Lawsuit regarding the progressive electricity pricing system dismissed by the Supreme Court in 2023 - ①

log date: 2026-5-1

"The privatization of KEPCO has infringed upon our citizens' fundamental rights to energy."


From the perspective of ownership, KEPCO is a company that has completed privatization.
Not only was it listed on the stock exchange in 1989 and the New York Stock Exchange in 1994,
but the ownership structure of KEPCO shares has reached a level that threatens South Korea's energy sovereignty. South Korea government owns only 18.2% of KEPCO shares, while the Korea Development Bank owns 32.9% and foreigners own 22.26%. (As of April 10, 2026) (Source: 곽상언TV) 


Preface
I would like to clarify that the content of this post is sourced from a book authored by lawyer Sahng-eon Gwak and video materials from his YouTube channel. Based on his litigation records and explanations, this post aims to identify unlawful business conduct of KEPCO's progressive residential electricity pricing system and to document the progress of the lawsuit and the facts that have emerged.
 
Korea Electronic Power Corporation (KEPCO) - A so-called "market-oriented" energy company under the Ministry of Climate, Energy and Environment established to supply electricity to South Korea. Although it operates under the guise of a public enterprise, it is publicly listed and has completed privatization with the number of shares held by foreign entities currently on the rise.

12 lawmakers proposed an amendment bill to the Electric Power Business Act last December; however, no progress has been made over the past six months. And, public interest in related lawsuits appears to be far too minimal. South Koreans should have demanded government intervention and rectification long ago. 

While lawmakers should step forward to resolve cases where the low-income households suffer the most, the reality is that the current South Korean National Assembly is solely focused on catering to the demands of large conglomerates as well as the wealthy families.

Reference


A lawyer who was the first to recognize, research, and pursue litigation regarding the progressive electricity rate system along with relevant policies since 2012, Sahng-eon Gwak (곽상언) became a member of the National Assembly, elected from the Jongno-gu in the 22nd general election.

One summer of his time as a lawyer, Gwak received an electricity bill that suddenly charged exorbitant amounts. To understand the cause of these excessive charges, he embarked on an analysis of the electricity pricing system.

He stated that because no research on electricity rate policies had been conducted previously, there was almost no systematic data available, and he had to personally read all the documents and meticulously review the information from beginning to end. 

It appears Gwak faced significant difficulties in planning and conducting surveys and research one by one while engaging the public. In particular, he mentioned that obtaining data regarding KEPCO was quite difficult; I believe this is largely due to the lack of existing research data and the fact that KEPCO's management is not transparently disclosed.


Source:  Live [Live Episode 24] streamed on 2026-4-10
While there were difficulties in obtaining information related to KEPCO, its retirees called his office and testified, "You seem to grasp the essence of what happened. Now that I have retired, I can speak."


Lawyer Gwak briefly summarized the issues on page 130 of his book 'Sahng-eon Gwak's Perspective - A Cry to the World,' in which caused by KEPCO's residential electricity pricing policies. 

"KEPCO imposes electricity charges on users through 'Terms of Electricity Supply' approved by the South Korean government. KEPCO's Terms of Electricity Supply introduce a 'progressive rate system' only for 'residential' electricity rates, and due to this progressive system applied to residential rates, ordinary households are paying excessive electricity bills.

In particular, lower incomers pay more in electricity bills relative to their income, meaning the poorest are suffering the greatest harm. Furthermore, while electrical energy consumers 24 hours a day, they have no rights or freedoms when it comes to electricity consumption. They simply pay electricity bills as determined by KEPCO and the government." 
 



A significant issue is pointed out on page 6 of the amendment to the Electric Power Business Act, proposed by 12 lawmakers including Gwak in November 2025.

"In the market for essential goods, only monopolistic retailers exist. If such monopolistic retailers introduce a progressive pricing system, it maximizes their profits both theoretically and empirically, while inflicting the greatest disadvantage on consumers. 

For this reason, no country in the world, with the exception of South Korea, allows monopolistic retailers to adopt progressive pricing systems. This situation is permitted only in South Korea."

As the sole operator licensed for the electricity sales business, the Korea Electric Power Corporation (KEPCO) is a monopolistic electricity retailer authorized to sell electricity throughout South Korea.

Nevertheless, it conducts its electricity sales business by obtaining approval from the Minister of Climate, Energy and Environment for its Basic Supply Terms and Conditions, which include electricity rate regulations adopting a "differential pricing system by usage" based on Article 7, Paragraph 1 of the Enforcement Decree of the Electric Power Business Act and Article 14 of the Notification on Electricity Rate Calculation, as well as regulations adopting a "progressive pricing system" based on Article 14, Paragraph 2 of the Notification on Electricity Rate Calculation.

Based on the reasons above, lawmaker Gwak argues that the government should be enabled to review whether there is a legitimate reason for an electricity retailer to adopt a "differential pricing system by usage," and that 

it is correct to prohibit the progressive pricing system unless the government licenses multiple electricity retailers in accordance with Article 7, Paragraph 1 of the Electric Power Business Act. 




In 2014, lawmaker Gwak who was a lawyer at the time filed a lawsuit along with 20 taxpayers to correct the unfairness and illegality of the progressive electricity pricing system of KEPCO and demand refunds.

The three objectives of the lawsuit he filed were to rectify the illegality by making KEPCO (1) to return the unjustly collected electricity fees to the public, (2) to reform the electricity rate system so that unfair collection could never happen again, and (3) to prevent the state or large groups from committing illegal acts and irregularities through covert methods such as electricity sales.

Gwak began to inform the public of the fact that for a long time,

KEPCO has exacerbated inequality by collecting excessive electricity fees from the public while selling electricity at low prices to giant conglomerates.

Lawsuit which began with only 20 people grew to include over 20,000 participants by September 2016. As the number of citizens participating in the lawsuit increased significantly, the government reportedly reformed the residential electricity rate system in January 2017. 

As a result, electricity rates were reportedly lowered by 1.2 trillion won. While the lawsuit proceeded, many citizens doubted whether the people could win against the government; however, Sang-eon Gwak, lawyer at the time, reportedly boasted that the consumers would win because he trusted the South Korean judiciary. Nevertheless, in April 2023, the Supreme Court ruled to dismiss the consumers' claim.

This ruling angered many electric energy consumers, and the Korean judiciary was criticized for turning a blind eye to justice and siding with the powerful to secure its own interests.

Gwak explained that the reason doubts were raised about the legitimacy of the ruling was that the grounds for the judgment were not specified in the ruling document.

Source: Live [Live Episode 24] streamed on 2026-4-10
"A ruling in which the judge made no judgment.
On March 30, 2023, the Supreme Court ruled in the 'case regarding the claim
for refund of residential electricity charges' that the progressive rate system is legitimate."


The progressive rate system in South Korea is a pricing scheme in which electricity rates increase in stages as consumption increase. KEPCO applies this progressive system only to residential electricity rates. Furthermore, the actual progressive rate based on usage differs from the nominal progressive rate.

A fatal flaw of the progressive system for residential electricity rates is that it charges higher rates to general housing using low-voltage power (town houses, multi-family homes, and detached houses) than to apartments using high-voltage power. This effectively results in higher electricity bills being imposed on low-income households.

On the other hand, KEPCO is incurring losses by selling industrial electricity, which accounts for 55% of total electricity sales, below cost. It is reported that large corporations account for 73.5% of industrial electricity consumption. (Page 138) 

This effectively amounts to the government emptying the pockets of the public to subsidize the profits of large corporations.

Source:  Live [Live Episode 24] streamed on 2026-4-10
The Dae-jung Gihm (김대중) administration pushed for privatization by separating the power generation sector from KEPCO and opening to private power companies.
Gwak stressed that the generation, transmission and distribution sectors should never have been privatized, and the public is now bearing the full brunt of the damage.


According to lawmaker Gwak, no other country in the world applies such high progressive rates to its citizens as South Korea does. The fact that the stated purpose of introducing the progressive rate system was energy conservation and the protection of low-income households demonstrates the cunning and duplicity of those who designed this rate policy.

Although the creation of the energy voucher system appears to be a form of assistance to low-income households, this is merely another instance of deceiving the public.

* Energy voucher system: a system that requires low-income citizens seeking government assistance to submit documents proving their income level, grants energy vouchers if eligible, and enables them to purchase electricity from KEPCO.

"If they truly intended to help low-income households who have lived paying electricity bills tens of times higher than their income and usage due to the progressive rate system, they should have simply abolished the progressive rate system.
However, leaving the progressive pricing system - which forces them to pay excessive electricity bills - as is, merely pretending to appease them by offering energy vouchers is akin to saying they will not prohibit the act of beating with a stick, but will instead offer a bandage to heal the wounds caused by the beating." - said Gwak pointing out the flaws in the energy voucher system.


Source:  Live [Live Episode 24] streamed on 2026-4-10
"The only way to resolve all the problems caused by the privatization of KEPCO is to delist KEPCO.


"After that, the only solution is to transform KEPCO into a full-fledged public enterprise."


South Korea's residential electricity rate system is based on a malicious scheme designed to exploit the socially vulnerable, forcing recipients of basic living allowances to pay electricity bills amounting to tens of times their income.

Gwak emphasizes that only by discarding information injected for the purpose of brainwashing and fixed perspectives, and facing reality can the problems be identified and rectified.

It meant that South Koreans seem to have been tamed and brainwashed by propaganda that exquisitely combines falsehood and fact, failing to realize that they are being treated unfairly.

For a simplest yet most shocking example, the Korean public perceives Korea Electric Power Corporation (KEPCO), which has already been privatized, as a public enterprise. In fact, KEPCO was listed on the New York Stock Exchange in 1994, and currently, the ownership ratio of KEPCO shares by foreigners reaches 22.26% as of Apr.10, 2026.

Gwak asserted that the aforementioned lawsuit is absolutely necessary to rectify the injustices rampant in our society, normalize abnormal situations, and eradicate deep-rooted evil. 

For the same reason, the Supreme Court decision to dismiss the case was a great shock and disappointment to many citizens including Attorney Gwak, and was an unjust ruling that was utterly incomprehensible and thus unacceptable.

 
Source:  Live [Live Episode 24] streamed on 2026-4-10
"I am saddened by the justification of injustice, desensitization, and learned helplessness."


Who is Sahng-eon Gwak?

Lawmaker Gwak was born in 1971 and is the husband of the daughter of the 16th President Roh Moo-hyun (노무현) and the father of two daughters and a son. 

He majored in International Economics in his undergraduate studies, pursued a master's degree in Law. He has worked as a lawyer in South Korea since 2004 and reportedly entered politics to fulfill his dream of building a society where basic living conditions are equal. 

Currently serving as a member of the 22nd National Assembly, Gwak serves as a standing member of the Special Committee on Budget and Accounts, and the Climate, Energy, Environment, and Labour Committee.



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