Slip Op. 23-

UNITED STATES COURT OF INTERNATIONAL TRADE 

NUCOR CORPORATION, 

 Plaintiff, 

 v. 

UNITED STATES, 

 Defendant, 

 and 

GOVERNMENT OF THE REPUBLIC OF 

KOREA, 

 Defendant-Intervenor. 

Before: Mark A. Barnett, Chief Judge 

Court No. 22-00070 

OPINION 

[Sustaining the U.S. Department of Commerce’s final results in the 2019 administrative 

review of the countervailing duty order on certain carbon and alloy steel cut-to-length 

plate from the Republic of Korea.] 

Dated: April 28, 2023 

Adam M. Teslik, Wiley Rein LLP, of Washington, DC, argued for Plaintiff Nucor 

Corporation. With him on the brief were Alan H. Price, Christopher B. Weld, and Tessa 

V. Capeloto.

Augustus Golden, Trial Attorney, Civil Division, Commercial Litigation Branch, U.S. 

Department of Justice, of Washington, DC, argued for Defendant United States. With 

him on the brief were Brian M. Boynton, Principal Deputy Assistant Attorney General, 

Patricia M. McCarthy, Director, and Tara K. Hogan, Assistant Director. Of Counsel on 

the brief was W. Mitch Purdy, Attorney, Office of the Chief Counsel for Trade 

Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC. 

Sarah S. Sprinkle, Akin Gump Strauss Hauer & Feld LLP, of Washington, DC, argued 

for Defendant-Intervenor Government of the Republic of Korea. With her on the brief 

were Yujin K. McNamara, Daniel M. Witkowski, Devin S. Sikes, Sung Un K. Kim, and 

Sydney L. Stringer. 
Court No. 22-00070 Page 2 

Barnett, Chief Judge: Plaintiff Nucor Corporation (“Nucor”) challenges the U.S. 

Department of Commerce’s (“Commerce” or “the agency”) final results in the 2019 

administrative review of the countervailing duty (“CVD”) order on certain carbon and 

alloy steel cut-to-length plate (“CTL plate”) from the Republic of Korea (“Korea”). 

Compl., ECF No. 8; see also Certain Carbon and Alloy Steel Cut-to-Length Plate From 

the Republic of Korea, 87 Fed. Reg. 6,842 (Dep’t Commerce Feb. 7, 2022) (final results 

and partial rescission of [CVD] admin. review, 2019) (“Final Results”), ECF No. 19-4, 

and accompanying Issues and Decision Mem., C-580-888 (Jan. 31, 2022) (“I&D 

Mem.”), ECF No. 19-5.1 Nucor seeks judgment on the agency record pursuant to U.S. 

Court of International Trade (“CIT”) Rule 56.2 and requests the court to remand 

Commerce’s determination that the Government of the Republic of Korea (“Government 

of Korea” or “GOK”) does not provide a countervailable subsidy to the Korean steel 

industry through the provision of electricity for less than adequate remuneration. See 

Confid. Pl. Nucor Corp.’s Rule 56.2 Mot. for J. on the Agency R. and accompanying 

Mem. in Supp. of Rule 56.2 Mot. for J. on the Agency R. (“Pl.’s Mem.”), ECF No. 30; 

Confid. Pl. Nucor Corp.’s Reply Br. (“Pl.’s Reply”), ECF No. 35. 

1 The administrative record for the Final Results is contained in a Public Administrative 

Record (“PR”), ECF No. 19-1, and a Confidential Administrative Record (“CR”), ECF 

No. 19-2. Nucor submitted joint appendices containing record documents cited in 

Parties’ briefs and requested by the court. See Confid. J.A. (“CJA”), ECF Nos. 37 (Tab 

1–Tab 10 (Part 1)), 37-1 (Tab 10 (Part 2)), 37-2 (Tab 10 (Part 3)–Tab 17); Public J.A., 

ECF No. 38; First Suppl. Confid. J.A. (“1st Suppl. CJA”), ECF Nos. 44–44-4 (replacing 

Tabs 4 and 5 previously filed), First Suppl. Public J.A., ECF Nos. 45, 45-1; Second 

Suppl. Confid. J.A. (“2nd Suppl. CJA”), ECF No. 47 ; 2nd Suppl. Public J.A., ECF No. 

48. The court references the confidential record documents unless otherwise specified. 
Court No. 22-00070 Page 3 

Defendant United States (“the Government”) and Defendant-Intervenor the 

Government of Korea urge the court to sustain the Final Results. Def.’s Resp. to Pl.’s 

Mot. for J. upon the Agency R. (“Def.’s Resp.”), ECF No. 32; Confid. Def.-Int. [Gov’t of 

Korea’s] Mem. in Opp’n to Pl.’s Mot. for J. on the Agency R. (“Def-Int.’s Resp.”), ECF 

No. 33. 

For the following reasons, the court sustains the Final Results. 

BACKGROUND

I. CVD Overview 

A countervailable subsidy “exists when . . . a foreign government provides a 

financial contribution . . . to a specific industry” that confers “a benefit” on “a recipient 

within the industry.” Fine Furniture (Shanghai) Ltd. v. United States, 748 F.3d 1365, 

1369 (Fed. Cir. 2014) (citing 19 U.S.C. § 1677(5)(B)). A countervailable benefit 

includes the provision of goods or services “for less than adequate remuneration.” 19 

U.S.C. § 1677(5)(E)(iv) (2018).2 The statute directs Commerce to determine the 

adequacy of remuneration “in relation to prevailing market conditions for the good or 

service being provided or the goods being purchased in the [subject] country” and 

explains that “[p]revailing market conditions include price, quality, availability, 

marketability, transportation, and other conditions of purchase or sale.” Id. 

2 Further citations to the Tariff Act of 1930, as amended, are to Title 19 of the U.S. 

Code. All references to the U.S. Code are to the 2018 edition unless otherwise 

specified. 
Court No. 22-00070 Page 4 

Commerce’s regulations prescribe a three-tiered approach for determining the 

adequacy of remuneration. See 19 C.F.R. § 351.511. When, as here, both an incountry market-based price and a world market price are unavailable, Commerce 

examines “whether the government price is consistent with market principles,” referred 

to herein as a “Tier 3 analysis.” Id. § 351.511(a)(2)(iii).3 A Tier 3 analysis accounts for 

“such factors as the government’s price-setting philosophy, costs (including rates of 

return sufficient to ensure future operations), or possible price discrimination.” 

Countervailing Duties, 63 Fed. Reg. 65,348, 65,378 (Dep’t Commerce Nov. 25, 1998) 

(“CVD Preamble”). Those factors are not “in any hierarchy,” and Commerce “may rely 

on one or more of these factors in any particular case.” Id.

II. Agency Proceedings 

On May 25, 2017, Commerce published the CVD order on CTL plate from Korea. 

Certain Carbon and Alloy Steel Cut-to-Length Plate From the Republic of Korea, 82 

Fed. Reg. 24,103 (Dep’t Commerce May 25, 2017) ([CVD] order) (“Korea CTL Order”). 

On July 10, 2020, Commerce initiated the third administrative review of the Korea CTL 

Order for the 2019 period of review (“POR”). Initiation of Antidumping and 

Countervailing Duty Admin. Reviews, 85 Fed. Reg. 41,540, 41,548–49 (Dep’t 

Commerce July 10, 2020), PR 20, CJA Tab 1. Commerce selected POSCO as the sole 

3 Commerce first seeks to compare the government price to a market-based price for 

the good or service under investigation in the country in question (a “Tier 1 analysis”). 

19 C.F.R. § 351.511(a)(2)(i). When an in-country market-based price is unavailable, 

Commerce will compare the government price to a world market price when the world 

market price is available to purchasers in the country in question (a “Tier 2 analysis”). 

Id. § 351.511(a)(2)(ii). 
Court No. 22-00070 Page 5 

mandatory respondent for the review. See Decision Mem. on New Subsidy Allegations 

(Apr. 13, 2021) at 1 & n.2, PR 105, CJA Tab 3 (citation omitted). 

On November 19, 2020, Nucor timely filed a new subsidy allegation asserting 

that the Government of Korea provided electricity to the steel industry for less than 

adequate remuneration. New Subsidy Allegations (Nov. 19, 2020), CR 177–93, PR 68–

84, CJA Tab 2. On April 13, 2021, Commerce initiated a corresponding investigation. 

Decision Mem. on New Subsidy Allegations at 2. On August 5, 2021, Commerce 

published the preliminary results of the review. Certain Carbon and Alloy Steel Cut-toLength Plate From the Republic of Korea, 86 Fed. Reg. 42,788 (Dep’t Commerce Aug. 

5, 2021) (prelim. results of [CVD] admin. review, and intent to rescind review, in part; 

2019) (“Prelim. Results”), PR 183, CJA Tab 14, and accompanying Prelim. Decision 

Mem. (“Prelim. Mem.”), PR 179, CJA Tab 12. 

In the preliminary decision memorandum, Commerce summarized key aspects of 

the Korean electricity market. Commerce explained that “KEPCO[4] is the exclusive 

supplier of electricity in Korea” and is majority-owned by the Government of Korea. 

Prelim. Mem. at 27.5 Commerce noted that the Government of Korea “regulates the 

rates that KEPCO charges for electricity by approving” changes to “the electricity tariff 

rates.” Id. at 28. Electricity supplied by KEPCO is generated by “KEPCO’s six whollyowned subsidiary generators (GENCOs), independent power generation companies, 

4 KEPCO is the acronym for Korea Electric Power Corporation. 

5 There is an exception to KEPCO’s status as the exclusive electricity supplier for 

certain “customers serviced by community energy systems.” Prelim. Mem. at 27. That 

exception is not relevant here. 
Court No. 22-00070 Page 6 

and community energy systems.” Id. at 26 (internal footnote omitted). However, 

Commerce explained, “all purchasing and selling of electricity is done through [the] 

KPX.”6 Id. The KPX sets the price KEPCO pays for electricity, id., and is wholly owned 

by KEPCO, id. at 27. 

Commerce described the “cost-based pool system” the Korean electricity market 

uses to allocate purchase orders. Id. at 26. That system has two components: the 

marginal price, which represents variable costs of generating electricity, and the 

capacity price, which represents the fixed costs. See id. The marginal price is based 

on hourly sales of electricity. See id. “For nuclear generators, coal-power generators, 

and GENCOs, an adjusted coefficient is also included in their KPX price . . . to prevent 

over-payment to generators with low fuel costs (e.g., nuclear and coal) and to maintain 

a differential between the expected rate of return between the GENCOs and KEPCO.” 

Id. at 27. 

For its preliminary determination, Commerce applied a Tier 3 analysis that 

examined whether the industrial tariff schedule in effect during the POR7 allowed 

KEPCO to recover its costs and earn profit “sufficient to ensure future operations.” Id.

at 29. Commerce examined KEPCO’s reported cost data for 2019 and detailed the 

steps through which KEPCO accounts for its “operating costs and return on 

investment.” Prelim. Mem. at 31; see also Prelim. Results Calculation Mem. for 

6 KPX is the acronym for Korea Power Exchange. 

7 Commerce noted that the tariff schedule that applied “during the POR came into effect 

in November 2013.” Prelim. Mem. at 29. 
Court No. 22-00070 Page 7 

POSCO (July 30, 2021) (“Prelim. Calc. Mem.”) at 8–9, CR 323–24, PR 180–81, CJA 

Tab 13 (discussing, inter alia, Resp. to New Subsidy Allegation Questionnaire (Apr. 27, 

2021) (“GOK’s Resp. NSA”), Ex. E-18, CR 229–34, PR 115, CJA Tab 4, 1st Suppl. CJA 

Tab 4). Commerce explained that “POSCO provided electricity usage that included 

voltage, option, rates, and amount paid for the industrial classification.” Prelim. Mem. at 

31 & n.215 (citing POSCO’s Electricity New Subsidy Allegation Questionnaire Resp. 

(Apr. 27, 2021) (“POSCO’s Resp. NSA”), Ex. NSA-2, CR 235–44, PR 117, CJA Tab 5).8 

Commerce preliminarily found that “certain reported industrial rates recovered costs and 

a rate of return and certain rates did not,” id. at 32 & n.216 (citing Prelim. Calc. Mem.). 

Commerce thus found that although KEPCO has “a pricing mechanism in place that is 

based on market principles, . . . the industrial rates did not always recover costs and a 

rate of return.” Id. 

Commerce also considered whether KPX’s prices to KEPCO conferred a benefit. 

Id. at 30. Commerce referenced recent administrative reviews involving CVD orders on 

different Korean merchandise in which it considered upstream subsidy allegations and 

found no such benefit. Id. at 30 & n.200 (citations omitted). In the underlying review, 

Commerce preliminarily found that all six GENCOs recovered their costs; that “the 

system marginal price includes consideration of the GENCOs and KEPCO’s rate of 

8 Exhibit NSA-2 consists of POSCO’s reporting of monthly electricity purchases for its 

various facilities during off-peak, mid-peak, and on-peak hours. See POSCO’s NSA 

Resp. at 2, Ex. NSA-2. 
Court No. 22-00070 Page 8 

return”; and that “the price paid by KEPCO through KPX is inclusive of a rate of return.” 

Id. at 30. Commerce thus found no benefit from KPX’s prices to KEPCO. See id. 

Regarding the sales for which KEPCO did not recover its costs and a rate of 

return, Commerce preliminarily calculated a de minimis net countervailable subsidy rate 

for POSCO and the non-examined companies subject to the review. Prelim. Results, 

86 Fed. Reg. at 42,789. 

On February 7, 2022, Commerce published the Final Results of the review. 87 

Fed. Reg. at 6,842. For the Final Results, Commerce incorporated much of its 

preliminary analysis. See I&D Mem. at 21–26. Commerce continued to use a Tier 3 

analysis that examined whether KEPCO’s electricity prices covered KECPO’s costs and 

an amount for profit. Id. at 22 & n.75 (citing Prelim. Mem. at 28–29). Commerce 

explained that when KEPCO’s prices did not cover costs (and, thus, did not accord with 

“market principles”), Commerce determined a benchmark price “that cover[ed] costs 

plus a rate of recovery or profit[], with the difference between the price paid and the 

benchmark being the benefit conferred.” Id. at 22 & n.78 (citing Prelim. Mem. at 29).9 

Using this methodology, Commerce calculated a de minimis net countervailable subsidy 

rate in the amount of 0.42 percent for POSCO and the non-examined companies. Final 

Results, 87 Fed. Reg. at 6,843. 

9 Commerce also noted that “POSCO reported paying electricity prices that are listed on 

KEPCO’s electricity rate schedule, and . . . that POSCO’s operations were classified 

under the correct electricity consumption categories.” I&D Mem. at 22 & n.80 (citations 

omitted). 
Court No. 22-00070 Page 9 

In reaching its decision, the agency analyzed and rejected Nucor’s argument that 

Commerce should instead “compare the electricity prices paid by [POSCO] to the cost 

plus profit rate of KEPCO to determine whether a benefit exists.” I&D Mem. at 22; see 

also id. at 22–23. Commerce further explained that its “analysis is not based on 

KEPCO’s total revenue,” but on KEPCO’s “financial performance” in relation to “each 

electricity consumption category.” Id. at 24. Commerce explained that this method is 

appropriate because “POSCO paid electricity prices” in accordance with the 

“corresponding electricity consumption classifications” and, as such, its “analysis . . . 

account[s] for whether the prices POSCO paid were covering KEPCO’s costs.” Id. 

Referencing its preliminary analysis of the KPX, id. at 24–25, Commerce also rejected 

Nucor’s argument that the cost information provided by the Government of Korea does 

“not reflect actual costs of electricity generation and supply,” id. at 24. Lastly, 

Commerce disagreed with Nucor that “subsidization is masked” by the Government of 

Korea’s charging of “higher prices to other customers.” Id. at 26. 

This appeal followed, and the court heard oral argument on March 22, 2023. 

Docket Entry, ECF No. 46. 

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of 

1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii), and 28 U.S.C. § 1581(c). 

The court will uphold an agency determination that is supported by substantial 

evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). 
Court No. 22-00070 Page 10 

DISCUSSION

Nucor argues that Commerce applied an unlawful methodology and that 

Commerce’s determination is not supported by substantial evidence. The court 

addresses each issue in turn. 

I. Whether Commerce’s Determination is in Accordance with Law 

A. Parties’ Contentions 

Nucor contends that Commerce erred in examining KEPCO’s cost recovery 

based on sales to all users within the relevant tariff classification. Pl.’s Mem. at 14–15. 

Instead, Nucor contends, Commerce was required to consider whether KEPCO 

recovered its costs in connection with the specific prices paid by POSCO. Id. at 15–17. 

Nucor’s argument turns on its interpretation of the phrase “government price” in 

the applicable regulatory provision. See id. at 16; Pl.’s Reply at 8–9 (citing, inter alia, 

Kisor v. Wilkie, 139 S. Ct. 2400 (2019)). Nucor contends that Commerce impermissibly 

based its benefit analysis on KEPCO’s annual average unit sales price for the relevant 

industrial electricity groups and sub-groups, arguing that the sales price is “not a 

government price at all” but instead “reflects the [GOK’s] total annual sales revenue.” 

Pl.’s Mem. at 16; see also Pl.’s Reply at 11. Nucor further contends that its view on an 

appropriate Tier 3 analysis is supported by agency precedent, surrounding regulatory 

provisions, and Commerce’s statutory obligations. Pl.’s Mem. at 12–14, 16–17; Pl.’s 

Reply at 4–10. 

The Government contends that Commerce’s Tier 3 analysis complied with 

precedent from the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) 
Court No. 22-00070 Page 11 

through its examination of KEPCO’s costs and the impact of the KPX on the Korean 

electricity market. Def.’s Resp. at 19–20.10 The Government also contends that 

Commerce’s analysis in this review “is consistent with” the methodology used in prior 

determinations involving the Korean electricity market. Id. at 21. The Government 

asserts that, in a Tier 3 analysis, there are no “‘market-determined’ or ‘world-market’ 

prices to which [Commerce] can compare the prices ‘paid by the respondent,’” id. at 23, 

and, as such, Commerce permissibly considered whether KEPCO’s tariff rates were 

“set ‘in accordance with market principles’” and whether POSCO paid the applicable 

tariff rates, id. (quoting 19 C.F.R. § 351.511(a)(2)(iii)). 

The Government of Korea contends that Commerce’s determination was 

consistent with its statutory obligations and Commerce otherwise has discretion to 

develop a method for assessing the adequacy of remuneration. See Def.-Int.’s Resp. at 

9, 11. The Government of Korea further contends that a Tier 3 analysis is “more 

complicated” than Tier 1 and Tier 2 analyses because Commerce is not simply 

10 The Government cites Nucor Corp. v. United States, 927 F.3d 1243, 1254–55 (Fed. 

Cir. 2019) (“Nucor CAFC”), and POSCO v. United States, 977 F.3d 1369 (Fed. Cir. 

2020) (“POSCO CAFC”). See Def.’s Resp. at 19. In Nucor CAFC, the majority affirmed 

Commerce’s determination that the sale of electricity was not for less than adequate 

remuneration in the investigation concerning certain corrosion-resistant steel products 

from Korea. 927 F.3d at 1249, 1256. The majority’s affirmance was, however, based 

on the agency’s finding that KEPCO had recovered its costs during the investigation 

period and Nucor’s failure to exhaust its arguments regarding the KPX’s costs and 

prices before the agency. Id. at 1255. In POSCO CAFC, the appellate court remanded 

Commerce’s determination that electricity was not sold for less than adequate 

remuneration in the investigation concerning cold-rolled steel after finding that 

Commerce failed to adequately investigate the role of the KPX in the Korean electricity 

market. 977 F.3d at 1376–78. 
Court No. 22-00070 Page 12 

comparing prices but must instead assess whether government price-setting accords 

with market principles. Id. at 10 (citation and emphasis omitted). 

B. Analysis 

The statute directs Commerce to consider whether a benefit has been conferred 

through the provision of a good or service “for less than adequate remuneration.” 19 

U.S.C. § 1677(5)(E)(iv). While Congress directed Commerce to determine the 

adequacy of remuneration “in relation to prevailing market conditions” and provided a 

non-exhaustive list of conditions for Commerce consider, id., Congress otherwise left 

the development of a suitable methodology for conducting this analysis to Commerce’s 

discretion, Nucor, 927 F.3d at 1254 (stating that “the statutory standard of adequate 

remuneration . . . leaves a large range of potential implementation choices”). In the 

circumstances underlying this case, Commerce assesses “whether the government 

price is consistent with market principles.” 19 C.F.R. § 351.511(a)(2)(iii). Commerce 

adapts and applies this analysis on a case-by-case basis. See Preamble, 63 Fed. Reg. 

at 65,378 (declining to place relevant factors “in any hierarchy” and noting that “one or 

more of these factors” may be relevant “in any particular case”). 

Nucor does not dispute Commerce’s discretion to develop a suitable 

methodology for carrying out a Tier 3 analysis. See Pl.’s Reply at 7–8. Instead, Nucor 

argues that the phrase “government price” has but one meaning here, namely, the price 

reflected in KEPCO’s industrial tariff and POSCO’s corresponding reported prices. See

Pl.’s Mem. at 15 (citing GOK’s Resp. NSA, Ex. E-10; POSCO’s Resp. NSA, Ex. NSA-2); 

Pl.’s Reply at 9 (“Here, the regulation is unambiguous. Commerce’s tier three rule may 
Court No. 22-00070 Page 13 

not lay out an explicit methodology, but it is quite clear with respect to what must be 

‘consistent with market principles.’ That is the ‘government price,’ and not the 

government supplier’s revenues on all sales to all customers.”) (internal citation 

omitted). 

Nucor is correct insofar as the regulation unambiguously uses the phrase 

“government price.” As discussed below, however, Nucor fails to persuade the court 

that ascertaining whether the government price is consistent with market principles 

required Commerce to use KEPCO’s tariff rates as a comparator for cost recovery 

purposes. Stated differently, Commerce was within its discretion to determine whether 

KEPCO’s (i.e., the Government of Korea’s) tariff rates were set in accordance with 

market principles through its evaluation of whether KEPCO’s “income from prices 

charged for each electricity consumption category covers KEPCO’s costs, plus profit” 

for those categories. I&D Mem. at 24. 

In seeking to make its case, Nucor relies on Commerce’s explanation of its 

methodology in the agency’s remand results issued in connection with the investigation 

underlying the Korea CTL Order. See Pl.’s Mem. at 12; Pl.’s Reply at 5–6. Nucor 

emphasizes Commerce’s statement that “if the tariff charged to the respondent does not 

cover ‘cost of production’ plus a ‘profitable return on the investment,’ . . . then the 

respondent has received a countervailable benefit,” Pl.’s Mem. at 12 (quoting Final 

Results of Redetermination Pursuant to Ct. Remand at 30, POSCO v. United States, 
Court No. 22-00070 Page 14 

Consol. Court No. 17-cv-00137 (CIT July 6, 2021) (“POSCO Remand Results”)),11 to 

argue that Commerce has articulated—and should have applied—a cost recovery 

standard based on the POSCO’s reported prices, Pl.’s Reply at 6–7. In the POSCO

Remand Results, however, consistent with Commerce’s determination here, Commerce 

considered cost recovery in view of KEPCO’s industrial tariff classification schedule as a 

whole. See POSCO Remand Results at 10–11, 13; cf. I&D Mem. at 23 (noting 

consistency between Commerce’s analysis in this review and the investigation). 

Nucor next points to Commerce’s statutory duties to consider whether “there is a 

benefit to the recipient,” Pl.’s Mem. at 17 (quoting 19 U.S.C. § 1677(5)(E)), and to 

“determine individual countervailable subsidy rates,” id. at 12 (quoting 19 U.S.C. 

§ 1677f-1(e)); see also Pl.’s Reply at 10 (arguing that the statutory “provisions are 

necessary context for Commerce’s rule” and relevant to its proper interpretation). Nucor 

does not dispute that Commerce complied with the statute insofar as Commerce 

calculated an individual subsidy rate for POSCO, though one resulting in a nonmeasurable benefit. See Final Results, 87 Fed. Reg. at 6,843. Nucor argues, however, 

that Commerce’s analysis failed to measure the existence of a benefit to POSCO (i.e., 

the recipient) and instead measured whether KEPCO was “able to recoup losses on 

sales to some customers with excess returns on sales to other customers.” Pl.’s Mem. 

at 17. Nucor appears to suggest that the GOK is “engag[ing] in harmful cross11 Commerce issued the POSCO Remand Results pursuant to POSCO CAFC. See 

POSCO Remand Results at 1 & n.1 (citation omitted). The CIT sustained Commerce’s 

redetermination. POSCO v. United States, 46 CIT __, 556 F. Supp. 3d 1364 (2022), 

appeal filed, Court No. 22-1525 (Fed. Cir. Nov. 23, 2022). 
Court No. 22-00070 Page 15 

subsidization” within the industrial tariff classification schedule. Id. POSCO, however, 

paid the same tariff rates as other industrial users that purchased electricity during offpeak, mid-peak, and on-peak hours. See POSCO’s Resp. NSA, Ex. NSA-2.12

Nucor further contends that comparing the prices paid by the respondent directly 

to an underlying cost pursuant to a Tier 3 analysis is consistent with Commerce’s 

approach in Tier 1 and Tier 2 analyses. See Pl.’s Mem. at 12.13 Nucor argues that the 

phrase “government price” in the Tier 1 and Tier 2 provisions indisputably “refers to the 

government price actually paid by the respondent,” and, thus, the phrase must carry the 

same meaning here. Pl.’s Reply at 5. It is not the meaning of the phrase that differs in 

a Tier 3 analysis, however. What differs is Commerce’s method for determining the 

adequacy of remuneration based on the government price. Commerce’s Tier 1 and Tier 

2 analyses involve comparisons between the government price and either a market12 To prove its point, Nucor relies on Commerce’s benefit calculation for the industrial 

tariff rates that did not recover costs and a rate of return. See Pl.’s Mem. at 17–18. 

Nucor asserts that Commerce calculated benchmark prices that were “less than 

KEPCO’s cost of supply for the industrial tariff class.” Id. at 18 (emphasis omitted). 

Nucor, however, compared the lowest off-peak benchmark to the annual average unit 

cost of supply. See id. (citing GOK’s Resp. NSA, Ex. E-18; Prelim. Calc. Mem., Attach. 

II, ECF p. 630). Nucor thus failed to account for the fact that KEPCO’s annual average 

unit of supply includes the cost to supply electricity during mid-peak and on-peak time 

periods, for which Commerce calculated higher benchmarks. See id. 13 Nucor also relies on 19 C.F.R. § 351.503, Commerce’s regulation governing the 

benefit for programs not addressed elsewhere, which provides that Commerce “will 

consider a benefit to be conferred where a firm pays less for its inputs . . . than it 

otherwise would pay.” Pl.’s Mem. at 12–13 (quoting 19 C.F.R. § 351.503(b)) (alteration 

in original); see also Pl.’s Reply at 5. In addition to its lack of application here in light of 

19 C.F.R. § 351.511, section 351.503(b) does not explain how Commerce is to 

determine whether a firm has paid less for an input than it would have in the absence of 

a government program, and thus does not address the issues presented in this case. 
Court No. 22-00070 Page 16 

based price, or, when available to purchasers in the subject country, a world market 

price, respectively. 19 C.F.R. § 351.511(a)(2)(i)–(ii). By contrast, Commerce conducts 

a Tier 3 analysis when such comparators are unavailable, and that analysis necessarily 

is directed at “whether the government price is consistent with market principles.” Id.

§ 351.511(a)(2)(iii). 

For these reasons, decisions cited by Nucor involving benchmark comparisons 

for Tier 1 and Tier 2 analyses are inapposite. See Pl.’s Mem. at 13–14.14 Nucor’s 

citations to other Tier 3 determinations are also misplaced. See id. (citing Issues and 

Decision Mem. for Coated Free Sheet Paper from Indonesia, C-560-821 (Oct. 17, 2007) 

(“Paper from Indonesia Mem.”) at 23, https://access.trade.gov/Resources/frn/summary 

/indonesia/E7-21040-1.pdf (last visited Apr. 28, 2023); Issues and Decision Mem. for 

14 Citing U.S. Steel Corp. v. United States, 33 CIT 1935, 1944 n.10 (2009), Nucor 

argues that “the broader financial performance of the government supplier” is an 

impermissible method of determining the adequacy of remuneration. Pl.’s Mem. at 17. 

U.S. Steel, a Tier 1 case, does not foreclose Commerce’s methodology in this Tier 3 

case. In U.S. Steel, one plaintiff argued that Commerce should have used transaction 

prices between the government of India and Japanese customers as a Tier 1 

benchmark. 33 CIT at 1943. Commerce instead used prices at which the plaintiff 

“purchased iron ore lumps from an unaffiliated private supplier outside of India as the 

benchmark” for transactions between the plaintiff and the government supplier. Id. The 

court sustained Commerce’s decision, reasoning that the proffered alternative did not 

reflect “a market-determined price for the good resulting from actual transactions in 

India.” Id. at 1944. The court also noted that the supplier, “as a government authority, 

is free from normal profit-maximization pressures, and it may make pricing decisions 

based on other, non-commercial criteria.” Id. (emphasis added). It is in this context that 

the court rejected the argument that “overall profitability” of the government supplier 

alone demonstrated that its prices were market-based. 33 CIT at 1944 n.10. Here, 

however, in contrast to U.S. Steel, Commerce examined KEPCO’s costs, see Prelim. 

Mem. at 31, and based its decision regarding the adequacy of remuneration on 

KEPCO’s cost recovery for each relevant industrial classification, see id. at 32; I&D 

Mem. at 22. Thus, Nucor’s reliance on U.S. Steel is misplaced. 
Court No. 22-00070 Page 17 

Certain Cold-Rolled Steel Flat Prods. from the Russian Federation, C-821-823 (July 20, 

2016) (“CRS from Russia Mem.”) at 19, https://access.trade.gov/Resources/frn 

/summary/russia/2016-17937-1.pdf (last visited Apr. 28, 2023); Issues and Decision 

Mem. for Supercalendered Paper from Canada, C-122-854 (Oct. 13, 2015) (“Paper from 

Canada Mem.”) at 48, https://access.trade.gov/Resources/frn/summary/canada/2015-

26634-1.pdf (last visited Apr. 28, 2023)). Nucor cites these determinations to support 

the view that a market principles analysis required Commerce to compare POSCO’s 

rates to some other value. See Pl.’s Mem. at 13–14. In each case, however, 

Commerce first found that the government price was not demonstrably set in 

accordance with market principles and, in the pages cited by Nucor, derived a 

benchmark in order to calculate the benefit conferred, much as Commerce did here for 

certain electricity purchases. See Paper From Indonesia Mem. at 20, 23; CRS From 

Russia Mem. at 18–19, 67–68; Paper from Canada Mem. at 48; cf. Prelim. Calc. Mem. 

at 9. 

While Nucor might prefer Commerce to have used a different approach, Nucor’s 

disagreement is not a basis to remand Commerce’s determination. “Commerce has 

considerable prima facie leeway to make a reasonable choice within the permissible 

range,” Nucor CAFC, 927 F.3d at 1255, and has done so here. Accordingly, the court 

will sustain Commerce’s method of determining the adequacy of remuneration. 
Court No. 22-00070 Page 18 

II. Whether Substantial Evidence Supports Commerce’s Determination 

A. Parties’ Contentions 

Nucor contends that substantial evidence does not support Commerce’s 

determination that certain electricity prices were consistent with market principles. Pl.’s 

Mem. at 18. Nucor argues that Commerce should have rejected GOK pricing data 

based on governmental control over the electricity market and instead collected 

information directly from the GENCOs. Id. at 18–22. Nucor further contends that, even 

accepting KEPCO’s reported cost of supply, record evidence demonstrates that 

“KEPCO subsidizes large industrial users that can operate primarily during off-peak 

hours” and recoups those losses on sales to users that “primarily operate during onpeak hours.” Id. at 23; see also Pl.’s Reply at 15–16 (advancing similar arguments). 

The Government contends that Commerce’s determination is supported by 

substantial evidence. Def.’s Resp. at 11–14. The Government further contends that 

evidence cited by Nucor does “not undermine the substantiality of Commerce’s factual 

findings.” Id. at 17. 

The Government of Korea contends that “[r]ecord evidence establishes that 

KEPCO and the GENCOs cover their costs plus a sufficient rate of return” and, thus, 

“Commerce’s conclusion is supported by substantial evidence.” Def.-Int.’s Resp. at 16–

17. The GOK further contends that Nucor cherry picks data points in its attempt to 

demonstrate that prices paid by POSCO did not cover KEPCO’s costs. Id. at 19–20 

Lastly, the Government of Korea contends that Nucor has not shown that KEPCO’s 

prices operate to subsidize large industrial users. Id. at 21–23. 
Court No. 22-00070 Page 19 

B. Analysis 

Nucor’s characterization of the Korean electricity market as “a governmentowned, -operated, and -directed monopoly,” Pl.’s Mem. at 19, fails to carry the day. 

Commerce’s Tier 3 analysis exists to address circumstances such as those present in 

the Korean electricity market. See Preamble, 63 Fed. Reg. at 65,348 (stating that, “in 

situations where the government is clearly the only source available to consumers in the 

country, we normally will assess whether the government price was established in 

accordance with market principles”) (emphasis added). The key question is whether 

substantial record evidence supports Commerce’s determination that the Korean 

government’s electricity prices were consistent with market principles. Nucor’s 

arguments fail to persuade the court to answer this question in the negative. 

Nucor first asserts that the values that comprise the system marginal price are 

not determined “by the generators themselves” and, thus, Commerce should have 

requested relevant information from the GENCOs. Pl.’s Mem. at 21. Commerce found 

it unnecessary to do so, however, explaining that “KEPCO is obligated to pay the 

GENCOs for the total cost of generating electricity, including interest on loans, even if 

KEPCO is not profitable.” I&D Mem. at 24 & n.93 (citing GOK’s Resp. NSA at 34). 

Commerce further found that the GOK’s electricity “pricing is based on price-setting 

methodologies that aim to ensure companies in the chain are able to cover their costs, 

as well as a rate of profit.” Id. at 24–25 & n.95 (citing Prelim. Mem. at 27–32). Record 

evidence indicates that each of the GENCOs covered its cost of electricity sales for the 

POR. See GOK’s Suppl. Questionnaire Resp. (June 22, 2021) (“GOK’s 1SQR”), Ex. E-
Court No. 22-00070 Page 20 

26, CR 282–90, 2nd Suppl. CJA Tab 2 (the GENCOs’ unconsolidated financial 

statements); GOK’s Second Suppl. Questionnaire Resp. (July 21, 2021) (“GOK’s 

2SQR”), Ex. E-41, CR 311–14, 316–20, PR 170–73, CJA Tab 10 (Parts 2 and 3) (the 

GENCOs’ consolidated financial statements).15

Nucor next compares the annual average off-peak and mid-peak prices paid by 

POSCO to KEPCO’s annual average cost of supply for the industrial rate classification. 

See Pl.’s Mem. at 22 (citing POSCO’s NSA Resp., Ex. NSA-2; GOK’s NSA Resp., Ex. 

E-18). Nucor seeks to support the validity of this comparison through the amount of 

electricity purchased during the respective time periods. See id. (citing POSCO’s NSA 

Resp., Ex. NSA-2). From this information, Nucor infers that “KEPCO has structured its 

electricity prices to maintain subsidies to large industrial users like steel producers, 

while recouping losses on those sales through higher prices to other users.” Pl.’s Mem. 

at 22–23 (emphasis added). That inference, however, is unsupported; KEPCO’s annual 

average unit cost includes the cost of supplying electricity during on-peak hours, for 

which POSCO paid higher prices. See POSCO’s NSA Resp., Ex. NSA-2. Thus, to the 

15 In the preliminary memorandum, Commerce cited to the GENCOs consolidated 

financial statements. See Prelim. Mem. at 30 & n.203 (citing GOK’s 2SQR, Ex. E-41). 

A review of those statements shows that while the GENCOs each earned a gross profit 

for the POR, only three of six GENCOs were profitable overall. See GOK’s 2SQR, Ex. 

E-41. Following the hearing, Nucor also placed the unconsolidated financial statements 

on the record. See GOK’s 1SQR, Ex. E-26. Those statements likewise reflect a gross 

profit for the POR for all six GENCOs. See id. Nucor did not, however, raise arguments 

concerning any distinction between gross profit on sales and total profit either before 

Commerce or in its moving brief before the court; thus, any such arguments are waived. 

See Novosteel SA v. United States, 284 F.3d 1261, 1274 (Fed. Cir. 2002); see also 28 

U.S.C. § 2637(d) (“[T]he Court of International Trade shall, where appropriate, require 

the exhaustion of administrative remedies.”). 
Court No. 22-00070 Page 21 

extent Nucor argues that consumers of electricity during on-peak hours are subsidizing 

users during off-peak and mid-peak hours, Nucor must include POSCO within that 

group of on-peak consumers given POSCO’s purchase of electricity during this time as 

well. See id. 

Nucor also references news reports discussing analyses by the Korean National 

Assembly and the Korea Energy Economics Institute. Pl.’s Mem. at 23 (citing Cmts. 

and Rebuttal Factual Info. on New Subsidy Allegation Questionnaire Resps. (May 11, 

2021) (“Nucor’s Rebuttal Cmts.”), Exs. 5–6, CR 256–65, PR 129–38, CJA Tab 6); see 

also Pl.’s Reply at 18.16 Both reports claim that off-peak electricity prices should be 

raised to cover the costs of meeting the demand for electricity that is provided by 

higher-cost generators. See Nucor’s Rebuttal Cmts., Ex. 5 at ECF p. 272, Ex. 6 at ECF 

pp. 282–83. The data underlying these assertions are not, however, on the record and 

the reports do not address the information KEPCO provided for the industrial 

classification as a whole, except to note that the “cost recovery rate of current industrial 

electricity rates is higher than that of other contract types.” Id., Ex. 6 at ECF p. 283; see 

also GOK’s Resp. NSA, Ex. E-18 (listing cost recovery rates for different contract 

types). Additionally, Nucor’s focus on the comparative cost of providing electricity 

during different time periods is another iteration of Nucor’s argument that Commerce 

16 Nucor raised similar arguments in its case brief and Commerce acknowledged those 

arguments. See Case Br. (Dec. 15, 2021) at 7–8 & nn.27, 30–31, CR 360, PR 221, 

CJA Tab 15; I&D Mem. at 16 & n.40. While Commerce did not respond specifically to 

the cited reports, they do not undermine Commerce’s determination such that a remand 

is required for Commerce to address them explicitly. 
Court No. 22-00070 Page 22 

should have used a different benchmark to measure the adequacy of remuneration, an 

argument which the court has rejected. See supra, Discussion Section I.B. 

CONCLUSION

For the reasons discussed above, the court will sustain Commerce’s Final 

Results. Judgment will enter accordingly. 

 

 /s/ Mark A. Barnett 

 Mark A. Barnett, Chief Judge 

Dated: April 28, 2023 

 New York, New York