1. Explanation on
(1) the current power supply conditions and policies in Tianjin and
(2) continue to ensure stable power supply (guarantee to industrial power supply) and make power supply adjustment in a planned way:

The current power supply conditions in Tianjin are basically satisfactory. The demand/supply conflict arouse during the peak hours due to air-conditioners¡¯ use in summer will not last for long time. CPC Tianjin Committee, Tianjin Municipal Government and Tianjin Power Company have attached great importance to the power supply during peak hours in summer this year. The involved departments have made serious studies to ensure the power supply to city and rural residents and other important units and also how to balance the supply shortage which accounts for 10% of the total. Based on the studies, these departments made specific measures to ensure balanced and stable power supply.

The measures are as follows:

(1) Speed up the construction of power grid and improve the supply capability.
Based on the serious analysis on regional power grid supply capability, Tianjin Power Company arranged the operation of 10 220KV projects, 7 110KV projects and 11 35KV projects which greatly released the pressure brought by the fast growth of power consumption. Besides, the Company also arranged 34 projects of restructuring low-voltage power grid which solved some problems caused by the weakness of the grid. The projects specific to the summer have all been finished.

(2) Reinforce the repair force to ensure safe and reliable power supply during the peak hours in summer.

Tianjin Power Company strengthened the coordinating capability of customer service system on grid failure and other grid-related problems. The power supply companies at all levels have reinforced their repair force and set up repair teams for emergency to ensure timely and efficient repair on any failure. As estimated, there will be about 3000 repair personnel working on site this summer to provide timely response for the challenge of power load peak.

(3) Distribute the power consumption quota designated from North China Power Grid Company to all the areas and counties (branch power companies) at different levels and such quota could be adjusted any time depending on the situation at that time.

(4) Use best efforts to ensure the smooth operation of the local or company self-owned back-up power plants. Try to eliminate the possible equipment failure before the coming of peak hour. Currently, all the negative factors have been eliminated and power of 80,000KW have been added.

(5) Strengthen management on power demand to ease the conflict arising during the peak hours.

In recent years, with the fast growth of Tianjin economy and the improvement of residents¡¯ living standards, the demand for power has been steadily increased. In the meantime, some issues such as unbalanced power load and unreasonable use of power consumption has become more and more significant. For example, the difference between power peak and valley has grown more and more significant every year with the maximum balance reaching 1.8 million KW. The power load difference between weekend time and weekdays is 30.40 million KW. Power becomes to be in shortage during winter and summer. As a result, power consumption is restricted during peak hours in weekdays but the consumption in valley hours and weekend times is oversupply which caused the interruption or ineffective operation of generators.

In order to ensure the power industry and national economy and industry develop in a coordinated way, and let the power resources generate bigger social and economic efficiency, we should have scientific, reasonable and effective management on power load.

Currently, there are different management measures on power management in terms of administration, economy and technology. The major measures are:

A. All the productive enterprises with non-continuous operation should arrange holidays strictly to the power load arrangement. This measure is to ease the issue of unbalanced and unreasonable power consumption in a week.
B. Motivate the factories with major repair under power interruption (including major equipment repair) to move the repair work forward to July and August to ease the power supply difficult during the peak hours in these two months.
C. Conduct control and adjustment on 170 enterprises with huge power consumption to ease the power consumption during peak hours.
D. Organize the 27 key power users to avoid peak hours in their power use.
E. With the approval of municipal commodity price administration, the power company will adopt power prices specific to peak time in July, August and September every year aiming to use economic lever to balance the power load in peak hours.
F. Utilize the power load management system to conduct load monitoring.

As demanded by Tianjin Economic Commission, Tianjin Power Company has prepared multiple technological measures on restricting power consumption according to customers¡¯ nature, level of importance and timing of power consumption. These measures will be applied in the power grid when it is needed.

G. Encourage the whole society to use power in an economical and reasonable way.

In the meantime, with the guidance and arrangement from the municipal government and economic commission on power use this summer, we will guarantee a safe operation of the whole power grid. Our priority consumers are the municipal residents and some key enterprises like the foreign-invested enterprises in TEDA, Tianjin Free Trade Zone and other local development zones. These priority consumers will be guaranteed under normal conditions and will be the last ones to restrict power use under abnormal conditions of the grid.

All the above power balance and guarantee measures have been carried out and they can basically solve the power shortage problems in Tianjin. With the coordinated efforts by Tianjin Municipal Government, Tianjin Power Company and other concerned units, we are confident to smoothly go through the power peak time this summer.

2. Explanation on ¡°be sure to inform enterprises ahead of a possible power interruption¡±

As regulated in Article 28 of Chapter 4 in Regulations of Power Supply and Use: as regulated otherwise, the power supplier should conduct continuous power supply to the customers as long as the power generation and supply system are running under normal conditions. If the power supply need to be stopped due to some reasons, the power supplier should inform the customers or make public announcement in advance according to the following principles:

(1) If the power supply will be stopped due to expected facility repair reasons, the supplier should inform the customer or make public announcement 7 days ahead of the power interruption.
(2) If the power supply will be stopped due to temporary facility repair, the supplier should inform the customer or make public announcement 24 hours ahead of the power interruption.
(3) If the power supply need to be interrupted or restricted due to the failure in power generation and supply systems, the supplier should conduct such interruption or restriction according to the priority order. When the reasons for such interruption or restriction are eliminated, the supplier should resume the power supply as early as possible.

To sum up, customers could be informed in advance under expected power interruption; the power supply company will make public announcement on www.a95598.com (website of Tianjin Power Customer Service Center) or send informing letters to key customers under temporary power interruption due to repair reasons; but for the power interruption or restriction due to unexpected failures, it might be impossible for the power supplier to information or announcement in advance. Currently, Tianjin Power Company will announce the repair arrangement on both the Friday issue of Tianjin Daily and the website www.a95598.com of Tianjin Power Customer Service Center.

3. Explanation on ¡°if economic compensation is possible when enterprises suffer loss from power interruption¡±.

(1) Firstly, both power supplier and user should sign power supply contract before the supply is conducted and set up the articles of responsibilities for breaking the contract.
(2) If the power supply accident is caused by the power supplier and leads to damage to the power user, the power supplier should assume responsibilities of compensation according to Article 95 under Power Supply Operation Rules. For the any case as listed as follows, the supplier is not responsible for economic compensation.
i. Power switch failure caused by power operation accident but the switch is successfully on due to the automatic restoration system.
ii. When backup power source or non-power security measures are needed.
iii. Power interruption in only part of the multiple power-source-system.

As regulated in Article 95 in Power Supply Operation Rules, the power suppler and user should handle the responsibility issue according to the following principles:

(1) If the power interruption is caused by the operation accident of the power supply company, the supplier should make economic compensation equal to 5 times of the power consumption fee (4 times for singularity power consumption fee) which should be paid by the user during the interruption period. The possible power consumption during the interruption period should be calculated as the average power consumption per hour in the normal certain days or months before the interruption times the total interruption hours.

When the power interruption occurs due to the supplier¡¯s reasons, the user should take active measures to prevent further damage of the power accident.
(2) If the user is responsible for the power interruption, the user should make economic compensation equal to the interrupted power supply during the interruption period times the average power price during the previous month.

If the user is responsible for the damages to other users and when the damaged users require economic compensation, the responsible user should assume related compensation responsibilities.

If the user is responsible for the power interruption but the power supplier fails to take measures to prevent further damages to other users, the concerned user should not bear compensation responsibilities for the further damage.

(3) The analysis on power interruption responsibilities and calculation on interrupted power supply should be handled according to the power supplier¡¯s accident record and Procedures of Investigation on Power Accidents. If the power interruption period is less than one hour long, one hour should apply. If the period is over one hour, the actual hours happened should apply.

(4) The power consumption fee referred in this article should be calculated based on national guidance on the power consumption fee.