The Ministry of Industry, Trade and Energy said Monday it finalized the new electricity pricing system for residential use. 

Under the new system, bills will be charged in one of three brackets, with the top cumulative rate three times higher than the lowest. The current power rate is determined using six brackets, with the top rate 12 times higher than the lowest.

The ministry projected that the new system would cut power bills by 11.6 percent on average. Households consuming over 600 kilowatt-hours a month will be charged about 37 percent less, while those using over 800 kilowatt-hours a month will have about a 47 percent lower bill, it said.

The government introduced various discount packages to promote power-saving. It will give a discount of 4,000 won ($3.40) per month for households using under 200 kilowatt-hours a month, while offering a 10 percent discount for those reducing power use by over 20 percent on-year for two years.

It will also expand discount packages for low-income households.

The new bill system will retroactively come into effect from this month, the ministry added.

By Lee Hyun-jeong (rene@heraldcorp.com)