Document:

EX-10.36

Exhibit 10.36

FUJIAN PROVINCE PINGNAN COUNTY POWER SUPPLY CO., LTD.

PINGNAN COUNTY YUHENG HYDROPOWER CO., LTD.

POWER PURCHASE AND SALE CONTRACT

FOR

OLD YUANPING HYDROPOWER STATION

December 2008

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CONTENTS

	 	 	 	 	 
	CHAPTER I DEFINITIONS AND INTERPRETATIONS

	 	 	4	 
	CHAPTER II REPRESENTATIONS BY BOTH PARTIES

	 	 	5	 
	CHAPTER III OBLIGATIONS OF THE PARTIES

	 	 	5	 
	CHAPTER IV METERING OF ELECTRIC POWER

	 	 	7	 
	CHAPTER V ELECTRICITY OUTPUT

	 	 	11	 
	CHAPTER VI SETTLED ELECTRICITY TARIFF

	 	 	11	 
	CHAPTER VII PAYMENT AND SETTLEMENT FOR ELECTRICITY FEES

	 	 	12	 
	CHAPTER VIII FORCE MAJEURE

	 	 	14	 
	CHAPTER IX LIABILITY FOR BREACH OF CONTRACT

	 	 	16	 
	CHAPTER X EFFECTIVENESS AND VALID TERM OF THIS CONTRACT

	 	 	17	 
	CHAPTER XI APPLICABLE LAW

	 	 	18	 
	CHAPTER XII MODIFICATION, ASSIGNMENT AND TERMINATION OF THIS CONTRACT

	 	 	18	 
	CHAPTER XIII DISPUTE RESOLUTION

	 	 	19	 
	CHAPTER XIV MISCELLANEOUS

	 	 	19	 
	APPENDIX I: DIAGRAM FOR METERING POINTS

	 	 	23	 
	APPENDIX II: DIAGRAM FOR LIABILITY DEMARCATION POINT

	 	 	24	 

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

POWER PURCHASE AND SALE CONTRACT

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

Party A (hereinafter referred to as the “Power Purchaser”): Fujian Province Pingnan County Power
Supply Co., Ltd., a limited liability company registered and established with the Administration
for Industry and Commerce of Pingnan County;

Legal Address: No. 7, Huating Road, Gufeng Town, Pingnan County

Zip Code: 352300

Legal Representative: Wei Nai Sheng

Party B (hereinafter referred to as the “Power Seller”): Pingnan County Yuheng Hydropower Co.,
Ltd., a joint-stock enterprise registered and established with the Administration for
Industry and Commerce of Ningde City;

Legal Address: Yuanping Village, Shoushan Township, Pingnan County

Zip Code: 352300

Legal Representative: John D. Kuhns.

WHEREAS:

	(1)	 	The Power Seller is currently owning, managing, operating and maintaining the Old Yuanping
Hydropower Station (hereinafter referred to as the “Hydropower Station”) with the total installed
capacity of 30 MW in Yuanping, Baiyu Village, Shoushan Township, Pingnan County.

	(2)	 	Having been approved by the document with the number of Min Jing Mao [1995] No.
782 the Hydropower Station will be connected to the power grid of Pingnan County
according to the Grid Connection and Dispatching Agreement and operated on the power

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	grid operated and managed by the Power Purchaser.

After friendly consultations, on the principles of equality, free will and good faith, both Parties
have reached this Contract in accordance with 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 required by the context, the following terms used in this Contract
shall have the meanings set forth as follows:

	(1)	 	“Hydropower Station” refers to the power generation facilities with the total installed
capacity of 30 MW (three (3) sets of generator unit with the capacity of 10 MW), which is owned,
managed, operated and maintained by the Power Seller and located in Yuanping Village, Shoushan
Township, Pingnan County.

	(2)	 	“Grid Connection and Dispatching Agreement” refers to the agreement entered into by the Power
Purchaser and Power Seller concerning the grid connection and the dispatching arrangements of the
Hydropower Station.

	1.2	 	Interpretations

	1.2.1	 	All headings hereof are only for the convenience of reading and shall not be considered
as part of this Contract or affect the interpretation of this Contract in any way.

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

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

CHAPTER II REPRESENTATIONS BY BOTH 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 both 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 generator units of the Hydropower
Station of the Power Seller in accordance with the provisions of this Contract.
	 
	3.1.2	 	To abide by the Grid Connection and Dispatching Agreement entered into by Party A

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	and Party B, operate and maintain the power transmission and transformation facilities in
accordance with relevant national standards and electric power industry standards, and
maintain the safety, 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.
	 
	3.1.4	 	To provide electric power to the Power Seller for restarting the generator units of the
Hydropower Station according to relevant national regulations.
	 
	3.1.5	 	To compensate the Power Seller for the reasonable fees arising from the paid assistant
services provided by the Power Seller upon the request of the Power Purchaser according to relevant
national regulations.
	 
	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 in accordance with the provisions of this Contract.
	 
	3.2.2	 	To abide by the Grid Connection and Dispatching Agreement entered into by Party A and Party
B, comply with the unified dispatching of electric power, operate and maintain the Hydropower Station
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 safety, high quality and
economic operation of the electric power system.

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	3.2.3	 	To provide to the Power Purchaser with the reliability index and the operational conditions
for the units of the Hydropower Station 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
Hydropower Station, and strictly implement the overhaul plan for the generator units of the
Hydropower Station which has been comprehensively arranged and balanced by the Power Purchaser and
determined by the Parties through consultations.
	 
	3.2.4	 	To compensate the Power Purchaser for the reasonable fees arising from the paid assistant
services provided by the Power Purchaser upon its request according to relevant national
regulations.
	 
	3.2.5	 	Not to conduct the business of supplying power directly to the consumers without the
approvals from relevant authorities of the State.

CHAPTER IV METERING OF ELECTRIC POWER

	4.1	 	Gateway Metering Point
	 
	 	 	The gateway metering point shall be installed according to the Supplemental Agreement on the
Gateway Metering Point Installment, Electricity Output Calculation and Line Loss Calculation
for the Openness of the Temporary Integrated Channel of Pingnan Rongping Supply District.
Details please refer to Appendix I.
	 
	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) and the Technical

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	Code of Gateway Metering Devices issued by Fujian Province Electric Power Co., Ltd.(trial
version). Before the metering devices start 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) and the Technical Code of
Gateway Metering Devices issued by Fujian Province Electric Power Co., Ltd. (trial version),
and without passing the completion acceptance, the metering devices can not be put into
operation. 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 measured by two sets
(one set as main meter and the other as assistant meter, both the main and assistant meters shall
be marked clearly and of the same type, specification and grade) of electronic multifunctional
power meters which are capable of bidirectional watt-hour (the accuracy level is 0.2) 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.
	 
	4.2.3	 	Before the metering devices are put into operation, the Power Seller shall file a written
application for completion acceptance according to the Administration Regulations on the Operation
of Grid Gateway Metering Devices of Fujian Province, together with the drawings and other materials
of the gateway metering devices. As for those metering devices which do not conform to the
technical codes, the Power Seller shall take active measures to upgrade the technology. Prior to
the acceptance of the upgrading, the Parties shall correct the errors of the settled output
according to relevant laws and regulations of the State.

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	4.2.4	 	The Power Seller shall install testing metering points, which shall be in principle installed
at the bus-bar of the same voltage grade as the gateway metering devices. The installment and
allocation of the testing metering devices may refer to the technical requirements of gateway
metering devices.

	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 until 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 management 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. Neither
the Power Purchaser nor the Power Seller may unseal the devices, change the devices, and its
interconnections or the components of the metering devices without the prior consent of the other
Party. In case of any metering inaccuracy caused by any Party’s unauthorized unsealing or changing
of the devices, its 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.

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	4.3.5	 	In order to prevent the metering inaccuracy caused by the break of PT/CT, the Power Seller
shall make at every month the balancing of the electricity output of the bus-bar on which the
metering devices are located.

	4.3.6	 	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.
	 
	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 on the spot,
photographed and kept for record by the Power Purchaser and the Power Seller.

	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 both Parties shall consult with each other and
determine the resolution as soon as possible. Both 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, both Parties shall

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	determine the electricity output through further consultations.

CHAPTER V ELECTRICITY OUTPUT

	5.1	 	Annual Basic On-grid Electricity Output
	 
	 	 	Following the guidance of the annual electricity generation control plan, on the principle of
“Justice, Fairness and Publicity”, and considering the hydrological condition of the
Hydropower Station, the power supply and demand condition of the whole grid and the conditions
for the safe operation of the grid, etc., the Power Purchaser shall arrange in detail the
monthly electricity generation plan and relevant adjusted plans for the Hydropower Station of
the Power Seller.

	5.2	 	Principles of Allocating the Electricity Output between the New and Old Hydropower
Stations
	 
	 	 	On the premise of ensuring the safety of the grid and facilities and making the best use of
water resources, when arranging the electricity generation plans for the Technological
Upgrading Project of Lidaping Hydropower Station and the old Lidaping Hydropower Station, the
electricity output generated by the Technological Upgrading Project of Yuanping Hydropower
Station and Old Yuanping Hydropower Stations shall be allocated in principle in the proportion
of 28:72 of the initially designed multi-year average electricity generation output.

CHAPTER VI SETTLED ELECTRICITY TARIFF

	6.1	 	The on-grid electricity tariff for the units of the Power Seller: the on-grid electricity
tariff of RMB 0.29/kwh (including value added tax at a rate of 6%) shall be executed

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	which has been approved by the document with the number of Ning Jia Shang [2008]
No. 149 issued by the Price Bureau of Ningde City.

CHAPTER VII PAYMENT AND SETTLEMENT FOR ELECTRICITY FEES

	7.1	 	All fees and expenses between both
Parties shall be calculated and paid in RMB.
	 
	7.2	 	Calculation of the Electricity Output for Monthly
Settlement
	 
	 	 	The electricity output shall be settled in accordance with the Supplemental Agreement on the
Gateway Metering Point Installment, Electricity Output Calculation and Line Loss Calculation
for the Openness of the Temporary Integrated Channel of Pingnan Rongping Supply District.
Details please refer to Appendix I.
	 
	7.3	 	Electricity Fees for On-grid Electricity Output
	 
	7.3.1	 	The Power Purchaser shall pay the electricity fees to the Power Seller in an amount
calculated from the electricity output calculated according to Article 7.2 and the settled
electricity tariff provided in Chapter VI. The Power Seller and the Power Purchaser shall confirm
the amount of liquidated damages provided in the Grid Connection and Dispatching Agreement every
month.
	 
	7.3.2	 	The Power Seller and the Power Purchaser shall complete the annual clearing of the
electricity fees before February 10 of the next year.
	 
	7.4	 	Payment of Electricity Fees
	 
	 	 	After having read the meters, the Power Seller shall accurately calculate the on-grid
electricity output and the electricity fees, and fill in the Electricity Output Settlement

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	Sheet and the Electricity Fees Settlement Sheet. After having been confirmed by the Power
Purchaser, the Power Seller shall deliver such Electricity Output Settlement Sheet and
Electricity Fees Settlement Sheet to the Power Purchaser on the same day or on the next
working day.
	 
	 	 	After having received the Electricity Output Settlement Sheet and the Electricity Fees
Settlement Sheet delivered by the Power Seller, the Power Purchaser shall check and confirm
them as soon as possible. In case of any dissidence, the Power Purchaser shall inform the
Power Seller within three (3) working days after the receipt of those settlement sheets. After
having been amended by the Parties through consultations, the Power Seller shall deliver the
amended Electricity Output Settlement Sheet and Electricity Fees Settlement Sheet to the Power
Purchaser. In the event that the Power Purchaser fails to inform the Power Seller of any
dissidence within three (3) working days after the receipt of the settlement sheets, it shall
be deemed as having been confirmed with no dissidence.
	 
	 	 	The Power Seller shall issue the special value added tax invoice ( the date indicated on the
invoice shall be within the month of settlement) based on the settlement sheets which have
been confirmed by the Power Purchaser, and deliver such invoice to the Power Purchaser. After
the receipt of the originals of correct Electricity Output Settlement Sheet, Electricity Fees
Settlement Sheet and special value added tax invoice, the Power Purchaser shall pay off the
electricity fees for that period to the Power Seller according to Article 4 of the document
with the number of Min Dian Jian Jia Cai [2008] No. 61.
	 
	7.5	 	Payment Method
	 
	 	 	The electricity fees paid by the Power Purchaser to the Power Seller shall be directly
remitted to the bank account indicated in the special value added tax invoice of the Power
Seller (or the bank account designated by the Power Seller in written form). The

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	bank account must be under the name of the Power Seller, otherwise the Power
Purchaser shall be entitled to refuse to pay for the electricity fees.
	 
	7.6	 	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.
	 
	7.7	 	Miscellaneous
	 
	 	 	In the event that the Power Purchaser fails to pay the electricity fees to the Power Seller on
time, the Power Seller shall be entitled to require the Power Purchaser to disconnect the No.
103 Switch, and the electricity output of the Power Seller will be purchased by Ningde
Electric Power Industry Bureau.

CHAPTER VIII FORCE MAJEURE

	8.1	 	Force Majeure refers to the objective events which are unforeseen, unavoidable and
insurmountable. Such events shall include volcano eruptions, tornados, tsunamis, snowstorms,
mudslide, landslide, flood, fire, the earthquakes, typhoons, thunder and lightening, fog flash,
etc. beyond the designed standards, and nuclear radiation, wars, plagues and riots, 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:

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	(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 the communication).
	 
	8.4	 	The Party affected by the Force Majeure shall take reasonable measures to mitigate the losses
incurred by the other Party 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.

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	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 sixty (60) 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

	9.1	 	Principles for Handling Breach of Contract

	9.1.1	 	Any Party’s non-performance of its obligations under this Contract or non-conforming
performance of its obligations shall be deemed as a 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 compensate for the losses, etc.

	9.1.2	 	In case of any breach of contract, the non-defaulting Party shall 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.

	9.2	 	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 Power
Purchaser may correspondingly postpone the deadline for the payment of electricity fees.

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	9.3	 	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 0.3‰ of the unpaid portion per day.

	9.4	 	In the event that any Party violates the provisions of this Contract and causes
losses to the other Party, such Party shall be responsible for the compensation for
the losses incurred by the other Party.

	9.5	 	Both Parties agree that the liabilities for the 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 X EFFECTIVENESS AND VALID TERM OF THIS CONTRACT

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

	10.2	 	The valid term of this Contract shall be from December 28, 2008 to December 28,
2009.

	10.3	 	Within three (3) months before the expiration of this Contract, both Parties shall negotiate
with each other concerning the extension of this Contract. If both Parties believe this Contract
needs no amendments, the valid term of this Contract shall be extended to the expiration date of
the operation period of the Hydropower Station.
During such extension period, in the event that any Party proposes a written objection to the
other Party, this Contract shall terminate automatically, and both Parties shall execute a new
contract.

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

CHAPTER XI APPLICABLE LAW

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

CHAPTER XII MODIFICATION, ASSIGNMENT AND TERMINATION

OF THIS CONTRACT

	12.1	 	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 both
Parties.

	12.2	 	Both Parties expressly agree that, without the other Party’s prior written consent, any of
them shall not be entitled to assign to any other party all or part of its rights or obligations
under this Contract.

	12.3	 	Within the valid term of this Contract, both Parties agree to adjust or amend this
Contract accordingly under any of the following conditions:

	 	(1)	 	Relevant laws, regulations, rules and polices of the State have been amended;
	 
	 	(2)	 	Relevant rules, measures or regulations, etc. in relation to the power market are
promulgated and implemented by the State power regulatory agency.

	12.4	 	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:

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	(1)	 	The Power Seller fails to deliver electricity safely as required by this
Contract for a continuous period of sixty (60) days; or the Power Purchaser
fails to receive the electricity normally as prescribed in this Contract for a
continuous period of sixty (60) days (excluding Force Majeure);
	 
	 	(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 or all or majority part of its
assets has been transferred to another entity, and the surviving enterprise
cannot reasonably perform its all obligations under this Contract.

CHAPTER XIII DISPUTE RESOLUTION

	13.1	 	Any dispute arising out of the performance of this Contract or any dispute in relation to this
Contract shall be firstly resolved by both Parties through consultations. If such dispute cannot be
resolved through consultations within thirty (30) days, the Parties 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, both Parties agree to submit the
disputes to the Arbitration Committee of Pingnan County for arbitration. The arbitration award
shall be final and binding on both Parties. During the arbitration process, other than the disputed
matter, both Parties hereto shall continue to perform this Contract.

CHAPTER XIV MISCELLANEOUS

	14.1	 	Liability Demarcation

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	The liability demarcation point of 110kv Lijia Line shall refer to Appendix II for details
and the liability shall be demarcated as follows:

	 	(1)	 	The liability demarcation point: the property demarcation point shall be one
meter away from the 1321 Switch on the line connecting Jiayang Substation 110kv
bus-bar jumper and Lijia Line; (2) The space electrics and communication
equipments of 110kv Lijia Line which belong to Party B shall be entrusted by
Party B on its own expense to Party A for the operation and maintenance
management (the agreement entrusting Party A to manage the operation and
maintenance shall be signed separately); (3) The equipments one meter away from
the space gantry of Lijia Line directing to the grid shall be operated and
maintained by Party B itself (the 110kv Lijia Line operation demarcation
agreement shall be signed separately).

	14.2	 	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
laws.

	14.3	 	The Entire Agreement
	 
	 	 	This Contract and its appendices constitute the entire agreement of both Parties pertaining to
the transaction agreed upon in this Contract, and shall replace all previous discussions,
negotiations, agreements and contracts between both Parties to this Contract in respect of the
transaction of this Contract.

	14.4	 	Notification

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Power Purchase and Sale Contract for Old Yuanping Hydropower Station

	 	 	Any notification, document or checked bills pertaining to this Contract shall be
conducted in written form. Documents sent by a registered letter, express mail
or sent in person shall be deemed as having been served after signed and
confirmed with the receiver; if sent by facsimile, the documents shall be deemed
as having been served after those documents have been received. All
notifications, documents or checked bills shall come into effect upon the
service or receipt. All notifications, bills, information or documents shall be
sent to the following legal addresses and mail addresses provided in this
Contract, unless one Party issues a written notice to other Party to change its
address.

	 	 	 	 	 
	 	 	Party A: Fujian Province Pingnan County Power Supply Co., Ltd.
	 
	 	 	 	 
	 
	 	Addressee:	 	Lin Xiong Que
	 
	 	 	 	 
	 
	 	Telephone Number:	 	0593-3304003
	 
	 	 	 	 
	 
	 	Facsimile Number:	 	0593-3302386
	 
	 	 	 	 
	 
	 	Zip Code:	 	352300
	 
	 	 	 	 
	 
	 	Mail Address:	 	No. 7, Huating Road, Gufeng Town, Pingnan County, Fujian Province
	 
	 	 	 	 
	 	 	Party B: Pingnan County Yuheng Hydropower Co., Ltd.
	 
	 	 	 	 
	 
	 	Addressee:	 	John D. Kuhns
	 
	 	 	 	 
	 
	 	Telephone Number:	 	0593-3325389
	 
	 	 	 	 
	 
	 	Facsimile Number:	 	0593-3332698
	 
	 	 	 	 
	 
	 	Zip Code:	 	352300
	 
	 	 	 	 
	 
	 	Mail Address:	 	the 5th Floor, Cuibai Building, Gufeng Town, Pingnan County

	14.5	 	Text
	 
	 	 	This Contract shall be signed in six (6) counterparts, with two (2) originals and four (4)
duplicates. Party A and Party B shall each hold one (1) original and two (2) duplicates.

21

 

Power Purchase and Sale Contract for Old Yuanping Hydropower Station

Party A: Fujian Province Pingnan County Power Supply Co., Ltd.

     (Stamp)

Representative: Wei Nai Sheng

Party B: Pingnan County Yuheng Hydropower Co., Ltd.

     (Stamp)

Representative: Lian Xin Chun

Signing Place and Date: Pingnan County, December 2008

22

 

Power Purchase and Sale Contract for Old Yuanping Hydropower Station

APPENDIX I: DIAGRAM FOR METERING POINTS

23

 

Power Purchase and Sale Contract for Old Yuanping Hydropower Station

APPENDIX II: DIAGRAM FOR LIABILITY DEMARCATION POINT

DIAGRAM FOR CONNECTION AND LIABILITY DEMARCATION OF JIAYANG SUBSTATION 110KV LIJIA LINE

24EX-10.37

Exhibit 10.37

BETWEEN

FUJIAN PROVINCE PINGNAN COUNTY POWER SUPPLY CO., LTD.

AND

PINGNAN COUNTY YUANPING HYDROELECTRIC CO., LTD.

GRID CONNECTION AND DISPATCHING AGREEMENT

FOR

YUANPING TECHNOLOGICAL UPGRADING HYDROPOWER STATION

OF

FUJIAN PROVINCE

December 2008

 

 

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
	 	 	14	 
	CHAPTER V CONNECTION APPLICATION AND ACCEPTANCE
	 	 	18	 
	CHAPTER VI GRID CONNECTION AND DISPATCHING DURING THE COMMISSIONING PERIOD
	 	 	22	 
	CHAPTER VII OPERATION UNDER DISPATCHING
	 	 	24	 
	CHAPTER VIII EQUIPMENT OVERHAUL AND MAINTENANCE
	 	 	30	 
	CHAPTER IX POWER GENERATION PLAN
	 	 	32	 
	CHAPTER X RESERVOIR DISPATCHING
	 	 	35	 
	CHAPTER XI RELAY PROTECTION AND AUTOMATIC SAFETY DEVICES
	 	 	39	 
	CHAPTER XII DISPATCHING AUTOMATION
	 	 	44	 
	CHAPTER XIII DISPATCHING COMMUNICATION
	 	 	47	 
	CHAPTER XIV ACCIDENT MANAGEMENT AND INVESTIGATION
	 	 	53	 
	CHAPTER XV FORCE MAJEURE
	 	 	57	 
	CHAPTER XVI LIABILITIES FOR BREACH OF CONTRACT
	 	 	58	 
	CHAPTER XVII EFFECTIVENESS AND VALID TERM
	 	 	65	 
	CHAPTER XVIII MODIFICATION, ASSIGNMENT AND TERMINATION OF THIS AGREEMENT
	 	 	66	 
	CHAPTER XIX DISPUTE RESOLUTION
	 	 	67	 
	CHAPTER XX APPLICABLE LAW
	 	 	67	 
	CHAPTER XXI MISCELLANEOUS
	 	 	68	 
	APPENDIX I: DIAGRAM FOR METERING POINTS
	 	 	72	 
	APPENDIX II: TECHNICAL PARAMETERS FOR THE POWER PLANT
	 	 	73	 
	APPENDIX III: DIVISION OF DISPATCHING RANGE OF POWER PLANT EQUIPMENTS
	 	 	75	 

2

 

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 Pingnan County Power Supply Co., Ltd., a power grid operation enterprise
registered and established with the Administration for Industry and Commerce, having procured the
Power Transmission Business Permit (permit number: _________) issued by _________ power regulatory commission/bureau,
with the tax registration number of 350923764068857, its registered address at No.7, Huating Road,
Chengguan, Pingnan County and the legal representative of which is Wei Nai Sheng.

Party B: Pingnan County Yuanping 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, having procured the Power Generation Business Permit
for the power plant (units) referred to in this Agreement (permit number: 1041906-00095)
issued by the power regulatory commission/bureau, with the tax registration number of
3509237796366677, its registered address at the 5th Floor, Cuibai
Building, Pingnan County, Fujian Province and the legal representative of which is John D.
Kuhns.

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

3

 

	 	 	to the power grid pursuant to the provisions of this Agreement;

	(2)	 	Party B is constructing, owning and operating the Pingnan County Yuanping Hydropower Station
(hereinafter referred to as the “Power Plant”) with a total installed capacity of 16 MW at
Yuanping Ziran Village, Shoushan Township, Pingnan County, 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	 	“Power Dispatching Agency” refers to Pingnan Dispatching and Operating Department, an agency
in charge of organizing, commanding, instructing and coordinating the operation of the
electric power system pursuant to applicable laws, which is subordinated to Party A.

4

 

	1.1.2	 	“Power Plant” refers to the power generation facilities with all auxiliary facilities
stretching to the property demarcation point with the total installed
capacity of 16MW
(with one (1) unit, No. 4 unit of 16MW, the detailed technical parameters please refer to
Appendix II)1, which is constructed, owned, managed and operated by Party B and
located in Baiyu Ziran Village, Shoushan Township, Pingnan County.

	1.1.3	 	“Connection Points” refer to the interconnection points connecting the Power Plant and the
power grid (please refer to Appendix I).

	1.1.4	 	“Initial Connection Date” refers to the first day on which the Power Plant (units) is (are)
connected to the power grid.

	1.1.5	 	“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.

	1.1.6	 	“Connection Method” refers to the systematic way of connecting the Power Plant (units) to
the power grid.

	1.1.7	 	“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.

	1.1.8	 	“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	 	 

5

 

	1.1.9	 	“Unit Available Capacity” refers to the output of the units modified at any time due to
the restrictions of equipment conditions2.

	1.1.10	 	“Planned Outage” refers to the status of the units of the Power Plant during the planned
overhaul and reserve periods, 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 and the shutdown reserve required by the dispatching center, etc.

	1.1.11	 	“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.

	1.1.12	 	“Forced Outage” refers to the Categories 1, 2 and 3 of Unplanned Outage set forth in
Article 1.1.14.

	1.1.13	 	“Equivalent Unit Derated Hours” refers to the outage hours which are converted from derated
hours and calculated by the maximum capacity on the nameplate.
	 
	1.1.14	 	“Equivalent Unplanned Outage Hours” refers to the sum of Unplanned Outage

 

			
	2	 	As for hydropower station, the restrictions shall include the restrictions on the unit output by
river, shipping, etc.

6

 

	 	 	hours and unplanned Equivalent Unit Derated Hours.

	1.1.15	 	“Annual Allowable Planned Outage Hours” refers to the allowable hours3 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.

	1.1.16	 	“Annual Allowable Equivalent Unplanned Outage Hours” refers to the allowable
hours4 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.

	1.1.17	 	“Daily Power Generation Dispatching Plan Curve” refers to the curve worked out by the
county dispatching on a daily basis to determine the power generation output

 

			
	3	 	It shall be determined as 70% to 80% of the average amount of the actual Planned Outage hours
within the previous three years of the units on the same grid and with the same type.
	 
	4	 	It shall be determined as 70% to 80% of the average amount of the actual Equivalent Unplanned
Outage Hours within the previous three years of the units on the same grid and with the same
type.

7

 

	 	 	of the Power Plant for each period of time of the next day.

	1.1.18	 	“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.

	1.1.19	 	“Dispatching Code for Electric Power System5” refers to the codes which are
formulated in accordance with the Administration Regulations on the Dispatching of Power
Grids, the national standards and the electric power industry standards and regulate the
dispatching and operation of the electric power system of this area.

	1.1.20	 	“Party A’s Reason” refers to the requirements of Party A or liabilities attributed to Party
A, including the liabilities which should be borne by Party A for the enlargement of accident
due to Party A’s failure to perform relevant national regulations and standards, etc.

	1.1.21	 	“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.

 

			
	5	 	It is also referred to as the Grid Dispatching Code.

8

 

	1.1.22	 	“Power Purchase and Sale Contract” refers to the contract entered into by and 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.

	1.1.23	 	“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.
	 
	1.2	 	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.

	1.2.5	 	The words “Include”, “Includes” or “Including” herein shall mean including without
limitation.

9

 

	1.2.6	 	All numbers and terms mentioned in this Agreement shall include the given number.

CHAPTER II REPRESENTATIONS BY THE PARTIES

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

10

 

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 and electric power industry
standards, for the purpose of maintaining the safety, high quality and economic operation of
the electric power system, and according to the Power Plant’s technical characteristics and
the codes and specifications of relevant electric power system, to carry out unified
dispatching of the Power Plant (the dispatching range please refer to Appendix III) on the
principle of publicity, fairness and justice.

	3.1.2	 	To be 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 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, to work out and deliver to
Party B the monthly power generation plan, the Daily Power Generation Dispatching Plan Curve
and reactive output curve (or voltage curve) on schedule.

	3.1.4	 	To reasonably arrange the overhaul for the equipments of the Power Plant.

	3.1.5	 	To support and cooperate with Party B to carry out technological transformations or
parameter adjustments of relevant facilities; to instruct and coordinate the dispatching

11

 

	 	 	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 (including PSS), AGG, and speed
governor system, electric power metering system, electric power dispatching communication
and dispatching automation, etc.

	3.1.6	 	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 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.

	3.1.7	 	To timely amend relevant codes and regulations following the procedures in accordance with
the operation requirements of the electric power system and the characteristics of the
equipments of Party B.

	3.1.8	 	To take measures to prevent the occurrence of 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; subject to the authorization of the power regulatory agency,
the Power Dispatching Agency works out the plan for grid-plant joint anti-accident exercise
and organizes to implement such plan.

	3.1.9	 	To assist Party B in respect of the investigation on accidents.
	 
	3.2	 	The obligations of Party B shall include the following:

12

 

	3.2.1	 	Abiding by the national laws and regulations, national standards, the electric power
industry standards and the codes and regulations of the electric power system, for the
purpose of maintaining the safe, high quality and economic operation of the electric power
system, to comply with the unified dispatching by the Power Dispatching Agency, and
reasonably organize the operation of the Power Plant.

	3.2.2	 	To organize the real time operation of the Power Plant according to the dispatching
instructions of the Power Dispatching Agency, and participate in the peak regulation,
frequency modulation, voltage regulation and backup of the electric power system.

	3.2.3	 	According to the requirements of the Power Dispatching Agency, to provide proposals
concerning the equipment overhaul plans for the Power Plant and to implement the approved
overhaul plans and organize the overhaul and maintenance of facilities.

	3.2.4	 	To accept the professional instructions and coordination provided by Party A pursuant to
Article 3.1.5; and to assign relevant technical and overhaul management staff so as to assist
Party A in relevant work.

	3.2.5	 	To carry out technological transformations or parameter adjustments for the facilities
according to the needs in a timely fashion, and file such transformations or adjustments with
Party A (in case of involving grid safety, the consent from Party A must be procured).

	3.2.6	 	According to relevant regulations, to provide to Party A with the operating conditions for
the facilities of the Power Plant and the production information, including fuel and water
resources, etc in a timely, accurate, objective and complete fashion.

13

 

	3.2.7	 	To formulate field operation codes consistent with the electric power system codes and
specifications of Party A, and file such codes with Party A.

	3.2.8	 	To take measures to prevent the occurrence of 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 implement 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 raised by the Power
Dispatching Agency, to implement and maintain the operations according to the requirements; to
file relevant documents of safety measures with the Power Dispatching Agency; and to
participate in the joint anti-accident exercise organized by the Power Dispatching Agency.

	3.2.9	 	To assist Party A in respect of the investigations on accidents.

CHAPTER IV CONDITIONS FOR GRID CONNECTION

	4.1	 	The primary and secondary equipments of Party B shall conform to the national standards, the
electric power industry standards and other relevant regulations6, 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

 

			
	6	 	These refer to the counter measures against accidents to prevent equipments from
flashover, electric mis-operation and malfunction or missing operation of relay protection and
automatic safety devices. Same as below.

14

 

	 	 	grid connection has been defined, relevant parameters have been adjusted as compatible
(the parameters setting requirements relating to the power grid shall be provided by the
dispatching center), equipment settings have been set in accordance with the requirements
of the dispatching and management range division, and all conditions for being connected
to the power grid of Party A and accepting the unified dispatching by the dispatching
center are ready.

	4.2	 	The relay protection and automatic safety devices (including the excitation system and speed
regulation system) of the Power Plant shall conform to the national standards, the 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 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.

	4.3	 	The dispatching automation facilities of the Power Plant, including the units AGC/AVC, the
computer monitoring system and electric power metering devices, etc., shall conform to the
national standards, the 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 pass the acceptance according to infrastructure
construction procedures of the State, comply with the relevant provisions of Chapter XI
hereof, and satisfy the 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 standard and other relevant regulations,
shall be installed and commissioned according to the design

15

 

	 	 	requirements approved by the organizations authorized by the State, 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 B7.

	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 precautionary measures, and approved by the
dispatching center 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 and management range principle. The denominations and numbers
released by the dispatching center for the equipments

 

			
	7	 	The energy metering devices already in operation shall be technically certified on
their technical performance and management conditions by an energy metering testing agency
recognized by the national metering administration authority and confirmed by both Parties;
for items not meeting the specifications, renovation shall be made within the specified time
agreed by both Parties through consultations.

16

 

	 	 	within the jurisdiction of the dispatching center have been marked up at eye-catching
places on the respective electric equipments 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 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
operation of Party B shall conform to the national standards, the 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 pass the
acceptance according to the infrastructure construction procedures of the State, with the
relevant parameters reasonably compatible, the settings of such equipments being set as
required and readily available for the Power Plant to be connected.

	4.11	 	Both Parties have worked out relevant counter-accident measures against possible Emergencies
after the grid connection of the Power Plant, and such measures shall be filed with the
dispatching center.

	4.12	 	As for those new equipments which have not been handed over completed due to insufficient
materials or which fail to meet the safety or economic qualifications for independent
operation or which cannot meet the dispatching communication and power grid automation
requirements, the dispatching center shall, after issuing rectification opinion, be entitled
to refuse to approve such units to be put into commissioning operation.

17

 

CHAPTER V CONNECTION APPLICATION AND ACCEPTANCE

	5.1	 	Party B shall apply to Party A for the grid connection of its Power Plant, and shall be
connected to the grid through a method as required upon the acceptance of Party A.

	5.2	 	Connection Application

	 	 	Party B shall submit a connection application to Party A thirty (30) days prior to the
Initial Connection Date of the Power Plant (units) which shall include the scope of the
facilities to be connected, the basic conditions, the acceptance results, the
commissioning schedule and plan for the Power Plant (units) to be connected, etc., and
shall be attached with all documents set out in Article 5.5 hereof.

	5.3	 	Acceptance of Connection Application

	 	 	Upon the receipt of the connection application from Party B, Party A shall carefully review
the application according to the provisions of Chapter IV hereof and other relevant
regulations concerning the grid connection, and shall reply in time to Party B without any
unreasonable delay.

	5.3.1	 	In the event that the materials provided in the connection application conform to relevant
requirements, Party A shall confirm it within ten (10) days after the receipt of such
application from Party B, and send a written confirmation notice to Party B three (3)
days prior to the Initial Connection Date of the units.

	5.3.2	 	In the event that the materials provided in the connection application do not conform to
relevant requirements, Party A shall be entitled to refuse to confirm, but shall

18

 

	 	 	notify Party B in written form of the reasons for such refusal to confirm within
fifteen (15) days after the receipt of such application.

	5.4	 	The Parties hereto shall make arrangements for detailed issues relating to the grid
connection of the Power Plant when the connection application is confirmed.

	5.4.1	 	Party A shall, within five (5) days prior to the agreed Initial Connection Date, 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.

	5.4.2	 	Party A shall provide to Party B with the name list of liaison staff (including staff
authorized to issue dispatching instructions, staff in charge of operation modes, relay
protection staff, automation staff and communication staff) and contact details.

	5.4.3	 	Party B shall, within five (5) days after the receipt of the confirmation notice, submit
the grid connection commissioning items and plans to Party A according to its requirements,
and negotiate with the dispatching center to determine the specific timing and procedures for
the initial connection.

	5.4.4	 	Party A shall make a written confirmation of the grid connection commissioning items and
plans of the units submitted by Party B five (5) days prior to the Initial Connection Date of
the Power Plant.

	5.4.5	 	Other specific matters which are deemed by both Parties that need to be agreed upon:

19

 

	5.5	 	When submitting the connection application, Party B shall provide to Party A with accurate
materials in Chinese8 (the parameters required to be actually measured during the
startup process of the grid connection may be submitted within five (5) days after
the grid connection of the units), including:

	 	(1)	 	The technical specifications, technical parameters and actually 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 which are required for
calculating the tidal current, stability and relay protection settings.
	 
	 	(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 over-excitation character curve for the transformer of power generator of 300MW
and above, the allowable high and low frequency limits for the units, etc., and the
machines and equipments account (which could be filled out and submitted in DMIS
system) for the relay protection and safety automatic protection and other equipments
within Party B’s Power Plant.
	 
	 	(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 tele-control information form for the Power
Plant (including the no-load voltage ratio and tele-metering full scale values of
current transformers and voltage transformers), the completion acceptance report of
the energy metering system of the Power Plant, and

 

			
	8	 	 

20

 

	 	 	 	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.
	 
	 	(5)	 	The technical instructions and drawings for the unit excitation system and PSS devices
(design and measured parameters), under-excitation limitation, loss of excitation, loss of
step protection and dynamic monitoring systems.
	 
	 	(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 AGC, AVC and inherent frequency modulation of
the units.
	 
	 	(10)	 	Measures to ensure the electric power utility of the Power Plant.
	 
	 	(11)	 	The units commissioning plans, and startup commissioning schemes for the step-up substation
and the units.
	 
	 	(12)	 	Name list of the on-duty operators of the Power Plant who are authorized to take dispatching
instructions and the photocopies of their qualification certificates and contact details.
	 
	 	(13)	 	Name lists and contact details for the professional staff in the fields of operation mode,
relay protection, automation and communication.
	 
	 	 	 	Other conditions agreed upon by both Parties:

21

 

CHAPTER VI GRID CONNECTION AND DISPATCHING DURING THE COMMISSIONING PERIOD

	6.1	 	In accordance with the commissioning items and plans confirmed by Party A, Party B may carry
out the commissioning for the grid-connected operation of the Power Plant.

	6.1.1	 	The commissioning units of the Power Plant shall be regarded as the operating equipments
connected to the grid, which shall be incorporated into the unified operation and management
of the electric power system, and abide by the operational codes and specifications of the
electric power system and comply with the unified dispatching.

	6.1.2	 	The Power Plant shall, according to the commissioning items and plans which have been
confirmed, prepare a detailed commissioning scheme for the connection of units and report to
the Power Dispatching Agency item by item9 in accordance with the commissioning
schedule.

	6.1.3	 	The specific commissioning operations for grid connection shall be performed in strict
accordance with the dispatching instructions.

	6.1.4	 	In case of any operation of the equipments only managed by the Power Plant itself, which
may bring about impact on the power grid, Party B shall inform the Power Dispatching Agency
in advance to make preparations and accident forecasts, and implement in strict accordance
with the commissioning scheme.

 

			
	9	 	Subject to the approval of the dispatching center, one-time application and filing is
acceptable as well.

22

 

	6.2	 	Party A shall assist Party B in the grid-connected commissioning by reference to the actual
operating conditions of the power grid.

	6.2.1	 	The Power Plant during the grid-connected commissioning period shall be incorporated into
the formal dispatching range, and shall be managed in accordance with relevant codes and
specifications of the electric power system.

	6.2.2	 	According to the requirements of the Power Plant and the operating conditions of the power
grid, Party A shall formulate special commissioning dispatching schemes (including emergency
treatment measures), and reasonably arrange the dispatching items and dispatching plans for
the Power Plant. The commissioning dispatching scheme and specific commissioning plan shall be
notified to the Power Plant three (3) days prior to the start of commissioning.

	6.2.3	 	Through consultations and agreement with the Power Plant, rolling adjustments may be made
to the commissioning plan according to the commissioning progress of the units and the grid
operating conditions.

	6.2.4	 	The Power Dispatching Agency may send relevant staff as required for field dispatching, and
provide necessary technical guidance or support.

	6.3	 	Party A must prepare an emergency plan for any possible Emergencies during the commissioning
period of Party B, defining the principles of managements and the specific measures to handle
Emergencies, and ensure the safety of the electric power system and equipments. In case of
any Emergencies occurred to the power grid, the dispatching center shall be entitled to
adjust the operation mode and the power

23

 

	 	 	generation plan for the Power Plant to the extent of disconnecting the Power Plant from the
power grid.

CHAPTER VII OPERATION UNDER DISPATCHING

	7.1	 	During the operation period, the on-duty operators of the Power Plant shall strictly follow
the dispatching instructions given by the on-duty dispatchers of the Power Dispatching
Agency.

	7.1.1	 	The Power Plant must implement the dispatching instructions released by the Power
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 staff or equipments, the on-duty operators of the Power Plant shall immediately
report to the on-duty dispatchers of the Power Dispatching Agency and clarify the reasons,
and the on-duty dispatchers of the Power Dispatching Agency shall decide whether or not to
continue such implementation10.

	7.1.2	 	As for those equipments within the range of direct dispatching by the Power 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; and shall honestly
report the field conditions and answer the inquiries from the on-duty dispatchers of the Power
Dispatching Agency.

	7.1.3	 	As for those equipments within the licensing dispatching range of the Power

 

			
	10	 	If otherwise provided by the Dispatching Code for Electric Power System, such
provisions shall prevail.

24

 

	 	 	Dispatching Agency, the on-duty operators of the Power Plant shall make a report to the
on-duty dispatchers of the Power 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.

	7.2	 	The Power Dispatching Agency shall reasonably arrange the Daily Power Generation Dispatching
Plan Curve of the Power Plant according to relevant requirements. During the normal operation,
the on-duty dispatchers have the right to make appropriate adjustment to the Daily Power
Generation Dispatching Plan Curve according to the actual operating conditions of the power
grid, and such adjustment shall be notified to the on-duty operators of the Power Plant ten
(10) minutes in advance.

	7.3	 	In case of any abnormal condition of the operating equipments of the Power Plant, the Power
Plant may, according to the regulations of the Dispatching Code for Electric Power System,
bring forth an overhaul application to the Power Dispatching Agency in advance. The Power
Dispatching Agency shall, according to the regulations of the Dispatching Code for Electric
Power System 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 Power Dispatching Agency shall make a prompt reply
judging from the actual conditions. The Power Plant shall follow the final approval from the
Power Dispatching Agency11.

 

			
	11	 	In the event that the Power Dispatching Agency cannot arrange such overhaul
temporarily considering the needs of grid operation, both Parties shall negotiate with each
other to determine the measures to prevent accidents and procedures to handle accidents
according to the provisions of the Dispatching Code for Electric Power

25

 

	7.4	 	The Power Dispatching Agency shall, on the principle of the units on the same grid, of the
same type and with the same technical conditions shall be modulated to a basically same
magnitude, and considering the power grid structure, the grid operation requirements and the
electric technical conditions of the Power Plant, arrange the Power Plant to be involved in
the peak regulation, frequency modulation, voltage regulation and standby of the electric
power system in a safe, high quality and economic manner.
	 
	7.4.1	 	Peak Regulation
	 
	 	 	The Power Plant shall participate in the peak regulation of the electric power system in
accordance with relevant regulations, standards of the State and the unit ability. The
range of the peak regulation shall reach relevant regulations and standards of the State.
The regulation range for normal operations and accidents please refer to Appendix II.
	 
	7.4.2	 	Frequency Modulation

	 	(1)	 	The Power Plant shall participate in the frequency modulation of the power
grid. The dispatching center may, according to the actual conditions of the power
grid, arrange the Power Plant to be the modulation plant of the power grid and to
carry out operation in accordance with the curve released by the dispatching center.
The Power Plant must comply with the dispatching instructions and maintain the grid
frequency within the scope prescribed by the Dispatching Code or the power frequency
of the line communicated with the power grid of East China within the regulated
scope.
	 
	 	(2)	 	In the event that the units of the Power Plant are put into AGC operation as
the First dispatching plant; the units of the Power Plant exit from the AGC operation

 

			
	System.

26

 

	 	 	 	as not the First dispatching plant. The Power Plant shall participate in the frequency
modulation of the electric power system in accordance with the requirements of the
Dispatching Code for Electric Power System, and fulfill relevant obligations.
	 
	 	(3)	 	The installation and operation of the AGC of the Power Plant shall be in
accordance with the current policies of the State relating to the power generation
plant grid connection and operation management. According to relevant regulations
concerning operation management of the power plant connected onto the grid issued by
the State Electricity Regulatory Commission, the No. Unit of the Power Plant shall be
installed with AGC, the setting parameters and the unit output response speed of which
shall comply with the requirements of grid safety operation and shall be uniformly set
by the Power Dispatching Agency according to the characteristic of the unit, the
testing result and relevant requirements. Party B shall not make alteration
arbitrarily. The launch and exit of AGC of the unit shall be executed in accordance
with the dispatching instructions.
	 
	 	(4)	 	When the power generator has been connected to the power grid, the automatic
speed governing system of the Power Plant must be put into operation. In case of any
failure or abnormity of the automatic speed governing system of the Power Plant, the
staff of the Power Plant shall immediately notify the dispatching center and settle
the malfunctions as soon as possible.
	 
	 	(5)	 	The Power Plant shall implement relevant management regulations of the
dispatching center concerning the primary frequency regulation of the power grid of
Fujian Province, and conform to the various management requirements.

	7.4.3	 	Voltage Regulation

	 	(1)	 	In case the power grid requires reactive optimization, the Power Plant shall
adjust according to the reactive load released by the dispatching agency of Pingnan
county, and make adjustments whenever necessary.
	 
	 	(2)	 	During the operation, in the event that the units have lost the ability of reactive

27

 

	 	 	 	adjustment (or have reached the operation limitation), or the voltage at the testing
point has deviated from the quality limit, the Power Plant shall immediately inform the
dispatching center, and the dispatcher of the dispatching center shall take relevant
measures to maintain the voltage at the testing point within the quality limit. Under
the premise of controlling the voltage at the testing point of the Power Plant within
the quality limit, if the power grid requires reactive optimization, the Power Plant
shall make adjustment according to the reactive load released by the dispatching
center.
	 
	 	(3)	 	Subject to the needs of adjusting and controlling safety operation of the
power grid, the units of the Power Plant must be equipped with AVC and shall be put
into operation according to the dispatching instructions of the dispatching center.

	7.4.4	 	Standby

	 	 	If required by the Power Dispatching Agency, the Power Plant shall leave a proportional
rotary standby volume. In the event that the rotary standby volume cannot meet the
requirements of the Power Dispatching Agency, the Power Plant shall immediately report to
the on-duty dispatchers of the Power Dispatching Agency.

	7.4.5	 	The AGC/AVC controlling system at the Power Plant constitutes an important component part
of the AGC/AVC system of the whole power grid. The Power Plant shall take charge of the
maintenance and make the operation availability rate of the AGC/AVC reach 100%. Without being
approved by the dispatchers of the dispatching center, the AGC/AVC system at the Power Plant
end cannot exit operation randomly.

	7.4.6	 	After the Power Plant has been connected to the power grid and started operation, besides
the rectification measures taken by the staff of the Power Plant according to the dispatching
instructions of the dispatching center, the automatic excitation modulation system of the
Power Plant must be put into operation. In case of the

28

 

	 	 	failure or malfunction of the automatic excitation system of the Power Plant, the staff of
the Power Plant shall immediately inform the dispatching center and make well disposal of
the defects as soon as possible, and disconnect the power generator if necessary until the
problems have been resolved.

	7.5	 	In case of any Special Operation Mode of Party A due to the equipment upgrading or
transformation which may affect the normal operation of the Power Plant, the Power
Dispatching Agency shall notify the Power Plant of relevant plans fifteen (15) days in
advance and implement the plan which has been determined through consultation.

	7.6	 	In case of any Special Operation Mode of Party B due to the equipment upgrading or
transformation which may affect the normal operation of the power grid, Party B shall notify
the Power Dispatching Agency of relevant amended plans fifteen (15) days in advance and
implement the plan which has been determined through consultation.

	7.7	 	The Power Dispatching Agency shall consult with the grid-connected Power Plant to convene
grid-plants joint meetings on a regular basis and invite Party B to participate, during which,
the operating conditions of the power grid will be analyzed, the system tendency will be
predicted, the implementations of relevant grid safety and technical measures will be
demonstrated, and the disposal of major issues concerning the operation of the electric power
system will be discussed. Party B shall participate in such joint meetings, and report the
operating conditions of the Power Plant and the implementations of relevant safety and
technical measures of the Power Plant.

	7.8	 	Both Parties shall exchange the name lists of on-duty staff in written form and notify any
alteration thereof promptly.

29

 

	7.9	 	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 center. The operation records of the Power Plant shall be kept for
record in accordance with the requirements of archive management.

	7.10	 	The electric energy billing equipments of the Power Plant shall be put into normal operation,
and realize the remote delivery to the electric energy billing system of dispatching center.
The dispatching center shall carry out statistics and settlement of electricity volume basing
on the data of electricity volume collected from the electric energy billing system. In case
of malfunction of the electric energy billing equipments of the Power Plant, the Power Plant
shall report to the dispatching center and apply to exit due to malfunctions. In the
meanwhile, the Power Plant shall resolve the malfunctions as soon as possible.

CHAPTER VIII EQUIPMENT OVERHAUL AND MAINTENANCE

	8.1	 	The annual overhaul and maintenance plan for the Power Plant shall be reported according to
relevant regulations of the provincial company. After the assessment and approval, the
provincial company 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 local power
dispatching

30

 

	 	 	agency shall be entitled to cancel this overhaul plan, and the induced degraded liability
of the equipment operation shall be undertaken by the Power Plant itself.

	8.2	 	The Power Plant shall submit the overhaul plan for the subsequent month to the dispatching
center via dispatching overhaul management system or by facsimile according to the regulations
of the Dispatching Code. The dispatching center shall, formulate the monthly dispatching plan
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. Before the 30th day of each month, the dispatching center shall
release the dispatching plan for the next month to the Power Plant via the “Three Gong”
dispatching website or by facsimile.

	8.3	 	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 center according to the regulations of the Dispatching
Code, and the dispatching center shall also issue a reply pursuant to the time limits
provided in the Dispatching Code. The overhaul schedule and progress for the equipments of
the Power Plant shall comply with the unified arrangement and coordination of the dispatching
center.

	8.4	 	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 the dispatching
center at least five 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 center shall take such application into
consideration when drawing up the daily dispatching plan.

31

 

	8.5	 	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 the dispatching center pursuant to
the regulations of the Dispatching Code (excluding Emergencies). When the application has
been approved, the dispatching center 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.

	8.6	 	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 go through the formalities for extending the period, but the
extension application shall be submitted to the Power Dispatching Agency before half of the
approved overhaul period has elapsed.

CHAPTER IX POWER GENERATION PLAN

	9.1	 	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 Power Dispatching Agency, timely adjust the active output of the
units and arrange the generation and operation of the Power Plant.

	9.2	 	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 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

32

 

	 	 	output balancing conditions, etc. of the power grid, arrange the power generation plan for
the next day or subsequent days for the Power Plant.

	9.3	 	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 one (1) hour in advance, and only being approved by the on-duty dispatcher, the Power
Plant may revise the plan.

	9.4	 	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 the
dispatching center 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 of the generator units of the Power Plant and the
Daily Power Generation Plan Curve shall not exceed the range of negative 5% to positive 5%.

	9.4.1	 	The daily planned power generation active curve released by the dispatching center
mentioned in the above shall include the curve amended by the on-duty dispatcher of the
dispatching center or the curve amended according to the dispatching instructions of starting
or turning off the units.

	9.5	 	In case of outage due to accidents or emergent derated output, the Power Plant shall
immediately inform the outage or derated capacity to the dispatching center. If timely
restoration is impossible, the Power Plant shall make up an application as soon as possible,
and then the dispatching center can revise the power generation plan accordingly. The
dispatching center’s amendment to the power generation plan on the request of the Power Plant
due to the malfunction outage, the approval of the units’ Unplanned Outage and permit for
derated output of the units shall not relieve or

33

 

	 	 	lighten the statistic assessment of the Planned Outage hours, the Unplanned Outage hours
(including Forced Outage hours) and planned and unplanned derated output hours (shall be
converted into equivalent outage hours).

	9.6	 	The dispatching center shall monthly record and count the starting time, the recovery time,
the reason and the derated volume for all kinds of outage and derated output, and release the
statistic assessment data via the “Three Gong” website before the 15th day of each
month. The Power Plant may search on the “Three Gong” website of the dispatching center for
relevant statistics, in case of any dissent, the Power Plant shall submit its dissents to the
dispatching center according to the scheduled time of assessment which shall be confirmed by
both Parties (if the Power Plant fails to propose its opinions on time, the relevant
statistics will be deemed as being agreed). The above-mentioned statistic data shall be
deemed as the basis for the annual utilization hours of the Power Plant, the annual power
generation plan and the power grid safety assessment, etc.

	9.7	 	In case of the following situations, Party B shall assume the liability for breach of
contract to Party A pursuant to the provisions of Chapter XVI of this Agreement:

	 	 	The annual equivalent available rate for each unit of the Power Plant of Party B fails to
reach the target of 93% (the target of annual equivalent available rate for the units under
normal overhaul condition is 83%, and the target of annual equivalent available rate for
the units under expanded overhaul condition is 73%). (It is suggested that the assessment
target is proposed in accordance with the regulations of the Reliability Statistic Analysis
issued by the former State electricity regulatory agency and the requirements for
first-rate targets).

	 	 	Note: The annual equivalent available factor for each unit = 1— (annual Planned

34

 

	 	 	Outage hours + annual Unplanned Outage hours + the equivalent outage hours converted from
the annual planned and unplanned derated output) / 8760.

CHAPTER X RESERVOIR DISPATCHING

	10.1	 	Reservoir Flood Dispatching

	10.1.1	 	The Power Plant shall file the flood dispatching plan, flood counter measures and the plan
of defending beyond-standard flood with the dispatching center at the end of March each year.

	10.1.2	 	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 the dispatching center.

	10.1.3	 	The Power Plant shall finish the summary of the annual flood preventions within one month
after the flood season, and submit the summary to relevant authority with a copy to the
dispatching center.

	10.1.4	 	In case of major alteration of the anticipated reservoir water inflow, the Power Plant
shall report to the dispatching center in advance, so as to timely adjust the load and
improve the utilization rate of water resources.

	10.2	 	The Reservoir Dispatching Plans, Reports and Summary
	 
	10.2.1	 	Reservoir power generation dispatching plan

	10.2.1.1	 	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)

35

 

	 	 	to the dispatching center.

	10.2.1.2	 	The monthly power generation plan for the reservoir. Before the 20th day of
every month, the Power Plant shall report the power generation plan proposals for the next
month to the dispatching center and other relevant authorities.

	10.2.1.3	 	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 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 utility departments.

	10.2.2	 	Relevant reports and statements concerning the reservoir dispatching

	10.2.2.1	 	The daily dispatching report for reservoir. The Power Plant shall, before 9:00 of every
day, report to the dispatching center the up and down stream reservoir water level, the
reservoir water inflow and the discharge capacity at 8:00 of the current day, 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.

	10.2.2.2	 	The monthly dispatching report for reservoir. 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 e-mail, or send the original by mail to the dispatching center, the main
content for which shall include current monthly and the yearly aggregated active and reactive
actual power generation output (ten thousand kwh), the assessment 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 installed capacity (Mw), the power generation
dispatching plan (ten thousand kwh), 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

36

 

	 	 	inflow (m3/s), the drainage rainfall (mm), the maximum rainfall (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 water 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), shipping and
log 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.

	10.2.3	 	Summary of the reservoir dispatching

	10.2.3.1	 	The Power Plant shall, before October 10 of each year, report to the dispatching center
the operation summary of the automatic hydrological forecasting system for this year.

	10.2.3.2	 	The Power Plant shall, before January 10 of each year, report to the dispatching center
the reservoir dispatching summary and the operation summary of the water dispatching
automation system of the sub-center of the Power Plant for the previous year.

	10.3	 	The automatic hydrological forecasting system and water dispatching automation system

	10.3.1	 	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

37

 

	 	 	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.

	10.3.2	 	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 the dispatching center shall be procured.

	10.3.3	 	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 the dispatching center for examination.

	10.4	 	The Liability Affirmation for Breach of Reservoir Dispatching

	 	 	In case of any of the following events, Party B shall assume the liability of breach in
accordance with the provisions of Chapter XVI to Party A:

	 	(1)	 	The outage which has not been reported to the dispatching center in time,
due to the occurrence of overhaul or equipment maintenance of the water automatic
monitoring and reporting system of the Power Plant and the water dispatching
automation system of the sub-centre of the Power Plant, causes mistaken dispatching
of the dispatching center;
	 
	 	(2)	 	The Power Plant has not on time filled out and reported the reservoir
dispatching daily report or the reservoir dispatching daily power generation plan for
twice and above within one month;
	 
	 	(3)	 	The Power Plant has not on time filled out and reported the water and
electric power dispatching monthly report for twice and above within one year;

38

 

	 	(4)	 	Any transformation or upgrading scheme of the water automatic monitoring and
reporting system of the Power Plant and the water dispatching automation system of
the sub-centre of the Power Plant has been carried out without the examination and
approval of the dispatching center.

CHAPTER XI RELAY PROTECTION AND AUTOMATIC SAFETY DEVICES

	11.1	 	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 movements of the devices. The settings for the relay
protection and automatic safety devices of the Power Plant within the range under the
dispatching of the dispatching center shall be released by the dispatching center, and
the settings of other relay protection and automatic safety devices of the Power Plant
may be calculated and set by the Power Plant itself and filed with the dispatching
center, and the settings for the boundaries shall be examined and approved by the
dispatching center.
	 
	 	(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 Power Dispatching Agency, 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 Power Dispatching
Agency. In case the Power Plant is concerned, Party A shall

39

 

	 	 	 	cooperate with the Power Plant to analyze and handle the accidents.
	 
	 	(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
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 5th day of each month, finishing the analysis report on the
operation of relay protection and automatic safety devices for the previous month with
a copy to Party B.

	11.2	 	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 relevant regulations of the dispatching
center concerning the grid safe operation, 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, during the period of the preliminary design of the Power Plant,
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, otherwise, Party A shall be entitled to reject its connection to
the grid.
	 
	 	(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

40

 

	 	 	 	and assessment of the running conditions of the devices which shall be applied to the
dispatching center for filing and record.

	 	(3)	 	Taking charge of the settings of relay protection and automatic safety devices within the
jurisdiction of the dispatching center and being responsible for its correctness and
completeness, and pursuant to the administration requirements of the dispatching center,
conducting the setting conversion management in the DMIS system.
	 
	 	(4)	 	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.
	 
	 	(5)	 	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 by the dispatching center, and the selection of types of relevant
equipments shall be subject to the approval of the Power Dispatching Agency.
	 
	 	(6)	 	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 Power Dispatching Agency.
	 
	 	(7)	 	In case of any running of the relay protection and automatic safety devices of the Power
Plant, Party B shall immediately report to relevant on-duty dispatcher of the Power
Dispatching Agency, analyze the causes and take measures in accordance with the codes, and
submit relevant materials to the Power Dispatching Agency according to the requirements. In
case the power grid is concerned, Party B shall cooperate with Party A in assisting in
analyzing and handling the accidents.
	 
	 	(8)	 	In case of malfunction or defect of the relay protection and automatic safety devices of the
Power Plant, Party B shall immediately report to relevant on-duty

41

 

	 	 	 	dispatcher of the Power Dispatching Agency, handle the accidents, analyze the causes
and take measures in a timely fashion in accordance with the codes. In case the power
grid is concerned, Party B shall submit relevant status to the Power Dispatching
Agency in a written form.
	 
	 	(9)	 	Strictly implementing the counter measures against accidents for relay
protection and automatic safety devices promulgated by the State and relevant
authorities.
	 
	 	(10)	 	Before the 5th day of each month, 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 three (3) copies to
the Power Dispatching Agency.

	11.3	 	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 the dispatching center
(including direct dispatching and licensing dispatching equipments) need technological
transformation, the relevant technological transformation plan must be examined and approved
by Party A.

	11.4	 	In case of any trip of the switch of the generator units or lines of Party B due to the
relay protection devices, the Power Plant shall submit the relevant default conditions of the
equipments set forth below to the relay protection department of Party A within twenty four
(24) hours, mainly including but not limited to:

	 	(1)	 	The equipment turning-on condition and the operation mode of the primary
equipment during the occurrence of such trip;
	 
	 	(2)	 	The signal of the visual annuciator in the supervisory control panel and the
trip condition of the breaker;
	 
	 	(3)	 	Signal of face plate for the protection devices;
	 
	 	(4)	 	The printed report for the default of the microcomputer protection device;

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	 	(5)	 	The default report of the microcomputer default recorder.

	11.5	 	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 being
confirmed as qualified.

	11.6	 	As for the construction of the malfunction information management system (including units
and system fault recorder) for the electric power system of the whole province, the interface
protocol shall be completed to meet the system before [ ] month [ ] year and the data
transmission mode shall be configured according to the requirements of Party A, and connected
to Party A’s malfunction information system through communication network without barriers.

	11.7	 	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 Running of the Relay Protection and
Safety Automatic Devices of the Electric Power System and the Monthly Report on the
Abnormal Operation of the Differential Protection of High Frequency, Bus Difference,
Generators and Main Transformers shall be sent to Party A by mail before the
5th day of each month (turned through in the DMIS system), and shall be
postponed accordingly in case of holidays and vacations.

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	11.8	 	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.

	11.9	 	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 protections12 399%.
	 
	 	(2)	 	The accuracy rate for the running of protections with 110 kv and above
3100%.
	 
	 	(3)	 	The availability for fault recording 13 3100%.
	 
	 	(4)	 	The operation rate of automatic safety devices 399%.
	 
	 	(5)	 	The accuracy rate for the running of automatic safety devices 3100%.
	 
	 	(6)	 	Other operation index agreed by both Parties: ________________.

CHAPTER XII DISPATCHING AUTOMATION

	12.1	 	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:

 

			
	12	 	Operation ratio of main protection = duration for main protection devices in operation / statistic period duration for main protection devices. Same as below.
	 
	13	 	The availability for fault recording = times of available fault recording /times to be
assessed. Same as below.

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	 	(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)	 	Facilitating 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.
	 
	 	(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).

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

	 	(1)	 	The telecontrol data from the Power Plant RTU or the 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 Power 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

45

 

	 	 	 	satisfy the relevant regulations of the State and the operation requirements of the
Power 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.
	 
	 	(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) to make 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 the physical isolation of the
dispatching special data network from the comprehensive information network and
outside internet.

	12.3	 	Both Parties shall operate and maintain the automation equipments in accordance with the
Dispatching Code for Electric Power System and the dispatching automation operation code, and
shall not exit or shut down the equipments at random.

	12.4	 	In the event that the equipments which belong to the Power Plant but within the dispatching
range (including the equipments under the direct and licensing dispatching) of the dispatching
center and the dispatching automation and communication equipments need technological
transformation, the plan must be examined and approved by the dispatching center . The Power
Plant shall submit to the dispatching center all and complete design materials and requisite
testing data.

	12.5	 	In case of any bidding for grid connection of the power generation as required by the

46

 

	 	 	national polices or governmental regulations, the Power Plant shall establish and utilize
relevant technical support system according to relevant regulations, which could make the
Power Plant be ready for effective communication with relevant system of the dispatching
center.

	12.6	 	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.

	12.7	 	Party B shall, according to the requirements of the dispatching production control and
management, establish relevant computer data network, and interconnect it to the special
network for dispatching data and the dispatching management information network.

	12.8	 	The RTU or the computer monitoring and control system, the electric energy collection and
transmission devices of the Power Plant shall reach the following main operation standards:

	 	(1)	 	The availability of RTU or the telecontrol station of the computer monitoring
and control system (monthly) 3100%.
	 
	 	(2)	 	The accuracy error of telemeter £1%.
	 
	 	(3)	 	Other operation index agreed by both Parties:           .

CHAPTER XIII DISPATCHING COMMUNICATION

	13.1	 	Party A shall strictly abide by the codes and regulations concerning the design, operation
and management of the dispatching communication system, take charge of

47

 

	 	 	the operation and maintenance of the dispatching communication system at the dispatching
end, and conform to the following requirements:

	 	(1)	 	Supervising the reliable operation of the dispatching communication system,
taking charge of the monitoring and dispatching command of the operating conditions
of the dispatching communication system and coordinating the major problems arising
out of the operation.
	 
	 	(2)	 	Taking charge of the operational maintenance of the communication equipments
and communication lines at the dispatching end, and ensuring the reliable operation.
	 
	 	(3)	 	Making timely analysis of the fault causes for the dispatching communication
system and taking precautionary measures.
	 
	 	(4)	 	Providing instructions and assistance to Party B in the operational
maintenance of the dispatching communication system, and cooperating with Party B in
respect of the investigation on accidents.

	13.2	 	Party B shall strictly abide by the codes and regulations concerning the design, operation
and management of the dispatching communication system, and relevant communication management
regulations of the dispatching center, take charge of the operation and maintenance of the
dispatching communication system at the Power Plant end, and conform to the following
requirements:

	 	(1)	 	Taking charge of the operational 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.

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	13.3	 	The model selections and configurations for the communication equipments of Party B which
will be connected to the power communication network of Party A shall be compatible and
consistent with Party A, and shall be approved by Party A.

	13.4	 	In order to assure the reliability of the information transmission between both Parties, the
interconnected transmission net of both Parties shall be equipped with two different and
independent communication transmission routes (physical media) to ensure the specified
dispatching and the transmission channel for the automatization system, relay protection and
automatic safety devices. If it is the SDH optical transmission system, the interconnection of
Party B shall be synchronized with the clock of Party A.

	13.5	 	As required by the business of the power grid production dispatching, both Parties shall be
equipped accordingly with the complete connection and auxiliary facilities, etc. for the
systems in relation to data exchange, dispatching and executive exchange, communication
monitoring and controlling, and other communication system.

	13.6	 	In order to ensure the influent interconnection and intercommunication of the communication
net, the parameters of the communication equipment of Party B, including the frequency
requirements (which refer to the carrier wave of the electric power lines and wireless
frequencies), which is connected to the electric power communication net of Party A, shall be
approved by Party A in writing.

	 	(1)	 	In the event that Party B makes use of the carrier frequency which has not
been approved and caused frequency disturbing wave and the operation of other carrier
lines, Party A may refuse to allow Party B to be interconnect with carrier line, in
the meanwhile, it may ask Party B to compensate the losses arising therefrom.
	 
	 	(2)	 	In the event the technical parameters for interconnection with communication
net (such as power, bit error rate, equipment type, configuration, interface style) of

49

 

	 	 	 	Party B has not been approved by Party A in written form through consultations, Party
A may refuse the relevant interconnection. Party B shall assume the liability for the
failure of interconnection and intercommunication and the influence of the failure of
interconnection and intercommunication on the production.

	13.7	 	The overhaul and outage (retirement) of the system equipment of the power plant or
hydropower station, which is connected to the electric power communication interconnection
net of the local and county dispatching, shall comply with the management regulation and
examination and approval procedures of Party A.

	13.8	 	The system equipments of the plant and station, which are connected to the electric power
communication interconnection net of the local and county dispatching, must be equipped with
the corresponding staff for the daily operation maintenance to ensure the twenty four (24)
hours available field maintenance for any default to the interconnected electric power lines;
in addition, such staff shall strictly obey the electric power communication dispatching
instructions released by the local and county dispatching and communication net management and
maintenance cooperation.

	13.9	 	In case of any overhaul without going through any examination and approval procedures, or the
implementation that is not complied with the communication dispatching directions, and the
requirements of the cooperation for the net management and maintenance, which are due to Party
B’s Reason and cause mistaken operation, mistaken judgment and mistaken direction of the
communication dispatching and operation maintenance, Party B shall be responsible for the
corresponding liabilities for the aforesaid mistakes which lead to the delayed settlement and
overtime block of the interconnected communication net; among which, the interruptions may be
classified into the following four types due to the

50

 

	 	 	seriousness of the conditions:

	 	(1)	 	The malfunctions of the single (64KB/S) Class II and III circuits
(definitions please refer to Fujian Electric Communication Net Administration
Measures) of Fijian electric power communication on the transmission net which are
regarded as the communication barrier for assessment (the definition of the
communication barrier for assessment please refer to communication operation
management codes) and influence the safe operation of the power grid.
	 
	 	(2)	 	The malfunctions of the single (64KB/S) Class I circuits of Fijian electric
power communication and the multiple (the broad band of 2MB/S and above) Class II and
III circuits on the transmission net interconnected Party A and Party B or the whole
stop malfunctions of the interchange and other connection equipments which are
regarded as the communication barrier for assessment (the definition of the barrier
for communication assessment please refer to communication operation management codes)
and influence the safe operation of the power grid.
	 
	 	(3)	 	The block of all circuits on the transmission net interconnected Party A and
Party B which has become the barrier for communication and influenced the safe
operation of the power grid.
	 
	 	(4)	 	The interruption of the main equipments interconnected Party A and Party B
which have become the communication accidents for assessment (the definition of
communication accidents please refer to communication operation management codes).

	 	 	The so-called “communication circuit malfunctions” which “influence the safe production of
the power grid” generally refers to: the communication means, content and mode which are
indispensable for the safe production of the power grid, irreplaceable by temporary plans,
and are sufficient to influence and delay the handling of the power grid accidents.

	13.10	 	Both Parties shall prepare a standby communication system so as to ensure the

51

 

	 	 	communication uninterrupted by any Emergencies occurred to the power grid or the Power
Plant.

	13.11	 	Party B shall endeavor to make all relevant communication stations under its control comply
with the standard communication station of the provincial electric communication net,
free-willingly accept the supervision and inspection organized by Party A for standard
communication stations, be entitled to participate in the amendment and revision of the
criterions for standard communication stations, and ensure the continuous liable operation of
the communication equipments at the plant and station end. In the meanwhile, Party B shall
take an active part in the annual professional meeting for the whole province’s electric
communication work.

	13.12	 	Party A shall carry out the payable arrangement for the interconnection between the
provincial electric power communication net and the two communication transmission net lines
of Party B, which are of different operation modes, different wideband and different signal
contents, on the basis of the two different communication transmission routes owned by Party
B, and connect the corresponding signals to the provincial (local) dispatching agencies.

	13.13	 	The electric power dispatching communication system at the end of Party B shall reach the
following main operation standards:

	 	 	(A) Service factor of communication circuit14 399.9%.
	 
	 	 	(B) Equipment service factor15 399.9%.

 

			
	14	 	Service factor of communication circuit = {1 — å[number of interrupted circuits
×duration of circuit malfunction (min)]/ [actual number of circuits × calendar time of the
whole month (min)]}×100%
	 
	15	 	Equipment service factor = {1 — å[number of interrupted circuits ×duration of
equipment malfunction at local end (min)]/ [number of circuits configured × calendar time of
the whole month (min)]}×100%

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	 	 	Among which:

	 	(1)	 	Service factor of optical communication equipment 399.9%.
	 
	 	(2)	 	Service factor of communication interchange equipment 399.9%.
	 
	 	(3)	 	Other operation standards agreed by both Parties:  _____________

	13.14	 	Both Parties shall respectively appoint staff to take charge of the operation and
maintenance of the dispatching communication system within their respective jurisdictions, and
ensure the normal operation of the dispatching communication system.

CHAPTER XIV ACCIDENT MANAGEMENT AND INVESTIGATION

	14.1	 	The dispatching center 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 accidents in a correct and prompt manner
and timely inform each other of the handling results.

	14.2	 	The equipment accidents within the dispatching range of the dispatching center shall be
handled by strictly following the instructions of the on-duty dispatchers of the dispatching
center (excluding those that can be handled without dispatching instructions as clearly
specified in the field codes).

	14.3	 	In case of any tripping or unit derated volume and other abnormal conditions or accidents
occurred to the equipments within the dispatching jurisdiction of the dispatching center, the
Power Plant shall strictly abide by the provisions of the Dispatching Code to verify the
reasons for such abnormality or accidental tripping,

53

 

	 	 	report the actual conditions accurately, obey the directions of the dispatching center and
resolve the default of the equipments. Otherwise, the dispatching center shall be entitled
to order outage of relevant equipments or limit the active output of units, and the units
unplanned derated output hours caused therefrom shall be converted into equivalent outage
hours; in case of unit outage, shall be counted as Forced Outage hours.

	14.4	 	In case of breaker tripping occurred to the units or circuits of the Power Plant, the staff
of the Power Plant shall report by telephone to the dispatching center and submit the
following malfunction events, including but not limited to:

	 	(1)	 	The tripping of circuit breaker;
	 
	 	(2)	 	The location of the circuit breaker (on/off);
	 
	 	(3)	 	The tripping time;
	 
	 	(4)	 	Any information which will help to analyze the tripping reasons for circuit
breaker;
	 
	 	(5)	 	The tripping times of circuit breakers due to the malfunctions;
	 
	 	(6)	 	The output records from false recording devices.

	 	 	The staff of the Power Plant shall immediately report the above-mentioned events set forth
in items (1), (2) and (3), the events set forth in items (4), (5), (6) shall be reported as
soon as the preparation of the field is ready. In case of any abnormity of the far
transmission function of false recording devices, the event provided in item (6) shall be
provided within twenty-four hours to the dispatching center.

	14.5	 	The dispatching center shall, according to the Guide on Safety and Stability for 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

54

 

	 	 	accident management and specific counter measures against accidents, and raise specific
requirements on the necessary measures to be taken by the Power Plant.

	14.5.1	 	In case of any Emergencies that threaten the safety of the power grid, the on-duty
dispatchers of the dispatching center 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.

	14.5.2	 	In case that the Power Plant or any of the units has to be disconnected, the dispatching
center shall, after the termination or remedy of the Emergencies, restore the connection and
operation of the Power Plant or the unit.

	14.5.3	 	The dispatching center shall explain to Party B the reasons for disconnecting the Power
Plant or the unit after the accident.

	14.6	 	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 shall be taken
as the basis for relevant assessment In case of any dissenting opinion concerning the data
collected by the automation system of the dispatching center, the Power Plant may timely
provide evidence which shall be jointly confirmed by both Parties through verification.

	14.7	 	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

55

 

	 	 	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.

	14.7.1	 	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.

	14.7.2	 	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.

	14.7.3	 	As for the accidents involving both Parties, 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.

	14.7.4	 	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,
responsible party for the accident and the liabilities, the rectification plan and accident
preventive measures, etc.

	14.7.5	 	The responsible party for the accident shall timely correct the errors and implement the
rectification plan and accident preventive measures. In case that the other Party is

56

 

	 	 	involved in such rectification plan and preventive measures, the consent of the other Party
shall be obtained.

CHAPTER XV FORCE MAJEURE

	15.1	 	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.

	15.2	 	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.

	 	 	Upon the other 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 seven (7) days commencing from the date when the
Force Majeure event occurs (in the event of communication interruption, from the
restoration date of the communication).

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	15.3	 	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 minimize 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.

	15.4	 	In the event that the Force Majeure has prevented a Party from performing its obligations
under this Agreement for a continuous period of over thirty (30) 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 XVI LIABILITIES FOR BREACH OF CONTRACT

	16.1	 	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.

	16.2	 	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

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	 	 	 	direct economic losses to Party B.
	 
	 	(2)	 	Violation of the provisions of Article 4.9, which has resulted in the
incapability of the Power Plant to generate power on schedule, to generate power as
normal or which has caused direct economic losses to Party B.
	 
	 	(3)	 	Violation of the provisions of Articles 5.3 and 5.4, which has resulted in
the incapability of the Power Plant to generate power on schedule or which has caused
direct economic losses to Party B.
	 
	 	(4)	 	Violation of the provisions of Article 6.2, which has resulted in the
incapability of the Power Plant to generate power on schedule or which has caused
direct economic losses to Party B.
	 
	 	(5)	 	Violation of the Dispatching Code for Electric Power System, which has caused
direct economic losses to Party B.
	 
	 	(6)	 	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.
	 
	 	(7)	 	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.

	16.3	 	For each time of breach of Contract, Party A shall undertake the liabilities for breach
of contract by the following ways:

	 	(1)	 	Paying to Party B the electricity output of 50,000 kwh in a lump sum as a
compensation for its breach.
	 
	 	(2)	 	In case of any direct economic losses of Party B which cannot be fully
compensated by the electric power output paid in a lump sum provided in Item (1)
above, the electric power output corresponding to the direct expenses of Party B for
repairing equipments and restoring normal operations shall be

59

 

	 	 	 	complemented by Party A (calculated by the on-grid tariff of the Power Plant).
	 
	 	(3)	 	In case of causing electricity output losses to Party B, the relevant
provisions provided in the Power Purchase and Sale Contract entered into by both
Parties shall be resorted to.

	16.4	 	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 16.5:

	 	(1)	 	Failure to perform the obligations provided in Chapter III, which has caused
direct economic losses to Party A.
	 
	 	(2)	 	Failure to complete the grid connection preparation works in accordance with
the provisions of Chapter IV hereof, which has caused direct economic losses to Party
A.
	 
	 	(3)	 	Violation of the provisions of Articles 5.2 and 5.4, which has caused direct
economic losses to Party A.
	 
	 	(4)	 	Violation of the provisions of Articles 6.1 and 7.1.1.
	 
	 	(5)	 	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 or any third party.
	 
	 	(6)	 	Failure to participate in the peak regulation, frequency modulation, voltage
regulation and backup of the electric power system in accordance with the provisions
of Article 7.4.
	 
	 	(7)	 	Violation of the relevant regulations concerning the overhaul management
provided in the Grid Dispatching Code.
	 
	 	(8)	 	The variation of the overhaul period due to Party B’s Reason, which has
caused direct economic losses to Party A.
	 
	 	(9)	 	Failure to honestly report to the dispatching center the actual condition of
the equipments (such as the power generator, steam turbine, boiler and electric

60

 

	 	 	 	equipments) of the Power Plant and relevant facilities.
	 
	 	(10)	 	Violation of the regulations concerning the dispatching operation management
provided by the Grid Dispatching Code, which threatens the safe and stable operation
of the power grid.
	 
	 	(11)	 	The failure of the relay protection and automatic safety devices of the
Power Plant to reach the agreed standard provided in Article 11.9, or the malfunction
or incorrect running of the relay protection and automatic safety devices due to
Party B’s Reason, which has caused an accident or the amplification of accidents and
caused direct economic losses to Party A.
	 
	 	(12)	 	The failure of the electric power automatic system of the Power Plant to
attain the agreed standards provided in Article 12.8, or the malfunction of the
electric power automatic system of the Power Plant due to Party B’s Reason, which has
caused an accident or the amplification of accidents and caused direct economic losses
to Party A.
	 
	 	(13)	 	The failure of the dispatching communication system of the Power Plant to
attain the standards provided in Article 13.13, or the malfunction of the dispatching
communication system of the Power Plant due to Party B’s Reason, which has caused an
accident or the amplification of accidents and caused direct economic losses to Party
A.
	 
	 	(14)	 	Violation of the provisions of Articles 9.4.3 and 9.4.4.
	 
	 	(15)	 	Violation of the provisions concerning the reservoir dispatching provided in
Article 10.5.
	 
	 	(16)	 	Failure to control the unit output deviation within the range of negative 5%
to positive 5% in accordance with the provisions of Articles 9.4.1 and 9.4.2.
	 
	 	(17)	 	Failure of the unit annual availability rate to reach the agreed amount
prescribed in Article 9.7.

	16.5	 	Party B shall assume the liabilities for breach of contract by the following ways:

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	16.5.1	 	For each time of breaching Items (1) to (13) of Article 16.4, Party B shall assume the
liabilities for breach of contract by the following ways:

	 	(1)	 	Paying to Party A the electricity output of 50,000 kwh in a lump sum as a
compensation for its breach.
	 
	 	(2)	 	In case of any direct economic losses of Party A which cannot be fully
compensated by the electric power output paid in a lump sum provided in Item (1)
hereof, the electricity output corresponding to the direct expenses of Party A for
repairing equipments and restoring normal operations shall be complemented by Party A
(calculated by the on-grid tariff of the Power Plant); in case of causing economic
losses to the third party, Party A shall compensate.
	 
	 	(3)	 	In case of causing electricity output losses to Party A, the relevant
provisions stipulated in the Power Purchase and Sale Contract entered into by both
Parties shall be resorted to.

	16.5.2	 	For breaching the Item (14) of Article 16.4, the electricity output which shall be assumed
by Party B for breaching the contract shall be calculated on the basis of the accumulated
amount of automatic assessment of the automation system of the dispatching center.

	16.5.3	 	For breaching the Item (15) of Article 16.4, the electricity output for breaching the
contract shall be calculated by the following methods:
	 
	 	 	In case the equivalent availability factor of Party B’s units fail to satisfy the
requirements, the annual electricity output for the Power Plant’s breach of contract shall
be calculated by the following formula and shall be deducted from the settlement account of
Party B’s annual electricity output:
	 
	 	 	
	 
	 	 	Among which:

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	 	Q:	 	refers to the annual electricity output for breaching the contract by Party
B (unit: ten thousand kwh);
	 
	 	I:	 	refers to No. I installed unit of the Power Plant;
	 
	 	EAFis:	 	refers to the annual actual equivalent availability factor for No. I unit
(unit: %);
	 
	 	EAFib:	 	refers to the annual standard equivalent availability factor for No. I
unit (unit: %), the numerical value is the amount prescribed in Article 9.7;
	 
	 	C1:	 	refers to the installed capacity for No. I unit (unit: ten thousand kwh).

	16.6	 	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 dispatching center.
	 
	 	(2)	 	In case of Emergencies, the Power Plant violates the provisions of Articles
6.1 and 7.1.1.
	 
	 	(3)	 	In case of Emergencies, the Power Plant fails to report to the dispatching
center the real conditions of the equipments of the Power Plant (such as power
generator, steam turbine, boilers and electric equipments) and relevant facilities.
	 
	 	(4)	 	Other material breach of contract agreed by both Parties:

	16.7	 	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

63

 

	 	 	therefrom pursuant to the provisions of this Agreement.

	16.8	 	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 electricity output for breaching the contract shall be paid
together with the monthly electricity output settlement after the breach of contract
has been confirmed.
	 
	 	(2)	 	The electric power volume corresponding to 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.
	 
	 	(3)	 	In case of electricity output breach, the relevant agreements provided in
the Power Purchase and Sale Contract entered into by both Parties shall be resorted
to.

	16.9	 	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.

	16.10	 	When this Agreement has come into effect, the electricity output for breach of contract
agreed to be assumed by both Parties hereto shall not be repeatedly assessed and calculated
with the electricity output for rewards and punishments provided in the Measures on the
Operation Management and Assessment of the Unified Dispatching Power Plants of Fujian Power
Grid (Trial Version (No.14 Min Jing Mao Dian Li [2004]) issued by the Economic and Trade
Commission of Fujian Province, and the provisions of this Agreement shall prevail and the
Parties shall deal with it on the principle of equality.

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	 	 	Or, when this Agreement has come into effect, subject to the approval from the competent
electric power authority of the government and Party A, the implementation of the Measures
on the Operation Management and Assessment of the Unified Dispatching Power Plants of
Fujian Power Grid (Trial Version (No.14 Min Jing Mao Dian Li [2004]) issued by the Economic
and Trade Commission of Fujian Province shall be suspended, and the assessment of the
operation and management of the Power Plant shall be carried out in accordance with the
provisions of this Agreement.

CHAPTER XVII EFFECTIVENESS AND VALID TERM

	17.1	 	This Agreement shall come into effect upon being signed by the legal representatives or
authorized agents of both Parties and affixed with their official seals.

	17.2	 	The valid term of this Agreement shall be from December 28, 2008 to December 27, 2010.

	17.3	 	This Agreement shall come into effect after being signed by both Parties, with a valid term
of two (2) years, and the former dispatching agreement shall become invalid at the same time.
In case both Parties have no objection after the expiration of this Agreement, this Agreement
shall continue to be valid; in the event that either of the Parties has any objection, the
Parties shall renegotiate the terms of this Agreement and enter into a new dispatching
agreement.

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CHAPTER XVIII MODIFICATION, ASSIGNMENT AND TERMINATION OF THIS AGREEMENT

	18.1	 	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.

	18.2	 	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.

	18.3	 	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 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)	 	Other events agreed by both Parties:                    .

	18.4	 	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 seven (7) days from sending a notice of
termination:

	 	(1)	 	Either Party goes bankrupt or liquidated, 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 or all or majority parts of its
assets have been transferred to another entity, and the surviving enterprise cannot
reasonably

66

 

	 	 	 	perform its obligations under this Agreement.
	 
	 	(3)	 	Other events agreed by both Parties to terminate this Agreement:           .

CHAPTER XIX DISPUTE RESOLUTION

	19.1	 	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 No.2
method16:

	 	(1)	 	Both Parties agree to submit the dispute to _______ 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.
	 
	 	(2)	 	Any Party may submit the said dispute to the people’s court for resolution
through judicial proceedings.

CHAPTER XX APPLICABLE LAW

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

 

			
	16	 	Only one method may be selected.

67

 

CHAPTER XXI MISCELLANEOUS

	21.1	 	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.
	 
	21.2	 	Appendices17

	 	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 (including the special provisions) 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.

 

			
	17	 	When executing the formal agreement, the appendices shall be complete, accurate and
clear and without omission.

68

 

	21.3	 	Entire Agreement
	 
	 	 	This Agreement (including the special provisions) and the appendices hereto constitute the
entire agreement between 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.
	 
	21.4	 	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: Fujian Province Pingnan County Power Supply Co., Ltd.

	 	 	 
	Attention:

	 	Zhang Bi Hua
	Telephone Number:

	 	 0593-3322137
	Facsimile Number:

	 	 0593-3304061
	Zip Code:

	 	 32300
	E-mail:

	 	pndd137@126.com
	Mail Address:

	 	No. 7, Huating Road, Chengguan, Pingnan County

	 	 	Party B:

69

 

	 	 	 
	Attention:
	 	 
	 

	 	 

	Telephone Number:
	 	 
	 

	 	 

	Facsimile Number:
	 	 
	 

	 	 

	Zip Code:
	 	 
	 

	 	 

	E-mail: 
	 	 
	 

	 	 

	Mail address:
	 	 
	 

	 	 

	21.5	 	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.
	 
	21.6	 	Continuing Effect
	 
	 	 	The provisions with respect to arbitration and confidentiality of this Agreement shall
remain effective after the termination of this Agreement.
	 
	21.7	 	Text
	 
	 	 	This Agreement comprises forty-seven (47) pages, and shall be signed in six
(6) counterparts. Each Party shall hold three (3) counterparts.

70

 

	 	 	 
	Party A: Fujian Province Pingnan County
Power Supply Co., Ltd.

	 	Party B: Pingnan County Yuanping
Hydroelectric Co., Ltd.
	(Stamp)

	 	(Stamp)
	Legal Representative: Wei Nai Sheng, or

	 	Legal Representative:        , or
	Authorized Representative:

	 	Authorized Representative: Lian Xin Chun
	 
	Signing Date: December 26, 2008

	 	Signing Date: December 26, 2008
	Signing Place:                     

	 	Signing Place:                     

71

 

APPENDIX I: DIAGRAM FOR METERING POINTS

	1.	 	The equipments and units installed at the metering points, the property right owners, the
operation maintenance party and the dispatching party shall be indicated (provided by the
Power Plant)
	 
	2.	 	Zones and equipments owned by Party A in the diagram (provided by the Power Plant)
	 
	3.	 	Zones and equipments owned by Party B in the diagram (provided by the Power Plant)

72

 

APPENDIX II: TECHNICAL PARAMETERS FOR THE POWER PLANT

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Name of	 	 	 	 	 	Rated	 	Active	 	Rated	 	Rated	 	 
	Power	 	Unit	 	 	 	capacity	 	power	 	power	 	Voltage	 	Rated speed
	Station	 	No.	 	Type	 	(MVA)	 	(MW)	 	factor	 	(kv)	 	(r/min)
	Yuanping 

Hydropower 

Station
	 	4#
	 	SF16-14/3350
	 	20
	 	16
	 	0.8
	 	10.5
	 	428.6

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

	 	(1)	 	Name of the line: 110 KV Lijia Line 132 Circuit.
	 
	 	(2)	 	Voltage level: 110 KV.

	3.	 	Party B shall provide other accurate technical parameters of the equipments according to
the design parameters for the equipments and the connection commissioning
results18.
	 
	3.1	 	Normal Operation Output Range
	 
	 	 	The maximum output for the normal operation of the No. 4 unit of the Power Plant shall be
100% of the rated capacity, and the minimum output for the normal operation shall
be 0% of the rated capacity.
	 
	3.3	 	Power regulation rate of units during normal operation
	 
	 	 	No.4 Unit is 5 MW/min.

 

			
	18	 	For a power plant with different types of units, the technical parameters of different units
shall be indicated

73

 

	3.4	 	The shortest duration for the units from receiving a dispatching instruction to reaching the
output for grid connection or from zero output to the rated output is: 15 min.

	3.5	 	The shortest shutdown duration from full load output to zero load after receiving a
dispatching instruction is: 5 min.

	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
center, and a testing report issued by a qualified agency shall be submitted.

 

			
	 	 	respectively as per the contents listed in this Article in the actual performance of the Agreement.

74

 

APPENDIX III: DIVISION OF DISPATCHING RANGE OF POWER PLANT EQUIPMENTS

	1.	 	The equipments within the jurisdiction of the local dispatching
	 
	 	 	The primary and secondary equipments of the 110kv system and the relay protection and
automatic safety devices relating to the power grid operation; the electric power
dispatching automation, dispatching communication, tele-control information and other data
which are related to the business of local dispatching shall be transmitted to the local
dispatching, and the optical-fiber transmission channel shall be connected to the local
dispatching.
	 
	2.	 	The equipments within the jurisdiction of the county dispatching licensed by the local
dispatching
	 
	 	 	110kv main Substation
	 
	3.	 	The equipments within the jurisdiction of the county dispatching

	 	(1)	 	No. 4 power generation unit and the affiliated facilities;
	 
	 	(2)	 	Relay protection and automatic safety devices related to the operation of the
power grid of Party B
	 
	 	 	 	The automatic modulation excitation system of No. 4 power generation unit.
	 
	 	(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 local dispatching,
and the optical-fiber transmission channel shall be connected to the local
dispatching.

75

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