Document:

EX-10.34

Exhibit 10.34

INTENT AGREEMENT OF CONFORMITY OF POWER PURCHASE AND

SUPPLY IN RONGPING SUPPLY AREA

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

Party B: Fujian Province (Pingnan) Rongping Chemical Industry Co., Ltd.

Party C: Pingnan County Hengli Hydroelectric Co., Ltd. (the old Lidaping Power Station)

Party D: Pingnan County Yuheng Hydropower Co., Ltd. (the old Yuanping Power Station)

In accordance with the Work Plan for the Clearance of the Illegal Power Supply and the
Rectification and Regulation of the Business Areas of Power Supply of Fujian Province
(Min Dian Zheng [2007] No.1) issued by the Working Team for the Power Supply Business
Areas Rectification and Regulation and Direct Power Supply of Fujian Province, with the
coordination of the Committee of Pingnan County, the People’s Government of Pingnan
County and the Power Bureau of Ningde City, on the principles of “Separation of
Purchase and Sale, Respect for History, Win-Win of All Parties, and Gradual
Transition”, after consultations, Party A, Party B, Party C and Party D hereby reach
agreement as follows:

	I 	 	In order to regulate the power supply and usage, on the principle of the Separation of
Purchase and Sale, both Party C and Party D agree to connect the old Lidaping Power
Station (“Lidaping Station”) and the old Yuanping Power Station (“Yuanping Station”)
respectively owned by them directly with the grid of Party A, and sell all power to
Party A; Party B agrees to accept the power supplied by Party A and not to accept
other power directly supplied by any power generation enterprise or other grid
enterprises; and Party A is responsible for the supply of all power required for the
production and operation of Party B.
	 
	II	 	In order to support Party B’s development, in accordance with Ming Dian Zheng [2007]
No.1, and on the principle of Respect for History, Party A agrees to carry out the
transitional tariff within the three-year period of this Agreement, and settle the
electricity fees in accordance with the following three different power sources and
corresponding tariffs:

	 	1.	 	The Output of Lidaping Station and Yuanping Station

	 	(1)	 	During the three-year transitional period of this Agreement, Party A will
collect the electricity fees which are calculated on the basis of the three-year
transitional sale tariff approved by the Price Bureau of Fujian Province from
Party B by the month in accordance with the actual on-grid power quantities (on
Party A’s grid) from Party C (Lidaping Station) and Party D (Yuanping Station).
Such three-year transitional sale tariff shall be decided in accordance

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	 	 	 	with the basic on-grid power price of Lidaping Station and Yuanping
Station, which have been approved by the Price Bureau of Ningde City, plus
the tax and reasonable expenditures occurred at the power supply
procedures, and then be applied to the Price Bureau of Fujian Province for
approval.
	 
	 	(2)	 	Lidaping Station owned by Party C and Yuanping Station owned by Party D
shall carry out the power generation according to the Coordination Meeting
Minutes concerning the Dispatching of the Power Generation of Lidaping and
Yuanping Reservoirs by Fujian Province Power Co., Ltd. (Zhuan Ti Hui Yi Ji Yao
[2007] No.19), namely, the dispatching agreement on power generation for “Two
Reservoirs and Four Stations”. During the three-year transitional period as
provided in this Agreement, Party C undertakes that Lidaping Station shall
supply the power output in accordance with the agreement entered into by and
between Party B and Party C (Lidaping Station); and Party D undertakes that
Yuanping Station shall supply all power output produced in a three-year period
or in the volume of 300,000,000 kwh.
	 
	 	 	 	With respect to the on-grid tariff (connected to Party A’s power grid) of
the aforesaid two power stations, Party C and Party D shall be responsible
for submitting relevant applications to the Price Bureau of Ningde City
for approval in accordance with relevant power tariff regulations of
Fujian Province.
	 
	 	(3)	 	In order to speed up the performance of this Agreement, all Parties agree
that, after the effectiveness of this Agreement, Party A shall advance to Party
C and Party D the electricity fees for the on-grid output supplied by Lidaping
Station and Yuanping Station at prices of RMB 0.335/kwh and RMB 0.20/kwh
respectively and temporarily, and Party C and Party D shall issue the
value-added tax invoice at a rate of 17%; in the event that Party C and Party D
issue the value-added tax invoice at a rate of 6%, then the tariff for the
settlement of the electricity fees payable to Party C and Party D shall be RMB
0.3035 /kwh and RMB 0.181/kwh respectively.
	 
	 	 	 	Party A shall settle with Party B the electricity fees in advance for the
power output supplied by Party C and Party D at tariffs of RMB 0.355/kwh
(including the additional power municipal public utility fees of RMB
0.008/kwh and the value-added tax at a rate of 17%) and RMB 0.215/kwh
(including the additional power municipal public utility fees of RMB
0.008/kwh and the value-added tax at a rate of 17%). The tax for the
aforesaid additional power municipal public utility fees of RMB 0.008/kwh,
which is included in the power tariff, shall be paid by the benefiting
department, deducted from the additional fees, and refunded to Party A.
	 
	 	 	 	Party A shall immediately clear the aforesaid pre-settled electricity fees with

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	 	 	 	Party B, Party C and Party D upon the official approval for the on-grid
tariff and the transitional sale tariff on the principle of refund for any
overpayment or additional payment for any shortfall.

	 	2.	 	The Power Ouput Margin of the Small Hydroelectricity in Pingnan County
during the High Flow Period
	 
	 	 	 	Party A shall, in accordance with annual water flow conditions, actively
organize and dispatch the power output margin of the small hydroelectricity in
Pingnan County during the high flow period for the use of Party B, and collect
electricity fees from Party B in accordance with the sale tariff approved by the
Price Bureau of Ningde City. For the year of 2007, in accordance with the Reply
of the Price Bureau of Ningde City in relation to the Promotion Price Executed
for the Portion of the Power Output Margin of Fujian Province Pingnan County
Power Supply Co., Ltd. (Ning Jia Shang [2007] No.89), the power output margin of
the small hydroelectricity during the high flow period organized and dispatched
by Party A shall be 20,000,000 kwh or more and the sale tariff thereof shall be
RMB 0.33/kwh.
	 
	 	3.	 	The Grid Output Portion
	 
	 	 	 	In the event that the annual power used by Party B exceeds the aforesaid two
kinds of power, the power tariff for the excess power output purchased from the
provincial grid shall execute the power tariff of the big industries of the
power grid of Pingnan County approved by the Price Bureau of Fujian Province,
and implement the peak and valley power tariff method. According to the
regulations of Price Bureau of Fujian Province, the current power tariff for the
big industries of the power grid of Pingnan County is RMB 0.430/kwh, and the
basic tariff is RMB 16 per month per kilovar. In consideration of the current
affording ability of the power tariff of Party B, Party A and Party B shall make
joint efforts to obtain the support from the price department, which approves
that during the transitional period, it will not collect basic electricity fees
from Party B by means of power use capacity for the time being, instead, the
basic tariff shall be converted into the tariff of RMB 0.04/kwh and the
collection shall be made in accordance with the actual use volume of the power.
	 
	 	4.	 	For the purpose of avoiding the fund occupation of each other, Party B
undertakes that the electricity fees for the above-mentioned various power
output shall be paid to Party A in three installments on the 10th
and 20th day of each month and within five days after the meter
copying. Party B shall be liable for breach of contract in case of any delayed
payment. Under such circumstances, Party A has the right to collect liquidate
damages for the delayed payment of electricity fees pursuant to the provisions
of the Regulations on the Supply and Utilization of Electricity and the Power
Supply Operation Regulations, and the liquidated damages shall be calculated at
a rate of 2‰ of the unpaid amount of the electricity fees per day.

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III Power Supply Plans

	 	1.	 	The Final Plan (π Connection Plan)
	 
	 	 	 	Party A will disconnect the 110KV line (Rongyuan Line) from Yuanping Power
Station to Party B at the point near Jiayang Substation, and connect
double-circuit lines into the Jiayang Substation of Party A (See attached
Drawing I). Party A, Party B and Party D agree that the investment fund for such
plan shall be divided as follows: Party A shall pay all investment fund for the
civil construction of the interval, and the investment for the lines and
interval shall be carried out as agreed by Party B and Party D.
	 
	 	2.	 	35kv Temporary Power Supply Plan
	 
	 	 	 	Before the implementation of the Final Plan, Party A connects Rongli Line in a
“T” form to the 35kv switch interval of Jiayang Substation and temporarily
supplies power to Party B through 35kv line (See attached Drawing II).
	 
	 	3.	 	110kv Temporary Power Supply Plan
	 
	 	 	 	Before the implementation of the Final Plan, in the event that the temporary
35kv power supply line is unable to satisfy the power usage demand of Power B,
after the full payment of 20% of the project fees by Party B in accordance with
Clause 5 hereof (approximately in the amount of RMB400,000 on the basis of the
design budget), Party A is responsible for the coordination of the 110kv
temporary power supply line from Jiayang Substation to Lidaping Switching
Station to New Yuanping Station to Yuanping Station to Party B (See attached
Drawing III).

IV Metering Method

	 	 	 	Party A, Party B and Party D shall, on the principle of “Separation of Sale and
Purchase and Facilitating Calculation”, separately negotiate and execute the
agreement on the design and installation of metering devices, which shall serve as
the supplemental agreement to this Agreement.

V Miscellaneous

	 	1.	 	Before the start-up of the 110kv temporary power supply line by Party A,
Party B shall pay 20% of the design and construction fees for the Final Plan (π
Connection Plan) on the basis of the design budget, which shall be borne by
Party B, within five days commencing from the effectiveness of this Agreement.
	 
	 	 	 	The project fund assumed by the Parties shall be paid in time in accordance with
the project schedule. Party A, Party B and Party D shall negotiate and enter
into

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	 	 	 	agreement regarding the payment of the project fund (as the supplemental
agreement to this Agreement).
	 
	 	2.	 	Party A undertakes that, upon the full payment of 20% of the construction
fees assumed by Party B, Party A shall be responsible to start up the 110kv
temporary power supply line within one month; in case that Party A fails to do
so as scheduled, the 20% of the construction fees advanced by Party B shall be
set off against the electricity fees payable to Party A by Party B.
	 
	 	3.	 	Party B undertakes that it will not carry out any electric connection with
any other power girds other than the grid of Party A until the consent of Party
A is granted, otherwise, Party B will assume all liabilities incurred
therefrom.
	 
	 	4.	 	The additional municipal public utility power fees shall be levied in
accordance with relevant regulations. In the event that Party B applies to the
people’s government of Pingnan County for the reduction or exemption of such
fees, Party A shall reimburse such fees to Party B upon the governmental
approval.
	 
	 	5.	 	The four Parties to this Agreement agree to execute the power supply and
purchase contract in accordance with this Agreement and relevant regulations.

	VI 	 	In case of any conflict between this Agreement and the national laws, regulations
and policies, the Parties shall comply with relevant national laws, regulations and
policies. Any issue, which is not covered in this Agreement, shall be resolved among
the Parties through friendly consultation.
	 
	VII 	 	The valid term of this Agreement shall be from September 1, 2007 to August 31, 2010.
	 
	VIII 	 	This Agreement shall be executed in eight counterparts, and each of Party A, Party B,
Party C and Party D shall hold two counterparts.

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

(seal)

Signature of the Representative of Party A:

Party B: Fujian Province (Pingnan) Rongping Chemical Industry Co., Ltd.

(seal)

Signature of the Representative of Party B:

Party C: Pingnan County Hengli Hydroelectric Co., Ltd.

(seal)

Signature of the Representative of Party C:

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

(seal)

Signature of the Representative of Party D:

August 31, 2007

6EX-10.35

Exhibit 10.35

BETWEEN

FUJIAN PROVINCE PINGNAN COUNTY POWER SUPPLY CO., LTD.

AND

PINGNAN COUNTY YUHENG HYDROPOWER CO., LTD.

GRID CONNECTION AND

DISPATCHING AGREEMENT

FOR

PINGNAN YUANPING 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	 

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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 Yuheng Hydropower 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: 1041907-00219) issued by the power
regulatory commission/bureau, with the tax registration number of
350923660394930, 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

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	 	 	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 30 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.

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	1.1.2	 	“Power Plant” refers to the power generation facility with all auxiliary
facilities stretching to the property demarcation point with the total installed
capacity of 30MW (with three (3) units, No. 1 unit of 10MW, No. 2 unit of 10 MW, No. 3
unit of
10 MW, the detailed technical parameters please refer to Appendix
II)1, which is constructed, owned, managed and operated by Party B
and located in Yuanping 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

 

			
	1	 	 

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	 	 	connection mode for the Power Plant or the power grid due to certain needs.
	 
	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.

 

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

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	1.1.14	 	“Equivalent Unplanned Outage Hours” refers to the sum of Unplanned Outage 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.

 

			
	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.

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	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 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.

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	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.

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	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.

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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

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	 	 	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 counter-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:

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	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

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
gird 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

Power 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

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	 	 	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

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	 	 	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)

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	 	 	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

36

 

	 	 	kwh), the total reservoir water inflow (ten thousand m3), the
average reservoir water 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

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	 	 	Power Plant or the water dispatching automation system of the sub-center of the
Power Plant, the Power Plant shall immediately make restorations and report to
the dispatching center, so as to collect the real time rain and water
conditions for the reservoir drainage and serve to improve the economic
operation level of the Power Plant and ensure the flood prevention for the up
and down stream of the reservoir.
	 
	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;

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	 	(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
cooperate with the Power Plant to analyze and handle the accidents.

39

 

	 	(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 for 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 onto 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 and assessment of the running conditions of the devices which
shall be applied to

40

 

	 	 	 	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 dispatcher of the Power Dispatching Agency, handle the accidents,
analyze the

41

 

	 	 	 	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;

42

 

	 	(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 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
>99%.
	 
	 	(2)	 	The accuracy rate for the running of protections with 110 kv and above
>100%.
	 
	 	(3)	 	The availability for fault recording 13 >100%.
	 
	 	(4)	 	The operation rate of automatic safety devices > 99%.
	 
	 	(5)	 	The accuracy rate for the running of automatic safety devices > 100%.
	 
	 	(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

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	 	 	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) > 100%.
	 
	 	(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

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	 	 	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 > 99.9%.
	 
	 	(B)	 	Equipment service factor15 > 99.9%.

 

			
	14	 	Service factor of communication circuit = {1 – Σ[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 – Σ[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 >
99.9%.
	 
	 	(2)	 	Service factor of communication interchange equipment
> 99.9%.
	 
	 	(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
jurisdiction 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

58

 

	 	 	 	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 for the treatment.

	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:

61

 

	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:
	 
	 	 	

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	 	 	Among which:

	 	 	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

63

 

	 	 	non-defaulting Party shall immediately notify the defaulting Party to stop
breaching the contract, and shall furnish a written notice as quickly as
possible to the breaching Party, demanding it to correct the breach of contract
and assume the liabilities arising therefrom pursuant to the provisions of this
Agreement.
	 
	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

64

 

	 	 	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.
	 
	 	 	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.

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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 Yuheng
 Hydropower Co., Ltd.
	 
	 	 
	      (Stamp)

	 	      (Stamp)

	 
	 	 
	Legal Representative: Wei Nai Sheng, or 

Authorized Representative:

	 	Legal Representative:              , or

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)

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APPENDIX II: TECHNICAL PARAMETERS FOR THE POWER PLANT

Technical Parameters for the Power Plant

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Rated	 	 	 	 	 	Rated	 	Rated	 	Rated
	Name of the	 	Unit	 	 	 	 	 	Capacity	 	Active Power	 	Power	 	Voltage	 	Speed
	Power Station	 	No.	 	Type	 	(MVA)	 	(MW)	 	Factor	 	(kV)	 	(r/min)
	Yuheng
	 	 	1	#	 	SF10-10/2600	 	 	12.5	 	 	 	10	 	 	 	0.8	 	 	 	10.5	 	 	 	600	 
	Hydropower
	 	 	2	#	 	SF10-10/2600	 	 	12.5	 	 	 	10	 	 	 	0.8	 	 	 	10.5	 	 	 	600	 
	Station
	 	 	3	#	 	SF10-10/2600	 	 	12.5	 	 	 	10	 	 	 	0.8	 	 	 	10.5	 	 	 	600	 

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

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

	3.	 	Party B shall provide other accurate technical parameters of the Power Plant
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.1, No. 2 and No. 3 units 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.

 

			
	18	 	In case that the Power Plant owns the equipment units with different
types, during the actual performance of this Agreement, the technical parameters
of different units shall be indicated respectively as per the contents listed in
this Article.

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	3.2.	 	Under the special condition of frequency modulation of the power grid, the
minimum output of the No. 1, No. 2 and No. 3 units of the Power Plant shall be 60% of
the rated capacity; 100% .
	 
	3.3.	 	Power regulation rate of units during normal operation
	 
	 	 	No. 1, No. 2 and No. 3 Units are 3 MW/min.
	 
	3.4.	 	The shortest time for the units from receiving a dispatching instruction to
reaching the grid connection output or from zero output to rated output is 15 min.
	 
	3.5.	 	The shortest time from full load output to zero load after receiving a
dispatching instruction is 5 min.
	 
	 	 	Other inadvisable operation mode:                    .
	 
	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 as well.

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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. 1, No. 2 and No. 3 power generation units and the affiliated facilities;
	 
	 	(2)	 	Relay protection and automatic safety devices related to the operation of the
power grid of Party A
	 
	 	 	 	The automatic modulation excitation system of No. 1, No. 2 and No. 3
power generation units. 
	 
	 	(3)	 	Dispatching automation and communication facilities related to the
dispatching operations of Party A
	 
	 	 	 	The electric power dispatching automation, dispatching communication,
water dispatching automation system and electric power billing information
collection device, tele-control information and other data shall be
transmitted to the local dispatching, and the optical-fiber transmission
channel shall be connected to the local dispatching. 

75

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