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PARLIAMENT OF ROMANIA CHAMBER OF DEPUTIES LAW On Electric Power The Chamber of Deputies adopts the current Draft Law

CHAPTER I General Provisions Field of Regulation Art. 1. (1) The current law sets the regulating framework for carrying out the activities in the field of co-generated electric and thermal power in safe conditions and at high quality standards, in view of an optimal utilization of the primary energy sources and according to the environmental protection norms. (2) The following shall be exempted from the provisions of this law: a) electric accumulators, mobile power generating units, electric equipment located on vehicles of any kind; b) stationary continuous current power sources; c) power generating installations within territorial sea waters that are not connected to the electricity network d) Electrical sources with an installed active power lower than 250kV. The Objectives of the Law Art. 2. Activities in the field of electric and thermal energy produced through cogeneration must be carried out in view of achieving the following main objectives: a) ensuring a sustainable development of the national economy; b) diversifying the primary energy sources; c) creating and ensuring the operation of competitive electric power markets; d) providing indiscriminating and regulated access of all participants to the electric power market and to the power networks of public interest;

e) making electric power tariffs, prices and taxes transparent within a tariff policy, for the purpose of increasing efficiency in producing, transporting, distributing and using electric power; f) creating safety supplies of the fuel needed for the production of electric and thermal power through cogeneration; g) ensuring the interconnected functioning of the national power grid with the power grids of the neighboring countries and with the power grids of the Union for the Coordination of Transmission of Electric Power (U.C.T.E); h) promoting the use of new, renewable sources of energy; i) ensuring environmental protection at the local and international level, in accordance with the treatises Romania is part of; j) providing security measures against terrorist and sabotage acts. The meaning of some terms and expressions Art. 3. For the purpose of the current law, the terms used shall be defined as it follows: 1. electric power self-generator natural or legal person generating power, in addition to the activities performed in the normal course of business electric and thermal power through cogeneration needed for its own use. The self- producer can operate on the power market as holder of generation, supply or consuming licenses, under the terms of the current law; 2. access to the electrical network of public interest - the right of companies that generate and/or supply electric power, as well as of electric power consumers to get connected and to use in accordance with the law, the electrical transportation, distribution and supply networks; 3. vertically integrated economic entity in the electric power sector legal person carrying out, a part from other activities outside the power sector at least one of the following activities: generation, transportation, distribution or supply of electric power; 4. horizontally integrated economic entity in the field of electric power legal person carrying out, apart from other activities outside the power sector, at least one of the following activities: generation, transportation, distribution or supply of electric power; 5. 6. competent authority The National Power Energy Sector Regulatory Authority A.N.R.E.; emergency event which is manifested through dangerous deviations from the functional parameters stipulated by the technical norms in force;

7.

interconnection facility installations and equipments by which the connection of two or more electric power systems is made;

8.

power facility installations for generating electric or thermal power in co-generation, electric networks and other electric power equipments;

9.

electric power station ensemble of installations, buildings and equipment needed for the generation of electric power.

10.

cogeneration (thermal) power station ensemble of installations, buildings and equipments necessary for the generation of combined electric and thermal power;

11. client natural or legal person with whom electric power is traded; 12. electric power consumer natural or legal person buying electric power for their own use and/or for a sub-consumer connected to its installations; 13. eligible electric power consumer the consumer that can chose the supplier and contract the needed power directly, having access to the transportation and/or distribution networks; 14. captive consumer the consumer who, for technical, economic or regulating reasons, is unable to choose the supplier; 15. passage (functioning) way of the power line the land surface along the power line and the air space above it for which some restrictions are imposed with regard to the power lines coexistence with natural elements, objects, buildings, installations etc.; the passage way includes the protection zone and the safety zone; 16. distribution transmission of electric power through distribution networks from the transport networks or from producers to consumer installations; 17. commercial exploitation of a power facility ensemble of activities carried out by an economic entity in the power sector in view of obtaining profit; 18. supplier legal person holding a supply license, that supplies electric power to one or several consumers, according to a supply contract; 19. supply the activity of trading electric and/or thermal power to the clients; 20. direct line line by which electric power is transmitted from the generator to a single user; the direct line is complementary to the electric power system; 21. natural monopoly in the field of electric power a market situation in which electric power transportation and distribution services are provided by a single economic entity for all the consumers across a certain delimited area;

22. electric power market operator legal person providing the transacting of electric power amounts on the electric power market and determining the prices on the spot market; 23. distribution operator legal person holding a distribution license that holds, exploits, maintains, modernizes and develops the distribution network; 24. transportation and system operator legal person holding a license for transporting electric power and system services; 25. merit order the order in which an electric power generator is taken into consideration according to the price offered for covering the electric power necessary for the National Power Grid (SEN); 26. electric power market the organizational frame in which electric power and its associated services are traded; 27. perspective plan long term planning of the needed investments in generation, transportation and distribution facilities in view of meeting the power needs of the system and covering client delivery requirements; 28. plan for protecting the national power system from major perturbations document containing technical and organizational measures meant to prevent perturbations from expanding and to limit their consequences; 29. electric power generator natural or legal person holding a license for generating electric power, including through cogeneration; 30. electric power independent generator electric power generator that does not have transport or distribution functions on the territory in which the electric network to which it is connected is located; 31. rehabilitation ensemble of operations for replacing some existent equipments and/or installations which, without the modification of the initial technology, recover the technical parameters and the effectiveness to a level close to the initial one; 32. upgrading ensemble of replacement operations of some technologies that are morally and/or physically obsolete by modern technologies based on state of the art technical conceptions in view of increasing production, reducing specific energy consumption, reducing polluting emissions, etc.; 33. electric power network - ensemble of lines, including their support and protection elements, electric power stations and other interconnected electro-power equipments. The electric power network can be a transport network or a distribution network;

34. electric power transportation network electric power network of national and strategic interest with the nominal line tension/voltage higher than 110 kV; 35. electric power distribution network electric power network with the nominal line tension lower than 110 kV, inclusively 36. electrical network of public interest electrical network to which at least two users can get connected; 37. electric power sector ensemble of activities and installations for electric and thermal power cogeneration, transport, system services, distribution and supply, including the import and export of electric power and customary and/or emergency exchanges with the power grids of neighboring countries; 38. transport service service provided by the transportation and system operator, consisting in ensuring the transmission of an amount of electric power between two or more points of the transport network, at the required quality standards; 39. system service service provided for maintaining the safety functioning of the power grid as well as of the quality of electric power, according to the regulations in force; 40. technological system service system service usually provided by producers at the request of the transportation and system operators; 41. electric power grid ensemble of interconnected electrical equipments by which the generation, transport, transmission, distribution, supply and use of electricity is carried out; 42. National Power Grid hereinafter called SEN - the power grid across the national territory. SEN constitutes the basic infrastructure used in common by the electric power market participants; 43. isolated electric power system local system that produces, distributes and supplies electric power and is not interconnected with SEN; 44. sub-consumer natural or legal person whose electrical equipment is connected downstream of the consumer measurement set; 45. electric power transport transmission of electric power from the generators to the distribution installations or to the installations of the consumers connected directly to the electric power transport networks; 46. electric power network user producer, transportation and system operator, distribution operator, supplier, eligible consumer or captive consumer; 47. U.C.T.E - Union for the Coordination of Transmission of Electric Power;

48. protection zone the zone adjacent to the power facility in which restrictions are introduced regarding the access of persons and constructions regime; 49. safety zone adjacent zone to the power facilities in which restrictions and interdictions are imposed in order to ensure the proper functioning of the facility and to avoid jeopardizing persons, goods and environment; the safety zone includes the protection zone. CHAPTER II Authorities and Competences Power Strategy and Policy Art. 4. (1) The national power strategy defines the objectives of the electric power sector and the optimal ways of achieving these objectives, also ensuring a sustainable development of the national economy on the long and medium term. The electric power strategy is drafted by the Government in consultation with nongovernmental organizations and is approved by law. (2) The national power policy is drafted according to the governing program and the guidelines established by the national power strategy by the relevant ministry, in consultation with nongovernmental organizations for a medium term and accompanied by a long-term forecasts for the long term, with a focus mainly on: a) creating the appropriate institutional frame by defining the competent bodies and authorities for the implementation of this policy; b) ensuring security in fuel provision; c) ensuring electric power and fuel imports and exports; d) providing environmental protection and ecological reconstruction of the sites affected by power related activities; e) transparency of prices and tariffs for fuels and energy; f) increasing the effectiveness in using fuels and energy; g) development of renewable sources of energy, with priority given to electricity for isolated settlements; h) development of international cooperation in the power sector; (3) The funding sources for the implementation of the Government strategy and policy in the power sector shall be covered from own sources of the economic entities in the field, the state budget, local budgets and by reimbursable loans and grants.

The Power Program Art. 5 (1) The power policy results in a program comprising measures for the stimulation of investment activities, research, development, etc., approved by Government Decision. (2) The Government, the relevant ministry and the other specialized central an local public authorities shall take measures in view of achieving the objectives set in the program mentioned at paragraph (1) and shall examine the progress in the implementation of the programs provisions yearly or as frequently as needed. Duties of the line ministry Art. 6. The relevant ministry shall draft the national power policy and make sure the policy is implemented according to the stipulations of the current law. In doing so the relevant ministry shall have the following main duties: a) to draft programs and plans for the implementation of the Government policy in the electric power sector, including energy efficiency plans and plans for the promotion of renewable energy sources; b) to draft norms and regulations for the electric power sector; c) to approve the compulsory technical standards and norms for the electric power system; d) to provide for the drafting of studies according to which priorities are set for the investments in the electric power sector; e) to draft the fuel safety supplies program and monitor the implementation of its provisions by economic entities; f) to permanently monitor the performance and quality of technologies and installations in the power system and initiate measures in view of increasing their parameters; g) to act as concession granting authority in the electric power sector; h) to take measures for constructing power generating installations enabling the efficient use of inferior fuels from domestic resources and for using some pre-established quantities of renewable and secondary energy sources; i) to supervise the implementation and compliance with the set measures for the environmental protection by all those involved in activities pertaining to the electric power sector; j) to draft programs for the promotion of electric power exports proposing to Government measures for decreasing the countrys dependency on imports of primary energy resources;

k) to monitor and propose to Government measures about the situation of the national power system safety supplies of primary energy resources coal and hydrocarbon fuels and, together with the Ministry of Waters and Environmental Protection, about the water level in the storage reservoirs; l) to implement the power policy of the Government focusing on cogeneration as an efficient solution of meeting the national thermal energy consumption needs and on using renewable energy sources solar, wind, geothermal, biomass, biogas; m) to coordinate cooperation with similar institutions from other countries as well as with specialized international bodies; n) to endorse the labor protection norms and regulations in the power sector together with the Ministry of Labor and Social Protection; o) to draft and sustain social policy proposals for the power sector, social and medical assistance programs, risk and accident insurance programs in view of avoiding professional risks and rehabilitating those who have suffered from labor accidents and professional diseases, together with the Ministry of Labor and Social Protection, the owners associations and trade unions. The Competent Authority Art. 7. The competent authority in the electric power sector is the National Power Sector Regulatory Authority (A.N.R.E.), a public autonomous institution of national interest, having legal authority and functioning under the co-ordination of the relevant ministry according to its own set of organizational and operation rules, approved by Government decision. Financing A.N.R.E activity Art. 8. (1) A.N.R.E is integrally financed from extra-budgetary incomes obtained from tariffs for licenses and authorizations granting as well as from contributions of the international bodies or of economic entities, according to the legal requirements on public finances. (2) The level of tariffs and contributions stipulated at art (1) shall be established by A.N.R.E each year in compliance with the requirements of the law and shall be made public. (3) A.N.R.E shall draft its own budget yearly, according to the methodological norms in force; (4) The surplus resulted from the execution of A.N.R.E incomes and expenditures budget shall remain in its possession and shall be used for the same destination the following year.

A.N.R.E Management Art. 9. (1) A.N.R.E. is managed by a president and a vice-president, appointed by the prime minister at the proposal of the relevant minister, over a period of 5 years. The president represents A.N.R.E in its relationships with third parties. (2) A regulatory committee is created for regulatory activities in view of a higher objectivity. The committee shall include a president, a vice president and 3 regulators. (3) The three regulators in the regulatory committee shall be appointed by the relevant minister on a 5 year mandate. (4) The mandate of the regulatory committee members ends in the following situations: a) when the duration expires; b) in case of resignation; c) in case of death; d) in case of a definitive impossibility to exercise the mandate consisting in an impossibility of attending to the mandate duties for a period longer than 60 consecutive days; e) if one of the incompatibilities mentioned at par. 5 arises; f) in case the mandate is cancelled for failure to meet the requirements of the mandate, for breaching the stipulations of the current law, or for criminal convictions or by a final legal decision. The president and vice-president can be revoked by the authority that appointed them. (5) The quality of being a member of the regulatory committee is incompatible with exercising any other commercial activities, functions or public dignity positions, with the exception of teaching positions in university and post graduate education, under the terms of the law. (6) A.N.R.E regulatory orders and decisions shall be adopted by the vote of the majority members of the regulatory committee. (7) The orders shall be published in the Official Gazette of Romania, Part I. (8) Orders and decision issued by the president in exercising his duties can be legally attacked in the Administrative Litigation Division within the Bucharest Court of Appeal, within 30 days of their publication in the Official Gazette of Romania, Part I, or of the date they were notified to the interested parties. (9) A.N.R.E regulatory committee shall be assisted by a consultative board made up of 9 members appointed by order of the relevant minister, of which: a) 2 members representing owners associations in the power sector;

b) 2 members representing the trade unions of employees in the power sector; c) one member representing local public authorities associations; d) 2 members representing professional associations; e) 2 members representing electric and thermal power consumers associations; (10) Consultative board members shall be entitled to a session allowance of 10% of the basic salary of the president, but without exceeding 20% of the same salary over one month. (11) Consultative board members have the right to have their travel and accommodation expenses covered in case the meeting is held in a different locality than the one of residence. (12) The consultative board supports the harmonization of the interests of economic entities in the electric power sector with those of the consumers, assesses the impact of A.N.R.E regulations and makes proposals in view of their improvement, according to A.N.R.E organizational and functioning rules. Employment and Payment of A.N.R.E Personnel Art. 10. (1) Personnel shall be employed and released from their functions according to the stipulations of A.N.R.E. organizational and functioning set of rules, of the collective bargaining contract and with the legal regulations in force. Incompatibility conditions set at art 9 paragraph (5) shall also be applied for A.N.R.E. personnel. (2) A.N.R.E personnel salaries shall be established by negotiation within the collective bargaining contract and the individual labor contract, according to the legal regulations in force for public institutions integrally financed from extra-budgetary funds. A.N.R.E. Duties Art. 11. (1) A.N.R.E drafts, establishes and monitors the national level implementation of the compulsory regulations ensemble needed for the transparent, competitive, efficient and consumer protecting functioning of the electric power market. (2) A.N.R.E shall have the following competences and duties: a) to set compulsory regulations for economic entities in the electric power sector; b) to grant, modify, suspend or withdraw authorizations and licenses of economic entities in the electric power sector, including for co-generated thermal power, as well as for power generators emerging after the liberalization of the electric power market; c) to draft and approve the calculation methodologies needed for setting prices and tariffs; d) to establish tariffs that apply to captive consumers;

e) to establish the prices and tariffs used by amongst the economic entities in the electric power sector, the tariffs for system services, for the transport and distribution of electric power, the prices and tariffs used for activities and services pertaining to the production of cogenerating thermal power; f) to establish the standard supply contracts as well as contracts between economic entities for the sale, purchase, transport, system service and distribution of electric power as well as for the sale of co-generated thermal power; g) to draft the rules for customers electric power supply, which shall be approved by Government Decision; h) to set the requirements, criteria and procedures for the eligibility of electric power consumers and to certify the eligible consumers; i) to approve technical and commercial regulations for the economic entities in the power sector; j) to control economic entities compliance with the issued regulations in the electric power sector and with the system of prices and tariffs in force and to impose sanctions in case they are breached; k) to establish the procedure for settling and settles the pre-contractual disagreements pertaining to the conclusion of contracts between economic entities in the electric power sector and electric power supply contracts; l) to set its own monitoring and control methodology for making sure that economic entities in the electric power sector comply with the price and tariffs system requirements; m) according to legal provisions to draft the rules for the identification, notification, and sanctioning of failures to comply with the regulations issued in the field; n) to draft the set of rules for the authorization of electricians and certification of economic entities designing, executing, checking and exploiting power facilities and power usage installations respectively; o) to monitor the implementation of specific regulations in the electric power sector; p) to notify the relevant ministry and the Competition Council with regard to the abuse of a dominant position on the market and to the breach of legal provisions referring to competition, whenever it identifies a breach of competition and transparency regulations; q) to create and manage a national database needed for carrying out its activities and for providing information to other authorities for drafting the development strategy for the

electric power sector as well as in relation to the international trade of electric power and to the international practices in the field, based on the data to be transmitted by the economic entities involved; r) to draft the set of rules for the connection of users to the electric networks of public interest, that are to be approved by Government decision; s) to inform the relevant ministry about its own activity through annual reports which are to be published; (3) In exercising its duties, A.N.R.E cooperates with the Competition Council, with the National Authority for Consumer Protection, with the ministries and other interested specialized central and local public authorities, with electric power consumer associations and with specific power sector service provider economic entities, with professional associations in the electric and thermal power sector, with owners associations and trade unions associations. Electrification of localities Art. 12. (1) Electrification of localities shall be done with funds from the local budgets, from the state budget or from other legally constituted funds. (2) Local public authorities and ministries involved shall be responsible for the implementation of electrification projects and programs and for their improvement and expansion. CHAPTER III Authorizations, Licenses and Concessions Section 1 Authorizations and licenses Activities subject to the authorization regime Art. 13. (1) Establishment of new power facilities as well as upgrading of the existent ones shall be made based on an establishment authorization granted in accordance with the legal provisions in force. (2) Production, transport, system service, distribution and supply of electric power as well as the activities of electric power market participants and system technological services supply shall be carried out based on licenses granted under the conditions of the current law. (3). Any power sector activity carried out without an authorization or license shall be sanctioned according to the law.

Authorization regime Art. 14 (1) In order to receive an authorization the applicant shall submit an application to the competent authority. (2) The applicant shall attach to the application form all the papers and documents in proof for the applicants ability to meet the economic, financial, technical and professional conditions set for different categories of power facilities and specific activities in the field. (3) A Romanian legal person applicant needs to have the headquarters in Romania. A foreign legal person applicant needs to establish and maintain a secondary headquarters in Romania, under the conditions of the law, throughout the duration of the authorization. (4) Applicants under legal reorganization or bankruptcy procedure and those for whom a license or authorization has been withdrawn throughout a period of five years prior to the application registration date, can not be granted authorizations. (5) The procedure for granting authorizations/licenses, terms, tariffs and granting conditions consisting in: criteria, authority limits, certifications, approvals, guarantees and others, differentiated according to facility categories and activities subject to authorizations, shall be established by a regulation drafted by the competent authority and approved by Government decision. (6) Refusal to grant an authorization or license, failure to answer within the deadline and any other solution of the competent authority considered illegal and damaging by the applicant can be legally attacked in the Administrative Litigation Division within the Bucharest Court of Appeal, according to the law. Categories of authorizations and licenses Art. 15. The competent authority grants: 1. Establishment authorizations for: a) establishment of new power facilities for the generation of electric power and co-generated thermal power or for upgrading the existent technologies that have a higher power than 10MW; b) establishment of electric power transport lines and stations or upgrading of the existent ones; c) creation or upgrading of electric networks with a nominal line tension of or higher than 110kV.

2. Licenses for: a) commercial exploitation of electric power or cogeneration thermal power generation facilities; b) c) d) e) f) g) commercial exploitation of electric power transport facilities; commercial exploitation of electric power distribution facilities; electric power market operator activity; system service supply activity; electric power supplying activities; technological system services supply activity. Rights and obligations resulting from establishment authorization and licenses Art. 16. (1) Power facilities construction or upgrading works for which authorizations are granted as well as the activities and services for which licenses are granted, are of public interest, with the exception of those exclusively designed for meeting the authorization or license holders own needs. (2) According to the law, throughout the construction and respectively functioning duration of the power facilities, the authorization holders and license holders benefit, under the terms of the law, from the following rights over the lands and assets in public property and in the private property of some natural or legal persons and over the activities carried out by natural or legal persons in the vicinity of the power facility: a) the right to use the land for the execution of the works needed for the construction or upgrading of a power facility, which represents the object of authorization; b) the right to use the land for ensuring a proper functioning of the power facility representing the object of the establishment authorization, for the technological checks, repairs and necessary interventions; c) underground, surface or air trespassing right for installing, electric networks or other equipments related to the power facility and for the access to their location, under the conditions of the law; d) the right to obtain the restriction or suspension of some activities that might endanger persons or assets; e) the right of access to public utilities. (3) The public utility is the object of the rights to use and trespass and their legal, nature and content is stipulated in art. 18 and shall be exercised throughout the existence of a power facility or,

temporarily during the upgrading, repairing, technical checking of a functioning power facility or during emergency interventions. (4) The rights to use and trespass over the properties affected by power facilities shall be exercised free of charge throughout the existence of power facilities. If damages are produced to owners from the vicinity of power facilities during the interventions for upgrading, repairs, technical checks and emergencies, license holders shall pay damage compensations under the conditions of the present law. (5) Land owners and activity developers affected by authorization and license holders exercising the rights stipulated at paragraph (2) shall receive damage compensations for the losses suffered. When calculating the damage compensations the following shall be taken into consideration: the land surface affected by the works; the types of cultures and plantations as well as the adjustments affected by the power facility works; the activities that have been restricted as a consequence of the power facility works.

The amount of the compensation payment shall be established by agreement between the parties or, in case, the parties fail to reach an agreement, by court decision. (6). The right to use and trespass over lands within private poverty, restriction or closing of some activities stipulated at paragraph (2) shall be established and exercised according to the equity principle, to the property right legal regime and the legislation in force. (7) Holders of authorizations and licenses are entitled to carry out vegetation clearing or modeling cutting for the creation and observation of the minimum requested distance from the electric networks only with specialized personnel and in compliance with the legal stipulations in force. (8) Authorization and license holders that are the beneficiaries of the rights to use and trespass over public or private property of the state and of the local authorities, shall be exempt from the payment of taxes and other liabilities imposed by central and local government authorities. Obligations resulting from establishment authorizations and licenses Art. 17. (1) The holder of an establishment authorization has the following obligations: a) to set and apply measures for the protection of persons, assets and environment throughout the duration of the works;

b)

to obtain all the approvals, endorsements and certificates stipulated by the law for the accomplishment of the authorized objective.

(2) Within the validity of licenses, license holders have the following obligations: a) to observe the conditions accompanying the license; b) to keep separate books for each activity that represents the object of the license granted by the competent authority for horizontally or vertically integrated economic entities in the electric power sector, to do the same in the case of separate companies and to draft financial reports in the format requested by the competent authority; c) to present and maintain financial guarantees that allow them to continue their activity and to ensure the service continuity; d) to provide the competent authority with all the information needed for the proper unfolding of the authoritys activity. Rights and obligations of establishment authorizations holders and licenses holders over the property of third parties Art. 18. (1) The right to use the land for power facility construction or upgrading works extends over the period necessary for the works to be completed. In exercising this right, according to the law, the holder can: a) store materials, equipments, machineries and installations on the private property of third parties; b) eliminate existent cultures or plantations, constructions or other adjustments or restrict them to the extent strictly needed for the authorized facility works to be completed, according to the law; c) remove materials and catch water under the conditions stipulated by the legislation in force; d) install equipments and machineries and operate them, build offices and construction site housing; e) suspend or restrict activities of the owner to an extent strictly needed for the execution of the authorized facility works. (2) The right to use stipulated at paragraph (1) comes to an end before the duration established for the completion of works expires or before the term, in case of an anticipate completion of works or on the date of their suspension and on the date the authorization is given up. Every situation of this kind shall be immediately notified to the owner. (3) The right to use over the land for ensuring a proper functioning of the power facility extends over the entire duration of the facilitys functioning and shall be exercised as many times as needed for ensuring the proper functioning of the facility. In exercising this right, the license holder can:

a) store materials, equipments, machineries and installations for maintenance, technical checks, repairs and interventions necessary for a proper functioning of the facility; b) install machineries and operate them; c) eliminate or reduce cultures, plantations or other existent adjustments and restrict activities of the owner, to the extent to which it is necessary for the execution of the maintenance, repairs, technical check or intervention works for ensuring a proper functioning of the facility. (4) The license holder shall notify the owner of assets, lands or activities in writing about the fact that these could be affected as a result o the power facility works, with the exception of emergency cases when the owner shall be informed in the shortest time possible. (6) The right of underground, surface or air trespass includes the right of access and execution of works at the location of the power facility during the intervention for upgrading, repairs, technical checks and emergencies. (7) In order to avoid endangering persons, assets or activities unfolding in the area of works for constructing or upgrading power facilities or for checking or repair operations of a functioning facility, the holder of the authorization or license has the right to obtain the restriction or suspension of the activities developed by other persons in the vicinity of the power facility throughout the duration of the works. In this case, the affected persons shall be notified in writing about the date of inception and respectively finalization of the works. (8) When ceasing to exercise the rights stipulated at art 16 par. (2) the establishment authorization holder and license holder shall make sure that the land is cleared and restored to its initial state. (9) The right of access to public utilities stipulated at article 16 paragraph (2) letter e) needs to be exercised by the authorization or license holder reasonably and in good faith, without hindering the access of other persons to the respective public utilities. Protection and safety areas Art. 19 - (1) Protection and safety areas shall be established for the protection and normal operation of the power capacities and of their annexes, as well as for avoiding endangering the persons, assets and environment. (2) The protection and safety areas shall be determined for each capacity, according to the technical norms elaborated by the competent authority. (3) A legal right of trespassing shall be established on the plots of land owned by third parties that are included in protection and safety areas.

Expropriation Art. 20 (1) The land necessary in order for the power capacity to be set up and to operate is either a private property of a third party, or of the holder of the authorization, or a public property. (2) If the plot of land necessary in order for the power capacity to be set up and to operate is the private property of a third party, the applicant for the establishment authorization may either initiate the legal procedure of land expropriation, in case a public utility cause is invoked and obtain its concession, according to the law, during the life of the power capacity, or buy it. Modifying the authorizations and licenses Art. 21 Authorizations and licenses shall be modified in the event the circumstances or conditions existing as of the date of their grant change. Suspension and withdrawal of authorizations and licenses Art. 22 (1) In the event the holder of the establishment authorization, respectively of the license, fails to meet their legal obligations, as well as in the event they fail to observe the conditions, limitations, restrictions, interdictions or the tasks established by the authorization, respectively by the license, identified by the competent authority ex officio or upon the notice of third parties or upon notification by the holder, the competent authority shall proceed as it follows: a) in case the failure to meet or to observe the obligations is not imputable to the holder, it shall decide: in case the situation created is remediable, a term for compliance; in case the situation created is irremediable, the withdrawal of the authorization, respectively of the license; b) in case the failure to meet or to observe the obligations is imputable to the holder, it shall decide: in case the situation created is remediable, the suspension of the authorization, respectively of the license, for a set period in order to remedy the situation created and to be in line with the authorization, respectively with the license; in case the situation created is irremediable, the withdrawal of the authorization, respectively of the license. (2) In all cases provided by paragraph (1), the damaged persons may sue the holder in court in order to recover the damage created. (3) The competent authority shall suspend the establishment authorization, respectively the license of the holder, in case the legal reorganization or bankruptcy procedure starts against the holder.

(4) The competent authority shall withdraw the establishment authorization, respectively the license, in the event of holders disqualification, incapacity or bankruptcy, as well as upon the termination of the concession or of the rental of the power capacity or upon the sale of the capacity by the holder. Section 2 Concession Object of the concession and the concession granting authority Art. 23 (1) The assets in the public or private property of the state, the public activities and services of national interest in the field of electric power may be the object of a power concession. (2) The concession contract comes into force as of the date of its publication in the Official Gazette of Romania. (3) The conditions for the commercial operation of the assets in the public or private ownership of the state and for carrying out the activities or the public services shall be established in the concession contract concluded by the concession granting authority and approved according to the provisions herein. (4) The relevant ministry is the concession granting authority for the assets in the public or private property of the state or for the public activities or services of national interest. (5) The general framework regarding the legal regime of concession contracts, the procedures for granting concessions as well as the standard content of the tasks book shall be established by the granting authority and shall be approved by Government decision. CHAPTER IV Electric power Electric power market Art. 24 (1) The electric power market is made of the regulated market and of the competitive market, and the power transactions shall be wholesale or retail transactions. (2) The opening of the electric power market shall be made by gradually increasing the weight of the competitive market, according to the provisions of the power strategy and policy and shall be approved by Government decision. Participants on the electric power market Art. 25 (1) The participants on the electric power and the associated operational structures are: the producer, transport and system operator, self-producer, the market operator, distribution operator, supplier, eligible and captive consumer.

(2) The activities of generation, transportation and distribution may be carried out by distinct legal or natural persons. (3) The disputes on the electric power market shall be solved by an Arbitration Committee, which shall be organized and shall operate based on the regulations issued by the competent authority. (4) The members of the Arbitration Committee benefit of a session allowance equal to 5% of the basic salary of the ANRE president, without exceeding 10% of the same salary, over one month. Operation of the regulated electric power market Art. 26 (1) The regulated electric power and associate services market operates according to commercial contracts, with regulated prices, concluded between the participants on the electric power market. (2) On the regulated electric power and associated services market, the competent authority shall establish the quantities contracted in the wholesale transactions between producers and suppliers. The operation of electric power competitive market Art. 27 The electric power competitive market operates based on: a) bilateral contracts negotiated by electric power producers with suppliers; b) bilateral contracts negotiated by electric power suppliers with eligible consumers; c) electric power import and export contracts; d) transactions through auctions on the spot market; e) transactions of specific services. Transportation and distribution Art. 28 (1) The holder of the license and the consumer have regulated access to the electrical networks of public interest. The access to electrical networks of public interest represents a mandatory service, under regulated terms, that the transportation and system operator as well as the distribution operator have to meet. (2) The cases where the network operator does not have conditions to allow the supply of this service are exempted from the provisions of paragraph (1). In this case the refusal shall be justified. (3) The access tariff for the electrical networks of public interest shall be regulated. (4) The installation of direct electric lines and the access thereto shall be regulated by the competent authority. Generation of electric power

Art. 29 The generation of electric power and thermal power in cogeneration shall be performed by the holders of license, according to the terms hereof. Obligations of the generators Art. 30 The generators have the following main obligations: a) to provide the supplies of electric power, respectively of thermal power produced in cogeneration and the technological system services, observing the terms imposed by licenses, contractual clauses and regulations in force; b) to offer in non-discriminatory conditions the entire electric power available, as well as the technological system services; c) to maintain a fuel reserve at a sufficient level or, as the case may be, a sufficient water reserve, in order to carry out the obligations of continuous production and supply of electric power provided by regulations in force; d) to comply, from an operative standpoint, with the requirements of the transportation and system operator and to set up, as the case may be, its own levels of operative management. The rights of the generators Art. 31 The electric power producers have the following main rights: a) to access electrical networks of public interest, under the terms hereof. b) to obtain, according to the law, a passage way for their own electrical lines; c) to trade electric power and technological system services on the regulated and competitive market; d) to establish and maintain their own telecommunications system for the connection with their production capacities, with the consumers or with the levels of operative management. Electric power transportation Art. 32 (1) The transportation of electric power shall be done by the transportation and system operator, legal person license holder. (2) The electrical network for electric power transportation is in the public property of the state, including the land on which it is located.

Perspective Plan Art. 33 (1) The transportation and system operator has the obligation to draft perspective plans regarding the transportation, according to the current stage and the future evolution of power and resources consumption, including power imports and exports. The plans shall include the ways of financing and carrying out the investments regarding transport equipments, also taking into consideration the improvement and systematization of the land it crosses, observing the environment protection norms. (2) The plans provided at paragraph (1) are subject to endorsement by the competent authority and shall be approved by the relevant ministry. Transportation and system operator Art. 34 (1) The transportation and system operator provides the public transportation system for all users of electrical transportation networks, in non-discriminatory conditions, providing any applicant that meets the requirements hereof with access to those networks, observing the norms and performances provided by technical regulations in force. (2) The transportation and system operator is allowed to take part in the trading of electric power only within the limit of purchasing electric power in order to cover their own technological consumption. (3) The transportation and system operator shall provide the system service in non-discriminatory conditions for all SEN users, ensuring the operative management, in order to achieve the safe operation, stable frequency and tension, continuous supply to consumers and coordination of exchanges of electric power with other power systems. (4) The transportation and system operator shall carry out mainly the following activities: a) operates, upgrades, rehabilitates and develops: installations in electrical transportation networks, installations for measuring and metering the transfer of electric power through electrical transportation networks and to the interface with the users of electrical transportation networks that belong to them, IT and telecommunication installations in the electrical transportation networks related to SEN; b) provides the public transportation service and the transit of electric power on Romanias territory, according to the contracts concluded; c) analyzes and endorses the accomplishment of connection technical conditions by the users of electrical transportation networks, according to the provisions of technical regulations in force;

d)

provides the transmission of electric power measurement results to the market operator and the access of transportation service beneficiaries in order to check the measurement sets;

e)

carries out the operational planning and the operative management of SEN at the central and regional level based on their own prognosis according to legal regulations in force on the electric power market;

f)

authorizes the staff that carries out the operative management according to regulations in force;

g) h)

collects, records and archives statistical data regarding SEN operation; performs the exchange of information with interconnected operation partners and with other collaborators in the power field, observing U.C.T.E. regulations on information exchange protocols, reports, structure and database access procedures;

i)

qualifies the system services suppliers, based on their own procedure, approved by the competent authority;

j)

drafts and submits for approval to the competent authority the technical norms and specific regulations necessary for carrying out the operative management activity, after consultation with the participants on the electric power market;

k)

drafts, under the terms of the law, the plan for protecting the national power system from major perturbations;

l)

endorses the studies, programs and works regarding SEN development.

(5) In case of material emergency that jeopardizes the safety of SEN operation, the transportation and system operator may decide to use the water reserve outside the water storage exploitation programs, having the obligation to notify the competent water management authorities. (6) The transportation and system operator is not allowed to disclose commercial information obtained during its activity. (7) The expenses incurred for modifying the electric power transport equipments, following the connection of new users or the change of initial power characteristics of existing users, including for clearing certain location shall be entirely paid by the entity that generated the modification. Interdictions Art. 35 For the protection of transport equipment it is forbidden for natural or legal persons to: a) build any kind of constructions within the safety area of the installations without the endorsement of location from the transportation and system operator;

b) make diggings of any kind or set up plantations within the safety area of electrical transportation networks without the approval of the transportation and system operator; c) deposit materials on passage ways and in installations protection and safety areas; d) throw objects of any kind on electrical transportation networks or to intervene on them, in any other way; e) deteriorate constructions, fences or identification and warning labels related to transport equipment. Electric power market operator Art. 36 (1) The electric power market operator is the legal person, license holder, that organizes and manages the market, which carries out the following main activities: a) provides the takeover and processing of electric power sale-purchase and services offers from market participants, according to regulations in force; b) establishes, on a daily basis, the electric power quantities traded for each programming interval; c) establishes the collection rights and payment obligations of market participants and provides the functioning of specific payment settlement mechanisms; d) collects and makes public, according to the regulations of the competent authority, statistical data on the market, including short term forecasts on how the demand is covered by the supply; e) determines and makes public, according to the regulations of the competent authority, the prices of the market on intervals, programming basis, as well as other money obligations relevant for the market; f) suspends the market upon its own initiative or upon the request of the transportation and system operator, in the situations provided by regulations in force; g) coordinates the activity of forecasting the demand of electric power for the operational planning and the operative programming of SEN; h) establishes the hours intervals needed for setting the tariffs, based on the methodology drafted by the competent authority. (2) The electric power market operator is not allowed to disclose information on transactions obtained during its activity. (3) The participants to the electric power market have the obligation to provide information on the establishment of consumption forecast to the electric power market operator.

Electric power distribution Art. 37 (1) Electric power distribution shall be carried out by the distribution operator, legal person, license holder. (2) The distribution operator shall provide the public service to all electrical distribution network users, in non-discriminatory conditions, providing distribution networks access to all applicants that meet the requirements hereof, observing the performance norms and standards provided by technical regulations in force. (3) The electrical distribution networks are delimited from the production installations or from the electrical transportation networks or from users installations in the points of patrimonial delimitation. (4) The plots of land on which the electrical distribution networks existing as of the coming into force of the law herein are located are and shall remain in the public property of the state. (5) The plots of land for which the distribution operator, license holder, obtained the right of ownership, according to the law, are exempted from the provisions of art. (4). (6) The electrical distribution networks shall be developed with the observance of urban plans, of the right property, environment protection, persons health and lives and energy saving, according to technical and safety norms included in the technical regulations in force. (7) The expenses for modifying the electric power distribution installation, following the connection of new users or following the change of initial power characteristics of existing users, including for clearing certain location, shall be entirely paid by the entity that generated the modification. Distribution operator Art. 38 (1) The distribution operator shall have the following main attributions: a) operates, upgrades, rehabilitates and develops electrical distribution networks, observing the technical regulations in force; b) provides the transit of electric power through electrical distribution networks upon the request and by informing the transportation and system operator, for those areas of the country where there is not enough capacity through its networks, in order to evacuate power from power plants, respectively cogeneration power plants, in order to connect to the electric power system of a neighboring country, under an existing bilateral agreement in this respect, in the event of SEN incidents and in the case of carrying out operation and maintenance works or new works in the transportation networks, that make the transportation networks in the area temporary unavailable;

c) performs works for the development of electrical distribution networks through optimum development programs, based on perspective studies, upon consultation, as the case may be, with the transportation operator and through specific upgrading programs for installations; d) provides the operative management according to the distribution license; e) provides users access, in technical connection conditions, and provides information on the electrical distribution network, observing their confidentiality, according to regulations approved by the competent authority; f) submits for approval to the transportation and system operator the program of repairs and maintenance works planned in installations with line nominal tension of 110 kV; g) monitors the safety in operating the electrical distribution networks, as well as the performance indicators of the distribution service. (2) In order to carry out the attributions provided by paragraph (1), the distribution system operator may interrupt the operation of installations for the time strictly necessary for performing the planned repairs and maintenance works, having previously notified the electrical distribution network users. Interdictions Art. 39 - For the protection of electrical distribution networks it is forbidden for natural or legal persons to: a) build any kind of constructions within the safety area of distribution networks without the endorsement of location from the distribution operator; b) make diggings of any kind or set up plantations within the safety area of electrical distribution networks without the approval of the distribution operator; c) deposit materials on passage ways and in installations protection and safety areas; d) throw objects of any kind on electrical transportation networks or to intervene on them, in any other way; e) deteriorate constructions, fences or identification and warning labels related to electrical distribution networks.

Isolated electric power systems Art. 40 - (1) The localities which, for technical or economic reasons, are not connected to SEN networks, may be supplied with electric power through isolated electric power systems. (2) The consumers supplied by isolated electric power systems shall pay the same price for the consumed power as the captive consumers supplied by SEN. (3) The competent authority shall establish the local price and minimum conditions regarding the continuity and quality of the supply service. (4) In the event the local price does not cover the costs related to the supply from a electrical network of public interest, the difference shall be covered from the state budget. Electric power supply Art. 41 (1) The electric power supply is the activity whereby the legal person license holder trades power to their customers. A contract shall be concluded for the supply of electric power, according to the electric power supply regulation. (2) The electric power provided to the customer shall be invoiced by the supplier based on values recorded by metering equipments. (3) The supplier that is also a distribution operator has the obligation to conclude supply contracts with captive consumers and with those accredited as eligible that do not exercise this right. (4) It is forbidden to consume electric power without having concluded a supply contract. Contracting obligation Art. 42 (1) Upon the written request of the consumer regarding the supply of electric power to new consumers or the granting of additional power for existing consumers, the supplier that is also a distribution operator has the obligation to communicate in writing, within no more than 30 days, the technical and economic conditions, in view of meeting the request, and to cooperate with their customers when establishing the most advantageous supply solutions. Failure to communicate in due time the conditions presumes the acceptance of the request. (2) The supply contract shall be concluded for an undetermined duration or for a duration agreed by the parties. (3) The consumer may terminate at any time the supply contract, with a prior notification of 7 days for captive consumers, respectively of 30 days for eligible consumers. (4) The supplier is entitled to terminate the contract only in the event of fraudulent consumption, repeated failure to pay the bills or in other situations provided by the law.

Retransmission of power Art. 43 (1) The consumer can transmit or resell electric power to another consumer only with the approval of the supplier and distribution operator, according to the law herein. (2) The consumer, the legal person holding their own electrical distribution network whereby at least two sub-consumers are supplied, has the obligation to provide the regulated access to the network. To this end, the consumer may conclude a contract of power services with the subconsumers, according to the standard contract established by the competent authority. The subconsumer shall pay the power supplied by the consumer according to the methodology established by the competent authority. (3) The consumer may interrupt the supply of electric power to the sub-consumer only if the latter breaches the obligations undertaken in the contract. Limitation or interruption of supply Art. 44 (1) The distribution operator is entitled to interrupt the supply of electric power in the following situations: a) when peoples life, health or the integrity of tangible assets are endangered; b) prevention or limitation of emergency extension in power equipments, in electrical network areas or at the level of the entire SEN; c) for the execution of operations and works that cannot be carried out without interruptions. (2) The distribution operator has the obligation to notify the consumers affected by the planned interruptions, through the supplier, in the way established in the contract and to communicate the planned duration for the interruptions necessary for the execution of some maintenance and repair works. (3) The distribution operator shall be liable for damages created to consumers of its own fault. (4) The supply regulation establishes the conditions in which, in exceptional cases, the electric power supply to the consumers may be limited or interrupted. Payment of supplied power Art. 45 According to the provisions of the contract, the consumer has the obligation to pay the value of the consumed electric power. Liabilities of the supplier Art. 46 (1) The supplier is liable for all damages created to the consumer of its fault, according to the conditions established in the supply contract.

(2) The supplier is entitled to recover the damages created to consumers from the distribution operator, from the transport and system operator or from the generator, proven to have been created by the fault of any of the them. Liabilities of the consumer Art. 46 (1) The consumer is liable for the damages created to the supplier of its own fault, according to the conditions established in the supply contract. (2) Consumers failure to observe the electric power supply contract entails the payment of the value of electric power consumed, respectively evaluated, and, as the case may be, the following consequences: a) b) c) penalties; temporary cease of electric power supply; disconnection from the electrical network.

(3) In the case of fraudulent consumption, the consumer shall be disconnected from the electrical network and shall have to pay the value of the electric power consumed and the costs related to the disconnection, evaluated according to technical norms in force. The rights of the consumer Art. 48 Consumers have the following rights: a) to have access to electrical networks of public interest and to consume electric power according to the provisions of the supply contract; b) to request the supplier to modify and supplement the supply contract and the annexes thereto or to initiate addenda to contracts, when new elements appear or when they consider necessary to detail or supplement certain contractual clauses; c) to have access to measurement settlement sets; d) to connect sub-consumers to their own installations, with the written approval of the network operator or of the supplier, according to the law; e) to request the supplier to take measures in order to remedy the defects and malfunctions occurring in electrical networks; f) to request indemnification from the supplier, according to the contractual provisions, when damages occur of suppliers fault or in case power quality indicators are not met.

Measurement of electric power Art. 49 - (1) Electric power traded on the electric power market shall be measured by measurement sets, according to the measurement code prepared by the competent authority. (2) Electric power measurement sets shall be provided, in view of settlement, as the case may be, by: transportation and system operator, for the provision of measurement on the wholesale market; producers, for the provision of measurement in undispatchable sets for the supplies in the distribution network; distribution operator, for the provision of measurements on the retail market. (3) The electrical network operator has the obligation to allow the users to install, additionally, measurement sets, upon their request and on their own expenses. CHAPTER V Renewable power sources Definition of sources Art. 50 Under the terms of the law herein, the following sources are defined as renewable power sources: a) wind power; b) solar power; c) waves and tide power; d) geothermal power; e) hydroelectric power; f) power contained in the biodegradable fraction of products, waste and residues from agriculture (including vegetal substances and residues of animal origin), forestry and related industries, as well as the biodegradable fraction of industrial and communal, town and city waste, referred to as biomass; g) power contained in the fermenting waste gas, also referred to as waste dump gas; h) power contained in the fermenting sediment gas in the used waters treatment installations; i) power contained in secondary gas products, obtained through fermentation of organic residual materials, forming the category of gas fuel, referred to as biogas;

j) power contained in liquid products obtained from the distillation of fermented organic material, forming the category of liquid fuel, referred to as alcohol fuel; k) the power obtained from other renewable sources, not exploited so far. Technical conditions for use and sale Art. 51 The competent authority shall regulate the technical conditions for accessing the electrical network and those for trading electric power and thermal power produced in cogeneration, from renewable sources. Facilities Art. 52 The development and use of renewable sources of power shall be stimulated based on technical and economic in-depth studies. Facilities shall be granted based on Government decision, upon the proposal of the competent authority. CHAPTER VI Prices and tariffs Types of prices and tariffs. Their substantiation Art. 53 In the field of electric power whose production is traded on the domestic market, the following prices and tariffs shall be applied: a) prices resulting from the market competitive mechanisms; b) regulated prices for thermal power produced in cogeneration; c) regulated tariffs for electric power transportation and distribution services, considered as activities of natural monopoly; d) regulated tariffs for the supply of electric power to captive consumers; e) regulated tariffs for the provision of technological system services, until the creation of a competitive market; f) regulated tariffs for the transformation and interconnection services; g) regulated tariffs for connection to the network; h) tariffs charged by the transportation and system operator and by the electric power market operator for the services provided to the market participants.

Prices regulation Art. 54 (1) The competent authority may suggest to the relevant ministry to regulate a price used by the companies in the electric power sector if it is considered that the economic entities uses a dominant position abusively. (2) Declaring a price as being regulated shall be made by Government decision, initiated by the relevant ministry, for limited periods, with the endorsement of the Competition Council. Tariffs regulation Art. 55 The tariffs for captive consumers of electric power shall be regulated by the competent authority and are the same for the entire territory of the country. Prices and tariffs regulation methodologies Art. 56 (1) The regulated prices and tariffs shall be established based on the methodologies approved and published by the competent authority. When computing the regulated prices and tariffs, the justified costs of production, transportation, distribution and supply of electric and thermal power, the development and environment protection costs, as well as a reasonable profit share shall be taken into consideration. (2) Prices and tariffs regulation methodologies and the possible subsequent changes shall be approved by the competent authority, after informing and consulting the line ministry and the involved companies in the sector. Recording costs and incomes Art. 57 Economic entities, license holders in the electric and thermal power sector that charge regulated prices and tariffs have the obligation to provide to the competent authority with: a) the costs and incomes obtained separately from activities that are the object of licenses granted in the structure established by the competent authority; b) the method for allotting the assets, liabilities, expenses and incomes taken into account when accounting statements are drafted, according to art. 17, paragraph (2), letter b). The principles for substantiating the regulated prices and tariffs proposals Art. 58 (1) The regulated prices and tariffs proposals for the electric and thermal power shall be drafted by the economic entities in the electric power sector, observing the methodologies issued by the competent authority and shall be communicated to the latter, together with the substantiation in the established format.

(2) The economic entities in the electric energy sector shall send to the competent authority all necessary data used in the process of substantiating the request and shall provide the access to data of the representatives appointed by the competent authority. (3) The order approving the regulated prices and tariffs for electric power, applicable to captive consumers and to activities having a natural monopoly character, shall be published in the Official Gazette of Romania, Part I. The order shall contain their enforcement date. (4) The prices on the spot market shall be made public on a daily basis, by the electric power market operator. (5) The principles based on which the regulated prices and tariffs for electric and thermal power are established take into account the following: a) b) to contribute to the efficient use of electric power; to be differentiated on categories of consumers, depending on the power behavior and not on the nature of the activity, allowing them to select the type of price/tariff that is most favorable to them, out of those charged by the supplier; c) for electric power consumers, other than the domestic ones, with a power higher or equal to 30 kW, the tariff both for the electric and for the thermal power should have a binomial structure, respectively a price for the output and a price for power; d) to stimulate the electric power consumers in redistributing the consumption in the peak hours of the SEN; e) to provide the consumer interests protection and the quality of services.

(6) It is forbidden to subsidize the consumers through electric and thermal power tariffs or to recover the costs corresponding to the service provided to a certain category of consumers, through the tariffs charged to other categories of consumers. Interdiction to subsidize the combined production of electric and thermal power Art. 59 The companies that produce combined electric and thermal power and trade at least one of them shall distribute the costs to the two forms of power, according to the regulations approved by the competent authority. It is forbidden to cross subsidize the two forms of power. Related services Art. 60 The services provided to third parties by economic entities producing hydroelectric power and that have embankment, dams and storage reservoirs under administration, concession or rental, shall be made based on contracts concluded with the beneficiaries.

CHAPTER VII Infraction and contravention Liabilities Art. 61 The violation of the provisions hereof entails, as the case may be, criminal, contravention or civil liability. Infractions Art. 62 (1) Stealing electric power is an infraction of theft and shall be punished according to the provisions of the Criminal Code. (2) The deterioration, modification with no right or the blockage of electric power measurement equipment operation represent infractions and shall be punished with imprisonment for 6 months to 4 years. (3) The deterioration, modification with no right or the theft of power installations components are infractions and shall be punished with imprisonment for one to 5 years. (4) The execution or use of clandestine installations, in order to directly connect to the network or to avoid measurement equipment represent infractions and shall be punished with imprisonment for one to 5 years. (5) In case the infractions provided by paragraphs (2) (4) are committed by an employee of a license holder, the special minimum and maximum limit of the punishment shall be increased by one year. (6) The attempt to the infractions provided by paragraphs (2) (4) shall be punished. Contravention Art. 63 (1) The following deeds are considered contravention: a) The breach of technical and commercial regulations by the competent authority, as well as the failure to observe the conditions associated to licenses and authorizations; b) c) Influencing the free formation of prices on the electric power market; the unjustified refusal of producers to observe the obligations assigned to them according to art. 30; d) e) failure to observe the operative decisions of the transportation and system operator; exploitation of installations that do not observe the technical safety conditions that can create damages to natural persons, property and/or environment;

f)

the unreasonable refusal of the access of any applicant to the transportation and distribution networks;

g)

reselling electric power to a captive consumer without suppliers and distribution operators agreement;

h)

the refusal to allow the checks and inspections provided by regulations or decided by the competent authority, as well as obstructing it in meeting its attributions;

i)

failure to produce the data and information required by the competent authority or the inaccurate and incomplete provision of data and information necessary for the competent authority to carry out its activity, as well as the failure to observe the measures decided by the said authority;

j) k)

consumers refusal to allow access to measurement sets; failure to observe the obligations of production and/or offering to the electric power market operator according to the legal provisions, without the confirmation of the transportation and system operator;

l)

any action of the transportation and system operator meant to unreasonable alter the merit order of production capacities;

m) the provision of incomplete or erroneous information to external partners of SEN by the transportation and system operator; n) o) the transmission of confidential data regarding commercial operations; unreasonable delay in connecting new consumers or in reconnecting them after disconnection, as well as the proposal of certain connection solutions, other than the technically optimal ones, with minimum costs, according to normative acts in force and to regulations established by the competent authority; p) execution of diggings or works of any kind in the equipment protection areas, without the prior consent of their holder; q) r) s) failure to observe the performance standards established by the regulations in force; failure to observe the measures for the efficient use of sector resources; the interdiction by natural or legal persons of network operators access for carrying out upgrading, repair works, breakdown interventions and for land clearing works or for modeling cutting in order to create and maintain the prescribed distance to electrical networks;

) charging prices or tariffs for regulated activities without the approval of the competent authority. (2) Contravention stipulated by paragraph (1) letter a) i) shall be sanctioned with fine from ROL 1,000,000 to ROL 5,000,000 for natural persons and with fine from ROL 100,000,000 to ROL 500,000,000 for legal persons, and contravention stipulated by paragraph (1) letters j) ) with fine from ROL 1,000,000 to ROL 2,000,000 for natural persons, and with fine from ROL 100,000,000 to ROL 200,000,000 for legal persons. (3) Identification of contravention cases and application of sanctions shall be made by: a) the mandated representatives of the competent authority for contravention stipulated by paragraph (1), letters a), b), d), h), i), k), l), m), n), o), r) and ); b) the mandated representatives of local councils for contravention stipulated by paragraph (10, letters c), e), f), g), p), q), s). (4) Identification of contravention stipulated by paragraph (1), letters e), g), p) and s) can also be made, apart from persons provided by paragraph (3), by mandated representatives of license holders, the said representatives having the obligation to notify the bodies entitled to apply the sanctions, according to the provisions hereof. Legal regime of contravention Art. 64 The provisions of Government Ordinance no. 2/2001 regarding the legal regime of contraventions, approved with modifications and supplements by Law no. 180/2002, as subsequently modified, shall be applied to the contravention listed under art. 63. Establishment of contravention Art. 65 (1) In view of establishing the contravention cases contemplated by art. 63, paragraph (1), the agents provided by art. 63 paragraph (3) and (4) are allowed to access, according to the law, buildings, rooms, installations and any other location, up to power receptors, and are entitled to check the installations, as well as to make measurements and determinations. The owners and those that operate such buildings, locations or installations have the obligation to put at the agents disposal the documents and acts specific to their activity. (2) Police bodies have the obligation to grant support to agents, upon request.

CHAPTER VIII Transitory and final provisions Coming into force Art. 66 (1) The law herein shall come into force within 30 days after the date of its publication in the Official Gazette of Romania, Part I. (2) As of the coming into force of the law herein the following Ordinances are abrogated: a) Government Emergency Ordinance no. 63/1998 on electric and thermal power, published in the Official Gazette of Romania, Part I, no. 519 of December 30, 1998, as subsequently modified; b) Government Emergency Ordinance no. 29/1998 on the establishment, organization and operation of National Power Sector Regulatory Authority A.N.R.E., approved with modifications by Law no. 99/2000, as subsequently modified and supplemented. (3) Within 6 months from the coming into force of the law herein, the relevant ministry and the competent authority shall prepare the regulations to be approved by Government decisions. This draft law was approved by the Chamber of Deputies in the session on May 6, 2003, observing the provisions of article 74, paragraph (1) of Romanian Constitution.

SPEAKER OF THE CHAMBER OF DEPUTIES Valer Dorneanu signed illegibly