1 Approved Terms of Reference for HAPUA Working Group No.5-ESI Services Project 6 Bilateral Contract Benchmarking

2 1. Objectives 1.1To establish the criteria for the bilateral contract benchmarking. 1.2To benchmark the bilateral contracts between HAPUA member countries. 1.3To conduct the relevant studies related to commercial issues, including, but not limited to, Tax, Regulation and Tariff system in support of the cross-border electricity trade. 1.4To develop bilateral contract model(s) based on the experiences and examples of the past bilateral contracts, and to recommend for further improvement, (if needed).

3 2. Scope of Work 2.1Initially, the Project 6 will conduct a benchmarking study of bilateral contracts between member countries of Subsystem A. 2.2At the later stage, this study could then be replicated to Subsystem B and Subsystem C upon the directive of the HAPUA Council.

4 3. Deliverables 3.1A Final Report on the Benchmarking Study of the Bilateral Contracts between HAPUA member countries of Subsystem A, including recommendations for further improvement, (if needed); and 3.2Bilateral Contract Model(s).

5 4. Project Leader Mr. Chuchwal Nonthaleeruk Director, Power Purchase Agreement Division Electricity Generating Authority of Thailand (EGAT) THAILAND

6 5. Project Members 5.1Project 6 is open to all HAPUA member countries. 5.2Subsystem A member countries are encouraged to take part. 5.2Each member country shall designate one (1) representative as a member and other participants, if any, as observers. 5.3Representatives are preferably personnel responsible for developing and/or managing the power purchase and sale contracts. 5.4Nomination of representatives and participants is required by December 2008.

7 6. Host and Venue of Meeting 6.1The first meeting of Project 6 shall be organized by EGAT in Thailand. 6.2Host and venue of additional meeting(s) shall be rotated according to alphabetical order of the Project 6 member countries, or as agreed by the Project members.

8 7. Time Line 7.1To start the Project implementation in January To report the progress to HAPUA Council in the next meeting tentatively scheduled in May/June To complete the Project (Phase I) by end of 2009.

9 8. Confidentiality 8.1Any information or data arising during the study shall be kept in strict confidence. 8.2Confidential information or data shall not be disclosed to third parties without prior written consent from all members. 8.3Confidentiality of the contracts may be subjected to policy and governing rules of each member country. Any confidential issues may be escalated to the higher level committees. 8.4Those data not available due to the confidentiality shall be recorded for further reference.

10 9. Project Action Plan (9/1) DescriptionDateResponsibility 1. Internal Study on Criteria and Model(s) of Bilateral Contracts for Benchmarking Jan – Feb 09WG5 Project 6 Leader and Members 2. The 1 st HAPUA WG5 Project 6 Meeting - Presentation on Criteria and Model(s) of Bilateral Contract - Discussion and Model Benchmarking Feb 09WG5 Project 6 Leader and Members 3. Meeting Summary for Reporting to HAPUA WG5End of Feb 09WG5 Project 6 Leader 4.Development of the 1 st Draft of Bilateral Contract Model(s) for Subsystem A Mar 09WG5 Project 6 Members (to be initiated by Project 6 Leader) 5.Circulation of the 1 st Draft of Bilateral Contract Model(s) for Comments End of Mar 09WG5 Project 6 Leader 6.Tentative Joint Meeting with HAPUA WG5 Meeting and 2 nd HAPUA WG5 Project 6 Meeting Apr–May 09WG5 Project 6 Members

11 9. Project Action Plan (9/2) DescriptionDateResponsibility 7. Progress Report to HAPUA Council MeetingJun 09WG5 Project 6 Leader 8. Development of the 2 nd Draft of Bilateral Contract Model(s) as Commented Jul – Aug 09WG5 Project 6 Members (to be initiated by Project 6 Leader) 9.Circulation of the 2 nd Draft of Bilateral Contract Model(s) for Comments End of Aug 09WG5 Project 6 Leader 10.The Final HAPUA WG5 Project 6 Meeting - Discussion on the 2 nd Draft Bilateral Contract Model(s) Sept 09WG5 Project 6 Leader and Members 11.Development of the Final Draft of Bilateral Contract Model(s) as Commented Oct – Nov 09WG5 Project 6 Members (to be initiated by Project 6 Leader) 12.Submission of the Final Report and Bilateral Contract Model(s) to HAPUAWG5 Dec 09WG5 Project 6 Leader

12 9. Project Action Plan (9/3)

13 Thank you

WC Meeting Decision & Advice  TOR for WG5 Project 6 was approved by the WC.  Updates on the project to be presented to the Council (around May 2009)  WC instructed WG5 to modify the Project 6 title and come up with a better term other than a benchmarking study of the existing bilateral arrangements concerning cross border/country interconnections. The project title should describe the salient points of the interconnection arrangement concerning tax, tariff, country regulations, etc. A suggested title would be: Models of Bilateral Interconnection Arrangement.  The adoption of Project 6 TOR template as reference for all future project TORs. Project name: Bilateral Interconnection Arrangement.

WC Meeting Decision & Advice (2)  As to the APGCC meeting, WG5 was instructed to:  Conduct the study and identify features of existing bilateral arrangements to be used later to Multilateral Arrangement for the APGCC.  Carry out study on bilateral basis first between Members countries of Subsystem A. Relevant studies related to Commercial Issues, Tax, Regulation, Tariff System and Social Impact are to be included in the study.  Provide various contractual models base on the experience and examples of past contracts between two countries and recommend for further improvement if needed. This study could then be replicated to other bilateral subsystem connections.  Prioritize the major issue on the commercial/regulation tax and tariff aspect of the interconnection which may impasse the study. 1.Need to clear with APGCC, It is for project 5.

Summary “Social impact” would be an issue of WG5 project 5. Report to WC. The project title is changed to “Bilateral Interconnection Arrangement”, which consist of report and Bilateral Interconnection Agreement. In the first step, WG5 Pro.6 will do only bilateral contract. Bilateral contract means contract for interconnection(s) between two countries.