Korea Electric Power Corp. reported first-half consolidated operating profit of 4.91 trillion won on revenue of 46.32 trillion won, but its second-quarter profit fell 47.2% from a year earlier to 1.13 trillion won, missing the market forecast of about 1.9 trillion won as fuel costs climbed. KEPCO's generation subsidiaries spent 10.14 trillion won on fuel in the first half, up 8.8% from a year earlier, even after a government move in March to expand coal-fired output to reduce reliance on more expensive LNG generation. That shift had limited benefit because international bituminous coal prices rose 24.3% to $128.2 per ton, while the utility said the real pressure is likely to build in the second half as higher LNG prices from the Middle East war flow into domestic power costs with a four-to-five-month lag. Korea Gas Corp.'s gas rate for general power producers rose to 22,726 won per gigajoule in August, up 39% from January, helping push the System Marginal Price above 150 won per kilowatt-hour for six straight days from Aug. 3. The Ministry of Climate, Energy and Environment estimates KEPCO's annual break-even SMP at about 146 won per kilowatt-hour, meaning sustained wholesale prices above that level can turn electricity sales loss-making. KEPCO has raised its internal financial risk status to Warning, its third-highest level, as debt climbed to 210.7 trillion won at the end of the first half and daily interest costs reached 11.5 billion won. The burden is being compounded by grid investment tied to semiconductor clusters and AI data centers, the high cost of underground transmission lines, and delayed electricity rate normalization as the government says it is not yet considering a near-term rate increase.