Steel Petitioner Says Commerce Won't Investigate Time of Use Electricity Systems as Subsidies

After the Commerce Department once again refused in an administrative review to investigate an alleged countervailable subsidy provided by the South Korean government, the original investigation’s petitioner claimed the department’s results upon remand (see 2408160038) actually showed a reluctance on Commerce's part to investigate time of use electricity supply systems that can sustain themselves annually (Nucor Corp. v. U.S., CIT # 21-00182).

Petitioner Nucor Corp., a U.S. steel producer, alleges that the Korean government-owned electricity provider KEPCO provides steel exporters electricity during off-peak hours that were much lower than the cost of supply (see 2303070039).

CIT has remanded the decision three times (see 2309050074 and 2404290036), pointing out that the barrier for initiating subsidy investigations is purposefully low and saying Commerce failed to explain why Nucor’s evidence was insufficient. Commerce has remained reluctant, pointing out that the U.S. Court of Appeals for the Federal Circuit has held KEPCO’s off-peak electricity prices aren’t countervailable.

But "the Third Remand Redetermination suggests that the agency’s actual problem with Nucor’s allegation were not evidentiary at all, but rather were tied to the agency’s refusal to consider whether individual prices in a [time of use] system may be subsidized prices, ‘in isolation of the overarching tariff schedule,’” Nucor said.

It claimed that Commerce has, in the past, been unreasonably unwilling to investigate time of use systems “when the broader tariff schedule, in the aggregate, ‘is designed to generate [annual] revenue [sufficient] to cover [the government supplier’s] costs plus a return to ensure future operations.’”

Commerce has instead primarily attempted to dismiss Nucor’s evidence by pointing to the petitioner’s failure to provide KEPCO cost data not available to the public and to “sweeping references to a universe [of] unspecified information that purportedly undermines the evidence that Nucor provided,” Nucor said.

In particular, the department said Nucor hadn’t shown that KEPCO’s off-peak prices weren’t consistent with prevailing market conditions. But this requirement isn’t in the statute, and both Commerce itself and CAFC have rejected this sort of analysis in favor of one regarding “market principles,” which the petitioner called a “cost-plus-profit standard.”

It also pointed out that because KEPCO is the only electricity provider in South Korea, “KEPCO and its subsidiaries are the prevailing market conditions in Korea.”