[00:00:00] Speaker 01:
Case is Pasco versus United States, 19-1213.

[00:00:47] Speaker 01:
Attorney DeFrancisco, you've reserved five minutes of your time for rebuttal, correct?

[00:00:51] Speaker 04:
Correct, Your Honor.

[00:00:52] Speaker 01:
Okay, we're ready to go when you are.

[00:01:19] Speaker 04:
Good morning, Your Honors.

[00:01:20] Speaker 04:
May it please the Court, Robert DeFranchesco on behalf of Plaintiff Appellant, New Court Corporation.

[00:01:25] Speaker 04:
Your Honors, this is the second of three flat rolled steel cases involving Korea and whether electricity was provided for less than adequate remuneration.

[00:01:35] Speaker 04:
This past June, this Court in New Court v. U.S.

[00:01:38] Speaker 04:
a decision involving corrosion resistant steel, this case involves cold rolled steel.

[00:01:43] Speaker 04:
This court determined that it is no longer sufficient for commerce to rely on preferentiality standard alone when measuring benefit.

[00:01:51] Speaker 04:
The court in that case did not explicitly reach the issue of whether commerce's cost analysis considered the correct level of cost when evaluating adequate remuneration.

[00:02:02] Speaker 04:
Unlike that case, the record in this case is substantially more developed on this issue, and Commerce was fully on notice regarding the need to consider the actual cost associated with generating the electricity that was distributed.

[00:02:16] Speaker 04:
As such, we believe the exhaustion issue that existed in that case does not exist in this case.

[00:02:20] Speaker 00:
Can I just double check something?

[00:02:22] Speaker 00:
I guess I came into this argument thinking that the exhaustion question doesn't exist here for a reason quite independent

[00:02:30] Speaker 00:
of whether the record would have supported an exhaustion argument, but the government simply, in this case, never raised an exhaustion question.

[00:02:38] Speaker 04:
That's correct, Your Honor.

[00:02:39] Speaker 00:
So exhaustion's out of the case because it's waived by the government.

[00:02:41] Speaker 04:
Correct.

[00:02:42] Speaker 04:
We would agree with that, yes.

[00:02:48] Speaker 04:
In this case, I don't think there's any question that we did not fully develop the idea that Commerce Department should be looking at how the cost of electricity was generated and how it flowed through the system when measuring whether the price that KEPCO charged the steel producers was adequately remunerated.

[00:03:09] Speaker 00:
And the only thing that, if I remember right, the issues and decision memo says on that

[00:03:15] Speaker 00:
essentially a sentence that says, wrong question, that's not relevant.

[00:03:18] Speaker 04:
That's correct, Your Honor.

[00:03:19] Speaker 00:
Which isn't much of an explanation.

[00:03:20] Speaker 04:
Correct, Your Honor.

[00:03:21] Speaker 04:
We don't believe that that was a sufficient analysis.

[00:03:25] Speaker 04:
In this case, unlike the last case, we presented substantial amounts of additional evidence documenting why the cost of electricity or the production cost associated with the electricity

[00:03:37] Speaker 04:
at the generator level did not flow all the way through the system and is not reflected.

[00:03:42] Speaker 04:
There was additional pieces of evidence in this case that wasn't on the record in the last case so far as the system marginal price, as your honors may recall, in that case reflects the variable cost of electricity generated.

[00:03:54] Speaker 04:
It doesn't include the capacity price or the fixed cost.

[00:03:56] Speaker 00:
I thought that there is some

[00:04:00] Speaker 00:
I'm going to be very vague about this.

[00:04:02] Speaker 00:
Some multiplier in the description of the KPX pricing so that it's not only variable and a different multiplier, if that's the right term, perhaps different depending on whether the energy comes from nuclear generation or from coal or whatever else there might be.

[00:04:22] Speaker 04:
That's exactly right, Your Honor.

[00:04:24] Speaker 00:
So it's not just the variable.

[00:04:25] Speaker 04:
Correct.

[00:04:26] Speaker 04:
You're correct.

[00:04:27] Speaker 04:
The point we were making was that there were multiple pieces of evidence that if you look, if the Commerce Department had looked at it, demonstrated that the price of the electricity that was charged wasn't adequately remunerated.

[00:04:39] Speaker 04:
So again, going to the question of the variable cost alone.

[00:04:43] Speaker 04:
In this case, we put on the record the system marginal price, the marginal price, the variable cost of electricity that's on KPX's schedule for the period of review.

[00:04:53] Speaker 04:
It identifies the hour of the variable cost and the month at every hour of the day.

[00:05:01] Speaker 01:
This is for the period that's under review?

[00:05:03] Speaker 01:
Correct, Your Honor.

[00:05:04] Speaker 04:
Correct, Your Honor.

[00:05:05] Speaker 04:
In fact, well, I can direct, Your Honor, to the actual appendix site where you can find it.

[00:05:13] Speaker 04:
It is Appendix 12864.

[00:05:16] Speaker 04:
And in that, you can see it's a table, and it identifies all the different marginal prices, the variable cost.

[00:05:24] Speaker 04:
It does not include the capacity price, okay?

[00:05:29] Speaker 04:
In our case brief, we had said to the department, look, if you just take the marginal cost, just the variable cost alone in this table, and you aggregate it together and take the average,

[00:05:39] Speaker 04:
There's a small variations on a monthly basis, on an hourly basis, but even just the variable cost alone was substantially higher than the price Kepco charged to the steel producers.

[00:05:52] Speaker 04:
That was one piece of additional evidence that exists on this record that didn't exist in the last record.

[00:05:56] Speaker 04:
And another piece of evidence that exists on this record that didn't exist in the last record was in this case, one of the respondents actually has its own electricity generating facility.

[00:06:07] Speaker 04:
It generates electricity and sells it into the grid.

[00:06:09] Speaker 04:
It sells it to KPX.

[00:06:12] Speaker 04:
And then it purchases the same electricity back off the grid from KEPCO.

[00:06:16] Speaker 04:
And the price of the electricity that they sold it into the grid at is substantially higher than the price of the electricity they purchased.

[00:06:25] Speaker 02:
Where is that in the record?

[00:06:26] Speaker 04:
Certainly, Your Honor.

[00:06:27] Speaker 04:
So it wasn't referenced in our case brief or in the appendix, but it is in the record.

[00:06:33] Speaker 04:
It's public record 324, confidential record 381.

[00:06:38] Speaker 04:
And that is a...

[00:06:40] Speaker 04:
It's a December 4, 2015.

[00:06:42] Speaker 00:
Is it in the joint appendix that we have in front of us?

[00:06:44] Speaker 04:
It is not in the joint appendix.

[00:06:45] Speaker 00:
It is in the record.

[00:06:48] Speaker 04:
So if you go to the record numbers, it's public record 324 and confidential record 381.

[00:06:55] Speaker 04:
It's a December 2015 document.

[00:06:59] Speaker 04:
It's a response to a questionnaire that we had put on the record.

[00:07:02] Speaker 04:
This is weeks before the department's preliminary determination in this case.

[00:07:07] Speaker 04:
And in that document, starting at page 7,

[00:07:10] Speaker 04:
Going through page eight nine and ten there's significant amounts of discussion about KPX and distortions and right at page seven we discuss the price of the electricity charged into KPX and the price Purchased and actually in that document Do you suggest that we can?

[00:07:28] Speaker 00:
do anything more than

[00:07:32] Speaker 00:
remand this to commerce to provide a full consideration of this question about essentially not taking KPX's prices to KEPCO as a given.

[00:07:49] Speaker 04:
Your Honor, we do believe that there is substantial evidence on this record for you to make that finding to say the benefit should have been X and had, again, it's flushed out in our case brief to the department where we've offered multiple different types of benchmarks, the marginal system price.

[00:08:05] Speaker 02:
Can you have us make that fact finding?

[00:08:08] Speaker 04:
I think it's possible to make that fact-finding.

[00:08:11] Speaker 04:
But certainly, if the Court wasn't comfortable making that fact-finding, it certainly should be remanded back to commerce to actually conduct an appropriate cost analysis, as Your Honor suggested.

[00:08:21] Speaker 01:
Would that be an issue of substantial information?

[00:08:23] Speaker 01:
If we believe that the KPX prices cost should have been factored into the analysis but wasn't, then that's a question of a lack of substantial information.

[00:08:35] Speaker 04:
Correct.

[00:08:37] Speaker 04:
Commerce's decision to base its analysis to limit what chain in the cost distribution it looked at wasn't supported by substantial evidence.

[00:08:45] Speaker 04:
That there was substantial amounts of evidence on the record that demonstrated that had they gone all the way back and done a proper analysis of what's the actual cost associated with generating that electricity, they should have at least asked for the information and they didn't.

[00:09:00] Speaker 04:
and we supplied large amounts of evidence on that issue that weren't addressed.

[00:09:05] Speaker 04:
And in fact, going again back to that system marginal price data that's on the record, we raised it in our case brief.

[00:09:14] Speaker 04:
In fact, we had asked Commerce to use it as an alternative benchmark and said if you're not going to

[00:09:19] Speaker 04:
examine the KPX data, at least you can use this.

[00:09:23] Speaker 04:
And even though it only reflects the variable cost, it doesn't include the capacity price, it doesn't include the capacity cost, it doesn't include an amount for profit.

[00:09:31] Speaker 04:
But even that would have resulted in a subsidy, because it showed that there was a substantial difference between even the variable cost and the price that they paid, and we'd suggested that they use that as a benchmark.

[00:09:43] Speaker 04:
So it's possible that they could go there, but certainly as Your Honor suggested,

[00:09:47] Speaker 04:
The evidence suggests that the cost element they were looking at does not accurately reflect the actual cost of generating the electricity, and they should have asked for the information, and they didn't.

[00:09:58] Speaker 04:
And they didn't multiple times.

[00:09:59] Speaker 04:
This is not a scenario where we asked once.

[00:10:02] Speaker 04:
We asked in November in response to the first questionnaire, where we specifically laid out, in fact,

[00:10:10] Speaker 04:
Again, this is not in the record, but it is in the record, but it's not in the appendix.

[00:10:15] Speaker 04:
It's public record 315, confidential record 378.

[00:10:20] Speaker 04:
And again, it starts at page 11, where again, we go through why commerce should be looking at KPX, where the distortions in the system are.

[00:10:29] Speaker 04:
And we say, and I quote, KPX is thus not only another channel through which the Korean government actively intervenes in electricity prices, it also acts as another market regulator and as a repository of market data.

[00:10:41] Speaker 04:
It appears that KPX and not KEPCO is in fact the key actor in the Korean electricity market.

[00:10:46] Speaker 04:
KPX thus cannot be ignored and the department must ask significantly more detailed questions regarding its role in the market.

[00:10:53] Speaker 04:
The department didn't ask any additional questions.

[00:10:55] Speaker 04:
It certainly didn't ask for the generator's cost of production data.

[00:10:59] Speaker 04:
It didn't ask for KPXs.

[00:11:02] Speaker 01:
Refresh my memory.

[00:11:03] Speaker 01:
Did Commerce conduct verification in this?

[00:11:06] Speaker 04:
It did not.

[00:11:07] Speaker 04:
It conducted verification in the corrosion resistant case, which was the case underlying the New Court case.

[00:11:13] Speaker 04:
It just took the verification results from that case and applied it in this case.

[00:11:20] Speaker 00:
Can I just – I think you said at the beginning of the argument that there's a third case in the wings.

[00:11:25] Speaker 04:
There is.

[00:11:26] Speaker 04:
It's currently stayed.

[00:11:27] Speaker 04:
It's the – Briefed here or?

[00:11:30] Speaker 04:
I have to – it's in front of this court.

[00:11:32] Speaker 04:
It's – I'd have to check if it was briefed.

[00:11:34] Speaker 04:
I don't recall off the top of my head.

[00:11:35] Speaker 04:
But it's – there was three flat rolled cases.

[00:11:37] Speaker 04:
There's corrosion-resistant steel, which was the new court case.

[00:11:40] Speaker 04:
There's cold rolled steel, which is this case.

[00:11:42] Speaker 04:
And then there's hot rolled steel, which is currently stayed before this court pending resolution of this case.

[00:11:47] Speaker 01:
Okay, you're into your rebuttal time.

[00:11:48] Speaker 01:
You want to say that?

[00:11:49] Speaker 04:
If there are no other questions, I've reserved the balance of my time.

[00:12:01] Speaker 03:
Good morning, Your Honor.

[00:12:02] Speaker 03:
May it please the Court?

[00:12:04] Speaker 03:
After this Court's decision in new core that came out this June, the remaining question for this panel is essentially whether or not commerce is required to essentially pierce the veil and go back through KPX and basically, Appellant is arguing, all the way down to a generator-by-generator level to determine whether or not the power that was consumed was actually purchased in accordance with market principles.

[00:12:29] Speaker 02:
And what about the question of simply whether they adequately gave an answer for not doing that?

[00:12:35] Speaker 02:
Is that a possible issue before us today?

[00:12:37] Speaker 03:
Well, I think that the IDM sets forth their reasoning for not essentially piercing back to KPX.

[00:12:44] Speaker 02:
The only reason I see is they say it's irrelevant.

[00:12:46] Speaker 02:
They say that KEPCO's cost is what matters.

[00:12:48] Speaker 03:
They say that KEPCO's cost is what matters because they get the costs from KPX.

[00:12:52] Speaker 03:
And I think it's important to remember that there is set forth in our brief a significant series of statutes and regulations in Korea that require that the actual tariff schedule reflect the cost of the generation of the electricity.

[00:13:04] Speaker 03:
And in addition to all of those statutes and regulations, the government of Korea put over 1,000 pages of fiscal year 2014 data on the record.

[00:13:12] Speaker 01:
That's the cost to KEPCO, right?

[00:13:15] Speaker 01:
Correct.

[00:13:16] Speaker 01:
To purchase electricity.

[00:13:17] Speaker 01:
Yes.

[00:13:18] Speaker 01:
It's not the production cost of KPX.

[00:13:22] Speaker 03:
Right, but the statutes and regulations require that the actual purchase cost reflect the cost for the generators, and there's not been any assertion that... Where is that discussed in the opinion?

[00:13:31] Speaker 02:
Excuse me?

[00:13:32] Speaker 02:
Where is that discussed in the opinion?

[00:13:34] Speaker 03:
From the... From the... Commerce or anybody else?

[00:13:37] Speaker 03:
Well, the IDM, and I'm citing specifically to Appendix 13083, does go through the way in which the costs are calculated.

[00:13:46] Speaker 03:
It does not specifically discuss all of the laws and statutes, but they were put in the record by the government of Korea.

[00:13:52] Speaker 03:
They're included in the joint appendix here, and I think it's reasonably discernible that the commerce is looking at all of the statutes and regulations that Korea is pointing to in its response to the

[00:14:03] Speaker 03:
to the questionnaire, in addition again to all the financial information that specifically indicates that for the fiscal year 2014, and this is subject to business proprietary information so I won't say the specific numbers, but the industrial sector in the year 2014 actually did recover more than 100% of its costs for the purchase of electricity during that year.

[00:14:24] Speaker 03:
And so essentially the question before the court is what does the statute require?

[00:14:28] Speaker 03:
Does the statute require that commerce go further back down to a generator by generator level to determine whether or not a particular nuclear generator is recovering its costs when you look at the variable and the capacity?

[00:14:44] Speaker 03:
It's a government entity.

[00:14:46] Speaker 03:
I don't know that it's wholly owned by KEPCO.

[00:14:48] Speaker 03:
It is certainly a government entity, Your Honor, which is why it's, of course, subject to the laws and regulations that require that the tariff schedule reflect the actual cost of generation.

[00:14:57] Speaker 01:
And I'd be happy to walk... Doesn't the statute require, if they're a government entity, that their costs be included in the analysis?

[00:15:08] Speaker 03:
So the statute says, and I believe the court's referring to the regulations at 31.

[00:15:19] Speaker 03:
351.511, which is the question about whether or not the authority is purchasing and consistent with market principles.

[00:15:31] Speaker 03:
And so here, that I guess would be a question of Chevron deference as to whether or not Department of Commerce properly determined that KEPCO was the authority at issue here as opposed to going back further to KPX.

[00:15:42] Speaker 03:
Again, for the reasons we set forth, we think that

[00:15:44] Speaker 03:
The fact that the statutory regulations of the government of Korea and also the financial data that was put onto the record by Korea, establishing that the generators actually were recuperating their costs in 2014, that they weren't required to go further back.

[00:15:59] Speaker 03:
And I would point the court to the statute actually at issue here, not just the regulation at 19 USC 1677.

[00:16:07] Speaker 03:
5e, Romanet 4, and the standard that they're looking at here is the adequacy of remuneration determined in relation to prevailing market conditions for the good or service being provided or the goods purchased.

[00:16:23] Speaker 03:
And a lot of the appellant's assertion essentially

[00:16:27] Speaker 03:
It seems that it comes from what is kind of a logical leap between this idea that nuclear plants have higher startup costs, they are more expensive to construct and to get going, but once you construct them, they tend to make clean, lower cost energy.

[00:16:42] Speaker 03:
And then they quote to one footnote actually in a response from the government of Korea that says that, and it's worth noting that this document, it appears at tab 10 in the joint appendix,

[00:16:53] Speaker 03:
This document was a response from the government of Korea about why the 2012 National Assembly Report is not something the Department of Commerce should rely on, explaining why they thought the data in that report was not reliable.

[00:17:05] Speaker 03:
And in that response, the government of Korea said that because that report related specifically to the top 100 industrial consumers of electricity, some of the data may be skewed because as the top 100 largest consumers, they may be able to

[00:17:22] Speaker 03:
And I'll pull up the language for the court.

[00:17:30] Speaker 03:
I apologize, it's tab 8.

[00:17:31] Speaker 03:
I think I said tab 10, Your Honors.

[00:17:33] Speaker 03:
And it said, appendix 11519.

[00:17:36] Speaker 03:
More specifically, if one consumes electricity when the load factor is low, e.g.

[00:17:40] Speaker 03:
at night, the electricity tariff decreases since electricity could be generated by those using cheap fuels.

[00:17:45] Speaker 03:
EG nuclear power generators.

[00:17:47] Speaker 03:
So it's this idea that because an industrial client, especially the 100 largest industrial producers in the government in Korea, which we're going to have more steady energy requirements, right?

[00:17:58] Speaker 03:
A large factory oftentimes will just be running 24 hours a day.

[00:18:02] Speaker 03:
Or if you have huge energy requirements, you can set up your system in a way that ensures that you receive electricity at the lowest tariffs possible.

[00:18:10] Speaker 03:
The lowest rates and the pricing for KPF contemplates this.

[00:18:15] Speaker 01:
KPX is a wholly-owned subsidiary of KEPCO.

[00:18:19] Speaker 01:
Then doesn't the analysis shift a little bit here?

[00:18:22] Speaker 01:
And aren't we now looking at whether KPX is adequately enumerated by the price or what it receives from KEPCO?

[00:18:35] Speaker 01:
So KPX, I believe... We don't know that until we do a cost analysis or a cost analysis is done on KPX.

[00:18:41] Speaker 03:
Well, my understanding is that KPX operates as more of an intermediary, and the 20F response from the government of Korea sets forth the... So they're selling the electricity.

[00:18:51] Speaker 03:
Right, they almost do sort of a bidding system.

[00:18:53] Speaker 01:
Well, how do you know that?

[00:18:54] Speaker 01:
They're being adequately enumerated in these cells.

[00:18:58] Speaker 03:
Well, I believe because as a government entity, they're subject to the laws and regulations that require that the generators actually... But we don't know that.

[00:19:07] Speaker 01:
That's what a CVD case is all about, to see what type of action the government has taken with respect to these industries.

[00:19:14] Speaker 02:
It sounds like you're saying don't look at KPX because you don't have to because I've already looked at them and there's nothing going on there because they have to comply with the rules and regulations.

[00:19:23] Speaker 02:
I mean, that's what it sounds like you're saying.

[00:19:25] Speaker 02:
Is that what you're saying?

[00:19:27] Speaker 03:
No, Your Honor.

[00:19:28] Speaker 03:
We're saying that the government of the commerce did an analysis to determine whether or not

[00:19:32] Speaker 03:
the actual costs are being recuperated and the combination of the statutes and regulations that do require the government of Korea to ensure that the generous are being are being recompensated and the lack of any evidence on the record that they actually are not being compensated and then also the financial fiscal year 2014 evidence that establishes that they're actually were compensated for their costs in 2014 was sufficient to determine that there was not a counter-available subsidy available here

[00:19:58] Speaker 01:
If all that's correct, then you'd like for us to take the word of the Korean Government that it's following its own laws and regulations.

[00:20:06] Speaker 03:
Absent evidence that they are not following the laws and regulations.

[00:20:09] Speaker 01:
But isn't that what a countervailing duty investigation is all about?

[00:20:13] Speaker 01:
To find out what's going on in the marketplace, to find out whether there's any countervailing subsidies

[00:20:20] Speaker 01:
that are benefiting a particular industry.

[00:20:24] Speaker 03:
Not so specifically or always, Your Honor.

[00:20:26] Speaker 03:
For example, I believe there's a decision that both our brief and the reply from the appellant cites the cold-rolled steal from Russia, and appellant cites it for the proposition that because Gazprom, which is the government entity in that circumstance, was found to be manipulating the crisis,

[00:20:43] Speaker 03:
There, commerce determined that it could not rely on the prices and so it went outside to another market to determine what prices it should charge for natural gas.

[00:20:50] Speaker 01:
Do you know whether KPX is manipulating prices here?

[00:20:53] Speaker 03:
So in that instance, the reason that commerce decided to go outside the country is because... Do we know?

[00:20:58] Speaker 03:
There's no indication that they are manipulating.

[00:21:01] Speaker 01:
Isn't that part of what this investigation should entail?

[00:21:05] Speaker 03:
And so that comes back, I guess, to the commerce's discretion as to how far it has to go under the statute and whether or not it's an abuse of its discretion to take the laws and regulations of the government of Korea in conjunction, again, with this data that indicates that the actual generation costs were recovered in the fiscal year 2014.

[00:21:24] Speaker 03:
and any other evidence that KPX is not actually operating in accordance with those laws, whether or not it's a reasonable interpretation of the statute for commerce to not go back again almost to a generator-by-generator analysis to determine whether or not one particular nuclear generator somewhere in the country of Korea

[00:21:44] Speaker 03:
maybe is not actually recuperating its costs.

[00:21:47] Speaker 03:
And I think it also bears noting, you know, the statute says in accordance with market principles, in accordance with market principles does not necessarily mean free market or no company would ever operate at a loss on a given year, right?

[00:22:01] Speaker 03:
For example, a nuclear plant, which is incredibly expensive and a lot of upfront costs to actually get constructed and get going,

[00:22:08] Speaker 01:
What's the percentage of electricity that's produced by or sold by KPX?

[00:22:16] Speaker 03:
They sell 100% of the electricity to KEPCO in the government.

[00:22:21] Speaker 00:
And am I remembering right from a chart that about 80% on the generating side is a KEPCO affiliate?

[00:22:31] Speaker 03:
I'm not sure.

[00:22:34] Speaker 00:
There's a little table with about eight companies or nine companies of which five or six have KEPCO in their name or are KEPCO.

[00:22:43] Speaker 00:
I think add to around 80%.

[00:22:45] Speaker 03:
I believe that may be correct, Your Honor, although I'm not exactly sure.

[00:22:49] Speaker 03:
And I would note that nuclear energy represents about 30% of the energy that's used in Korea, or at least during 2014 pursuant to the 20F

[00:22:59] Speaker 03:
submission that was given by the government of Korea So if the court has no further questions Okay, thank you.

[00:23:08] Speaker 03:
We we would ask in accordance with the the new court decision that this court affirmed the finding of Department of Commerce Thank you Okay, thank you

[00:23:17] Speaker 01:
Mr. DeFrantisco, you have a little bit less than four minutes.

[00:23:21] Speaker 01:
You've got four and a half minutes.

[00:23:22] Speaker 04:
Great.

[00:23:22] Speaker 04:
Thank you, Your Honor.

[00:23:24] Speaker 04:
Just quickly, a few points to Your Honor's question about whether KPX is wholly owned.

[00:23:30] Speaker 04:
This is in the appendix.

[00:23:31] Speaker 04:
It's appendix 3137.

[00:23:35] Speaker 04:
At the top of the page, it discusses the relationship of KPX to KEPCO.

[00:23:39] Speaker 04:
And it says, the Korean Power Exchange, and it says, we and our six generating subsidiaries are member corporations of the Korean Power Exchange and collectively own 100% of its share capital.

[00:23:50] Speaker 04:
So yes, it is wholly owned.

[00:23:53] Speaker 04:
And to your honor's question, yes, you're correct.

[00:23:56] Speaker 04:
It's approximately, it's a little over 80% were the six generators.

[00:23:59] Speaker 04:
So KEPCO owns, let's see.

[00:24:02] Speaker 04:
80-85 percent of the generating capacity in Korea wholly owns their complete subsidiaries.

[00:24:08] Speaker 04:
It owns KPX, and then it distributes the electricity.

[00:24:13] Speaker 02:
Is that also at page 831-37 or elsewhere?

[00:24:15] Speaker 02:
Do you have a record site for the 80 percent figure?

[00:24:20] Speaker 04:
I do not, but I can get it.

[00:24:23] Speaker 04:
But to the point I think Your Honor was asking about, in the new court decision, when the court is examining what does remuneration mean, what does it mean to be adequately remunerated, the court looks at other types of definitions, and it looks at things like just equivalent, fair compensation, fair value.

[00:24:44] Speaker 04:
And the arguments we were making to commerce is that if you're going to correctly examine

[00:24:49] Speaker 04:
whether the price that KEPCO charged the steel producers was adequately remunerated, you ought to look at the actual cost associated with generating the good that's being provided.

[00:24:59] Speaker 04:
And in order to do that, you either have to gather the data directly from KPX's generators or at least get the data from KPX.

[00:25:06] Speaker 04:
I mean, that's the basis of the statute.

[00:25:10] Speaker 04:
That's what the statute directs commerce to look at.

[00:25:12] Speaker 04:
The statute directs commerce to examine whether a subsidy is being provided either directly or indirectly.

[00:25:19] Speaker 04:
Now, the argument we were making was, what benchmark should they be using when measuring the amount of the benefit here?

[00:25:26] Speaker 04:
And the correct benefit, the correct benchmark, should have been the actual cost associated with generating the electricity.

[00:25:33] Speaker 04:
And they didn't look at that.

[00:25:34] Speaker 04:
They didn't ask the question, they didn't gather the data, and they stopped their analysis.

[00:25:39] Speaker 04:
And one of the points

[00:25:41] Speaker 04:
that we heard was that, well, KEPCO more than covered its cost.

[00:25:44] Speaker 04:
Again, in our case brief, we dispute that if you actually look at KEPCO's financial statement.

[00:25:51] Speaker 04:
It shows that the revenue generated from electricity sales relative to the cost associated with that electricity didn't adequately remunerate.

[00:26:01] Speaker 04:
It was about 98 percent.

[00:26:02] Speaker 04:
There's a reconciling item afterward where additional revenue is booked to push it up to 100 percent.

[00:26:08] Speaker 04:
It's not clear where that reconciling item came from or how it was adjusted or why it showed up there.

[00:26:12] Speaker 04:
But again, if Commerce didn't blind itself to the full record to examining going all the way back to the generating cost, they would have properly calculated a benefit and a benchmark and would have found that the subsidy does provide – is counter-available.

[00:26:29] Speaker 04:
And so with that, Your Honors, we will rest, and we ask that Your Honors remand back to the Department of Commerce for proper analysis.

[00:26:38] Speaker 04:
Thank you.