cases pasco versus united states nineteen dash one th measuring benefit the court in that case did not explicitly reach the issue of whether commerce is cost analysis consider the correct level of cost when evaluating adequate remuneration unlike that case the record in this case is substantially more developed on this issue in commerce was fully on notice regarding the need to consider the actual cost associated with generating the electricity that was distributed as such we believe the exhaustion issue that existed in that case  exist in this case nor can i just double check something i would have i guess i came into this argument thinking that the exhaust in question doesn't exist here for a reason quite independent of whether the record would have supported the exhaustion argument but the government simply in this case never raised an exhaustion question that's correct your honor so exhausted it's out of the case because it's waived by the government correct we would agree with that yes and frankly in this case i don't think there's any question that we did not fully develop the idea the commerce department should be looking at how the cost of aleck how the electricity was generated and how it flowed through the system when measuring that's correct isn't much of an explanation correct your honor we don't believe that that was a sufficient analysis in this case unlike the last case we presented substantial amounts of additional evidence documenting why the cost of electricity production cost associated with the electricity at the generator level did not flow all the way through the system and it's not reflected 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 your honour's may recall in that case reflects the variable cost of electricity generated it doesn't include capacity price or the fixed cost i thought that i thought that there is i mean to be very vague about this some multiplier in the description of k p n x pricing so that it's not only variable and different multiplier that's right term perhaps different depending on whether the energy comes from nuclear generation or from coal or whatever else they might be that's exactly right you're on so it's not just a variable cost to correct your correct 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 was an adequately remunerated so again going to the question of the variable cost alone in this case we put on the record the system marginal price the marginal price the variable electricity that's on k p axis schedule for the period of reviewed it identifies the hour of the variable cost and the month for it at every hour of the day this is for the period that's under review and in that you can see it's a table and it identifies all the different marginal prices the variable cost that does not include the capacity price ok 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 aggregated together and take the average 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 cap go charge he still produces that is one piece of additional evidence that exists on this record that exists in the last record in another piece of evidence that exists on this record that that exists in the last record and is in this case one of the respondents actually has its own electricity generating facility it generates electricity and sells it into the grid it sells it to k p n x and then it purchases the same electricity back off the grid from cap go and the price weeks before the department preliminary determination in this case and in that document starting at page seven going through page eighty nine and ten there's a significant amount of discussion about k p n x in the store  page seven we discuss the price of the electricity charge and the caveats in the price purchase and actually in that document he printed do you suggest that we can do anything more than  given 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 offered multiple different types of benchmarks the marginal system presents us make that fact try me i think it it's possible to make that fact finding a certainly if the court wasn't comfortable making that fact finding it's certainly should be remitted back to substantial amounts of evidence on the record that demonstrated that had they gone always back in the proper analysis of what's the actual cost associated with generating that electricity they should have at least asked for the information they did and we supplied large amounts of evidence as to that as on that issue that one addressed and in fact they're going again back to that system marginal pricing data that's on the record we raised that in our case brief we had asked in fact we to ask commerce to use it as an alternative benchmark and said if you're not going to examine the k p x data at least you can use this and even though it only reflects the variable cost that doesn't include the capacity price it doesn't include the capacity cost it doesn't include an amount for profit 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 suggest that they use that as a benchmark so it's possible that they could go there but certainly as your hon suggested the evidence suggests that the cost element they were looking at does not accurately reflect the actual cost of generating electricity and they should have asked for the information and they didn't and they didn't multiple times that this is not a scenario where we thus not only another channel through which the korean government actively intervenes electricity prices it also acts as another market regulator and as a repository of market data it appears that k p n x and not kept go is in fact a key actor in the korean electricity market k p n x trust cannot be ignored and the department must ask significantly more detailed questions regarding its role in the market department and ask any additional questions or certainly didn't ask for the generators cost of production data it didn't ask her may please the court after this court's decision in new corps that came out this june and the remaining question for this panel is essentially whether or not commerce is required to essentially pierce the veil and go back through 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 with market principles and what is the question of simply reflect the cost of the generation of the electricity and in addition to all of those statutes regulations become you know korea put over a one thousand pages of fiscal year two thousand and fourteen data on the record that's the cost to discuss all of the laws and statutes but they were put in the record by the government of korea there including the joint appendix here and i think it's recently discernible that the got that korea that congress is looking at all of the statutes and regulations that korea is pointing to in its  fourteen actually did recover more than one hundred percent of its cost for the purchase of m for the purchase of electricity during that year and so essential question before the court is what does the statute require 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 cost when you look at the variable and the capacity to hold it it's a it's a government entity i don't know that it's deference as to whether or not department of commerce properly determined kept show was the authority at issue here as opposed to going back further to keep p x again for the reasons we set forth that we think that the fact that the statutory regulations of the government of korea and also the financial data market conditions for the good or service being provided the goods purchased and a lot of a lot of the appellant's assertion essentially it seems that it comes from what is kind of a logical leap between this idea that nuclear plants have higher startup costs they're more expensive to construct and to get going but once you construct they tend to make clean lower cost energy and then they quote to one dollar footnote actually in a response from the government of korea that says  that and it's worth noting that this document is it appears that tab ten in the joint appendix this document was a response from the governor of crete government of korea about why the two thousand and twelve national simply report is not something the department of harmer should rely on explaining why they thought the data in that report was not reliable and in that in that response to government of korea said that because that report related specifically to the top one hundred industrial consumers electricity some of the data may be skewed because as the top one hundred largest consumers they may be able to put the language for the court g nuclear power generators so it's this idea that because an industrial client especially wants the one hundred dollars largest industrial producers in the government in korea which we're going to have more steady energy requirements right a large factory oftentimes will just be running twenty four hours a day 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 tariff possible the lowest rates and the pricing for  to comply with the rules and regulations and that's what it sounds like you're saying i don't know what do you is that what you're saying no your honor we're saying that the government of the commerce did an analysis to determine whether or not the actual costs are being are too great and the combination of the statutes  regulations that do require the government of korea to ensure that centers are being are being recompensation ed and the lack of any evidence on the record that they actually are not being compensated and then also the financial disclosure two thousand and fourteen evidence that establishes that they're actually proposition that because gazprom which is the government entity in that circumstance i was found to be manipulating the prices they are commerce determine that it cannot rely on the prices and so went outside to another market to determine what prices it should charge a natural think that that comes back i guess to the congress discretion as to whether 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 commerce to not go back again almost to a generator by generator analysis to determine whether or not one particular nick nuclear generator somewhere in the country of korea maybe is not actually recouping recuperating its cost and i think it also  accordance with market principles in accordance with market principles and not necessarily mean free market or no company whatever operate at a loss on a given year right for example a nuclear for a nuclear plant which is incredibly so yes it is wholly one into your honour's question yes you're correct it's a process a little over eighty percent were the six generators so kept go owns eight thousand and eighty five percent of the generating court looks at other types of definitions and it looks at things like just equivalent fair compensation fair value in the arguments we were making to commerce is that if you're going to correctly examine whether the price that cap go charge the steel producers was adequately remunerated you want to look at the actual cost associated with generating the good that's being provided in order to do that you either have to gather the data directly from the caveats as generators or at least get the data from k p n x and that's the basis of the statute that's what the statute directs commerce to look at the statute directs commerce to examine whether a subsidies being provided either directly or indirectly now w argument we were making was what benchmarks should they be using when measuring the amount of the benefit here in the correct ben benefit the correct benchmark should have been the cost of the actual cost associated with generating the electricity and they didn't look at that they didn't ask the question they didn't gather the data and they stopped their analysis and for one of the points that we heard was it well kept go more than covered its cost d again in our case brief we dispute that if you actually look at kept goes a financial statement it shows that the revenue generated from electricity sales relative to the cost associated with that electricity didn't adequately remunerate is about ninety eight percent there's a reconciling item afterward the revenue is booked to push it up to one hundred percent it's not clear where that reconciling item came from or how it was adjusted or why it showed up there but again if congress didn't blind itself to the full record to examining going all the way back to the genera