Abstract: In this paper, we attempt to measure the adequacy of the industrial electricity price in the aspect of generation cost in the situation that the recent industrial electricity experiences intensive and a sharp increase. The results of our study suggest that the effect of generating cost savings in the industrial sector are larger compared to other sectors. This is because generation cost are cheaper from high voltage usage, higher load factor from the plant from construction investment amount of savings, transmission line saving costs. In particular, we can expect that the room for reducing electricity prices exist when taking into account the power supply, demand conditions and institutional conditions. To summarize the discussion on these, industrial electricity prices than the actual costs of supply are determined to be overly been rising when compared to the actual generation costs increase. These results suggest that Korean regulation authorities needs to draw up measures to help improve the coetitiveness of those firms which possess high portion of electricity costs, but experience the rapid rate increases in recent years.