Public utility service rates represent the essential services provided for industry and everyday living, and have a substantial impact and effect on the people and companies, depending on the adequacy of utility rates and equity in setting prices. At the same time, since it is difficult for utilities to fulfill their public purpose when left under market-based mechanisms, given their strong monopolistic nature, the government retains the right to regulate the public utility service rating system and/or allow for its adjustment and sets forth detailed criteria for setting the rates for public utility services according to the “Public Utility Rating Criteria.”
   This evaluation report makes a comparison between total costs and public utility rates, through which an analysis is conducted on key issues including the pricing structure of each public utility and relevant policies; by reviewing the adequacy of current utility rates and giving comprehensive consideration to the characteristics of each service, industry structure, market conditions and the fiscal soundness of the service provider.
   As a result, in the case of electricity prices, the calculation method of using a calibration adjustment factor in wholesale power transactions serves the role of only distributing operating profits between Korea Electric Power Corporation and power generation subsidiaries, and fails to encourage higher efficiency in power generation. In case of retail electricity prices, it has been pointed out that a gap between the production cost and price occurs due to the progressive electricity rate scheme for households and the lack of a fuel price linkage system, failing to induce rational power consumption. The report concludes that consumer utility needs to be maximized by inducing rational power consumption via relaxing the progressive electricity rate scheme for households and implementing a fuel price linkage system. Rural waterworks showed a wide gap between production costs and prices by region, which appeared to be caused by renovation cost differences, in addition to inevitable conditions such as size of population, population density and the distance to water intake plant. Recommendations made included the need to actively enhance operational efficiency in local waterworks, adjust excessively low water utility rates in some areas to reflect reality and the need for the central government’s fiscal support to cover renovation costs. In the case of railways, high speed railway construction debts posed a serious issue requiring a fundamental solution, and the report proposed ways to improve the transparency of the cost structures as they were undermined to some degree by the cross-subsidizing of high speed and regular railways.