
| Company | Employees | Average annual pay | Average tenure | Revenue per employee | Operating profit per employee |
|---|
| KEPCO* | 22,875 (parent) | approx. 94 million won | 15.0 years | approx. 4.18 billion won | approx. 370 million won |
| Korea Gas Corporation | 4,289 | approx. 100 million won | 16.5 years | approx. 8.33 billion won | approx. 490 million won |
*Excludes staff at generation subsidiaries. Per-employee figures are rough estimates on a non-consolidated basis.
The money one person at Korea Gas Corporation turns over in a year is 8.3 billion won, the largest figure anywhere in this series. That is the density of a company that imports a nation's fuel whole; and yet what remains per person is less than 500 million won, and even that rests on the tab called receivables.
At both companies, average tenure is around fifteen years, and pay runs from 90 million to about 100 million won. There is a reason people call them ‘workplaces of the gods’. A structure in which politics sets the price and a loss changes only the CEO comes back around, ironically, to the employees as a stability that hardly ever shakes. The wall may fail to protect the company's profits, but it protects the seats of the people inside.
The next story is about yet another wall. This time it was built neither by the state nor by nature, but by our own hands. KakaoTalk and Naver, the apps we open every morning without a thought. The wall called habit — just how solid is it?
This piece is part of the "Korea Value Chain" series and is an original work. It is an analysis based on public data and industry sources; some figures and assessments are estimates. It is not intended as a direct basis for investment decisions.
By Alexandro Lee · July 2026
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