Effect of the amendments to the Power Supply Regulations on Individual Supply Contracts

The Electric Utility Act, which is a public service business that supplies electricity essential to a large number of general consumers, excludes the freedom of contract from the principle of freedom of contract so that the parties to the supply contract between the general electricity business and the general consumers may individually agree on the terms and conditions of the supply contract and shall only follow the determination of the supply regulations by excluding the principle of freedom of contract for the rational operation of the electricity business that supplies electricity essential to their lives. In particular, with respect to the electricity rates, strict procedures are required from the standpoint of fair and reasonable determination of public utility charges, and these supply regulations have the nature of the terms and conditions of all the supply contracts applicable to all the electricity supply contracts between the general electricity business operator and the large and unspecified consumers in the supply area, so if the amendment of the supply regulations has completed the duty of publication after obtaining authorization through the procedures prescribed in the Electric Utility Act, it shall be deemed that there was a change in the contract with

Articles 15, 16, and 19 of the Electric Utility Act

Korea Electric Power Corporation

Korea Highway Corporation

Daegu High Court Decision 86Na18 delivered on October 15, 1987

The conjunctive claim part of the judgment below shall be reversed and the case shall be remanded to the Daegu High Court.

The appeal against the primary claim is dismissed.

The costs of appeal against the dismissal of an appeal shall be borne by the plaintiff.

(1) As to the grounds of appeal on the main claim, the court below, after considering the evidence, found that the plaintiff supplied electricity to the part of the facility's explanation on the Southern Sea Highway with the general electricity charge applicable to the business electricity of the government offices, etc. upon entering into an electricity supply contract for the construction of the facility and the electrical power supply contract for the part of the facility's explanation on the Highway, and the defendant had to maintain and manage the facility's above highway opened, and the above general electricity supply provision was amended from December 7, 1974 to the above general electricity supply terms and conditions, and the above general electricity "B" was used for the electricity of the government offices (as from September 1, 1981, changing its name to Class 1 and Class 2 of the business usage charge). The court below rejected the plaintiff's agreement to provide the defendant with the above new electricity supply charge for the facility's new electricity supply and demand based on the electricity supply and demand rate of Class 2, which was concluded with the plaintiff's employees' error on the ground that the contract had not been concluded with the plaintiff's new electricity supply rate to 181.

On the other hand, the court below's decision that the electricity supply regulations on the electricity rates were amended and applied to the defendant's facilities that had already been imposed the electricity rates of the Class 1 for business due to the error of the plaintiff's employees on the ground that they had agreed to have continued to exist as the Class 1 for business purposes, is erroneous in the misapprehension of the binding force of the electricity supply regulations as seen earlier, but even if the Class 1 for business was applied as alleged by the plaintiff, even if the Class 1 for business purposes were paid, the remaining charges that have not been paid remain due to the failure to claim and unpaid charges, and cannot be deemed as having been unjustly unjust because the defendant exempted the remainder of the charges. Therefore, the court below's decision that dismissed the plaintiff's claim for unjust enrichment is justified in its conclusion.

(2) As to the grounds of appeal on the conjunctive claim:

The court below rejected the plaintiff's conjunctive claim for payment of unpaid electricity charges of KRW 4,906,092, which is the amount calculated by deducting the electricity rates of Class 1 for business already paid by the defendant from the electricity rates of Class 2 for three (3) years prior to the filing date of the principal lawsuit on the remainder of the facilities other than the Seongdong Group among the facilities under the defendant's management, on the ground that the plaintiff can claim electricity rates of Class 2 for business which are higher than the Class 1 for business already paid by the defendant to the defendant, even if the power supply regulations were amended and promotions to the people through newspapers and broadcasting, such facts alone are insufficient, and there is no evidence to support that there is no agreement between the plaintiff and the defendant to supply electricity of Class 2 for business purpose or that the defendant agrees to pay electricity rates of Class 2 for business purpose at least, on the ground that there is no reason to support that such agreement or approval had been made between the plaintiff and the defendant.

According to the provisions of the Electric Utility Act on the supply of electricity, the general electricity supplier shall establish the supply regulations on electricity rates and other supply terms and obtain authorization from the chief of the power resources department, and shall obtain approval from the President with respect to the electric utility charges of the Korea Electric Power Corporation under the Korea Electric Power Corporation Act after deliberation by the Public Utility Fee Review Committee and the State Council in accordance with Article 3 of the Budget and Accounts Act (Article 15), and once the provisions of the Korea Electric Power Corporation are granted authorization, it shall be able to take unilateral measures on the basis of public interest judgment depending on changes in circumstances (Article 19) (Article 16), and shall prohibit the supply of electricity that is not in accordance with such supply regulations (Article 17), and shall impose an obligation to supply general electricity service supplier with respect to the general demand in the supply area (Article 14); and such provisions are supported by penal provisions (Article 80 subparagraphs 2, 3, 81 subparagraph 3, 4, and 83 subparagraph 2).

In light of these provisions, the Electric Utility Act, which is a public service business that supplies electricity essential to a large number of general consumers, requires strict procedures in terms of the fair and reasonable determination of public utility charges, by excluding the principle of freedom of contract for the rational operation of the electricity business that supplies electricity essential to their lives and for the protection of users’ interests, and by requiring the parties to individually agree on the terms and conditions of the supply contract with a large number of general consumers to comply with the exclusive determination of the supply regulations. In particular, such supply regulations have the nature as a general contract clause applicable to all the electricity supply contracts between the general electricity business operator and his/her supply area and his/her general consumers, and thus, if the amendment of the above supply regulations has completed the duty of publication after obtaining authorization through the procedures prescribed in the Electric Utility Act, it shall be deemed that the amendment of the supply regulations is a change in the terms and conditions of the contract with a new rate for the supply contract with a large number of individual consumers, and it shall not be deemed binding only when a new contract

In a different view, the lower court rejected the Plaintiff’s claim for unpaid rental fees, which affected the conclusion of the judgment by misapprehending the nature of the electricity supply provision.

(3) Therefore, the part of the judgment below's conjunctive claim shall be reversed and remanded to the court below. The appeal against the main claim shall be dismissed. It is so decided as per Disposition by the assent of all participating judges.

Justices Kim Yong-ju (Presiding Justice)