[2020 National Audit] Opposition: "Korea Hydro & Nuclear Power, 2018 Wolseong Board Hastily Formed" Jung Jae-hoon: "Establishing It Was the Best Option"

October 23 Science and ICT Committee Audit... Afternoon Session Continues Focused Questions on Wolseong Unit 1 Following Morning Session

Jaehoon Jeong, President of Korea Hydro & Nuclear Power, appears at the Science, Technology, Information and Broadcasting and Communications Committee comprehensive audit held at the National Assembly on the 23rd, responding to lawmakers' questions. (Photo by Yonhap News)

[Asia Economy Reporter Moon Chaeseok]

"Is the Korea Hydro & Nuclear Power (KHNP) board of directors the mouthpiece of the president or the Ministry of Trade, Industry and Energy?" (Park Seong-jung, People Power Party lawmaker)

"To block management uncertainties, shutting down Wolseong Unit 1 was the best alternative." (Jung Jae-hoon, KHNP CEO)

On the afternoon of the 23rd, during the National Assembly Science, Technology, Information and Broadcasting Communications Committee (STIBC) audit, intense questioning from both ruling and opposition parties continued regarding the early closure of Wolseong Unit 1.

Park, the opposition party secretary of the STIBC, asked CEO Jung extensively about the validity of evaluations on economic feasibility, appropriateness, safety, and local acceptance.

Park criticized the local acceptance survey process, saying, "The Nuclear Safety and Security Commission should have held a public hearing, but only two resident meetings were held," and added, "Overall, all procedures were ignored by a single word from the president, and the entire decision-making was rushed."

He continued, "KHNP held an emergency board meeting on the 15th, right after the ruling party's landslide victory in the local elections on June 13, 2018," and asked, "Why was it such an emergency board meeting? Is the KHNP board the president's mouthpiece or the Ministry of Trade, Industry and Energy's mouthpiece?"

CEO Jung tried to respond, but STIBC Chairman Lee Won-wook passed the floor to ruling party lawmaker Cho Seung-rae.

Cho asked, "Maintenance was done at a cost of about 700 billion won, but wouldn't a decisive manager stop a nuclear plant that has already incurred sunk costs of 500 to 700 billion won if additional costs and losses are expected?"

Jung replied, "At that time, shutting it down was the best alternative to block management uncertainties."

Cho further asked, "KHNP must have considered the macro changes in the business environment. With the global trend of energy transition and nuclear phase-out, shouldn't KHNP, as an energy-specialized company, also worry about survival? What decision was made based on that?"

Jung answered, "Early closure. In fact, Wolseong Unit 1 had already been offline for more than a year and had little chance of being operated again."

He added, "Wolseong Unit 1 was losing about 100 billion won annually even if left alone. Under such circumstances, which manager would insist on continuing its operation?"

Cho said, "The life extension decision made in 2012 was hasty, and the first step was taken wrongly. I see the reversal of that wrong decision as a brave choice."

Jung responded, "I don't think it was a good decision, but I believe it was a necessary one."