Document:

EX-10.28

Exhibit 10.28

BETWEEN

FUJIAN PROVINCE NINGDE ELECTRIC POWER INDUSTRY BUREAU

AND

PINGNAN COUNTY WANGKENG HYDROELECTRIC CO., LTD.

GRID CONNECTION AND

DISPATCHING AGREEMENT

FOR

WANGKENG HYDROPOWER STATION

July 2008

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CONTENTS

	 	 	 	 	 	 	 
	CHAPTER I	 	DEFINITIONS AND INTERPRETATIONS
	 	 	4	 
	CHAPTER II	 	REPRESENTATIONS BY THE PARTIES
	 	 	10	 
	CHAPTER III	 	OBLIGATIONS OF THE PARTIES
	 	 	11	 
	CHAPTER IV	 	CONDITIONS FOR GRID CONNECTION
	 	 	15	 
	CHAPTER V	 	TRANSFER OF DISPATCHING RIGHT
	 	 	19	 
	CHAPTER VI	 	OPERATION UNDER DISPATCHING
	 	 	22	 
	CHAPTER VII	 	EQUIPMENT OVERHAUL AND MAINTENANCE
	 	 	26	 
	CHAPTER VIII	 	POWER GENERATION PLAN
	 	 	29	 
	CHAPTER IX	 	RESERVOIR DISPATCHING
	 	 	31	 
	CHAPTER X	 	RELAY PROTECTION AND AUTOMATIC SAFETY DEVICES
	 	 	34	 
	CHAPTER XI	 	DISPATCHING AUTOMATION
	 	 	39	 
	CHAPTER XII	 	DISPATCHING COMMUNICATION
	 	 	42	 
	CHAPTER XIII	 	ACCIDENT MANAGEMENT AND INVESTIGATION
	 	 	46	 
	CHAPTER XIV	 	FORCE MAJEURE
	 	 	50	 
	CHAPTER XV	 	LIABILITIES FOR BREACH OF CONTRACT
	 	 	51	 
	CHAPTER XVI	 	EFFECTIVENESS AND VALID TERM
	 	 	56	 
	CHAPTER XVII	 	MODIFICATION, ASSIGNMENT AND TERMINATION OF THIS
AGREEMENT
	 	 	56	 
	CHAPTER XVIII	 	DISPUTE RESOLUTION
	 	 	58	 
	CHAPTER XIX	 	APPLICABLE LAW
	 	 	58	 
	CHAPTER XX	 	MISCELLANEOUS
	 	 	59	 
	APPENDIX I:	 	DIAGRAM FOR METERING POINTS
	 	 	63	 
	APPENDIX II: TECHNICAL PARAMETERS FOR THE POWER PLANT	 	 	64	 
	APPENDIX III: DIVISION OF DISPATCHING RANGE OF POWER PLANT EQUIPMENTS	 	 	66	 

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(Agreement Number:                      )

GRID CONNECTION AND DISPATCHING AGREEMENT

This Grid Connection and Dispatching Agreement (hereinafter referred to as this
“Agreement”) is executed by and between the following two Parties:

Party A: Fujian Province Ningde Electric Power Industry Bureau, a regional power grid
operation enterprise registered and established with the Administration for Industry
and Commerce of Ningde City, Fujian Province, with the tax registration number of
35090215742088X, the registered address at No. 48, Hefeng Road, Ningde City, Fujian
Province, Zip Code: 352100, and the legal representative of which is Wang Feng.

Party B: Pingnan County Wangkeng Hydroelectric Co., Ltd., a power generation
enterprise with the legal entity status, which was registered and established with the
Administration for Industry and Commerce of Pingnan County, Fujian Province, with the
tax registration number of 3522280012723, the registered address of Chengguan, Pingnan
County, Fujian Province, and the legal representative of which is Huang Shao Jian.

WHEREAS:

	(1)	 	Party A is currently operating and managing a power grid which is suitable for
the operation of power plants, and agrees that the power plant of Party B could
be connected to the power grid pursuant to the provisions of this Agreement;

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	(2)	 	Party B is constructing, owning and operating the Wangkeng Hydropower Station
(hereinafter referred to as the “Power Plant”) with a total installed capacity of
2×20 MW at Wangkeng Village, Tangkou Township, Pingnan County, Fujian Province,
and agrees to connect the Power Plant to the power grid of Party A pursuant to
the provisions of this Agreement.

In order to ensure the safety, high quality and economic operation of the electric
power system, regulate the dispatching of power grids and grid-connected
operations, and protect the legal rights and interests of both Parties, on the
principles of equality, free will and good faith, both Parties hereto have
entered into this Agreement through consultations in accordance with the Electric
Power Law of the People’s Republic of China, the Contract Law of the People’s
Republic of China, the Administration Regulations on the Dispatching of Power
Grids and other relevant laws and regulations of the People’s Republic of China.

CHAPTER I DEFINITIONS AND INTERPRETATIONS

	1.1	 	Unless otherwise required by the context, the following terms used in this
Agreement shall have the meanings set forth as follows:
	 
	1.1.1	 	“Dispatching Center” refers to Fujian Electric Power Dispatching (Transaction)
Center, a dispatching agency in charge of organizing, commanding, instructing and
coordinating the operation of the electric power system of the province pursuant
to applicable laws, which is subordinated to Fujian Province Electric Power Co.,
Ltd.
	 
	1.1.2	 	“Ningde Regional Dispatch” refers to the Electric Power Dispatching Station
subordinated to Ningde Electric Power Industry Bureau, a dispatching agency in
charge of organizing, commanding, instructing and coordinating the operation of
the

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	 	 	regional electric power system pursuant to applicable laws, which is subordinated to
Party A.

	1.1.3	 	“Power Plant” refers to the power generation facilities with all auxiliary
facilities stretching to the property demarcation point with the total installed
capacity of 40 MW (with two (2) units, respectively No. 1 unit of 20 MW, No.2
unit of 20 MW, the detailed technical parameters please refer to Appendix II),
which is constructed, owned, managed and operated by Party B and located at
Wangkeng Village, Tangkou Township, Pingnan County, Fujian Province.
	 
	1.1.4	 	“Connection Points” refer to the interconnection points between the Power Plant
and the power grid (please refer to Appendix I).
	 
	1.1.5	 	“Initial Connection Date” refers to the first day on which the Power Plant
(units) is (are) connected to the power grid.
	 
	1.1.6	 	“Connection Application” refers to the written application document submitted
by Party B to Party A requesting for connecting its Power Plant (units) to the
power grid.
	 
	1.1.7	 	“Connection Method” refers to the systematic way of connecting the Power Plant
(units) to the power grid.
	 
	1.1.8	 	“AVC” refers to Automatic Voltage Control.
	 
	1.1.9	 	“RTU” refers to Remote Terminal Unit.

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	1.1.10	 	“Disconnection” specially refers to, under this Agreement, the interruption of
electric connection between the power grid and the power generation equipments
which are operating connected to the power grid.
	 
	1.1.11	 	“Special Operation Mode” refers to the operation arrangement of taking unusual
connection mode for the Power Plant or the power grid due to certain needs.
	 
	1.1.12	 	“Unit Available Capacity” refers to the output of the units modified at any
time due to the restrictions of equipment conditions.
	 
	1.1.13	 	“Planned Outage” refers to the status of the units of the Power Plant during
the planned overhaul period, including the general overhaul, the maintenance, the
general service system planned overhaul, and the holiday repairing and the
elimination of defects during off-break period required by the dispatching
agency, etc.
	 
	1.1.14	 	“Unplanned Outage” refers to the unavailable status of the units of the Power
Plant other than Planned Outage. Based on the urgency of the needs of outage, the
Unplanned Outage can be classified into five categories: (1) immediate outage;
(2) the outage which could be delayed for a short while but the units must exit
within six hours; (3) the outage which could be postponed over six hours but the
units must exit within seventy-two hours; (4) the outage which could be deferred
over seventy-two hours but the units must exit before the next Planned Outage;
and (5) the prolonged outage which is beyond the period of the Planned Outage.
	 
	1.1.15	 	“Forced Outage” refers to the Categories 1, 2 and 3 of Unplanned Outage set
forth in Clause 1.1.14.

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	1.1.16	 	“Equivalent Unit Derated Hours” refers to the outage hours which are converted
from derated hours and calculated by the rated capacity on the nameplate
	 
	1.1.17	 	“Equivalent Unplanned Outage Hours” refers to the sum of Unplanned Outage hours
and Unplanned Equivalent Unit Derated Hours.
	 
	1.1.18	 	“Annual Allowable Planned Outage Hours” refers to the allowable hours for
Planned Outage within any given year for the units classified by the same type on
the same grid which have been determined by both Parties according to the
recommendations of equipment manufacturers and the operating conditions of the
Power Plant’s grid-connected generation units. The Annual Allowable Planned
Outage Hours for the units can be classified into the Annual Allowable Planned
Outage Hours for general overhaul years and the Annual Allowable Planned Outage
Hours for the years without general overhaul.
	 
	1.1.19	 	“Annual Allowable Equivalent Unplanned Outage Hours” refers to the allowable
hours for Equivalent Unplanned Outage within any given year for the units
classified by the same type on the same grid which have been determined by both
Parties according to the recommendations of equipment manufacturers and the
operating conditions of the Power Plant’s grid-connected generation units. In
this Agreement, it only refers to the Unplanned Outage caused by Party B’s
Reason. The Annual Allowable Equivalent Unplanned Outage Hours for the units can
be classified into the Annual Allowable Equivalent Unplanned Outage Hours for
general overhaul years and the Annual Allowable Equivalent Unplanned Outage Hours
for the years without general overhaul.
	 
	1.1.20	 	“Daily Power Generation Dispatching Plan Curve” refers to the curve worked out
by the dispatching agency on a daily basis to determine the power generation
output of the Power Plant for each period of time of the next day.

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	1.1.21	 	“Emergencies” refer to the major accidents occurred to the power generation or
power supply facilities within the electric power system, including the grid
frequency or electric voltage exceeds the prescribed limit, the loading of the
transmission and transformation facilities is over the regulated amount, the
power of trunk circuit exceeds the specified stability limitation and other
operating conditions which threaten the grid operation safety, may destroy the
grid stability and eventually lead to the grid collapse or even vast area power
cut.
	 
	1.1.22	 	“Dispatching Code for Electric Power System” refers to the Fujian Province
Electric Power System Dispatching Code and the Ningde Region Electric Power
System Dispatching Code which are formulated by Party A and Party B in accordance
with the Administration Regulations on the Dispatching of Power Grids, the
national standards, the electric power industry standards and the actual
operating conditions of the power grid of Fujian province, and regulate the
dispatching and operation of the electric power system of Fujian Province.
	 
	1.1.23	 	“Party A’s Reason” refers to the requirements of Party A or liabilities
attributed to Party A, including the liabilities which should be born by Party A
for the enlargement of accident due to Party A’s failure to perform relevant
national regulations and standards, etc.
	 
	1.1.24	 	“Party B’s Reason” refers to the requirements of Party B or liabilities
attributed to Party B, including the liabilities which should be born by Party B
for the enlargement of accident due to Party B’s failure to perform relevant
national regulations and standards, etc.
	 
	1.1.25	 	“Power Purchase and Sale Contract” refers to the contract entered into by and

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	 	 	between Party A and Party B regarding the purchase and sale of the electricity output
generated by the Power Plant and other relevant commercial issues.

	1.1.26	 	“Force Majeure” refers to the objective events which are unforeseen,
unavoidable and insurmountable, including volcano eruptions, tornados, tsunamis,
snowstorms, mudslide, landslide, flood, fire, water inflows failing to meet the
designed standards, earthquakes, typhoons, thunder and lightening and fog flash,
etc. which exceed the designed standards, and nuclear radiation, wars, plagues
and riots, etc.
	 
	1.1.27	 	“Direct Economic Losses” refers to the expenses for replacing the spare parts,
accessories, materials, labour and transportation. In case the equipments suffer
from damages and cannot be fixed up, the losses and expenses shall be calculated
according to the price for re-purchasing the equipments of the same type.
	 
	1.2	 	Interpretations
	 
	1.2.1	 	All headings hereof are only for the convenience of reading and shall not
affect the interpretations of this Agreement in any way.
	 
	1.2.2	 	The Appendices hereto shall have the same legal effect as this Agreement.
	 
	1.2.3	 	Unless otherwise agreed by the Parties, this Agreement shall have binding force
on the lawful successors or assignees of any Party.
	 
	1.2.4	 	Unless otherwise required by the context, the year, month and day mentioned in
this Agreement shall be the year, month and day in Gregorian calendar.

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	1.2.5	 	The words “Include”, “Includes” or “Including” herein shall mean including
without limitation.
	 
	1.2.6	 	All numbers and terms mentioned in this Agreement shall include the given number.

CHAPTER II REPRESENTATIONS BY THE PARTIES

Each Party hereby represents to the other Party that:

	2.1	 	It is an enterprise that has been duly established and validly and legally in
existence in accordance with law, and has the full right to enter into and the
ability to perform this Agreement.
	 
	2.2	 	All procedures required for entering into and performing this Agreement
(including procuring requisite governmental approvals, business license and power
business permit, etc.) have been accomplished and are legal and valid.
	 
	2.3	 	When entering into this Agreement, no judgments, verdicts, awards or specific
administrative acts have been carried out by any courts, arbitration institutes,
administrative organs or other regulatory bodies that will have material adverse
effect on its performance of this Agreement.
	 
	2.4	 	All internal authorization procedures required for executing this Agreement have
been accomplished and this Agreement is signed by its legal representative or

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	 	 	authorized proxy. This Agreement shall have the binding force on both Parties to this
Agreement after it comes into effect.

CHAPTER III OBLIGATIONS OF THE PARTIES

	3.1	 	The obligations of Party A shall include the following:
	 
	3.1.1	 	Abiding by the national laws and regulations, national standards, electric
power industry standards and the power grid operation guidelines, and the
relevant policies, regulations and measures formulated and promulgated by the
electric power administration authorities of the state and Fujian Province, for
the purpose of maintaining the safety, high quality and economic operation of the
province’s electric power system, and according to the Power Plant’s technical
characteristics and codes and specifications of the electric power system of
Fujian Province, to carry out unified dispatching of power plants (the
dispatching range please refer to Appendix III) on the principle of publicity,
fairness and justice.
	 
	3.1.2	 	Responsible for the operation management, overhaul and maintenance and
technological transformation for relevant equipments and facilities of the power
grid within its jurisdiction, so as to meet the needs of normal operations of the
power grid and the Power Plant.
	 
	3.1.3	 	Based on the anticipated objective of electricity generation output released by
relevant authorities, according to the provisions of the Power Purchase and Sale
Contract, and considering the actual operating conditions of the power grid and
the water inflows of the Power Plant, work out and deliver to Party B the monthly
power generation plan and the Daily Power Generation Dispatching Plan
Curve on schedule.

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	3.1.4	 	To make unified arrangement for the power generation, voltage modulation and
standby of the Power Plant, so as to satisfy the safety and stability operation
of the power grid and the acceptable quality of electric power.
	 
	3.1.5	 	To take measures to prevent the accidents which could affect the safe operation
of the electric power system; to regularly carry out special and professional
safety inspections concerning the grid safety, and formulate counter measures
against accidents subject to the needs; to periodically work out a plan for
grid-plant joint anti-accident exercise and organize to implement such plan.
	 
	3.1.6	 	According to the dispatching codes, the overhaul codes and the development
tendency of the non-Emergency defects of the units proposed by Party B,
considering the actual operating conditions of the power grid, to reasonably
arrange the overhaul for the units of the Power Plant in appropriate time.
	 
	3.1.7	 	To support and cooperate with Party B to carry out technological
transformations or parameter adjustments of relevant facilities; to instruct and
coordinate the dispatching and operation management of Party B related to the
power grid; to provide Party B with instruction and coordination and requisite
technical support for relevant professions and operations in connection with the
grid operation safety, such as electric facilities, relay protection and
automatic safety devices, excitation system and speed governor system, electric
power metering system, electric power dispatching communication, dispatching
automation, and reservoir dispatching, etc.
	 
	3.1.8	 	According to relevant regulations, to inform Party B of the information
concerning the major defects of facilities of the power grid relating to Party B
and the power

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	 	 	transmission ability relating to the Power Plant in a timely fashion, and to regularly
disclose to Party B the electric power dispatching information relating to Party
B. And according to regulations, to make assessment and statistics for the
operating conditions of the equipments of power plants within its jurisdiction.

	3.1.9	 	To provide on-duty operators of Party B with professional technical trainings
of the dispatching system.
	 
	3.1.10	 	To assist Party B in respect of the investigation on accidents.
	 
	3.2	 	The obligations of Party B shall include the following:
	 
	3.2.1	 	Abiding by the national laws and regulations, national standards, the electric
power industry standards and the power grid operation guidelines, and abiding by
the regulations of electric power system dispatching codes and documents worked
out by Party A to ensure the safe and stable operation of the power grid and
relevant policies, regulations and measures formulated and promulgated by the
electric power administration authorities of the State and Fujian Province, to
comply with the unified dispatching by Ningde Regional Dispatch, and reasonably
organize the operation of the Power Plant.
	 
	3.2.2	 	To formulate field operation codes consistent with the electric power system
codes and specifications of Party A, and file such codes with Party A.
	 
	3.2.3	 	To provide respective proposals concerning the overhaul plans for the
equipments within different dispatching ranges as required by the dispatching
agency and to implement the approved overhaul plan and organize the overhaul and
maintenance of the equipments.

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	3.2.4	 	To timely carry out technological transformations or parameter adjustments for
the facilities according to the needs, and file such transformations or
adjustments with Party A (in case of involving grid safety, the approval from the
dispatching agency of Party A must be procured).
	 
	3.2.5	 	To take measures to prevent accidents that may affect the operation safety of
the electric power system; to assist Party A in carrying out regular special and
professional safety inspections relating to the grid safety, and implementing the
precautionary measures proposed during the inspections; in case of any specific
counter measures against accidents or other safety requirements for the electric
power system (such as the needs of adding new safety devices), Party B shall be
in charge of the implementation and maintenance of the operations according to
the requirements, and file relevant documents concerning safety measures with the
dispatching agency; and to participate in the joint anti-accident exercise
organized by the dispatching agency.
	 
	3.2.6	 	To operate according to the Daily Dispatching Plan Curve formulated by the
dispatching agency, regulate the power and voltage according to its corresponding
instructions, and participate in the peak regulation, voltage modulation and
undertake reserve capacity for the power grid and provide other basic assistant
services.
	 
	3.2.7	 	According to the requirements of relevant dispatching agency, to timely and
accurately provide to the dispatching agency with the operating conditions for
the facilities of the Power Plant and the production information concerning the
water conditions and statements, etc., and ensure the accuracy of the sent
information.

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	3.2.8	 	To accept the instructions and coordination provided by Party A pursuant to
Clause 3.1.7; and assign relevant technical and overhaul management staff to
assist Party A.
	 
	3.2.9	 	Party B shall provide adequate cooperation and support in respect of the
investigation on and analysis of accidents in which Party A is participated.

CHAPTER IV CONDITIONS FOR GRID CONNECTION

	4.1	 	The primary and secondary equipments of Party B shall conform to the national
and electric power industry standards, and other relevant regulations,, shall be
installed and commissioned according to the design requirements approved by the
organizations authorized by the State, and shall pass the acceptance according to
the infrastructure construction procedures of the State; the normal operation
mode for grid connection has been defined, relevant parameters have been adjusted
as compatible, equipment settings have been set as required, and all conditions
for being connected to the power grid of Party A and accepting the unified
dispatching by the Power Dispatching Agency are ready.
	 
	4.2	 	The relay protection and automatic safety devices (including the excitation
system speed regulation system, high frequency switch-off generator and low
frequency self-starting, etc.) of the Power Plant shall conform to the national
standards, the electric power industry standards, the power grid operation
guidelines and relevant codes and regulations of Fujian power grid, shall be
installed and commissioned according to the design requirements approved by the
qualified organizations, and pass the acceptance pursuant to the requirements of
the Administrative Measures on the Commissioning Acceptance for Relay Protection
New Facilities of Electric Power System of Fujian Province and satisfy all
conditions for synchronous operation, and comply with the relevant provisions of
Chapter X hereof.

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	4.3	 	The dispatching automation facilities of the Power Plant, including the units
computer monitoring system and electric power metering devices, etc., shall
conform to the national standards, the electric power industry standards, the
power grid operation guidelines and relevant codes and regulations of the power
grid of Fujian province, shall be installed and commissioned according to the
design requirements approved by qualified organizations, and pass the acceptance
according to the infrastructure construction procedures of the State, comply with
the relevant provisions of Chapter XI hereof, and satisfy all conditions for
synchronous operation.
	 
	4.4	 	The power dispatching communication facilities of the Power Plant shall conform
to the national standards, the electric power industry standards, the power grid
operation guidelines and relevant codes and regulations of the power grid of
Fujian Province, shall be installed and commissioned according to the design
requirements approved by qualified organizations, and pass the acceptance
according to the infrastructure construction procedures of the State, and comply
with the relevant provisions of Chapter XII hereof.
	 
	4.5	 	The energy metering devices of the Power Plant shall be configured according to the
Technical Administration Code of Electric Power Metering Devices (DL / T448-2000) and
the provisions of the Power Purchase and Sale Contract, and pass the testing and
acceptance jointly organized by Party A and Party B (Party A and Party B agree
that Fujian Province Electric Power Center Testing Institute shall be in charge of
the testing and technical supervision of the electric energy devices).
	 
	4.6	 	According to the requirements of the Regulations on Safe Protection of Computer
Monitoring and Control Systems and Dispatching Data Networks of Power Grids and
Power Plants (No.30 Decree issued by the former State Economic and Trade
Commission), the secondary system of the Power Plant shall be protected by safety

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	 	 	precautionary measures, and approved by the Power Dispatching Agency to be qualified
for operation.

	4.7	 	All operation and maintenance codes for the Power Plant have been formulated and
relevant management regulations are complete, and those related to the grid
safety shall be consistent with the safety management regulations of the
connected power grid.
	 
	4.8	 	The denominations and numbers for the equipments of the Power Plant shall be
given in accordance with the dispatching ranges. The denominations and numbers
for the equipments within the jurisdiction of the dispatching agency have been
marked up at eye-catching places where relevant electric equipments are installed
in accordance with the denominations and numbers released by the Dispatching
Center and Ningde Regional Dispatch, so as the on-duty operators of the Power
Plant may clearly define the electric equipments to be operated.
	 
	4.9	 	The Power Plant’s on-duty operators which are authorized to take dispatching
instructions shall receive strict training pursuant to the provisions of the
Administration Regulations on the Dispatching of Power Grids and other relevant
regulations, and receive the training of basic operational knowledge concerning
the power dispatching from the Dispatching Center and pass the examination and
procure relevant qualification certificates before being assigned to the posts.
	 
	4.10	 	The primary and secondary equipments of Party A to be operated in conjunction
with the system of Party B shall conform to the national and electric power
industry standards, relevant regulations of Fujian power grid and other relevant
regulations, shall be installed and commissioned according to the design
requirements approved by qualified organizations, and pass the acceptance
according to the infrastructure construction procedures of the State, with the
relevant parameters reasonably

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	 	 	compatible (the settings relating to the power grid shall meet the requirements of
power grid), the settings of such equipments being set as required and readily
available for the Power Plant to be connected. The units of the Power Plant shall
have the functions of high frequency switch-off and low frequency self-starting
(self-locking) and shall be put into operation synchronously with the units of
the power grid.

	4.11	 	The Power Plant shall, as required by the dispatching agency, formulate a plan
to prevent the complete shutoff of the Power Plant and protect the electric power
utilized by the Power Plant. In view of the Emergencies which may happen after
the Power Plant has been connected to the power grid, Party B shall be
responsible for working out a black-start plan for the Power Plant, and organize
to implement the safety and technical measures for black-start and file the plan
with Ningde Regional Dispatch.
	 
	4.12	 	The Power Plant of Party B shall be approved by the Startup Committee with both
Party A and Party B participating, and pass the multi-professional acceptance and
recognition concerning the whole conditions for grid connection organized by the
Dispatching Center or Ningde Regional Dispatch, and only with all dispatching
conditions for startup of operation having been satisfied, the Power Plant may be
connected to the power grid. When the rectification suggestions have not been
fully implemented, the dispatching agency has the right to reject the
commissioning operation for such units.
	 
	4.13	 	Without being approved by relevant authorities of the State, the Power Plant
shall not carry out the business to supply power directly to consumers;
otherwise, Ningde Regional Dispatch shall be entitled to reject the grid
connection for the Power Plant.
In case the new policies of the State concerning the Power Plant’s direct power
supply are published, Party A and Party B shall have separate consultation.

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CHAPTER V TRANSFER OF DISPATCHING RIGHT

	5.1	 	The Power Plant of Party B shall be connected to the power grid of Party A
according to the requirements on July 6, 2004.
	 
	5.2	 	When the dispatching right has been transferred to Party A, the Parties shall
make arrangements for the detailed issues concerning the dispatching of the Power
Plant.
	 
	5.2.1	 	Party A shall, within 10 days prior to the agreed date for the transfer of
dispatching right, provide to Party B with the electric power system data,
equipment parameters and system diagrams in respect of the Power Plant, including
the relay protection settings (or limits) for the power grid related to the Power
Plant and the settings (or limits) for the relay protection and automatic safety
devices of the Power Plant related to the power grid.
	 
	5.2.2	 	Party A shall provide to Party B with the list of contact persons (including
staff authorized to issue dispatching instructions, staff in charge of operation
modes, relay protection staff, automation staff, communication staff and water
dispatching staff) and contact information.
	 
	5.3	 	When transferring the dispatching right, Party B shall provide to Party A with
accurate materials in Chinese, including:

	 	(1)	 	The technical materials for the primary system equipments which are required for
calculating the tidal current, stability and relay protection settings, such as

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	 	 	 	the technical specifications, technical parameters and measured parameters
(including the zero sequence impedance parameters for the main transformers) for
the main equipments such as power generators (including speed governors and
excitation system) and main transformers.

	 	(2)	 	The drawings (including the drawings for a complete set of protections for
generators and transformers), instruction manuals and trip models of the relay
protection and automatic safety devices which are related to the grid operation;
and the installation and commissioning reports for the relay protection and
automatic safety devices within the range of power dispatching. The equipments’
technical parameters required for calculating the settings of the system
protection of Party A, the allowable high and low frequency limits for the units,
etc., and the machine account for the relay protection and safety automatic
protection and other equipments within Party B’s Power Plant (filled out in DMIS
system or by written report).
	 
	 	(3)	 	Documents such as the technical instructions, technical parameters and equipment
acceptance reports for the dispatching automatic equipments of the Power Plant
which are related to Party A, the telecontrol information form for the Power
Plant (including the no-load voltage ratio and telemetering full scale values of
current transformers and voltage transformers), the completion acceptance report
of the energy metering system of the Power Plant, and relevant plans and
technical documents in respect of the safety protection for the computer system
of the Power Plant.
	 
	 	(4)	 	Documents such as drawings, equipment technical specifications and equipment
acceptance reports for the communication projects which are interconnected with
or related to the communication network of Party A.

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	 	(5)	 	The technical instructions for the unit excitation system (design and measured
parameters) and under-excitation limitation function. The technical instructions
for speed regulation system, including the type, schematic diagram, transfer
function block diagram and the producer’s suggested parameters for the
characteristic configuration. The frequency operation requirements for the units
(including the high frequency and low frequency characteristics). The technical
instructions (including the logic diagram and technical instructions) for low
frequency self-starting and high-frequency switch-off devices (functions). The
under-excitation design ability of the units and other materials.
	 
	 	(6)	 	The technical specifications, technical parameters and measured parameters of
other main equipments related to the grid operation.
	 
	 	(7)	 	Field operation codes.
	 
	 	(8)	 	Primary electric wiring diagrams.
	 
	 	(9)	 	The startup and shutdown curves and the load increasing and decreasing rate of
the units, relevant parameters and materials concerning inherent frequency
modulation.
	 
	 	(10)	 	Measures to ensure the electric power utility of the Power Plant.
	 
	 	(11)	 	The unit commissioning plans, and startup commissioning schemes for the step-up
substation and the units.

21

 

	 	(12)	 	Name list of the on-duty operators of the Power Plant who are authorized to take
dispatching instructions, and contact details.
	 
	 	(13)	 	Name list and contact information of the professional staff in the fields of
operation mode, relay protection, automation, communication and water
dispatching.

CHAPTER VI OPERATION UNDER DISPATCHING

	6.1	 	During the operation period, the on-duty operators of the Power Plant shall,
according to the dispatching range of the equipments, strictly follow the
dispatching instructions given by the on-duty dispatchers of the dispatching
agency.
	 
	6.1.1	 	The Power Plant must implement the dispatching instructions released by the
dispatching agency in a prompt and accurate manner, and must not refuse or delay
the implementation with any excuse. In case that implementing a dispatching
instruction may endanger the personnel or equipments, the on-duty operators of
the Power Plant shall immediately report to the on-duty dispatchers of the
dispatching agency and clarify the reasons, and the on-duty dispatchers of the
dispatching agency shall decide whether to continue such implementation or not.
	 
	6.1.2	 	As for those equipments within the range of direct dispatching by the
dispatching agency, the Power Plant must strictly follow the relevant operation
rules of dispatching and carry out operations according to the dispatching
instructions, and be responsible for the accuracy and promptness of implementing
the dispatching instructions; shall honestly report the field conditions and
answer the inquiries from the on-duty dispatchers of the dispatching agency.
Without dispatching instructions,

22

 

	 	 	the on-duty operators may not arbitrarily operate the equipments within the
jurisdiction of the dispatching agency. In case of and only in case of any
conditions which may endanger the personnel and equipments, the on-duty operators
of the Power Plant may handle such conditions in accordance with relevant codes
and regulations, and shall immediately report such treatment to relevant on-duty
dispatchers of the dispatching agency.

	6.1.3	 	As for those equipments within the licensing dispatching range of the
dispatching agency, the on-duty operators of the Power Plant shall make a report
to the on-duty dispatchers of the dispatching agency prior to the operations, and
only upon an approval, such operations may be carried out according to the
Dispatching Code for Electric Power System and the field operation regulations of
the Power Plant.
	 
	6.1.4	 	The Power Plant shall make sure there will be enough staff on field at any time
to be contacted by dispatching agency and to receive the dispatching instructions
released by the dispatching agency.
	 
	6.2	 	When the on-duty dispatchers of Ningde Regional Dispatch make appropriate
adjustment to the Daily Power Generation Dispatching Plan Curve according to the
load curve released by Fujian Electric Dispatching Center and the actual
operating conditions of the power grid, such adjustment shall be notified to the
on-duty operators of the Power Plant ten (10) minutes in advance, and the on-duty
operators of the Power Plant shall report to Ningde Regional Dispatch the curve
variation.
	 
	6.3	 	In case of any abnormal condition of the operating equipments of the Power
Plant, the Power Plant may, according to the dispatching range of the equipments
and the regulations of the Dispatching Code for Electric Power System, bring
forth an overhaul application to the dispatching agency in advance. The
dispatching agency shall, according to the regulations of the Dispatching Code
for Electric Power System

23

 

	 	 	and the actual conditions of the power grid, approve such overhaul application in
advance upon going through specified procedures and revise relevant plans. In the
event that the equipments need an urgent outage, the relevant dispatching agency
shall make a prompt reply judging from the actual conditions. Party B shall
follow the final approval from the dispatching agency.

	6.4	 	In case of any Special Operation Mode due to the equipment upgrading or
transformation which may affect the normal operation of the power plant, relevant
dispatching agency shall notify the power plant of relevant plans
five (5) days
in advance and implement the plan which has been determined through consultation.
	 
	6.5	 	In case of any Special Operation Mode due to the equipment upgrading or
transformation which may affect the normal operation of the power grid, relevant
dispatching agency shall notify the Power Plant of relevant plans
five (5) days
in advance and implement the plan which has been determined through consultation.
	 
	6.6	 	Both Parties shall exchange the name lists of on-duty staff in written form and
notify any alteration thereof promptly.
	 
	6.7	 	The Power Plant shall keep daily field operation records, recording the actual
power generated for every hour, the operating conditions for all equipments, the
planned and unplanned power cut and any abnormal condition during the overhaul
period. The date and time (the time shall be in twenty-four hour format) for each
record shall be clearly listed out on the records and such materials shall be
provided at proper time after being required by the dispatching agency. The
operation records of the Power Plant shall be kept for record in accordance with
the requirements of archive management.

24

 

	6.8	 	Ningde Regional Dispatch carries out operation management over the equipments,
malfunctions and standby of the Power Plant.

	 	(1)	 	The annual tripping frequency of the normal operating power generation units of
the Power Plant may not exceed four times for each unit, and the annual Forced
Outage frequency of the power generation units may not exceed two times for each
unit.
	 
	 	(2)	 	The standby units shall be capable of starting up (the unit) within fifteen
minutes after the receipt of the dispatching instructions and operate according
to the curve released by the dispatching agency. The time for delayed startup
shall be deemed as the time for Forced Outage.

	6.9	 	The Power Plant shall strictly implement the regulations of the dispatching
disciplines of Fujian Grid. In case that any of the following events occurs, the
Power Plant shall be deemed as having violated the dispatching disciplines:

	 	(1)	 	Without being approved by the dispatching agency, arbitrarily changing the
status of the primary and secondary equipments within the jurisdiction of the
dispatching agency and the settings of automatic safety devices relating to the
safe and stable operation of the power grid, such as the unit speed governing
system, excitation system, high frequency switch off generator, low frequency
self-starting, etc.;
	 
	 	(2)	 	Failing to implement or fully implement the dispatching instructions;
	 
	 	(3)	 	Failing to honestly report the implementations of the dispatching instructions
and the actual conditions of the equipments of the Power Plant (such as the power
generators, hydraulic turbines and electric equipments, etc.) and other relevant
facilities;
	 
	 	(4)	 	The responsible on-duty operator leaving the post due to certain reason and
failing to appoint another instruction receiver, which delays the implementation
of dispatching instructions;

25

 

	 	(5)	 	Failing to implement or fully implement the measures to secure the safe
operation of the power grid released by the dispatching authority (excluding the
nonperformance for which the reason has been timely clarified);
	 
	 	(6)	 	In case of any accident occurred to the equipments within dispatching range, the
Power Plant failing to report such accident to the dispatching authority within
ten minutes (at least the switch tripping condition shall be reported, while the
detailed information may be reported after a thorough investigation);
	 
	 	(7)	 	In case of any malfunction or overloading condition of the equipments within
dispatching range, the Power Plant failing to report within ten minutes;
	 
	 	(8)	 	In case of any misoperation of the equipments within dispatching range, the
Power Plant failing to report the whole course of the accident to the dispatching
authority within one hour or making false reports;
	 
	 	(9)	 	The frequency modulation plant designated by the power grid failing to fulfill
the frequency modulation responsibilities regulated by the Dispatch Code.

CHAPTER VII EQUIPMENT OVERHAUL AND MAINTENANCE

	7.1	 	The annual overhaul and maintenance plan for the Power Plant shall be reported
according to relevant regulations issued by Fujian Province Electric Power
Company and Ningde Electric Power Industry Bureau. After the assessment and
approval, the Fujian Province Electric Power Company and Ningde Electric Power
Industry Bureau shall issue an annual overhaul plan for the equipments within
dispatching range to the Power Plant. The Power Plant shall make preliminary
preparations for the overhaul of equipments in accordance with the annual
overhaul plan and make sure the overhaul of equipments will be completed as
scheduled. In the event that the overhaul plan cannot be completed as scheduled
due to the Power Plant’s own reasons, in order to satisfy the loading
requirements and the needs of safe and stable operation of the power grid, the
dispatching agency shall be entitled to cancel this

26

 

	 	 	overhaul plan, and the induced degraded liability of the equipment operation shall be
undertaken by the Power Plant itself. In the event that the normal operation
requirements of the Power Plant cannot be satisfied due to the reason of system,
which has caused the load down or malfunction outage of the units, the
assessments shall not be carried out.

	7.2	 	The Power Plant shall submit the overhaul plan for the subsequent month to
relevant dispatching agency via dispatching overhaul management system or by
facsimile according to the regulations of the Dispatching Code. The dispatching
agency shall formulate the monthly dispatching plan and notify the Power Plant
based on the released annual (seasonal) power generation plan, annual overhaul
plan and the monthly overhaul plan and the actual operating conditions of the
power grid provided by the Power Plant. .
	 
	7.3	 	The Power Plant shall arrange the overhaul and maintenance for the equipments
according to the schedule of the monthly dispatching plan. For any time of
equipment overhaul, the Power Plant shall apply to the dispatching agency which
has the jurisdiction over the equipments according to the regulations of the
Dispatching Code, and the dispatching agency shall also issue a reply pursuant to
the regulations of the Dispatching Code. The overhaul schedule for the equipments
of the Power Plant shall comply with the unified arrangement and coordination of
the dispatching agency.
	 
	7.4	 	In the event that the Power Plant needs to launch important testing projects
after the general overhaul or technology upgrading, it shall submit the testing
plan to relevant dispatching agency at least three (3) working days prior to the
grid connection, including to provide the equipment alteration scope, the testing
items and testing procedures which need arrangement and the parameters for new
equipments, and shall file a startup application in advance pursuant to the
Dispatching Code. The dispatching agency shall take such application into
consideration when drawing up
the daily dispatching plan.

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	7.5	 	In the event that the Power Plant needs unplanned outage or derated output due
to the defects of equipments, it shall also apply in advance to relevant
dispatching agency pursuant to the regulations of the Dispatching Code (excluding
Emergencies). When the application has been approved, the dispatching agency may
revise the dispatching plan and arrange the outage or derated output for the
equipments. Such kind of applications shall not influence the assessment and
statistics of other aspects of the Power Plant.
	 
	7.6	 	The ending time for the overhaul of the units shall be calculated from the time
of reconnecting the power generator or resuming the standby. If the overhaul
period is not long enough, the Power Plant shall apply to the dispatching agency
in advance for extending the period pursuant to the Dispatching Code.
	 
	7.7	 	Ningde Regional Dispatch shall be in charge of managing the overhaul of the
equipments of the Power Plant. In case of any of the following circumstances
occurs, Party B shall assume the liability for breach of contract pursuant to the
regulations of Chapter XV hereof:

	 	(1)	 	The planned overhaul period for the main equipments of the Power Plant exceeds
the approved time limit (unless being approved by the dispatching agency).
	 
	 	(2)	 	Applying for shutting down the equipments which have already start operation,
the overhaul of equipments cannot be finished on schedule due to the Power
Plant’s reason and the Power Plant fails to apply for extending the period within
the time limit prescribed in the Dispatching Code.
	 
	 	(3)	 	In case of overhaul of equipments such as alteration of primary and secondary
equipments, and arrangement of zero voltage boosting, zero current boosting,
total pressure impact, phase check, protective vector testing and other startup

28

 

	 	 	 	operations for re-commission, while the Power Plant fails to report the equipment
alteration scope, startup plan (for those projects explicitly need arrangement)
and startup application to the dispatching authority three working days before
the re-commission of equipments.

	 	(4)	 	The Power Plant expands the scope of equipment overhaul without being approved
by the dispatching authority, which has made the equipments unable to resume the
normal power supply on schedule.

CHAPTER VIII POWER GENERATION PLAN

	8.1	 	The Power Plant shall strictly implement the Daily Power Generation Dispatching
Plan Curve (including the curve temporarily modified by the on-duty dispatchers)
and the dispatching instructions released by the Dispatching Center, timely adjust
the active output of the units and arrange the generation and operation of the
Power Plant.
The dispatching agency at provincial level shall, according to the loading condition
of the system and the upstream water conditions, work out the active power
generation curve for the subsequent day of the Power Plant and release such curve
to the Power Plant and Ningde Regional Dispatch (the Power Plant and Ningde
Regional Dispatch shall set up a curve receiving system) through the automatic
network at the same time. Ningde Regional Dispatch shall be responsible for
working out and releasing the Power Plant’s 110 KV busbar voltage control range
or the reactive power generation curve for the subsequent day in accordance with
the active power generation curve released by the dispatching agency at
provincial level. Ningde Regional Dispatch shall reinforce the management and
assessment of the reactive voltage operation and report such assessment result to
the dispatching agency at provincial level.
	 
	8.2	 	As for the daily power generation plan, the Power Plant shall, with reference to
the upstream water inflows and weather forecast, report to the Dispatching Center
before

29

 

	 	 	9:00 of every normal working day the power generation plan for the next day or for
the subsequent three to eight days in case of holidays and vacations. The
Dispatching Center shall, in view of the above and the safety constraint and
power generation output balancing conditions, etc. of the power grid, arrange the
power generation plan for the next day or subsequent days for the Power Plant.

	8.3	 	As for the adjustment of daily power generation plan, in case of any difference
between the upstream water inflows and the arrangement of the daily power
generation plan, the Power Plant shall propose to revise the daily power
generation plan to the Dispatching Center at least three hours in advance, and
only being approved by the on-duty dispatcher, the Power Plant may revise the
plan.
	 
	8.4	 	The Power Plant shall arrange the power generation in strict accordance with the
Daily Power Generation Plan Curve released by the Dispatching Center. In case the
dispatcher of Ningde Regional Dispatch has revised the Daily Power Generation
Plan Curve, the Power Plant shall arrange the power generation according to the
revised Daily Power Generation Plan Curve. The deviation between the total active
power and the Daily Power Generation Plan Curve shall not exceed the range from
negative 3% to positive 3%. In the event that the water inflow alteration volume
has exceeded the adjusting capability range of the units, there shall be no need
of deviation assessment.
	 
	8.5	 	In case of outage due to accidents or emergent derated output, the Power Plant
shall immediately inform the outage or derated capacity to Ningde Regional
Dispatch. If timely restoration is impossible, the Power Plant shall make up an
application as soon as possible, and Ningde Regional Dispatch may revise the
power generation plan accordingly.

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CHAPTER IX RESERVOIR DISPATCHING

	9.1	 	Reservoir Flood Dispatching
	 
	9.1.1	 	The Power Plant shall file the flood dispatching plan, flood counter measures
and the plan of defending beyond-standard flood with Ningde Regional Dispatch at
the end of March of each year.
	 
	9.1.2	 	The Power Plant shall make an analysis of the flood within one week after the
flood, and submit the analysis to relevant authority with a copy to Ningde
Regional Dispatch.
	 
	9.1.3	 	The Power Plant shall finish the summary of the annual flood preventions within
one month after the flood, and submit the summary to relevant authority with a
copy to Ningde Regional Dispatch.
	 
	9.1.4	 	In case of major alteration of the anticipated reservoir water inflow, the
Power Plant shall report to Ningde Regional Dispatch in advance, so as to timely
adjust the load and improve the utilization rate of water resources.
	 
	9.2	 	The reservoir dispatching plans, reports and summary
	 
	9.2.1	 	Reservoir power generation dispatching plan
	 
	9.2.1.1	 	The daily power generation plan for the reservoir. Before 9:00 of normal
working days, the Power Plant shall report the anticipated average reservoir
water inflow, the anticipated power generation output and the feasible capacity
of the Power Plant for the next day (for the subsequent three to eight days in
case of holidays and vacations) to the Dispatching Center at provincial level and
Ningde Regional Dispatch.

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	9.2.1.2	 	The monthly power generation plan for the reservoir. Before the
18th of every month, the Power Plant shall report the power generation
plan proposals for the next month to the Dispatching Center at provincial level,
Ningde Regional Dispatch and other relevant authorities.
	 
	9.2.1.3	 	The annual power generation plan for the reservoir. The Power Plant shall,
before the end of October of each year, submit the reservoir control and
operation proposal for the next year to the Dispatching Center, Ningde Regional
Dispatch and other relevant authorities, which shall mainly include the
month-specific water inflow, power generation capacity, the month-end water
control level and other requirements of the reservoir from water authorities.
	 
	9.2.2	 	Relevant reports concerning the reservoir dispatching
	 
	9.2.2.1	 	The daily reservoir dispatching report. The Power Plant shall, before 9:00 of
every day, report to the Dispatching Center and Ningde Regional Dispatch the up
and down stream reservoir water level at 8:00, the reservoir water inflow at
8:00, the discharge capacity at 8:00, and the previous day’s reservoir water
inflow, power generation capacity, discharge capacity, the reservoir water
outflow, the drainage area average rainfall and the lost electricity volume due
to the peak regulation and water discard.
	 
	9.2.2.2	 	The monthly reservoir dispatching report. The Power Plant shall, before the
3rd day of each month, correctly fill in the monthly dispatching
report and send such report by facsimile or via e-mail, or send the original by
mail to the Dispatching Center and Ningde Regional Dispatch, the main content for
which shall include current month and the monthly aggregated active and reactive
actual power generation output (ten thousand kwh), the maximum daily power
generation output (ten thousand kwh), the maximum output (Mw), the minimum output
(Mw), the monthly average maximum output (Mw), the monthly average minimum output
(Mw), the term end adjustable output (Mw), the installed utilization hour (h),
the plant’s utilizing electricity volume (ten thousand kwh), the total reservoir
water inflow (ten thousand m3), the average reservoir water inflow
(m3/s), the drainage rainfall (mm), the maximum rainfall

32

 

	 	 	(mm)/date, the maximum reservoir water inflow (m3/s)/date, the minimum
reservoir water inflow (m3/s)/date, the maximum water discharge
(m3/s)/date, the rain days (day), the water discard days (day), the
aggregated water consumption volume (ten thousand m3), the power
generation water consumption volume (ten thousand m3), the discharging
water volume (ten thousand m3), other lost water volume (ten thousand
m3), the average water head (m), the checking water head (m), the
highest water level (m)/date, the lowest water level (m)/date, the month-end
actual water level (m), the month-end checking water level (m), the month-end
adjustable water volume (ten thousand m3), the month-end stored energy
(ten thousand kwh), the water consumption rate (m3/kwh), the water
utilization ratio (%), the water head proportion, the water discarding period
power generation load ratio (%), the accuracy rate for load estimation (%), the
value of composite factor K, the energy-saving electricity volume (ten thousand
kwh), the total water saving volume (ten thousand m3), the lost
electricity volume due to water discarding (ten thousand kwh), the average
reservoir water inflow for the beginning, middle and end of each month
(m3/s), etc.

	9.2.3	 	The Power Plant shall, before January 10 of each year, report to the
Dispatching Center and Ningde Regional Dispatch the reservoir dispatching summary
for the previous year and the operation summary of the automatic hydrologic
forecasting system for the pervious year.
	 
	9.3	 	The automatic hydrological forecasting system and water dispatching automation
system
	 
	9.3.1	 	In case of malfunctions of the automatic hydrological forecasting system of the
Power Plant or the water dispatching automation system of the sub-center of the
Power Plant, the Power Plant shall immediately make restorations and report to
the Dispatching Center, so as to collect the real time rain and water conditions
for the reservoir drainage and serve to improve the economic operation level of
the Power Plant and ensure the flood prevention for the up and down stream of the
reservoir.

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	9.3.2	 	In the event that the overhaul and equipment maintenance for the automatic
hydrological forecasting system of the Power Plant and the water dispatching
automation system of the sub-center of the Power Plant have caused the outage of
the forecasting system, the approval from Ningde Regional Dispatch shall be
procured.
	 
	9.3.3	 	The transformation and upgrading plan for the automatic hydrologic forecasting
system of the Power Plant and the water dispatching automation system of the sub-
center of the Power Plant shall be submitted to Ningde Regional Dispatch and the
Dispatching Center for assessment.

CHAPTER X RELAY PROTECTION AND AUTOMATIC SAFETY DEVICES

	10.1	 	Party A shall strictly abide by the codes and specifications concerning the
design, operation and management of relay protection and automatic safety
devices, take charge of operation and management of relay protection and
automatic safety devices within the range of dispatching, and conform to the
following requirements:

	 	(1)	 	Taking charge of calculation of settings and the operation of relay protection
and automatic safety devices within the range of dispatching, and making analysis
and assessment of the startup of the devices.
	 
	 	(2)	 	Being responsible for the commissioning and regular testing and maintenance of
the relay protection and automatic safety devices within its jurisdiction, making
such devices satisfy the set technical requirements and conform to the setting
requirements of the dispatching authority, and keeping complete commissioning
reports and records.
	 
	 	(3)	 	Once the relay protection and automatic safety devices of the power grid have
started running, Party A shall immediately analyze the reasons and take measures
in accordance with the codes, and submit relevant materials to the dispatching
authority. In case the Power Plant is concerned, Party A shall cooperate with the
Power Plant to analyze and handle the accidents.

34

 

	 	(4)	 	In case of any malfunction or defect of the relay protection and automatic safety
devices of the power grid, Party A shall immediately take measures in accordance with
the codes, analyze the causes and promptly take precautionary measures. In case
the Power Plant is concerned, Party A shall inform the Power Plant of relevant
information in written form.
	 
	 	(5)	 	Providing instructions and assistance to the Power Plant in respect of the
setting and operation of relevant relay protection and automatic safety devices,
and provide necessary technical support.
	 
	 	(6)	 	Strictly implementing the counter measures against accidents for relay
protection and automatic safety devices promulgated by the State and relevant
authorities.
	 
	 	(7)	 	Before the 15th day of each month, finishing the analysis report on the
operation of relay protection and automatic safety devices for the previous month
with one copy to Party B.

	10.2	 	Party B shall strictly abide by the codes and specifications concerning the
design, operation and management of relay protection and automatic safety devices
and relevant relay protection counter measures against accidents, abide by the
codes and regulations concerning the relay protection operations issued by the
dispatching agency, take charge of operation management of relay protection and
automatic safety devices within its jurisdiction, and conform to the following
requirements:

	 	(1)	 	Party B must provide the principle designing instructions for the adopted relay
protection equipments to Party A and ensure the implementation of opinions
proposed by Party A according to the requirements of safe operation of the power
grid and counter measures against accidents.
	 
	 	(2)	 	Taking charge of calculation of settings and the operation of the relay
protection and automatic safety devices belonging to the Power Plant, and making
analysis and assessment of the operation of the devices and filing with relevant
dispatching agency.
	 
	 	(3)	 	The settings for relay protection and automatic safety devices which belong to
the Power Plant but within the range of dispatching shall be released
respectively

35

 

	 	 	 	by the Dispatching Center and Ningde Regional Dispatch, and the settings for
other relay protection and automatic safety devices shall be calculated
and set by the Power Plant itself and filed with relevant dispatching
agency. The boundary setting shall be submitted to relevant dispatching
agency for assessment.

	 	(4)	 	Taking charge of the settings of relay protection and automatic safety
devices within the jurisdiction of dispatching agencies and responsible
for the correctness and completeness. Pursuant to the administration
requirements of the Dispatching Center, conducting the setting conversion
management in the DMIS system.
	 
	 	(5)	 	Being responsible for the commissioning and regular testing and
maintenance of the relay protection and automatic safety devices within
its jurisdiction, making such devices satisfy the set technical
requirements and conform to the setting requirements, and keeping complete
commissioning reports and records.
	 
	 	(6)	 	The relay protection and automatic safety devices related to the grid
operation must be matched up with the relay protection and automatic
safety devices of the power grid, the settings shall be made respectively
by the Dispatching Center and Ningde Regional Dispatch, and the selection
of types of relevant equipments shall be subject to the approval of the
dispatching agency.
	 
	 	(7)	 	In case of any change of operation status of the relay protection and
automatic safety devices of Party A, the Power Plant shall timely modify
the settings and operation status of the relay protection and automatic
safety devices within its jurisdiction according to the requirements of
the dispatching agency.
	 
	 	(8)	 	In case of any malfunction or defect of the relay protection and
automatic safety devices of the Power Plant, Party B shall immediately
report to relevant on-duty dispatcher of the dispatching agency, analyze
the causes and take measures in accordance with the codes, and submit
relevant materials to the dispatching agency according to the
requirements. In case the power grid is concerned, Party B shall assist in
analyzing and handling the accidents.
	 
	 	(9)	 	Strictly implement the counter measures against accidents for relay protection

36

 

	 	 	 	and automatic safety devices promulgated by the State and relevant authorities.

	 	(10)	 	Before the 5th day of each month (prolonged in the event of holidays
and vacations), finishing the analysis report on the operation of the relay
protection (including line protection, transformer protection, generator
protection and busbar protection, etc.) and automatic safety devices of the Power
Plant for the previous month, and provide one copy to the Dispatching Center and
Ningde Regional Dispatch.

	10.3	 	In the event that the relay protection and automatic safety protection devices
for the equipments belonging to the Power Plant but within the jurisdiction of
dispatching agency (including direct dispatching and licensing dispatching
equipments) need technological transformation, the relevant technological
transformation plan must be examined and approved by Party A.
	 
	 	 	The microcomputer fault recording devices of Party B shall have the remote
transmission function, and shall be connected without being impeded to the remote
transmission system of Party A via the communication network.
	 
	10.4	 	In order to improve the stability of the electric power system, both Parties
shall upgrade and transform the equipments in a timely manner.

	 	(1)	 	Both Parties’ upgrading and transformation for the relay protection and
automatic safety devices shall be coordinated with each other, so as to ensure
the compatibility and consistency between the equipments of both Parties.
	 
	 	(2)	 	The equipments after transformation shall not be put into operation through
specific procedures until being commissioned and passing the acceptance and
confirmed as qualified.

	10.5	 	Both Parties shall respectively designate staff to take charge of the
maintenance for the operation of relay protection and automatic safety devices,
and ensure the normal
operation of the relay protection and automatic safety protection devices.

37

 

	10.6	 	The relay protection and automatic safety devices of Party B shall reach the
following main operation standards (excluding the malfunction and missing
operation caused by Party A’s Reason):

	 	(1)	 	The service factor for the main protection of relay protections ≥99%.
	 
	 	(2)	 	The accuracy rate for the running of protections with 110KV  ≥100%.
	 
	 	(3)	 	The operation rate of automatic safety devices  ≥95%.
	 
	 	(4)	 	The accuracy rate for the running of automatic safety devices  ≥100%.

	10.7	 	In case any of the following circumstances occurs, Party B shall assume the
liabilities for breach of contract pursuant to the regulations of Chapter XV
hereof:

	 	1.	 	The malfunction or missing operation of the relay protection and automatic
safety devices within the maintenance jurisdiction of the Power Plant (excluding
those not caused by Party B’s Reason or due to the malfunctions of the devices),
which has caused damage to the grid stability or vast area power cut and other
accidents.
	 
	 	2.	 	The malfunction or missing operation of the relay protection and automatic
safety devices within the maintenance jurisdiction of the Power Plant (excluding
those not caused by Party B’s Reason or due to the malfunctions of the devices),
which has not caused damage to the grid stability or wide area power cut.
	 
	 	 	 	Assessment basis:

	 	(1)	 	The Code for Operation Assessment of the Relay Protection and Automatic Safety
Devices of the Electric Power System (DL/T623-1997);
	 
	 	(2)	 	The Interim Provisions for the Investigations on Electric Power Production
Accidents (No.4 Decree issued by the State Electricity Regulatory
Commission).

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	 	3.	 	The main protection and automatic safety devices within the maintenance
jurisdiction of the Power Plant cannot be normally put into operation, and each
time of Unplanned Outage for the main protection shall not exceed 24 hours, and
each time of Unplanned Outage for the automatic safety devices shall not exceed
12 hours.
	 
	 	4.	 	The statistical requirements for the reports of the relay protection and
automatic safety devices of the Power Plant:
	 
	 	 	 	The Monthly Report on the Statistical Analysis on the Operation of Relay Protection
and Safety Automatic Devices of the Electric Power System and the Monthly Report
on the Abnormal Operation of the Differential Protection of Generators and Main
Transformers and other reports shall be sent to Ningde Regional Dispatch and the
Dispatching Center by mail before the 5th day of each month (postponed
accordingly in case of holidays and vacations).

CHAPTER XI DISPATCHING AUTOMATION

	11.1	 	Party A shall strictly abide by the codes and specifications concerning the
design, operation and management of the dispatching automation system, take charge
of operation and maintenance for the dispatching automation system at the
dispatching end, and conform to the following requirements:

	 	(1)	 	Supervising the reliable operation of the dispatching automation system, being
responsible for monitoring the operating condition of the dispatching automation
system and coordinating the material problems arising out of the operation.
	 
	 	(2)	 	Taking measures to facilitate the connection of automation signals of the Power
Plant according to the design requirements.
	 
	 	(3)	 	Making timely analysis of the fault causes for the dispatching automation system
and taking precautionary measures.

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	 	(4)	 	Providing instruction and assistance to Party B in the operation maintenance of
the dispatching automation system, and cooperating with Party B in respect of the
investigation on accidents.
	 
	 	(5)	 	The computer monitoring and control system shall conform to the Regulations on
Safe Protection of Computer Monitoring and Control Systems and Dispatching Data
Networks of Power Grids and Power Plants (No.30 Decree issued by the former State
Economic and Trade Commission).

	11.2	 	Party B shall strictly abide by the codes and specifications concerning the
design, operation and management of the dispatching automation system and the
electric power industry standards, abide by relevant codes and regulations
concerning the automation formulated by dispatching agency, take charge of
operation and maintenance for the dispatching automation equipments at the Power
Plant end, and conform to the following requirements:

	 	(1)	 	The tele-control data from the Power Plant’s computer monitoring and control
system or the energy acquisition and transmission devices and the electric energy
metering data shall be transmitted to the dispatching automation system and the
electric energy metering system of the dispatching agency according to the
transmission protocols in line with the national standards or
industry standards.

The electric energy metering system shall pass the testing organized by a qualified
testing agency recognized by both Parties, so as to ensure the accuracy of data
transmission. The quantity and accuracy of the real time messages concerning the
operating equipments of the Power Plant shall satisfy the relevant regulations of
the state and the operation requirements of the dispatching agency.
	 
	 	(2)	 	Making timely analysis of the fault causes for the dispatching automation system
within its jurisdiction and taking precautionary measures.
	 
	 	(3)	 	Providing assistance to Party A in respect of the operation maintenance of the
dispatching automation system, and cooperating with Party A in respect of the
investigations on accidents.

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	 	(4)	 	The computer monitoring and control system of the Power Plant shall conform to
the Regulations on Safe Protection of Computer Monitoring and Control Systems and
Dispatching Data Networks of Power Grids and Power Plants (No.30 Decree issued by
the former State Economic and Trade Commission). Making sure the effective
isolation of the Power Plant’s computer monitoring and control system from the
management information system and the office automation system, and making sure
the physical isolation of the dispatching special data network from the
comprehensive information network and outside internet.

	11.3	 	Both Parties shall operate and maintain the automation equipments in accordance
with the Dispatching Code for Electric Power System of Fujian Province, the Code
of Ningde Regional Dispatch and the Dispatching Automation Operation Code, and
shall not withdraw or shut down the equipments at random.
	 
	11.4	 	In the event that the dispatching automation and communication equipments which
belong to the Power Plant but within the dispatching range of the dispatching
agency need technological transformation, the plan must be examined and approved
by relevant dispatching agency. The Power Plant shall submit to the dispatching
agency all and complete design materials and requisite testing data. In the event
that the technological transformation of the automation system of the dispatching
agency needs the cooperation of the Power Plant, the Power Plant shall make
corresponding transformations.
	 
	11.5	 	Both Parties shall respectively designate staff to take charge of the operation
and maintenance of the dispatching automation systems within their respective
jurisdictions, and ensure the normal operation of the dispatching automation
system.
Make sure that the accident management of the dispatchers will not be affected by the
reasons of the automation system.

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	11.6	 	Party B shall, according to the requirements of the dispatching production
control and management, establish relevant computer data network, and
interconnect it to the dispatching date special network and the dispatching
management information network.
	 
	11.7	 	The RTU, the computer monitoring and control system, the electric energy
acquisition and transmission devices of the Power Plant shall reach the following
main operation standards:

	 	(1)	 	The availability of RTU or the tele-control station of the computer monitoring
and control system (monthly)  ≥ 99.9%.
	 
	 	(2)	 	The accuracy error of telemeter  ≤ 1%.
	 
	 	(4)	 	The accuracy of tele-signaling response at accidents  ≥ 100%.
	 
	 	(5)	 	The annual qualification rate for telemeter  ≥ 99%.

CHAPTER XII DISPATCHING COMMUNICATION

	12.1	 	Party B shall strictly abide by the design, operation management codes,
technical standards and program of the electric power dispatching communication
system, and conform to the following specific requirements:
	 
	12.1.1	 	Party B shall have the transmission ability which is mainly through OPGW
optical communication and connected to the nearby double independent routing
communication channel at the interconnection points on the power grid of Fujian
Province, and shall be synchronous to the clock grid of Party A; shall be
equipped with corresponding audio exchange system between the two grids
(dispatching and administrative management), communication supervision
sub-station, the data

42

 

	 	 	equipments connected to the ATM wide area main data network of the province,
dispatching video system, dispatching telephone recording facilities and special
communication direct current supply, communication engine room, communication
distribution (cabling) frame, etc. which conform to the grid connection
requirements, in the meanwhile, shall be equipped with relevant instruments and
meters, special tools, auxiliaries and accessories, etc., so as to ensure the
safe and reliable operation of the communication equipments at the Power Plant
end of Party B. The type selection and configuration plan for the communication
(network) equipments at the interconnection points between Party B and the
electric power communication network of Party A shall be submitted to Party A and
subject to the assessment and approval of Party A.

	12.1.2	 	Party B shall ensure the construction process of the grid connection system
conform to the grid connection administrative measures of Party A, and the
connection infrastructure construction, transformation and general overhaul, etc.
shall conform to the requirements of applicable principles of the programming and
construction of the electric power communication network of the whole province.
	 
	12.1.3	 	The communication network interconnection technical parameters (such as power,
bit error rate, type selection, configuration, interface mode) and the
communication system connection commissioning outline shall be approved by Party
A in written form through consultation with Party A.
	 
	12.2	 	After consultations, Party A shall provide to Party B with two paid communication
transmission lines with different operation modes, different band width and
different signal contents which could satisfy all application requirements of the
dispatching system, to interconnect with the electric power communication network
of the province, and transmit relevant signals to the province dispatch and
regional dispatch.
Party B shall ensure the reliability, accuracy and safety of the professional

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	 	 	information concerning dispatching (including the performance of the interface)
transmitted to Party A will reach the electric power industry standards.

	12.3	 	The electric power dispatching communication system at the end of Party B shall
reach the following annual (monthly) operation standards:

	 	(A)	 	Service factor of optical communication equipment (including PCM equipments)
 ≥99.9%.
	 
	 	(B)	 	Service factor of dispatching program control exchange equipment  ≥99.9%.
	 
	 	(C)	 	Service factor of program control management exchange equipment  ≥99.9%.
	 
	 	(D)	 	Service factor of dispatching monitoring equipment  ≥99.9%.
	 
	 	(E)	 	 Service factor
of cable line equipment  ≥ 99.9%.
	 
	 	(F)	 	Service factor of the equipments connected to the wide area comprehensive data
communication network  ≥ 99.9%.

	12.4	 	Party A shall take charge of the operation maintenance for the dispatching
communication system at the dispatching end, and conform to the following
requirements:

	 	a.	 	Supervising the reliable operation of the dispatching communication system,
taking charge of monitoring the operating conditions and commanding the
dispatching of the dispatching communication system and coordinating the material
problems arising out of the operation.
	 
	 	b.	 	Taking charge of the operation and maintenance of the dispatching communication
system and the communication lines, and ensuring the reliable operation.
	 
	 	c.	 	Making timely analysis of the fault causes for the dispatching communication
system and taking precautionary measures.

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	 	d.	 	Providing instructions and assistance to Party B in respect of the operation and
maintenance of the dispatching communication system, and cooperating with Party B
in respect of the investigation on accidents.

	12.5	 	Party B shall take charge of the operation maintenance for the dispatching
communication system at the Power Plant end, and conform to the following
requirements

	 	(1)	 	Taking charge of the operation maintenance for the dispatching communication
system at the Power Plant end and ensuring the reliable operation.
	 
	 	(2)	 	Making timely analysis of the fault causes for the dispatching communication
system and taking precautionary measures.
	 
	 	(3)	 	Providing assistance to Party A in respect of the operation and maintenance of
the dispatching communication system, and cooperating with Party A in respect of
the investigation on accidents.

	12.6	 	Party B shall designate relevant maintenance staff and ensure to provide 24-hour
emergency maintenance service which will arrive on field immediately in case of
malfunctions of interconnected circuits. Such personnel shall comply with the
electric power communication dispatching instructions of the province and the
region and the communication network administration, and provide maintenance and
cooperation.
	 
	12.7	 	Both Parties shall prepare a standby emergency communication system so as to
ensure the communication uninterrupted by any Emergencies occurred to the power
grid or the Power Plant.
	 
	12.8	 	In case any of the following circumstances occurs, Party B shall assume liabilities for

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	 	 	breach of contract pursuant to the regulations of Chapter XV hereof:

	 	a.	 	Due to the Power Plant’s reason, the first class obstacles of the power grid,
communication obstacles, communication accidents and other communication
malfunctions which materially affect the safe production of the power grid;
	 
	 	 	 	The so-called “communication circuit malfunctions” which “materially affect the safe
production of the power grid” generally refers to the communication means,
content and mode which are indispensable for the safe operation of the power
grid, irreplaceable by temporary plans, and are sufficient to influence and delay
the handling of power grid accidents.
	 
	 	b.	 	Failing to implement the dispatching communication instructions or failing to
effectively implement the safety measures or not familiar with the operation,
which materially affects the timely restoration of relevant communication circuit
cut-out.
	 
	 	c.	 	Any operation which is not conforming to relevant grid and circuit management
measures and has not been approved by the dispatching agency of the province and
the region (the malfunction, lay-off and decommissioning, alteration of
connection, overhaul, etc. of the communication equipments and circuits relating
to the dispatching agency of the province and the region), and has changed the
status of communication equipments.
	 
	 	d.	 	Violation of the regulations of relevant communication professional management
codes and non-performance of the technical supervision requirements of Party A,
which has caused adverse effect.

CHAPTER XIII ACCIDENT MANAGEMENT AND INVESTIGATION

	13.1	 	Ningde Regional Dispatch and the Power Plant shall, within their respective
jurisdictions and in accordance with relevant regulations of the Dispatching Code
for Electric Power System and the Power Plant field operation codes, handle the

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	 	 	accidents in a correct and prompt manner and timely inform each other of handling
results.

	13.2	 	The equipment accidents within the dispatching range of the dispatching agency
shall be handled by strictly following the instructions of the on-duty
dispatchers of the dispatching agency (excluding those that can be handled
without dispatching instructions as clearly specified in the field codes).
	 
	13.3	 	In case of breaker tripping occurred to the units or circuits of the Power
Plant, the on-duty operator of the Power Plant shall report by telephone to the
on-duty dispatcher of the dispatching agency which has the jurisdiction over the
equipments, and submit the following malfunction events, including but not
limited to:

	 	(1)	 	The visual annuciator signal of the monitoring panel and the tripping of circuit
breaker;
	 
	 	(2)	 	The current location of the circuit breaker
(on/off);
	 
	 	(3)	 	The tripping time;
	 
	 	(4)	 	The panel signal
for protection devices;
	 
	 	(5)	 	Any information which will help to analyze the tripping reasons for circuit
breaker;
	 
	 	(6)	 	The tripping times of circuit breakers due to the malfunctions;
	 
	 	(7)	 	The printing report on the malfunctions of microcomputer protection devices;
	 
	 	(8)	 	The output records from false recording devices.

The staff of the Power Plant shall immediately report the above-mentioned (1), (2)
and (3) events, the (4), (5), (6) and (7) events shall be reported as soon as the
field is ready.

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	13.4	 	The dispatching agency shall, according to the Guide on Safety and Stability of
Power System (DL 755-2001), the Dispatching Code for Electric Power System and
other relevant regulations, and considering the grid structure, operation
characteristics and specific conditions of the Power Plant, formulate principles
for accident management and specific counter measures against accidents, and
raise specific requirements on the necessary measures to be taken by the Power
Plant.
	 
	13.4.1	 	In case of any Emergencies that threaten the safety of the power grid, the
on-duty dispatchers of the dispatching agency may take necessary measures to
ensure and restore the safe operation of the power grid, including adjusting the
power generation output of the Power Plant, issuing instructions to start or shut
down units, and disconnecting the Power Plant, etc.
	 
	13.4.2	 	In case that the Power Plant or any of the units has to be disconnected, the
dispatching agency shall, after the termination or remedy of the Emergencies,
restore the connection and operation of the Power Plant or the unit.
	 
	13.4.3	 	The dispatching agency shall explain to Party B the reasons for disconnecting
the Power Plant or the unit after the accident.
	 
	13.5	 	The units power generation curve (active or reactive), the voltage at the
voltage testing point and the power on the system frequency curve or link line
shall be subject to the data collected by the dispatching automation system of
the Dispatching Center and Ningde Regional Dispatch, and shall be taken as the
basis for relevant statistics, assessment, analysis and settlement. In case of
any dissenting opinion concerning the data collected by the automation system of
dispatching agency, the Power Plant may timely provide evidence which shall be
jointly confirmed by relevant Parties through verification.

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	13.6	 	The Party or Parties suffering from accident(s) shall carry out accident
investigation according to the Codes of Investigation for Electric Power
Production Accidents. The conclusions of the investigation shall include causes
of accident, responsible party for the accident and the liabilities, and the
counter measures against accidents to prevent similar accidents. The responsible
Party for the accident shall assume the liabilities according to the
investigation conclusion, and timely implement the counter measures against
accidents.
	 
	13.6.1	 	During the grid accident investigation carried out by Party A, Party B shall be
invited to participate when it is involved. Party B shall provide support to the
work of Party A and cooperate in the field investigation by providing accident
analysis materials such as the fault recording diagrams, the operating conditions
at the time of accident and relevant data, etc.
	 
	13.6.2	 	During the Power Plant accident investigation carried out by Party B, Party A
shall be invited to participate when it is involved. Party A shall provide
support to the work of Party B and cooperate in the field investigation by
providing accident analysis materials such as fault recording diagram, the
operating conditions at the time of accident and relevant data, etc.
	 
	13.6.3	 	As for the accidents involving both the Power Plant and the power grid, if the
Parties cannot reach an agreement within a short period of time on the cause of
accident, a special investigation panel shall be set up according to relevant
regulations of the State to carry out accident investigation.
	 
	13.6.4	 	The investigation report on the accident involving one Party or both Parties
shall be published, which shall cover causes of the accident, dealing progress of
the accident,

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	 	 	    responsible party for the accident and the liabilities, the rectification plan and
accident preventive measures, etc.

	13.6.5	 	The responsible party for the accident shall timely correct the errors and
implement the rectification plan and accident preventive measures. In case that
relevant Party is involved in such rectification plan and preventive measures,
the consent of relevant Party shall be obtained.

CHAPTER XIV FORCE MAJEURE

	14.1	 	If the occurrence of any Force Majeure event completely or partially impedes one
Party from fulfilling any obligation under this Agreement, such Party may be
exempted from or postpone to perform its contractual obligations, provided that:

	 	(1)	 	the scope and duration of the exempted or postponed performance shall not extend
beyond the reasonable needs of eliminating the impact of Force Majeure.
	 
	 	(2)	 	the Party affected by Force Majeure shall continue to perform its other
obligations hereunder which have not been affected by the Force Majeure.
	 
	 	(3)	 	in case the events of Force Majeure come to an end, the Party claiming Force
Majeure shall resume the performance of this Agreement as soon as possible.

	14.2	 	In the event that any Party is unable to perform this Agreement due to Force
Majeure, such Party shall promptly inform the other Party, and shall send a
written notice to the other Party within three (3) days thereafter. Such written
notice shall indicate the date of the occurrence of Force Majeure, the anticipated
duration, the nature of the events, the impact on its performance of this
Agreement and the measures it has taken to mitigate the impact of such Force
Majeure events.

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Upon relevant Party’s request, the Party affected by the Force Majeure shall furnish
the other Party with an evidential document issued by the competent local notary
public where the Force Majeure event occurs within thirty (30) days commencing
from the date when the Force Majeure event occurs (in the event of communication
interruption, from the restoration date of the communication).

	14.3	 	The Parties affected by the Force Majeure shall take reasonable measures to
mitigate the losses incurred by either or both Parties caused by Force Majeure.
The Parties shall immediately consult with each other to formulate and implement
a remedy plan and reasonable alternative measures to mitigate or eliminate the
impact of Force Majeure.
	 
	 	 	In the event that the Party affected by the Force Majeure fails to use all
endeavors to take reasonable measures to mitigate the impact of Force Majeure,
that Party shall be responsible for the enlarged losses arising therefrom.
	 
	14.4	 	In the event that the Force Majeure has prevented a Party from performing its
obligations under this Agreement for a continuous period of over
sixty (60) days,
the Parties hereto shall consult with each other to determine the conditions for
continuing the performance of this Agreement or to terminate this Agreement. If
the Parties hereto fail to reach agreement concerning the conditions for
continuing the performance of this Agreement or the termination of this Agreement
within thirty (30) days after the occurrence of Force Majeure, any Party shall be
entitled to terminate this Agreement with a notice to the other Party, unless
otherwise provided herein.

CHAPTER XV LIABILITIES FOR BREACH OF CONTRACT

	15.1	 	Either Party’s violation of the provisions of this Agreement shall be deemed as
a breach of contract, and the other Party shall be entitled to require the
breaching Party
to assume the liabilities for breach of contract.

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	15.2	 	Party A, in case of any of the following breach of contract, shall assume the
liabilities for breach of contract to Party B in the manner provided in Article
16.3 hereof:

	 	(1)	 	Failure to perform the obligations provided in Chapter III, which has caused
Direct Economic Losses to Party B.
	 
	 	(2)	 	Violation of the provisions of Article 4.10, which has resulted in the
incapability of the Power Plant to generate power on schedule.
	 
	 	(3)	 	Violation of the Dispatching Code, which has caused Direct Economic Losses to
Party B.
	 
	 	(4)	 	Party A requires the Power Plant (units) to conduct peak regulation, frequency
modulation or voltage regulation beyond its operation capacity or the provisions
of this Agreement (excluding for handling accidents), which has caused Direct
Economic Losses to Party B.
	 
	 	(5)	 	Setting or commanding error of the primary and secondary equipments of the power
grid due to Party A’s Reason, which has caused Direct Economic Losses to Party B.
	 
	 	(6)	 	Due to the inappropriate treatment by Party A, the implementation of provisions
of Clause 13.4.1 has caused Direct Economic Losses to Party B.
	 
	 	(7)	 	Malfunctions of the relay protection and automatic safety devices, dispatching
automation system and dispatching communication system caused by Party A’s
Reason, which has caused Direct Economic Losses to Party B.

	15.3	 	For each time of breach of contract, Party A shall assume the liabilities for
breach of contract by the following methods:

	 	(1)	 	Paying the electric power output of 100,000 kwh in a lump to Party B as
compensation for its breach of contract.

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	 	(2)	 	In case of any Direct Economic Losses of Party B which cannot be fully
compensated by the lump-sum liquidated damages provided in Item (1) above, the
direct expenses of Party B for repairing equipments and restoring normal
operations shall be complemented (calculated by the on-grid tariff of the Power
Plant).

	15.4	 	Party B, in case of any of the following breach of contract, shall assume the
liabilities for breach of contract to Party A by the method provided in Article
15.5:

	 	(1)	 	Failure to perform the obligations provided in Chapter III, which has caused
Direct Economic Losses to Party A.
	 
	 	(2)	 	Violation of the provisions of Article 6.1.1 and 6.9; violation of the
provisions of Article 7.7; violation of the provisions of Articles 10.2, 10.6 and
Items 3 and 4 of Article 10.7; violation of the provisions of Article 11.2;
violation of the provisions of Article 12.8; and violation of the provisions of
Article 13.3.
	 
	 	(3)	 	Abnormity or malfunction of the primary and secondary equipments of the Power
Plant related to the grid operation due to Party B’s Reason, which has caused
Direct Economic Losses to Party A.
	 
	 	(4)	 	The malfunctions of the power dispatching automation system of the Power Plant
caused by Party B’s Reason, which has resulted in accidents or expansion of
accidents, and has caused Direct Economic Losses to Party A
	 
	 	(5)	 	The dispatching communication system of the Power Plant fails to meet the
standards specified in Article 12.3, or suffers from malfunctions caused by Party
B’s Reason, which has resulted in accidents or expansion of accidents, and has
caused Direct Economic Losses to Party A.

	15.5.1	 	In case of any breach of contract prescribed in Article 15,4, Party B shall
assume the liabilities for breach of contract by the following ways:

	 	(1)	 	Paying the electric power output of 100,000 kwh in a lump to Party A as
compensation for its breach of contract.

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	 	(2)	 	In case of any Direct Economic Losses of Party A which cannot be fully
compensated by the lump-sum liquidated damages provided in Item (1) above, the
direct expenses of Party A for repairing equipments and restoring normal
operations shall be complemented.

	15.5.2	 	In case of the breach of contract prescribed in Article 6.8, the electricity
volume for breach of contract shall be calculated by the following ways:

	 	(1)	 	In case of sudden tripping of the power generation units, the deducted
electricity volume for each tripping (P)= The Outage Hours for power generation
units X The rated capacity of the units X 0.5.
	 
	 	(2)	 	In case of Forced Outage of power generator units, the deducted on-grid
electricity volume for each time (P)= The Outage Hours for power generator
units X The rated capacity of the units X 0.4.
	 
	 	(3)	 	In case the standby units fail to be started on schedule, for each time of
failure of startup, the deducted actual on-grid power generation
volume (P)= The
delayed time for startup X 50% of the rated capacity of the units X 0.4.

	15.6	 	In case of any of the following serious breach of contract committed by Party B,
Party A may take enforcement measures to the extent of disconnecting the Power
Plant (units) and Party B shall not be entitled to claim for compensations from
Party A for any loss caused by such disconnection.

	 	(1)	 	The Power Plant arbitrarily starts up for grid connection or shut down for
disconnection without being approved by the dispatcher of the dispatching agency.
	 
	 	(2)	 	In case of Emergencies, the Power Plant violates the provisions of Clause 6.9.
	 
	 	(3)	 	In case of Emergencies, the Power Plant fails to report to the dispatching

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	 	 	 	agency the real conditions of the equipments of the Power Plant (such as generators
and electric equipments) and relevant facilities.

	15.7	 	Unless otherwise provided in this Agreement, in case of any breach of contract,
the non-defaulting Party shall immediately notify the defaulting Party to stop
breaching the contract, and shall furnish a written notice as quickly as possible
to the breaching Party, demanding it to correct the breach of contract and assume
the liabilities arising therefrom pursuant to the provisions of this Agreement.
	 
	15.8	 	The breaching Party shall immediately take measures to correct its breach of
contract, and confirm its breach of contract and assume the liabilities arising
therefrom pursuant to the provisions of this Agreement.

	 	(1)	 	The lump-sum liquidated damages shall be paid together with the monthly
electricity output settlement after the breach of contract has been confirmed.
	 
	 	(2)	 	The portion of direct economic losses exceeding the lump-sum liquidated damages
shall be paid together with the monthly electricity output settlement after the
confirmation of the losses.

	15.9	 	In the event that either Party explicitly expresses or indicates by its own
actions that it will not perform its obligations hereunder prior to the
expiration of the performance period specified herein, the other Party may
request it to assume the liabilities for breach of contract.
	 
	15.10	 	Party A and Party B agree that, during the valid term of the document with the
number of Min Jing Mao Dian Li [2004] No.14 (or the amended version in case of
any amendment thereto), they shall make assessment and settlement and shall not
assume overlapping liabilities pursuant to the regulations of the Measures on the
Operation Management and Assessment of the Unified Dispatching Power Plants of

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	 	 	Fujian Power Grid (Trial Version). As for those assessments not regulated in the
document of Min Jing Mao Dian Li [2004] No.14, Party B shall resort to this
Agreement. In the event that Fujian Power Grid does not implement the document of
Min Jing Mao Dian Li [2004] No. 14 due to policy alterations, the Parties shall
assume their respective liabilities for breach of contract pursuant to the
liabilities for breach of contract provided in this Agreement.

CHAPTER XVI EFFECTIVENESS AND VALID TERM

	16.1	 	This Agreement shall come into effect upon being signed by the legal
representatives or authorized proxies of both Parties and affixed with their
official seals.
	 
	16.2	 	The valid term of this Agreement shall be from 2008 to 2010.
	 
	16.3	 	Within three (3) months before the expiration of this Agreement, both Parties
shall negotiate with each other about the renewal of this Agreement. If both
Parties agree that there is no need to amend this Agreement, this Agreement shall
continue to be valid.

CHAPTER XVII MODIFICATION, ASSIGNMENT AND TERMINATION

OF THIS AGREEMENT

	17.1	 	Any modification, amendment or supplement to this Agreement must be conducted in
written form, and the conditions for coming into effect shall be the same as
specified in Article 17.1.

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	17.2	 	Both Parties explicitly express that neither party shall be entitled to assign
all or part of its rights or obligations hereunder to any third Party without the
written consent of the other Party.
	 
	17.3	 	Within the valid term of this Agreement, both Parties agree to adjust or amend
this Agreement if any of the following events occurs:

	 	(1)	 	Alteration of relevant laws and regulations, rules, measures and policies of the
State;
	 
	 	(2)	 	Any clause of this Agreement conflicting with any relevant compulsory rules,
measures and regulations issued by the State electric power regulatory authority.
	 
	 	(3)	 	The formal operation of the electric power market of east China and the
implementation of the policy of grid connection subject to competitive bidding of
the power plants (including auxiliary services) and other policies.
	 
	 	(4)	 	Either Party raising a written request for amending this Agreement after 2008.

	17.4	 	Termination of Agreement
	 
	 	 	In the event that any of the following events occurred to any Party, the other
Party shall be entitled to terminate this Agreement after thirty (30) days from
sending a notice of termination:

	 	(1)	 	Either Party goes bankrupt or liquidated or the operating term has expired, or
the business license or the electric power business license of either Party or
the Power Plant is revoked.
	 
	 	(2)	 	One Party is merged with the other Party and all or majority parts of its assets
have been transferred to another entity, and the surviving enterprise cannot
reasonably perform its obligations under this Agreement.

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	 	(3)	 	Either Party commits material breach of contract twice or more within any period
of a year (calendar year) when performing this Agreement (see Article 16.8).

CHAPTER XVIII DISPUTE RESOLUTION

	18.1	 	Any dispute arising out of performance of this Agreement or any dispute in
relation to this Agreement shall be firstly resolved by the Parties through
consultations, or submitted to the power regulatory agency for mediation. If the
disputes cannot be resolved through consultation or mediation, the Parties shall
resolve the disputes by the following method:
	 
	 	 	Both Parties agree to submit the dispute to Fuzhou Arbitration Committee for
arbitration in accordance with its prevailing arbitration rules. The arbitration
award shall be final and binding on the Parties to this Agreement.
	 
	18.2	 	During the consultation or arbitration process, other than the disputed articles
and clauses, the other articles and clauses of this Agreement shall continue to
be performed.

CHAPTER XIX APPLICABLE LAW

	19.1	 	The establishment, effectiveness, interpretation, performance and dispute
resolution of this Agreement shall be governed by the laws of the People’s
Republic of China.

58

 

CHAPTER XX MISCELLANEOUS

	20.1	 	Confidentiality
	 
	 	 	Both Parties warrant to maintain confidential all information and documents which are
procured from the other Party and may not be procured from public channels.
Without the prior approval from the original provider of such information and
documents, the other Party shall not disclose to any third Party all or part of
the information and documents, unless otherwise provided by the regulations of
the State.

	20.2	 	Appendices
	 
	 	 	Appendix I: Diagram for the Metering Points
	 
	 	 	Appendix II: Technical Parameters of the Power Plant
	 
	 	 	Appendix III: Division of Dispatching Range for the Power Plant’s Equipments
	 
	 	 	The Appendices to this Agreement shall constitute an integral part of this
Agreement, and shall have the same legal effect as this Agreement. In case of any
discrepancy between this Agreement and its appendices, according to the nature of
discrepancy, the content most related to and dealing more deeply with the point
of dispute shall prevail. In case that the discrepancy and contradiction still
exist after applying the aforesaid principle, the Parties shall, on the principle
of good faith, consult with each other to make determinations according to the
purpose of this Agreement.

	20.3	 	Entire Agreement
	 
	 	 	This Agreement and the appendices hereto constitute the entire agreement between

59

 

	 	 	the Parties pertaining to the subject matter of this Agreement, and shall replace
all previous discussions, negotiations, contracts and agreements conducted by
both Parties in respect of this Agreement.

	20.4	 	Notification and Service
	 
	 	 	Any notification and document pertaining to this Agreement shall be conducted in
written form. A notification shall be deemed as having been served upon the
confirmation with signature by the recipient when delivered by way of registered
mail, express mail or in person, or upon confirmation as being received when sent
via fax. All notifications and documents shall come into effect upon service and
receipt. All notifications shall be delivered to the following addresses as
provided in this Agreement or to a modified address when either Party has
notified the other Party with a written notice.

	 	 	 	 	 	 	 
	 

	 	Party A:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Attention:
	 	Lai Zhi Qiang

	 
	 	 	 	 	 	 
	 

	 	Telephone Number:
	 	0593-2802008
	 
	 	 	 	 	 	 
	 

	 	Facsimile Number:
	 	0593-2802161
	 
	 	 	 	 	 	 
	 

	 	Zip Code:
	 	352100
	 
	 	 	 	 	 	 
	 

	 	E-mail:
	 	nddy@163.com

	 
	 	 	 	 	 	 
	 

	 	Mail Address:
	 	the Electric Power Dispatching Building, No.48, Hefeng Road,
Ningde City

	 
	 	 	 	 	 	 
	 

	 	Party B:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Attention:
	 	Huang Shao Ping

	 
	 	 	 	 	 	 
	 

	 	Telephone Number:
	 	0593-3325389
	 
	 	 	 	 	 	 
	 

	 	Facsimile Number:
	 	0593-3332259

60

 

	 	 	 	 	 	 	 
	 

	 	Zip Code:
	 	352300
	 
	 	 	 	 	 	 
	 

	 	E-mail:
	 	fjhsp@126.com

	 
	 	 	 	 	 	 
	 

	 	Mail address:
	 	5th Floor of Cuibai Building, Pingnan County, Fujian Province

	20.5	 	No Waiver
	 
	 	 	Either Party’s failure to waive any of its rights under this Agreement through
written statement shall not be deemed as a waiver thereof. Either Party’s
failure to exercise any of its rights under this Agreement shall not operate as
having waived or will waive any of its rights under this Agreement in the
future.
	 
	20.6	 	Continuous Effect
	 
	 	 	The provisions with respect to arbitration and confidentiality of this
Agreement shall remain effective after the termination of this Agreement.
	 
	20.7	 	Text
	 
	 	 	This Agreement comprises 30 pages, and shall be signed in six (6) counterparts.
Each Party shall hold three (3) counterparts.

61

 

	 	 	 
	Party A: Fujian Province Ningde Electric

	 	Party B: Pingnan County Wangkeng
	Power Industry Bureau

	 	Hydroelectric Co., Ltd.
	 
	 	 
	          (Stamp)

	 	          (Stamp)
	 
	 	 
	Legal (or authorized) Representative:

	 	Legal (or authorized) Representative:

Signing Date: July 21, 2008

Signing Place: Ningde City

62

 

APPENDIX
I: DIAGRAM FOR METERING POINTS

63

 

APPENDIX II: TECHNICAL PARAMETERS FOR THE POWER PLANT

	1.	 	Nameplate Parameters for the Generator Units of the Power Plant

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Rated Capacity	 	Active Power	 	Rated Power	 	Rated Speed
	Unit No.	 	Type	 	(MVA)	 	(MW)	 	Factor	 	(r/min)
	 	1	#	 	SF4-J20-10/3000
	 	 	25	 	 	 	20	 	 	 	0.8	 	 	 	600	 
	 	2	#	 	SF4-J20-10/3000
	 	 	25	 	 	 	20	 	 	 	0.8	 	 	 	600	 

	2.	 	Connection lines between the Power Plant and the power grids of Party A and
Party B

	 	(1)	 	Name of the line: 110 KV Wang Dai Line.
	 
	 	(2)	 	Voltage level: 110 KV.

	3.	 	Party B shall provide accurate technical parameters of the Power Plant according
to the design parameters for the equipments and the connection commissioning
results (The following parameters are filled in according to normal design, and
the exact parameters will be provided to Party A for confirmation within one
month after the commercial operation; in the event that Party B fails to provide
as scheduled, the following parameters shall be followed and the Power Plant
shall be responsible for all the liabilities arising therefrom).
	 
	3.1.	 	Normal Operation Output Range
	 
	 	 	The maximum output for the normal operation of the No.1 and No.2 units of the
Power Plant shall be 110% of the rated capacity, and the minimum output for the
normal operation shall be 0% of the rated capacity.
	 
	3.2.	 	Under the special conditions of accidents or abnormities, the minimum output of the
No.1 and No.2 units of the Power Plant shall be zero output, namely no-load operation.
	 
	3.3.	 	Power regulation rate of units during normal operation
No.1 and No.2 units are 10 MW/min.

64

 

	3.4.	 	The time for the units from receiving a dispatching instruction to starting up
for connection is 15 mins.
	 
	3.5.	 	The shortest time from full load output to zero load after receiving a
dispatching instruction is 5 mins.
	 
	3.6.	 	The under-excitation degree for No. 1 and No. 2 units is 10 MVAR.
	 
	4.	 	When the Power Plant has been put into commercial operation, if Party B finds
any change in the operation parameters of the units which fail to meet the
technical indicators as set out in Article 3 above and need modifications,
explanations shall be made to the dispatching agency, a testing report issued by
a qualified agency shall be submitted and the approval from Ningde Regional
Dispatch shall be procured.

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APPENDIX III: DIVISION OF DISPATCHING RANGE OF POWER PLANT EQUIPMENTS

	1.	 	After the grid connection of the Power Plant, the range of direct dispatching by
Ningde Regional Dispatch shall be:

	 	(1)	 	#1 and 2# power generator units
	 
	 	(2)	 	Relay protection and automatic safety devices related to the operation of the
power grid of Party A
	 
	 	 	 	The high frequency switch-off generator, low frequency self-starting
protection and the unit automatic modulation excitation system of No.1 and
No.2 units.
	 
	 	(3)	 	Dispatching automation and communication facilities related to the
dispatching operations of Party A
	 
	 	 	 	The electric power dispatching automation, dispatching communication, water
dispatching automation system and electric power billing information
collection device, tele-control information and other data shall be
transmitted to the Dispatching Center, and then forwarded to the Dispatching
Center by Ningde Regional Dispatch, and the optical-fiber transmission
channel shall be connected to Ningde Regional Dispatch and the Dispatching
Center, and the optical-fiber transmission channel shall be connected to
Ningde Regional Dispatch and the Dispatching Center.
	 
	 	(4)	 	The primary equipments
	 
	 	 	 	No.1 and No.2 units, 110 KV Wang Dai Line, 110 KV busbar, 110 KV breaker, CT,
PT, main transformers, 10KV busbar and PT.
	 
	 	(5)	 	Relay protection and automatic safety devices related to the operation of the
power grid of Party B

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The main protection and reserve protection for the main transformers, the
main protection, reserve protection and reclosing devices of the 110KV line.

	 	(6)	 	Dispatching automation and communication facilities related to the
dispatching operations of Party A
	 
	 	 	 	The electric power dispatching automation, dispatching communication devices,
tele-control information and other data shall be transmitted to Ningde
Regional Dispatch, and the optical-fiber transmission channel shall be
connected to the [ ] station of Ningde Regional Dispatch.

	2.	 	The equipments within the jurisdiction of the Power Plant itself.

The Power Plant electricity utilization system and the protection for No.1 and No.2 units.

67EX-10.29

Exhibit 10.29

BETWEEN

FUJIAN PROVINCE ELECTRIC POWER CO., LTD.

AND

PINGNAN COUNTY FUSHUN HYDROELECTRIC CO., LTD.

POWER PURCHASE AND SALE CONTRACT

FOR

WANGKENG HYDROPOWER STATION

October 28, 2004

1

 

CONTENTS

	 	 	 	 	 
	CHAPTER I DEFINITIONS AND INTERPRETATIONS
	 	 	4	 
	CHAPTER II REPRESENTATIONS BY THE PARTIES
	 	 	5	 
	CHAPTER III OBLIGATIONS OF THE PARTIES
	 	 	5	 
	CHAPTER IV METERING OF ELECTRIC POWER
	 	 	7	 
	CHAPTER V ELECTRICITY OUTPUT
	 	 	9	 
	CHAPTER VI SETTLED ELECTRICITY TARIFF
	 	 	10	 
	CHAPTER VII PAYMENT AND SETTLEMENT OF ELECTRICITY FEES
	 	 	10	 
	CHAPTER VIII FORCE MAJEURE
	 	 	13	 
	CHAPTER IX LIABILITY FOR BREACH OF CONTRACT
	 	 	14	 
	CHAPTER XI EFFECTIVINESS AND VALID TERM
	 	 	15	 
	CHAPTER XII APPLICABLE LAW
	 	 	16	 
	CHAPTER XIII MODIFICATION, ASSIGNMENT AND TERMINATION
OF THIS CONTRACT
	 	 	16	 
	CHAPTER XIV DISPUTE RESOLUTION
	 	 	17	 
	CHAPTER XV MISCELLANEOUS
	 	 	18	 
	APPENDIX I: DIAGRAM FOR METERING POINTS
	 	 	21	 

2

 

POWER PURCHASE CONTRACT

This Power Purchase Contract (hereinafter referred to as this “Contract”) is executed by and
between the following Parties:

Power Purchaser: Fujian Province Electric Power Co., Ltd., a grid enterprise registered
and established with the Administration for Industry and Commerce of Fujian Province.

	 	 	 	 	 
	Legal Address:

	 	No. 264, Wusi Road, Fuzhou City
	 	 
	Legal Representative:

	 	Ma Zong Lin.	 	 

Power Seller: Pingnan County Fushun Hydroelectric Co., Ltd., a company registered and
established with the Administration for Industry and Commerce of Pingnan County, Fujian
Province.

	 	 	 
	Legal Address:

	 	the 5th Floor, Cuibai Building, Chengguan, Pingnan County, Fujian Province
	Zip Code:

	 	352300 
	Legal Representative:

	 	Huang Shao Jian.

WHEREAS:

	(1)	 	The Power Seller is currently owning, managing, operating and maintaining a Power
Plant (hereinafter referred to as the “Power Plant”) with the installed capacity of 40
MW in Wangkeng Village, Tangkou Township, Pingnan County, Fujian Province.
	 
	(2)	 	The Power Plant has been connected to the power grid operated and managed by the
Power Purchaser.

After friendly consultations, on the principles of equality, free will and good faith, both

3

 

Parties have reached this Contract in accordance with the regulations of the Contract
Law of the People’s Republic of China, the Electric Power Law of the People’s Republic
of China, the Administration Regulations on the Dispatching of Power Grids and other
relevant laws and regulations of the People’s Republic of China.

CHAPTER I DEFINITIONS AND INTERPRETATIONS

	1.1	 	Unless otherwise prescribed and stipulated herein, the following terms used in this
Contract shall have the meanings set forth as follows:
	 
	(1)	 	“Power Plant” refers to the power generation facilities with all auxiliary
facilities stretching to the demarcation point of property rights with the installed
capacity of 40 MW (the unit capacity is 20 MW, with two (2) installed units,
respectively the No. 1 and No. 2 units), which are owned, managed, operated and
maintained by the Power Seller and located in Wangkeng Village, Tangkou Township,
Pingnan County, Fujian Province.
	 
	(2)	 	“Grid Connection and Dispatching Agreement” refers to the agreement entered into by
the Power Purchaser and the Power Seller concerning the grid connection and the
dispatching arrangements of the Power Plant.
	 
	1.2	 	Interpretations
	 
	1.2.1	 	All headings hereof are only for the convenience of reading and shall not affect the
interpretations of this Contract in any way.
	 
	1.2.2	 	Unless otherwise provided by the context, the day, month, and year mentioned in this
Contract shall refer to the day, month and year in Gregorian calendar.

4

 

	1.2.3	 	This Contract shall have binding force on the assignees of any Party.

CHAPTER II REPRESENTATIONS BY THE PARTIES

Each Party hereby represents to the other Party that:

	2.1	 	It is an enterprise that has been duly established and validly and legally in
existence in accordance with law, and has the full right to enter into and the ability
to perform this Contract.
	 
	2.2	 	All procedures required for entering into and performing this Contract (including
procuring requisite governmental approvals and relevant licenses and permits, etc.)
have been accomplished and are legal and valid.
	 
	2.3	 	Upon entering into this Contract, no judgments, verdicts, awards or specific
administrative acts have been carried out by any courts, arbitration institutes or
administrative organs that will have material adverse effect on its performance of this
Contract.
	 
	2.4	 	All internal authorization procedures required for executing this Contract have been
accomplished and this Contract is signed by its legal representative or authorized proxy.
This Contract shall have binding force on the Parties hereto after it comes into effect.

CHAPTER III OBLIGATIONS OF THE PARTIES

	3.1	 	The Power Purchaser’s obligations shall include the following:
	 
	3.1.1	 	To purchase the electric power generated by the Power Plant of the Power Seller.

5

 

	3.1.2	 	To abide by the Grid Connection and Dispatching Agreement entered into by the
Parties, operate and maintain the power transmission and transformation facilities in
accordance with relevant national standards and electric power industry standards, and
maintain the safe, high quality and economic operation of the electric power system.
	 
	3.1.3	 	To dispatch the electric power and disclose information publicly, justly and
fairly according to relevant regulations of the State, and provide information relating
to the power load, reserved capacity and operational conditions of power transmission
and transformation facilities, etc. for the purpose of performing this Contract.
	 
	3.2	 	The Power Seller’s obligations shall include the following:
	 
	3.2.1	 	To sell to the Power Purchaser the electric power that satisfies the national standards
and the electric power industry standards.
	 
	3.2.2	 	To abide by the Grid Connection and Dispatching Agreement entered into by the
Parties, comply with the unified dispatching of electric power, operate and maintain
the Power Plant according to national standards, the electric power industry standards
and the dispatching codes, ensure the operational abilities of the power generation
units satisfy the technical standards and rules issued by relevant departments of the
State, and maintain the safe, high quality and economic operation of the electric power
system.
	 
	3.2.3	 	To provide to the Power Purchaser with the reliability index and the operational
conditions for the units of the Power Plant on a monthly basis, provide information
concerning the defects of facilities in a timely fashion, regularly provide the
overhaul plan for the units of the Power Plant, and strictly implement the overhaul
plan for the generator units of the Power Plant which has been comprehensively arranged
and balanced by the Power Purchaser and determined by the Parties through
consultations.
	 
	3.2.4	 	Not to conduct the business of supplying power directly to the consumers without the

6

 

	 	 	approvals from the authority in charge of electric power at provincial level or above.

CHAPTER IV METERING OF ELECTRIC POWER

	4.1	 	Principle for the Installation of Metering Points of Electric Power
	 
	 	 	In principle, the metering points of electric power shall be installed at the
demarcation point of property rights between the Power Plant and the power grid.
(Please refer to Appendix I: Diagram for Metering Points).
	 
	4.2	 	Metering Devices
	 
	4.2.1	 	The metering devices shall be installed and allocated in accordance with the
Technical Administration Code of Electric Power Metering (DL / T448-2000). Before the
metering devices are put into operation, the Parties hereto shall carry out the
completion acceptance of the metering devices according to the requirements of the
Technical Administration Code of Electric Power Metering (DL / T448-2000). The wiring
terminal, testing terminal on the secondary circuit of the metering devices and the
metering box/tank shall be ready for being sealed with stamps.
	 
	4.2.2	 	The on-grid and off-grid electricity output of the Power Seller shall be metered
by a set of electronic multifunctional power meters which are capable of bidirectional
watt-hour (the accuracy level is 0.5) metering function and four-quadrant var-hour (the
accuracy level is 2.0) metering function, and such power meters must be capable of the
functions needed by the settlement ways of the electricity fees. The metering devices
shall be purchased, installed and owned by the Power Seller. The Power Seller shall be
responsible for the daily maintenance and other management of the metering devices, and
ensure that the metering devices will not suffer from any damage and the seals and
stamps are kept complete and intact.

7

 

	4.3	 	Checking and Operational Management of Metering Devices
	 
	4.3.1	 	The metering devices shall be checked and tested by a qualified metering testing
agency, and shall not be installed and put into operation unless having been tested to
be qualified. All fees and expenses arising therefrom shall be borne by the Power
Seller.
	 
	4.3.2	 	The periodical checking (rotation), the on-site periodical testing and other
operational management of the metering devices shall be carried out by a qualified
metering testing agency which has been jointly entrusted by the Power Purchaser and the
Power Seller.
All fees and expenses arising therefrom shall be borne by the Power Seller, and the
Power Seller shall assist in the operations and managements of the metering devices.

	4.3.3	 	The periodical checking (rotation) and the on-site periodical testing of the
metering devices shall be carried out in accordance with relevant national and electric
power industry standards, codes and regulations.
	 
	4.3.4	 	After having been checked or tested on site, the metering devices shall be sealed
with stamps. Neither the Power Purchaser nor the Power Seller may unseal the devices,
change the interconnections or the components of the metering devices without the prior
consent of the other Party. In case of any metering inaccuracy caused by one Party’s
unauthorized unsealing or changing of the interconnections or components of the
metering devices, besides refunding or compensating relevant electricity fees, the
defaulting Party shall be responsible for all consequences and liabilities arising
therefrom.
	 
	4.3.5	 	Any Party may require at any time to check or test the metering devices besides
the periodical testing and checking. All fees and expenses arising therefrom shall be
borne by the Party who proposes such checking or testing.

8

 

	4.4	 	Meter Reading
	 
	4.4.1	 	The meter reading day shall be set at the zero hour of the twenty-eighth day of
each month. The electricity output shall be subject to the data read from the energy
meters, in the event that the data recorded in the long-distance power energy billing
system could satisfy the requirements of settling the electricity fees, the electricity
fees shall be settled according to the data recorded in the long-distance power energy
billing system.
In case the data recorded in the long-distance power energy billing system differs
from the data read from the energy meters, the data read from energy meters shall
be adopted. All of the above-mentioned data of electricity output shall be signed
and confirmed by both Parties.
	 
	4.5	 	Metering Deviation
	 
	4.5.1	 	In the event that any Party detects the inaccuracy or malfunctions of the
metering devices, it shall immediately inform the other Party, and the Parties shall
consult with each other and resolve it as soon as possible. The Parties may determine
the amount of electricity output during the malfunction or inaccuracy period according
to other referential data. In case of lacking enough referential data to determine the
electricity output during the malfunction or inaccuracy period, the Parties shall
determine the electricity output through further consultations.

CHAPTER V ELECTRICITY OUTPUT

	5.1	 	Annual Basic On-grid Electricity Output
	 
	 	 	Under the guidance of the annual electricity generation plan issued by the
provincial authority in charge of electric power, referring to the planned
multi-year average electricity generation output of the Power Plant, considering
the hydrological conditions

9

 

	 	 	and on the principle of “Justice, Fairness and Publicity”, the Power Purchaser and
the Power Seller agree to arrange the annual electricity generation plan and/or
adjusted plans for the Power Plant of the Power Seller.

CHAPTER VI SETTLED ELECTRICITY TARIFF

	6.1	 	Electricity Tariff for Annual Basic On-grid Electricity Output
	 
	6.1.1	 	Prior to the adoption of the “Grid Connection subject to Competitive Bidding of
Tariff” policy, the settled electricity tariff for annual basic on-grid electricity
output shall be determined according to the on-grid electricity tariff approved by the
competent price regulatory authority and other relevant regulations.
	 
	6.1.2	 	When the “Grid Connection subject to Competitive Bidding of Tariff” policy has
been adopted, the settled electricity tariff for annual basic on-grid electricity
output shall be determined according to the electricity tariff system provided by the
“Grid Connection subject to Competitive Bidding of Tariff” policy.

CHAPTER VII PAYMENT AND SETTLEMENT FOR ELECTRICITY FEES

	7.1	 	All fees and
expenses between the Parties shall be calculated and paid in RMB.
	 
	7.2	 	Calculation
of the Monthly Electricity Output for Settlement
	 
	 	 	Monthly Electricity Output for Settlement= Monthly Actual On-grid Electricity Output
 — Electricity Output for Breach of Contract provided in this Contract and Grid
Connection and Dispatching Agreement+Compensation Electricity Output provided in
this Contract and the Grid Connection and Dispatching Agreement

10

 

	 	 	Wherein, the Electricity Output for Breach of Contract refers to the electricity
output which shall be deducted for punishing the Power Seller for breaching the
provisions of this Contract and the Grid Connection and Dispatching Agreement. The
Compensation Electricity Output refers to the electricity output which shall be
compensated by the Power Purchaser to the Power Seller due to the Power
Purchaser’s breaching of the provisions of this Contract and the Grid Connection
and Dispatching Agreement.
	 
	 	 	The Power Purchaser and the Power Seller shall confirm the amount of Electricity
Output for Breach of Contract and Compensation Electricity Output on a monthly basis.
	 
	7.3	 	Electricity Fees for Commercial Operation
	 
	 	 	After the Power Plant has been put into commercial operation, the Power Purchaser
shall calculate the electricity fees paid to the Power Seller in accordance with
the monthly settled electricity output and the settled electricity tariff, and
report such electricity fees to the provincial electric power company. The
electricity fees shall be paid by the provincial electric power company directly
to the Power Seller.
	 
	 	 	In the meanwhile, the Power Seller shall pay at every month to the local power
supply unit of the Power Purchaser for the from-grid electricity output supplied
by the Power Purchaser.
	 
	7.4	 	Payment of Electricity Fees
	 
	 	 	After reading the meters, the Power Seller shall deliver to the Power Purchaser
the value added tax invoice for the electricity fees, the confirmation letter for
settled electricity output and other materials relating to the settlement (the
date indicated on the invoice shall be within the month of settlement). After
receiving the invoice and relevant materials relating to the settlement delivered
by the Power Seller, the Power Purchaser shall check and confirm as soon as
possible. In case of any dissidence, the

11

 

	 	 	Power Purchaser shall inform the Power Seller within five (5) days after the
receipt of the invoice and materials. Both Parties shall consult with each other
and make confirmations within five (5) days, and the Power Seller shall deliver
the confirmed invoice and materials to the Power Purchaser. In the event that the
Power Purchaser fails to inform the Power Seller of any dissidence within five (5)
days after the receipt of the invoice and materials, it shall be deemed as having
confirmed with no dissidence. The Power Purchaser shall pay off the actual settled
electricity fees for the month indicated on the invoice to the Power Seller within
thirty (30) days after the receipt of the confirmed invoice and materials.
	 
	7.5	 	Clearing of Electricity Fees at Year-End
	 
	 	 	The Power Purchaser and the Power Seller shall accomplish the annual clearing of
electricity fees before February 10 of the next year.
	 
	7.6	 	Payment Method
	 
	 	 	The electricity fees paid by the provincial electric power company to the Power
Seller shall be directly remitted to the bank account indicated in the special
value added tax invoice delivered by the Power Seller (or the bank account
designated by the Power Seller in written form).
	 
	7.7	 	Materials and Records
	 
	 	 	The Power Seller and the Power Purchaser agree to keep their original materials
and records respectively so as to facilitate the reasonable checking of the
statements and records or the examination of the accuracy of calculations in
accordance with this Contract.

12

 

CHAPTER VIII FORCE MAJEURE

	8.1	 	Force Majeure refers to, the natural and social events occurred after the
effectiveness of this Contract, which are unforeseen, the occurrence and consequences
of which are unavoidable, out of the reasonable control and insurmountable. Such events
shall include, without limitation, volcano eruptions, lightening, tornados, landslide,
flood, fire, war, and earthquake and typhoon beyond the designed standards, etc.
	 
	8.2	 	In the event that any Party’s contractual obligations wholly or partially affected
by the occurrence of an event of Force Majeure , that Party may suspend the performance
of its contractual obligations provided that:

	 	(1)	 	the scope and period for the suspended performance shall not exceed the
reasonable requirements for eliminating the consequences of Force Majeure;
	 
	 	(2)	 	the Party affected by the Force Majeure shall continue to perform its other
obligations under this Contract which has not been affected by the Force Majeure;
	 
	 	(3)	 	In case the event of Force Majeure comes to an end, the Party claiming Force
Majeure shall resume the performance of this Contract as soon as possible.

	8.3	 	In the event that any Party is unable to perform this Contract due to Force
Majeure, such Party shall inform the other Party in written form as soon as possible.
Such written notice shall indicate the date of the occurrence of Force Majeure, the
anticipated duration, the nature of the events, the impact on its performance of this
Contract and the measures it has taken to mitigate the impact of such Force Majeure
events.
	 
	 	 	The Party affected by the Force Majeure shall furnish the other Party with an
evidential document within thirty (30) days commencing from the date when the
Force Majeure event occurs (in the event of communication interruption, from the
restoration date of

13

 

	 	 	the communication).
	 
	8.4	 	The Parties affected by the Force Majeure shall take reasonable measures to
mitigate the losses incurred by the other Party or both Parties caused by Force
Majeure. The Parties shall immediately consult with each other to formulate and
implement a remedy plan and reasonable alternative measures to mitigate or eliminate
the consequences of
Force Majeure.
	 
	 	 	In the event the Party affected by Force Majeure fails to use all its reasonable
endeavors to mitigate the consequences of Force Majeure, that Party shall be
responsible for the enlarged losses arising therefrom.
	 
	8.5	 	In the event that the Force Majeure has prevented a Party from performing its
obligations under this Contract for a continuous period of over thirty (30) days, the
Parties hereto shall consult with each other to determine the conditions for continuing
the performance of this Contract or to terminate this Contract. If the Parties hereto
fail to reach agreement concerning the conditions for continuing the performance of
this Contract or the termination of this Contract within one year after the occurrence
of the Force Majeure, any Party shall be entitled to terminate this Contract with a
notice to the other Party, unless otherwise provided herein.

CHAPTER IX LIABILITY FOR BREACH OF CONTRACT

	10.1	 	Principles for Handling Breach of Contract
	 
	10.1.1	 	Any Party’s non-performance of its obligations under this Contract or
non-conforming performance of its obligations shall be deemed as breach of contract.
The breaching Party shall assume liabilities for breach of contract to the
non-defaulting Party, such as to continue the performance, take remedy measures or

14

 

	 	 	compensate for the losses, etc.
	 
	10.1.2	 	In case of any Party’s breach of contract, the non-defaulting Party shall
immediately take proper measures to prevent the enlargement of losses. In the event
that such Party fails to take proper measures resulting in the enlargement of losses,
it shall not require the defaulting Party to compensate the enlarged losses.
	 
	10.4	 	In the event that the Power Seller violates the provisions of Article 7.4 of this
Contract and fails to accurately and timely provide the invoices and materials for
settlement, the provincial electric power company may correspondingly postpone the
deadline for the payment of electricity fees.
	 
	10.5	 	As for those funds which should have been paid by one Party to the other Party
hereto as provided in this Contract but have not been fully paid off, such Party shall
pay liquidated damages to the other Party in an amount of 0.01% of the unpaid portion
per day.
	 
	10.6	 	In the event that any Party violates the provisions of Clause 141 hereof and
causes losses to other Party, that Party shall be responsible for the compensation for
the losses incurred by the other Party.
	 
	10.8	 	The Parties agree that the liabilities for breach of contract which have not been
mentioned under this Contract shall refer to the relevant provisions of the Grid
Connection and Dispatching Agreement.

CHAPTER XI EFFECTIVINESS AND VALID TERM

	11.1	 	This Contract shall come into effect when it has been signed by the legal
representatives or authorized representatives of the Parties and affixed with the
official stamps, and upon the effectiveness of the Grid Connection and Dispatching
Agreement.

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	11.2	 	The valid term of this Contract shall be five (5) years, from October 28, 2004 to
December 31, 2009.
	 
	11.3	 	Within six (6) months before the expiration of this Contract, the Parties shall negotiate
with each other concerning the extension of this Contract.

CHAPTER XII APPLICABLE LAW

	12.1	 	The establishment, effectiveness, interpretation, performance and dispute resolution
shall be governed by the laws of the People’s Republic of China.

CHAPTER XIII MODIFICATION, ASSIGNMENT AND TERMINATION

OF THIS CONTRACT

	13.1	 	Any modification, amendment or supplement to this Contract shall be conducted in
written form, and shall come into effect after having been signed by the authorized
representatives of the Parties; in the event that this Contract shall be approved by
the original approval authority, it shall come into effect after having been approved.
	 
	13.2	 	The Power Purchaser and the Power Seller expressly agree that, without the other
Party’s prior written consent, any one of them shall not be entitled to assign to any
third Party all or part of its rights or obligations under this Contract.
	 
	13.3	 	Within the valid term of this Contract, the Parties agree to adjust or amend this Contract
under any of the following conditions:

	 	(1)	 	Relevant laws, regulations, rules and polices of the State have been amended;

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	 	(2)	 	New rules, measures and regulations, etc. are issued by the State power
regulatory agency;
	 
	 	(3)	 	Other circumstances confirmed by the Parties:                     

	13.4	 	Termination of Contract
	 
	 	 	In the event that any of the following events occurred to any Party, the other Party
shall
be entitled to terminate this Contract after having served a notice of termination:

	 	(1)	 	The Power Seller fails to deliver electricity safely according to the
requirements of this Contract for a continuous period of one (1) year; the Power
Purchaser fails to receive the electricity power normally as prescribed in this
Contract for a continuous period of one (1) year;
	 
	 	(2)	 	Any Party goes bankrupt, liquidated or the business license of any Party has been
revoked;
	 
	 	(3)	 	One Party is merged with the other Party and all or majority parts of its
assets have been transferred to another entity, and the surviving enterprise
cannot reasonably perform its obligations under this Contract;
	 
	 	(4)	 	Other events agreed by the Parties for the termination of
this
Contract:                     

CHAPTER XIV DISPUTE RESOLUTION

	14.1	 	Any dispute arising out of the performance of this Contract or any dispute in
relation to this Contract shall be firstly resolved by the Parties through
consultations. If such dispute cannot be resolved through consultations within thirty
(30) days, the Parties

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	 	 	shall submit such dispute to the power regulatory authority of Fujian Province for
mediation. In the event that such dispute cannot be resolved through mediation
within sixty (60) days, the Parties agree to submit the disputes to the
Arbitration Committee of Fuzhou City for arbitration. The arbitration award shall
be final and legally binding on the Parties.

CHAPTER XV MISCELLANEOUS

	15.1	 	Confidentiality
	 
	 	 	The Parties warrant that they will keep confidential the materials and documents
which are procured from the other Party and cannot be procured through public
channels. Without the prior approval from the original provider of such materials
and documents, the other Party shall not disclose to any third party all or part
of the materials and documents, unless otherwise provided by the State.
	 
	15.2	 	Appendix

	 	(1)	 	Diagram for Metering Points.

	15.3	 	Entire Agreement
	 
	 	 	This Contract and its appendix constitute the entire agreement of the Parties
pertaining to the transaction agreed upon in this Contract, and shall replace all
previous discussions, negotiations, agreements and contracts between the Parties
to this Contract in respect of the transaction of this Contract.
	 
	15.4	 	Any notification, document or legal bills pertaining to this Contract shall be conducted
in written form. Documents sent by a registered letter, express mail or sent in person

18

 

	 	 	shall be deemed as having been served after signed and confirmed by the receiver;
if sent by facsimile, the documents shall be deemed as having been served after
those documents have been received. All notifications, documents and normal bills
shall come into effect upon the service and receipt. All notifications, bills,
information and documents shall be sent to the following legal addresses and mail
addresses provided in this Contract, unless any Party issues a written notice to
other Party to change its address:

	 	 	 	 	 
	 

	 	Power Purchaser:
	 	Fujian Province Electric Power Co., Ltd.
	 

	 	Addressee:
	 	General Manager Department
	 

	 	Telephone Number:
	 	0591-87023314 
	 

	 	Facsimile Number:
	 	0591-87555121 
	 

	 	Zip Code:
	 	350003 
	 

	 	Mail Address:
	 	No.264, Wusi Road, Fuzhou City
	 
	 	 	 	 
	 

	 	Power Seller:
	 	Pingnan County Fushun Hydroelectric Co., Ltd.
	 

	 	Addressee:
	 	The Office
	 

	 	Telephone Number:
	 	0539-3331959 
	 

	 	Facsimile Number:
	 	0593-3332259 
	 

	 	Zip Code:
	 	352300 
	 

	 	Mail Address:
	 	5th Floor, Cuibai Building, Pingnan County, Ningde City, Fujian Province

	15.6	 	Text
	 
	 	 	This Contract shall be signed in four (4) counterparts, and the Power Purchaser and the
Power Seller shall each hold two (2) counterparts.

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NOTE: The settlement of the electricity fees of the Power Plant during the period from
the date of grid connection and power generation to the signing date of this Contract
shall also be carried out according to the provisions of this Contract.

	 	 	 
	Power Purchaser:

	 	Fujian Province Electric Power Co., Ltd.
	 
	 	 
	 

	 	(Stamp)
	 
	 	 
	Representative:
	 	 
	 
	 	 
	Power Seller:

	 	Pingnan County Fushun Hydroelectric Co., Ltd.
	 
	 	 
	 

	 	(Stamp)
	Representative:
	 	 

Signing Place and Date: Fuzhou City, October 28, 2004

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APPENDIX I: DIAGRAM FOR METERING POINTS

	APPENDIX I: DIAGRAM FOR METERING POINTS
Connection (Metering) Point 60km Wanggan Line Gan Tang Substation
Wangkeng Power
Plant
The same as right
Main Grid Connection Diagram for Wangkeng Power Plant

Main Grid Connection Diagram for Wangkeng Power Plant

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