A local court on Friday ruled it is not illegal for a state power monopoly to set its electricity rates below cost, a verdict expected to deter the state-run Korea Electric Power Corp. from implementing power rate hikes.

The Seoul Central District Court dismissed two separate suits filed by minor shareholders of KEPCO, who accused the government and a former KEPCO chief executive of keeping electricity rates intentionally low to the detriment of company shareholders.

One group consisting of 28 small shareholders filed a 7.2 trillion won ($6.38 billion) compensation suit against the government, claiming the state-run power company suffered massive losses due to its failure to adequately raise electricity prices in a timely manner between 2009 and 2010.

Another group of 14 small shareholders sued KEPCO’s former president, Kim Ssang-su, demanding 2.8 trillion won in compensation. (Yonhap News)