In the process of price control in service charge of public enterprises, the government use cross-subsidazation for political aims for redistribution of income and prices stabilization. Once a c cross-subsidazation is taken place, it is inertially maintained. With these contexts, it is important for the National Assembly to grasp of current situation of cross-subsidazation as it is excluded from deliberation of the National Assembly and, therefore, it would cause inefficient resource allocation problems. Considering these, this research reviews the cross-subsidazation problems with four case studies: KEPCO, KDHC, KLC and KEC.

According to the results of the research, cross-subsidazations is occured by purposes, consumption groups, and intra-business and among similar businesses. The government should cut the cross-subsidazation through price control in service charge of public enterprises with the reasons follows. First, cross-subsidazation goes against the benefit principle. Moreover, it prevents not only efficient resource allocations but also liquidation of marginal enterprises or marginal goods out of the market. In conclusion, the government should seize general situations of cross-subsidazation and make efforts for its systematic improvement.