Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

With a special attention given to the information on cost evaluation committee in Korea Power Exchange, an empirical analysis is performed to examine the determination process of wholesale power price. It is found that capacity payment has been determined by other factors such as fuel prices than marginal power plant capacity. It is also found that final settlement price of base load power has been systematically affected by the decision of cost evaluation committee under her consideration of peak load power settlement price. This empirical result indirectly shows that efforts to minimize the imbalance of profit among subsidiary power companies owned by KEPCO (Korea Electric Power Corporation) via arbitrary regulatory changes may increase the uncertainty and, in turn, deter new market entry in power sector.