Nucor Challenges Commerce's Decision Not to Countervail Provision of Electricity Below Cost

The Commerce Department's decision to find that the South Korean government provided electricity below cost for certain tariff classes but still say that electricity provision conferred a non-measurable benefit is illegal, U.S. steel company Nucor Corporation said in a March 25 complaint at the Court of International Trade (Nucor Corporation v. United States, CIT #22-00070).

Nucor filed its case to contest the 2019 administrative review of the countervailing duty order on carbon and alloy steel cut-to-length plate from South Korea. In South Korea, all electricity is supplied through Korean Electric Power Corporation (KEPCO), which buys its electricity from the Korean Power Exchange -- an entity owned by KEPCO. The price of electricity bought through KPX is derived through a formula that uses a variable cost component, fixed cost component and adjustment coefficient factor, which prevents overpayment.

Nucor argued, however, that the price at which KEPCO buys electricity through KPX doesn't reflect the true costs of generating and supplying electricity to third-party users. This is so because the largest electricity generation companies are owned affiliates of KPECO and the prices KEPCO pays to buy electricity from them are determined by government entities, the complaint said. The plaintiff claimed that Commerce did not collect actual information on the actual costs of generating electricity from the generators or the cost assignments of the KPX Cost Evaluation Committee.

Commerce then applied a tier three benefit analysis, which found that KEPCO provides electricity to the CVD review's mandatory respondents at below cost for certain tariff classes. However, the agency determined that this constituted a non-measurable benefit amount. Nucor argued at Commerce, as it does now at CIT, that the agency's data doesn't reflect market-based costs and that basing the analysis on the aggregate performance of KEPCO rather than the prices actually paid by the respondents is illegal.