(2022.12.26-ны өдрийн орчуулга)                  Unofficial translation

LAW OF MONGOLIA

February 1, 2001                                                                                      Ulaanbaatar city

ON ENERGY

CHAPTER ONE

GENERAL PROVISIONS

Article 1.The Purpose of the Law

1.1.The purpose of this Law is to regulate matters relating to energy generation, transmission, distribution, dispatching and supply activities, construction of energy facilities and energy consumption that involve utilization of energy resources.

Article 2.Legislation on Energy

2.1.Legislation on energy shall consist of this Law and other legal acts adopted in conformity with this Law.

2.2.Matters related to produce, supply, and distribute energy using renewable energy resource, shall be regulated by a separate legislation.

/This paragraph was added according to the Law of January 11, 2007/

2.3.Matters related to use nuclear power shall be regulated by the Nuclear Energy Law.

/This paragraph was added according to the Law of July 16, 2009/

2.4.Matters related to energy efficiency and conservation will be regulated by a separate law.

/This paragraph was added according to the Law of June 19, 2015/

2.5.If the international treaties to which Mongolia is a party, stipulates otherwise than the present law, the international treaties shall prevail.

/This paragraph was added according to the Law of December 9, 2011/

/The numbering of this paragraph was amended by the Law of June 19, 2015/

Article 3.Definitions of legal terms

3.1.The following terms used in this Law shall have the following meanings:

3.1.1."energy" shall mean energy resources and methane gas distributed to consumers through the grid network of electricity and heating produced for needs of consumers using the energy resources;

/This sub-paragraph was modified by the Law of June 19, 2015/

3.1.2."energy resources" shall mean all types of fuel, renewable and other resources that can be used for the purposes of producing electricity and heating;

3.1.3."fuel" shall mean all types of coal, slate, oil-slurry, oil, uranium and thorium- ore, ancillary products and concentrate thereof, biomass existing in the nature, other organic materials, and gas fuel those used for producing electricity and heating;

3.1.4."source of energy" shall mean facilities generating electricity and heating for consumer needs using energy resources;

3.1.5."main network/grid" shall mean co-operative of sources, transmission and distribution networks connected to each other providing electricity supply service;

/This sub-paragraph was modified by the Law of June 19, 2015/

3.1.6."main network code" shall mean procedures that regulate technical activities of components of the main network;

3.1.7."electricity transmission network" shall mean high voltage power lines and substations of 110 kV and higher generating main network for transmission of electricity, as well as other power lines and substations that are connected to the network, or technically and technologically required to be a part of this network;

/Addendum was made to this sub-paragraph by the Law of June 19, 2015/

3.1.8."electricity distribution network" shall mean power lines and substations of 110kV or less for distribution of electricity directly connecting from the source and substations of electricity transmission network to the consumer equipment;

/Addendum was made to this sub-paragraph by the Law of June 19, 2015/

3.1.9."energy facilities" shall mean energy source, transmission and distribution lines, and substations, and other facilities for technological purposes;

3.1.10."construction of energy facilities" shall mean having constructed by eligible entities of energy sources, transmission and distribution lines and substations; technical renovation, rehabilitation, repair and extension of basic technological equipment;

3.1.11."central heating supply" shall mean the activity of supplying more than 50 percent of the total consumption of a central settled area through a network from a source that produces combined heat and electricity or from a source that produces only heat;

3.1.12."central heating supply code" shall mean norms regulating technical operation of components of the central heating supply;

3.1.13."heat transmission network" shall mean heating lines and equipment from sources of energy to the heating distribution centers;

3.1.14."heat distribution network" shall mean heating distribution centers and heating lines and equipment from heating distribution centers to consumer equipment;

3.1.15."heating season" shall mean a period of time in the year determined on the basis of mean climatic indicators over years during which time it is necessary to provide heating to buildings and premises in order to ensure comfortable living and working conditions to humans;

3.1.16."supplier of energy" shall mean a legal entity, which holds a license to provide regulated or unregulated supply of energy;

3.1.17."regulated supply of energy" shall mean selling energy to consumers at tariffs (hereafter referred as "regulated tariffs) approved and published by the Energy Regulatory Commission specified in Article 8 of this Law ;

3.1.18."unregulated supply of energy" shall mean selling energy to consumers at contract prices;

3.1.19."consumer" shall mean a natural person or legal entity who is a party to the energy supply contract with the right to purchase energy;

3.1.20."consumer classes" shall mean classifying consumers depending on the terms of energy supply contract, quantity of energy consumption and time of use;

3.1.21."rule of business relations" shall mean standards that include terms and conditions of contracts between suppliers and consumers, including terms of level and quality of service, charges, and relations between license holders;

3.1.22."tariffs" shall mean prices approved and published by the Energy Regulatory Commission. These may include producer prices, supporting tariff, charges for dispatching, transmission, distribution and supply, as well as import prices or any one of these;

/Addendum was made to this sub-paragraph by the Law of June 19, 2015/

3.1.23."nuclear energy resource" shall mean nuclear fuel suitable for using as nuclear energy source in production of energy;

3.1.24."nuclear energy" shall mean energy produced for needs of consumers using nuclear energy resources;

3.1.25."source of nuclear energy" shall mean facilities producing energy for needs of consumers using nuclear energy resources;

3.1.26."dispatching regulation" shall mean planning and managing the daily operations of the main network by the license holder by balancing electricity and heat production and consumption by the license holder for dispatching regulation;

3.1.27."indexing" shall mean calculating and regulating the price and tariff of energy to be sold to the consumers in consideration of the actual changes in the main factors of energy production, transmission, distribution and supply expenses;

3.1.28."safety resources" shall mean fuel, fuel and lubricants, equipment, and preparation capability indispensable in order to mitigating losses incurred due to events of emergency and force majeure, ensuring safety of energy production and utilization;

/This sub-paragraph was amended by the Law of June 19, 2015/

3.1.29."category of consumers" shall mean categorizing consumers in order to setting the consumers' tariff based on characteristics of needs and expenses of energy supply;

3.1.30."rule of gas supply" shall mean a rule regulating the unified monitoring regulation of the components of methane gas supply and its technical operations;

/This sub-paragraph was added by the Law of June 19, 2015/

3.1.31."gas supply network" shall mean unified activities of planning, economy, management, and regulation including lines and equipment's for processing, purifying, storing, transporting, transmitting, and distributing methane gas;

/This sub-paragraph was added by the Law of June 19, 2015/

3.1.32."verification" shall mean the activity of specialized expert executing statement on whether the energy facilities, required feasibility study, technical and work layouts, techniques, technology, unified budget are consistent with the requirements in norms, rules, standards;

/This sub-paragraph was added by the Law of June 19, 2015/

3.1.33."independent energy producer" shall mean private sector and foreign invested energy producers to export energy, or supply energy at agreed price within the effective term of the agreement;

/This sub-paragraph was added by the Law of June 19, 2015/

3.1.34."energy sale and purchase agreement" shall mean agreement whereby the energy shall be purchased from the independent energy producer for long term of period.

/This sub-paragraph was added by the Law of June 19, 2015/

/This Article was modified by the Law of December 9, 2011/

CHAPTER TWO

POWERS OF STATE AUTHORITIES WITH REGARD TO ENERGY

Article 4.Powers of the State Great Khural

4.1.The State Great Khural shall define the state policies on energy and decide matters of construction sources of nuclear energy power.

Article 5.Powers of the Government

5.1.The Government shall exercise the following powers with regard to energy:

5.1.1.organize implementation of the state policy and legislation on energy;

5.1.2.establish the Energy Regulatory Commission, and approve its charter;

/This sub-paragraph was amended by the Law of December 9, 2011/

5.1.3.approve rules of energy consumption and protection of power lines and networks, and determine the boundaries of transmission networks;

/This sub-paragraph was amended by the Law of June 19, 2015/

5.1.4.constitute safety energy resources and source of funding, and approve the list of resources;

/This sub-paragraph was added by the Law of December 9, 2015/

5.1.5.develop documents of development, strategy and normative of energy, and establish research and analysis institution in charge of preparing calculation of the national balance of energy resources, and approve regulations on financing the expenses related to above operations;

/This sub-paragraph was added by the Law of December 9, 2011/

/This sub-paragraph was modified by the Law of June 19, 2015/

5.1.6.provide necessary support to an independent energy producer.

/This sub-paragraph was added by the Law of June 19, 2015/

Article 6.Powers of the State central administrative body

6.1.The State central administrative body in charge of energy matters shall exercise the following powers:

6.1.1.implement legislation and decisions of the Government on energy;

6.1.2.develop the state policies on use of energy and energy resources, importation and exportation of energy, construction of energy sources, lines and networks;

6.1.3.to approve regulations on establishing security reserves of fuel, equipment and spare parts to be used in generation of energy that need to be maintained by licensees;

/This sub-paragraph was invalidated by the Law of December 9, 2011/

6.1.4.approve regulations on energy supply during natural disasters, unforeseen and force majeure events;

6.1.5.approve rules of the main network, gas supply and central heating supply; rules and procedures for assembling, maintenance and utilization of energy facilities and equipment and their operational safety; to establish consumer classes;

/This sub-paragraph was amended by the Law of November 30, 2001, and addendum was made to this sub-paragraph by the Law of June 19, 2015/

6.1.6.resolve disputes connected with the issuance and revocation of licenses, and draw conclusions;

6.1.7.to approve methodology for setting prices of fuel to be used for energy generation and to review estimations; to give permission on licenses for importation and exportation of fuel for the purpose of generating energy for public use in cities, towns and other establishments;

/This sub-paragraph was amended by the Law of November 30, 2001/

/This sub-paragraph was invalidated by the Law of December 9, 2011/

6.1.8.get statistical information regarding energy utilization and production, prepare national balance of energy, approve documents of normative, and develop standards;

/This sub-paragraph was added by the Law of December 9, 2011/

/This sub-paragraph was amended by the Law of June 19, 2015/

6.1.9.approve a regulation of energy reserve evaluation jointly with related the state central administrative body, and ensure its implementation;

/This sub-paragraph was added by the Law of December 9, 2011/

6.1.10.develop human resource policy of the energy sector;

/This sub-paragraph was added by the Law of December 9, 2011/

6.1.11.determine commencing and ending dates of the heating season;.

/This sub-paragraph was added by the Law of December 9, 2011/

6.1.12.organize activities of conducting calculation, evaluation, and analysis necessary for developing the state policy with respect to using, importing, exporting energy and its resources, and constructing energy sources and lines and networks;

/This sub-paragraph was added by the Law of August 17, 2012/

/Addendum was made to this sub-paragraph by the Law of June 19, 2015/

6.1.13.organize implementation of projects, programs and measures to be implemented in energy sector;

/This sub-paragraph was added by the Law of August 17, 2012/

6.1.14.organize activities of verifying feasibility study of new energy sources and executing the verification;

/This sub-paragraph was added by the Law of August 17, 2012/

/This sub-paragraph was modified by the Law of June 19, 2015/

6.1.15.grant right to enter into energy sale and purchase agreement to relevant organization;

/This sub-paragraph was added by the Law of June 19, 2015/

6.1.16.conduct a research on uncustomary energy sources, and arrange activities of introducing new advanced techniques and technologies;

/This sub-paragraph was added by the Law of August 17, 2012/

/The numbering of this sub-paragraph was amended by the Law of June 19, 2015/

6.1.17.prepare proposal to decrees energy loss and increasing economical profit;

/This sub-paragraph was added by the Law of August 17, 2012/

/The numbering of this sub-paragraph was amended by the Law of June 19, 2015/

6.1.18.approve final destination and location of the connection and delivery of the gas to be supplied to gas supply network, and make a decision on entering into an agreement.

/This sub-paragraph was added by the Law of June 19, 2015/

6.2.The member of Government in charge of energy matters shall consult with the competent authority when appointing and releasing the management of wholly or partially state owned legal entities operating in the energy sector.

/This paragraph was modified by the Law of December 9, 2011/

Article 61./This Article was invalidated by the Law of August 17, 2012/

Article 7.Powers of Governors of provinces, soums, the capital city and district

/The title of this Article was amended by the Law of April 22, 2022/

7.1.Governors of provinces, soums, the capital city and districts shall organize implementation of legislation on energy and decisions issued by the authority in charge, in conformity with this legislation, develop a policy on energy supply in their respective territories; and implement the policy jointly with relevant authorities.

/This paragraph was amended by the Law of April 22, 2022/

7.2.Governors of provinces and the capital city shall set the starting and ending dates of the heating season adjusting to the regional climatic conditions.

/This paragraph was invalidated by the Law of June 19, 2015/

7.3.The governors shall take measures to evacuate buildings and facilities constructed within the protection strip of the energy linear network in the said territory and the families residing there, remove trees, bushes, shrubs, and take measures to prevent from such violations.

/This paragraph was added by the Law of December 9, 2011/

Article 8.The Energy Regulatory Commission

8.1.Energy Regulatory Commission /hereinafter referred to as "Regulatory Commission"/ shall have the functions to regulate the generation, transmission, distribution, dispatching and supply of energy, determining prices and tariffs, and implementing policy on energy reserving.

/Addendum was made to this paragraph by the Law of June 19, 2015/

8.2.The Regulatory Commission shall be governed by regulators with three full-time and two part-time members.

8.3.The Prime Minister shall appoint the chairman and two full-time regulators of the Regulatory Commission at the proposal of the member of the Government in charge of energy matters, and two part-time regulators at the proposal of Chamber of Trade and Commerce and Consumer Protection Association initially for 2, 4, and 6 years respectively, and thereafter appointment shall be made for 3 years. The terms of office can be extended once.

8.4.The regulator shall have a power of state energy inspectors.

8.5.Part-time board charged with advisory functions composed of representatives of equal numbers of consumers and license holders may be established under the Regulatory Commission.

8.6.The Regulatory Commission shall be financed by fees for issuance of the license and regulatory services provided to license holders.

/This sub-paragraph was amended by the Law of June 19, 2015/

8.7.The Regulatory Commission shall have annually audited and published its financial reports.

8.8.The Regulatory Commission shall have an executive office and the Chairman shall head the executive office. The Regulatory Commission shall appoint and release the Chairman.

8.9.The Regulatory Commission shall approve the procedures of executive office.

/This paragraph was modified by the Law of December 9, 2011/

Article 9.Powers of the Regulatory Commission

/The title of this Article was amended by the Law of December 9, 2011/

9.1.The Regulatory Commission shall exercise the following powers:

/This paragraph was amended by the Law of December 9, 2011/

9.1.1.to set requirements for obtaining licenses

/This sub-paragraph was invalidated by the Law of November 30, 2001/

9.1.2.issue, amend, suspend and revoke licenses in accordance with this Law;

9.1.3.set licensing terms and requirements for license holders and to monitor their implementation;

/This sub-paragraph was amended by the Law of June 19, 2015/

9.1.4.develop methodology to determine tariffs, define their structure, to review and approve tariffs of the license holders, to set sale price to the consumers, and to implement the indexing;

/This sub-paragraph was modified by the law of December 9, 2011/

9.1.5.establish a pricing and tariff system that enables supply of energy at the lowest possible cost and allows an adequate rate of return;

9.1.6.resolve disputes between license holders and those between license holders and consumers falling within its jurisdiction;

9.1.7.define levels of reliable supply of energy and service by suppliers to consumers according to the classes of consumers and monitor their implementation;

9.1.8.make decisions whether to permit changes in cases a licensed legal entity is to undergo restructuring, to renovate or change its facilities, lines, networks, equipment and other assets required for normal operation of licensed activities, to transfer ownership rights to such assets or to pledge in a way that such changes are likely to affect licensed activities;

9.1.9.establish a unified database of technical and economic information and information on licensed activities; to obtain relevant information from license holders;

9.1.10.register contracts made between unregulated licensed suppliers and consumers;

9.1.11.approve rules of business relations of license holders;

9.1.12.provide professional and methodological guidance to the aimag and the Capital city Regulatory Boards, and appoint and release the members consulting with the Governors of provinces and the capital city;

/Addendum was made to this sub-paragraph by the law of December 9, 2011/

9.1.13.approve regulations containing financial and technical conditions required for connection to the electricity and heating transmission and distribution networks for license holders and consumers in order to supply and obtain electricity and heating, and further connections of the other consumers;

/This sub-paragraph was modified by the Law of December 9, 2011/

9.1.14.approve method for determining the price of fuel to be used for energy production and review the calculation;

/This sub-paragraph was added by the Law of the December 9, 2011/

9.1.15.review the investment plan specified in sub-paragraph 25.1.9 hereof, and resolve issues related to repayment of the investment by means of tariff regulations;

/This sub-paragraph was added by the Law of December 9, 2011/

9.1.16.approve regulations for indexing energy price and tariff;

/This sub-paragraph was added by the Law of December 9, 2011/

9.1.17.submit to the Government the matters with respect to providing subsidies from the state budget to license holders related to the loss of energy prices in order to reduce the burden on consumers to an appropriate level;

/This sub-paragraph was added by the Law of December 9, 2011/

9.1.18.approve a method of calculating regulated service fees of energy and the amount of such service fees;

/This sub-paragraph was added by the Law of December 9, 2011/

/Addendum was made to this sub-paragraph by the Law of June 19, 2015/

9.1.19.determine direction and main principles to be followed for issuing licenses taking technically and economically beneficial and accurate terms as criteria;

/This sub-paragraph was added by the Law of June 19, 2015/

9.1.20.approve budget of the Regulatory Commission, report the work report and performance of the budget to the State central administrative body in charge of energy matters and license holders;

/This sub-paragraph was added by the Law of December 9, 2011/

/Title and numbering of this paragraph was amended by the Law of June 19, 2015/

9.1.21.approve a template of energy sale and purchase agreement to be entered into with independent energy producers, and register the agreement;

/This sub-paragraph was added by the Law of June 19, 2015/

9.1.22.verify the starting price of the agreement with independent energy producers;

/This sub-paragraph was added by the Law of June 19, 2015/

9.1.23.other rights and duties stated in the charter of Regulatory Commission.

/The numbering of this sub-paragraph was amended by the Law of December 9, 2011/

/The numbering of this paragraph was amended by the Law of June 19, 2015/

9.2.The Regulatory Commission shall consider the matters to be resolved at its Meeting of Board of Regulators. Decisions of the Meeting shall be in a form of resolution. License holders and consumers shall comply with the resolution.

/This paragraph was amended by laws of December 9, 2011 and June 19, 2015/

Article 10.The National Dispatching Center

10.1.The National Dispatching Center shall be a license holder for conducting regulation of energy importing, exporting though main network and energy dispatching.

/This paragraph was modified by the Law of December 9, 2011/

/Addendum was made to this paragraph by the Law of June 19, 2015/

10.1.1./This sub-paragraph was invalidated by the Law of December 9, 2011/

10.1.2./This sub-paragraph was invalidated by the Law of December 9, 2011/

10.1.3./This sub-paragraph was invalidated by the Law of December 9, 2011/

10.2.The National Dispatching Center shall manage commercial activities of the main network.

/This paragraph was added by the Law of December 9, 2011/

10.3.The National Dispatching Center shall have service fees of dispatching regulation and budget of the current year approved by the State central administrative body in charge of energy matters, and report the work reports and budget performance annually to such administrative body.

/This paragraph was added by the Law of June 19, 2015/

10.4.The National Dispatching Center shall be authorized under sub-paragraph 6.1.15 of this Law and enter into agreement and regulate the energy to be supplied to the network by an independent energy producer under such agreement.

/This paragraph was added by the Law of June 19, 2015/

Article 11.Regulatory Boards of provinces and the capital city

11.1.Regulatory Boards of provinces and the capital city shall exercise the state regulation of energy supply in provinces and the capital city.

11.2.Regulatory Boards of provinces and the capital city shall be composed of total three members. One of the three members shall be full-time. The Regulatory Commission shall approve the procedure for appointing members of Regulatory Boards and rules of its operation.

/This paragraph was modified by the Law of December 9, 2011/

/This paragraph was amended by the Law of June 19, 2015/

11.3.Regulatory Boards of provinces and the capital city shall have the following rights and duties in addition to those specified in sub-paragraphs 9.1.5, 9.1.6, 9.1.7, 9.1.8 and 9.1.10 of this Law:

11.3.1.issue, amend, suspend, and revoke licenses in accordance with this Law;

11.3.2.oversee compliance with conditions and requirements of licenses within their respective territories;

11.3.3.approve, review and publish the relevant license holder's tariff and consumer's price under methods and regulations approved by the Regulatory Board.

/This sub-paragraph was added by the Law of January 11, 2007/

/This sub-paragraph was modified by the Law of December 9, 2011/

11.4.Regulatory Boards of provinces and the capital city shall cover their expenses incurred in connection with the issuing licenses by service
fees of licenses.

CHAPTER THREE

LICENSES

Article 12.Operational Licenses and Issuance of License

12.1.A legal entity shall conduct the following activities on basis of licenses issued by the relevant authority:

12.1.1.electricity generation;

12.1.2.heat generation;

12.1.3.electricity transmission;

12.1.4.heat transmission;

12.1.5.dispatching;

12.1.6.electricity distribution;

12.1.7.heating distribution;

12.1.8.regulated supply of energy;

12.1.9.unregulated supply of energy;

12.1.10.importation and exportation of electricity;

12.1.11.construction of energy facilities;

12.1.12.gas supply.

/This sub-paragraph was added by the Law of June 9, 2015/

12.2.Licenses for construction of power lines crossing the state frontier and of energy facilities with capacity of over 5MW and dispatching licenses shall be issued by the Regulatory Commission at approval of the state central administrative body.

/This paragraph was amended by the law of December 9, 2011/

12.3.Licenses for utilization of power lines crossing the state border, construction of energy sources that generate both heating and gas and for engaging in the activities specified in sub-paragraphs 12.1-12.1.10 and 12.1.12 of this Law within the boundary of the main network and the central heating supply system shall be issued by the Regulatory Commission.

/This paragraph was amended by the Law of December 9, 2011/

/This paragraph was modified by the Law of June 19, 2015/

12.4.Licenses other than those specified in paragraphs 12.2 and 12.3 of this Law shall be issued by Regulatory Boards of provinces and the capital city.

/This paragraph was amended by the law of June 19, 2015/

12.5.Licenses shall not be required for construction and operation of energy sources with capacity up to 1.5 MW and construction of its transmission and distribution lines that do not have any adverse impact on the environment and normal living conditions of humans and are designated solely for own use.

12.6.License for distributing and supplying electricity and heating shall not be issued to the legal person and its affiliated legal persons as to the lines and substations drawn by the consumer for his/her own technical use, and consumer's linear network drawn from which.

/This paragraph was added by the Law of December 9, 2011/

/This paragraph was modified by the Law of June 19, 2015/

Article 13.License for Generation of Electricity and Heating

13.1.A license for generation of electricity and heating entitles the legal entities to generate electricity and heating and to connect energy sources to transmission and distribution networks.

13.2.A license holder for generation of electricity and heating shall have reviewed and approved by the Regulatory Commission the prices and conditions for selling electricity and heating, except for the following cases:

/This paragraph was amended by the Law of December 9, 2015/

13.2.1.generating electricity and heating solely for own use;

13.2.2.generation of electricity for export, without connecting to the main network;

13.2.3.selling electricity and heat at contract prices.

Article 14.License for Transmission of Electricity and Heating

14.1.A license for transmission of electricity and heating entitles legal entities to transmit electricity and heating using electricity and heating transmission networks.

14.2.A license holder for transmission of electricity and heating shall have the following rights and duties:

14.2.1.ensure reliability of operations of holders of licenses for generation, distribution and supply of electricity and heating and reliability of electricity and heating supply to consumers; to operate, maintain and extend transmission networks;

14.2.2.develop connection regulations specified in sub-paragraph 9.1.13 of this Law, have them approved and comply therewith;

/This sub-paragraph was amended by the Law of June 19, 2015/

14.2.3.create conditions for connecting all license holders to the transmission network on equality basis.

14.3.A holder of a transmission license may not be a supplier of energy.

14.4.Energy transmission lines, substations shall be the ownership of the state.

/This paragraph was added by the Law of June 19, 2015/

Article 15.License for Conducting Regulation of Dispatching

15.1.A license for conducting regulation of dispatching entitles the National Dispatching Center to swiftly dispatch generation, transmission and distribution of electricity and heating and balance production with consumption.

15.2.A license for conducting regulation of dispatching shall have the following rights and obligations:

15.2.1.to dispatch generation, transmission and distribution of electricity and heating in compliance with technical and technological requirements as well as with the least cost criteria with the purpose of ensuring reliable supply of electricity and heating that meets the standards;

15.2.2.to implement a contingency plan of stopping, restricting and subsequently restoring supply of electricity and heating in cases of natural disasters, unforeseen and force majeure events;

15.2.3.to register electricity and heating supply contracts in accordance with regulations issued by the Regulatory Commission;

/This sub-paragraph was amended by the Law of December 9, 2011/

15.2.4.to plan for reserves of electricity and heating, capacity and other services supplied to or provided by holders of other licenses through dispatching, to ensure integrity of operations of the main network and the central heating supply, to establish applicable procedures and to oversee their implementation;

15.2.5.to implement integrated policy on regime calculation of main network, relay-protection, automatic, direct management, communication and information;

/This sub-paragraph was added by the Law of June 19, 2015/

15.2.6.to annually make long-term estimates of electricity and heating consumption of the main network and the central heating supply;

/The numbering of this sub-paragraph was amended by the Law of June 19, 2015/

15.2.7.to develop and implement the main network code upon consultation with holders of other licenses;

/The numbering of this sub-paragraph was amended by the Law of June 19, 2015/

15.2.8.to plan and implement electricity transmission services for importation or exportation.

/The numbering of this sub-paragraph was amended by the Law of June 19, 2015/

15.3.A holder of license for conducting regulation of dispatching shall not be issued a license for generation, distribution and regulated or unregulated supply of electricity and heating.

15.4.Holders of other licenses shall be obliged to comply with the decisions of the holder of a dispatching license made within the scope of the main network code and the central heating supply code.

Article 16.License for Distribution of Electricity and Heating

16.1.A license for distribution of electricity and heating entitles legal entities to distribute electricity and heating within a specified territory.

16.2.A holder of a license for distribution of electricity and heating shall have the responsibility to connect all consumers of the territory specified in the license to the electricity and heating distribution network.

16.3.A holder of a license for distribution of electricity and heating shall have the following obligations:

16.3.1.to connect lines and equipment of consumers of the respective territory that meet requirements specified in this Law, to electricity and heating distribution lines and equipment;

16.3.2.to develop, to have approved and to comply with the connection regulations specified in sub-paragraph 9.1.13 of this Law;

/This sub-paragraph was amended in the Law of June 19, 2015/

16.3.3.to install electricity and heating meters certified by competent authorities at consumers' connection spots;

/This sub-paragraph was amended in the Law of June 19, 2015/

16.3.4.to provide equal possibilities to holders of licenses for regulated and unregulated supply of electricity and heating through the electricity and heating transmission network;

16.3.5.to ensure normal operations of holders of licenses for generation, transmission and regulated or unregulated supply of electricity and heating, and to ensure reliable supply of electricity and heating to consumers;

16.3.6.to operate, perform maintenance and expand the distribution network;

16.3.7.to connect, upon prior agreement, to the lines consumers that meet requirements of connection regulations specified in sub-paragraph 9.1.13 of this Law with other consumers by entering into agreement stated in paragraph 17.3 of this Law;

/This sub-paragraph was modified by the Law of December 9, 2011/

16.3.8.to purchase electricity and heating against advance payments under contracts made with holders of licenses for generation and transmission.

16.4.Meters specified in sub-paragraph 16.3.3 of this Law may be property of holders of licenses for distribution of electricity and heating.

/This paragraph was amended by the Law of June 19, 2015/

16.5.A holder of a license for distribution of electricity and heating shall be a holder of a regulated supply license and may also be a holder of an unregulated supply license.

Article 17.License of Regulated Supply of Energy

17.1.A license of regulated supply of energy shall entitle legal entities to purchase electricity and heating from holders of licenses for generation, transmission and distribution of electricity and heating, as well as the right to import electricity and to sell electricity and heating to consumers.

17.2.A holder of license of regulated supply of energy shall have the following obligations:

17.2.1.to supply electricity and heating to consumers within the territory specified in the license;

17.2.2.to make arrangements to obtain and transmit sufficient quantity of electricity and heating from holders of licenses for generation, transmission and distribution of electricity and heating;

17.2.3.to pay service fees for transmission, distribution and dispatching of electricity and heating;

17.2.4.to comply with the Rules of business relations.

/This sub-paragraph was modified by the Law of December 9, 2011/

17.3.A holder of the license for regulated supply of energy may have the sales of electricity and heating of some consumers in the territory specified in the license performed by citizen, legal entity under the agreement entered into with them. The sale price to the contract vendors and due commissions shall be regulated under the agreement and the energy and heating shall be sold to the consumers at the price set by the Energy Regulatory Commission.

/This paragraph was added by the Law of December 9, 2011/

/This paragraph was amended by the Law of June 19, 2015/

Article 18.License of Unregulated Supply of Energy

18.1.A license of unregulated supply of energy shall entitle legal entities to purchase electricity and heating from holders of licenses for generation of electricity and heating and sell to consumers approved by the Regulatory Commission and to export electricity.

/This paragraph was amended by the Law of December 9, 2011/

18.2.A holder of a license of unregulated of energy shall have the following duties:

18.2.1.to make arrangements to obtain and transmit sufficient quantity of electricity and heating from holders of licenses for generation, transmission and distribution of electricity and heating;

18.2.2.to develop and adhere to approved its Business Rules;

18.2.3.to provide the consumers with methane gas under agreement.

/This sub-paragraph was added by the Law of June 19, 2015/

Article 19.License for Importation or Exportation of Electricity

19.1.A license for importation or exportation of electricity shall entitle legal entities to export of electricity supplied on an unregulated basis and to the import electricity supplied on a regulated basis.

19.2.A license for importation or exportation of electricity through the regional electricity transmission network shall be issued to a holder of a license for transmission through the same network.

/This paragraph was modified by the Law of June 19, 2015/

19.3.The state central administrative body in charge of energy matters shall set the quantity of energy to be imported and exported by a holder of a license for importation and exportation of electricity.

/This paragraph was modified under the Law of December 9, 2011/

19.4.A holder of a license for importation or exportation of electricity shall agree with the dispatching center the periods and technical conditions of electricity importation and exportation.

Article 20.License for Construction of Energy Facilities

20.1.A license for construction of energy facilities may be issued to legal entities that expressed their interest in construction of such facilities and met the requirements specified in paragraph 21.2 of this Law.

/This paragraph was modified by the Law of June 9, 2015/

20.2.A holder of a license for construction of energy facilities shall have the design and construction works undertaken and reviewed by competent authorities.

20.3.A license for construction of energy facilities shall be issued upon assessment of the environmental impact in accordance with applicable legislation.

Article 21.Obtaining a License

21.1.An interested legal entity shall make an application for a license to the Regulatory Commission or Regulatory Board of aimag or the Capital city.

/This paragraph was modified by the Law of December 9, 2011/

21.2.A legal entity shall attach the following documents to its application for a license according to the activities to be engaged in:

21.2.1.Feasibility study;

21.2.2.Survey of energy resources to be used for energy generation;

21.2.3.Type, quantity and quality indexes of the energy to be generated, transmitted, distributed or supplied;

21.2.4.Major technical specifications of equipment to be used in operations;

21.2.5.Scope of services, boundaries of possession, the balance of energy generation, supply and consumption;

21.2.6.Environmental impact assessment;

21.2.7.Action plan for environmental protection;

21.2.8.Statements of financial capability and resources of the legal entities;

21.2.9.Starting date of operations, amount of initial investment and sources of financing;

21.2.10.Description of skills and experience of technical personnel.

21.3.The relevant authorized body to issue license under this Law may appoint an independent expert to make conclusion on applications and attached documents thereto, where necessary.

/This paragraph was amended by the Laws of December 9, 2011 and June 19, 2015/

21.4.A decision whether to issue a license shall be made within 60 days from the date of receipt of the application for a license.

21.5.The application and attached documents which fail to meet the requirements shall be returned to the applicant within 10 days from receipt.

21.6.The decision to issue a license or the ground for refusal to do so shall be published.

21.7.A license shall be issued to a financially capable legal entity, which is experienced or is able to operate in the given field, and met the conditions and requirements specified in sub-paragraph 9.1.3 of this Law.

/Addendum was made this paragraph by the Law of June 19, 2015/

21.8.In case several legal entities make applications for the same type of license, the license shall be issued on the basis of selection.

Article 22.Term and Extension of License

22.1.The term of a license for energy generation and transmission shall be 5 to 25 years; the term of a license for construction of energy facilities shall be up to 5 years; and terms of other licenses shall be up to 10 years.

22.2.If the licensor deems that the license holder has been meeting conditions and requirements of the license and has conditions and possibilities to further sustain normal operations in terms of technical and technological requirements, the licensor shall extend the license for up to 25 years.

22.3.An application for extension of a license shall be made no later than 180 days prior to the expiration of its term.

22.4.A license shall become valid from the date of its issue.

Article 23.Modifications, Amendments and Renewal of Licenses

23.1.A licensor may renew a license or make amendments to it in case of changes in conditions of issuing the license or at the request of the license holder.

Article 24.Suspension and Revocation of Licenses

24.1.In case of a failure of a license holder to meet the requirements set forth in this Law and specified in the license the licensor shall fix a period to remedy the breach.

24.2.If a license holder fails to remedy the breach within the fixed period, the state energy inspector shall impose relevant penalties and suspend the license. The suspension shall not serve as a ground for the license holder to terminate its activities.

24.3.Licensor shall revoke a license in the following cases:

24.3.1.expiration of the term of the license;

24.3.2.liquidation or bankruptcy of the license holder;

24.3.3.it is established that the license holder obtained the license illegally;

24.3.4.suspension of the license pursuant to paragraph 24.2 of this Law and failure to remedy the breach within the fixed period;

24.3.5.failure of the license holder to fulfill the environmental protection and rehabilitation action plan or breach of the legislation on environmental protection;

24.3.6.other grounds set forth in law.

24.4.Licensor shall make a decision to revoke a license within 30 days from delivery of the notice on revocation to the license holder.

24.5.Revocation of the license shall not serve as a ground for release of the license holder from the responsibility of rehabilitation of the environment and other obligations.

24.6.In case the licensor revokes a license, in order to ensure reliable energy generation, transmission and distribution and uninterrupted energy supply to consumers these activities may be undertaken by other license holders.

Article 25.Obligations of License holders

25.1.License holders shall have the following obligations:

25.1.1.not to transfer their licenses to others;

25.1.2.to comply with legislation, rules and regulations of technical operation and safety, terms and requirements of the license and decisions of the licensor;

25.1.3.to keep financial and accounting books and records for each licensed activity, separately from records of activities not specified in the license;

25.1.4.to annually submit its audited financial statements to the licensor;

25.1.5.to generate, transmit, distribute and supply energy in accordance with the main network code and the central heating and gas supply code;

/This sub-paragraph was modified by the Laws of December 9, 2011 and June 19, 2015/

25.1.6.to notify the licensor and obtain a relevant permission in case of arising of circumstances specified in provision 9.1.8. of this Law;

25.1.7.to obey the requirements of competent officials of the licensing authority made within the limits of their authority, to allow them to enter premises and facilities and to ensure them conditions to perform their duties;

25.1.8.to provide true and timely information required by the licensor necessary to evaluate technical and economic performance of the license holder;

25.1.9.when developing 3–5-year investment plans of extension and renovation of electricity and heating transmission and distribution networks to obtain opinions of other license holders and annually update the licensor about such plans;

25.1.10.in the case of necessity to discontinue operations for a fixed period of time so that it affects energy supply, to notify the licensor not later than in a 6 months advance;

25.1.11.to have an environmental impact assessment conducted by a relevant authority prior to starting its operations, to prepare annual environmental protection and rehabilitation plans, to have them approved by relevant authorities and to implement them;

25.1.12.to comply with terms and requirements of applicable rules, regulations, procedures, technical norms and standards, license terms and requirements in its operations, and to carry out its activities in accordance with technological procedures maintaining high safety and technical levels.

CHAPTER FOUR

PRICES AND TARIFFS

Article 26.Principles for Setting Tariffs

26.1.Tariffs shall be set separately for generation, transmission, distribution, and supply of energy.

/This paragraph was modified by the Law of June 19, 2015/

26.2.The following principles shall be observed in determining tariffs:

26.2.1.based on real costs of operations;

26.2.2.allocation of costs and expenses to each category of consumers in consideration of their requirements on electricity and heating supply;

/This sub-paragraph was amended by the Law of December 9, 2011/

26.2.3.enabling regulation of energy consumption;

26.2.4.setting the price coherent with the inflation;

/This sub-paragraph was modified by the Law of June 19, 2015/

26.2.5.ensuring sufficiency of revenues of license holders maintain their financial capability;

26.2.6.clarity and simplicity of the energy tariff structure to consumers;

/This sub-paragraph was amended by the Law of June 19, 2015/

26.2.7.the least-cost principle followed while tariffs are sufficient to enable compliance with the requirements of technical and technological safety in energy generation, transmission, distribution and supply;

/This sub-paragraph was amended by the Law of June 19, 2015/

26.2.8.meeting the proper level of profit calculated the yield of expenses required for conducting license activities and invested fund.

/This sub-paragraph was modified by the Law of December 9, 2011/

26.3.The Regulatory Commission shall be responsible for assessing the rationale and accuracy of cost estimations by license holders and shall return the cost estimates to the license holder for a revision in case the estimates fails to meet requirements. Regulatory Authority shall not itself complete license holder's estimates by making estimates on its behalf.

/This paragraph was amended by the Law of June 19, 2015/

26.4.The Regulatory Commission shall develop tariff determination methodology and procedures for review and examination.

/This paragraph was modified by the Law of December 9, 2011/

Article 27.Tariffs and Contract Prices

27.1.The Regulatory Commission and Regulatory Boards of provinces and the capital city shall annually review tariffs and terms of services provided by suppliers, and may review them from time to time at requests of license holders.

/This paragraph was modified by the Law of December 9, 2011/

/This paragraph was amended by the Law of June 19, 2015/

27.2.Consumers shall pay for regulated supply as per published tariffs and for unregulated supply as per contract prices.

27.3.The Regulatory Commission shall determine consumers eligible to receive unregulated supply on the basis of their electricity and heating usage. Such consumers shall have the right to choose between regulated and unregulated supply.

/This paragraph was amended by the Law of June 19, 2015/

27.4.A holder of a regulated supply license shall submit proposals for change in tariffs together with an itemized list of costs to the Regulatory Commission.

/This paragraph was amended by the Law of June 19, 2015/

27.5.The Regulatory Commission shall notify consumers or publish in mass media information on changes in energy tariffs no later than 15 days prior to the effective date of such changes.

/This paragraph was amended by the Law of June 19, 2015/

27.6.Tariffs and contract prices may differ for certain groups of consumers depending on the following indicators of energy supply in addition to other factors:

27.6.1.maximum load requested and consumption specified in the contract;

27.6.2.pattern of load;

27.6.3.ability of the consumer to manage its load or possibility to accept interruptions in the supply of energy;

27.6.4.geographical area served by the supplier;

27.6.5.term of the contract;

27.6.6.other factors.

27.7.Quantity and price of the fuel to be used for electricity and heating production may be regulated under long-term stable agreement.

/This paragraph was added by the Law of December 9, 2011/

27.8.Price and tariff of methane gas shall be determined for each state of liquid, compressed and gas in consideration of designation of the use and supply structure.

/This paragraph was added by the Law of June 19, 2015/

CHAPTER FIVE

RELATIONS BETWEEN SUPPLIERS AND CONSUMERS

Article 28.Energy Supply Contracts

28.1.Relationships between consumers and suppliers shall be governed by the Civil Code, this Law, Rules of business relations and contracts made between consumers and suppliers.

/This paragraph was amended by the Law of July 4, 2002/

28.2.Energy supply contracts with individuals shall set out the quantity and quality of energy to be consumed, terms of payment, boundaries of energy lines and network, and rights, obligations and liabilities of the parties, and other necessary matters.

/Addendum was made to this paragraph by the Law of July 4, 2002/

/This paragraph was amended by the Law of June 19, 2015/

28.3.Energy supply contracts with legal entities shall specify, in addition to the matters specified in paragraph 28.2 of this Law, pattern of energy consumption, monthly schedule, terms of direct debit deductions through banks from current accounts of consumers- legal entities, collateral and other necessary matters.

28.4.A supplier may enter into an energy supply contract based on a guarantee issued by the correspondent bank regarding solvency of the consumer.

28.5.A consumer shall make necessary amendments to the contract made with the supplier within 15 days after the notification specified in paragraph 27.5 of this Law. The failure to amend the contract shall not serve as a ground to refuse to comply with such amendments.

Article 29.Rights and Obligations of Suppliers

29.1.An energy supplier shall have the following rights and obligations in addition to those specified in Article 25 of this Law:

/This paragraph was amended by the Law of July 4, 2002/

29.1.1.to provide consumers with energy that meets standard requirements;

29.1.2.to notify consumers about scheduled interruptions of energy supply not later than 24 hours prior to the interruption;

/This sub-paragraph was amended by the Law of June 19, 2015/

29.1.3.to ensure provision of services at the level set out in the contact;

29.1.4.to commence to supply energy starting from the date specified in the contract;

29.1.5.to resume energy supply immediately after elimination of reasons for interruption;

29.1.6.an authorized representative of the supplier shall have the power to inspect consumers' energy supply equipment and to enter premises for such purpose;

29.1.7.to terminate a supply contract in the event of the consumer's failure to timely pay energy charges as set out in the contract and refuse to supply energy to consumers that dwell within the network safety zone in breach of paragraph 33.1 of this Law.

29.1.8.to suspend energy supply to consumers as specified in paragraph 32.2 of this law;

29.1.9.a supplier shall have a right to add and connect other consumers to the consumer owned line and substation based on the perspective of the current territory.

/This sub-paragraph was added by the Law of June 19, 2015/

29.2.A supplier shall be prohibited from restricting consumer rights by imposing conditions and requirements not specified in the contract unless required under legislation, by the local administrators, the state central administrative body in charge of energy matters and legal authorities.

/In this paragraph, the term "specialized inspection" was changed to "the state central administrative body in charge of energy" by the law dated November 11, 2022, and will be enforced from January 1, 2023/

/This paragraph was modified by the Law of June 19, 2015/

Article 30.Rights and Obligations of Consumers

30.1.Consumers shall have the following rights and obligations:

/This paragraph was amended by the Law of July 4, 2002/

30.1.1.to be supplied with energy which meets the requirements of the standards;

/Addendum was made to this sub-paragraph by the Law of June 19, 2015/

30.1.2.to fully pay the energy charges within the period set out in the contract;

30.1.3.to observe all technical operation and safety rules;

30.1.4.to provide possibilities to supplier's representatives to conduct their operations;

30.1.5.to refuse to pay the energy charges fully or partially and claim compensation of damage incurred in the event that the supplier undersupplies or supplies energy of different quantity and quality than that specified in the contract due to inadequate performance of its contractual obligations;

30.1.6.to receive compensation of damage incurred due to suspension of energy supply on the grounds other than those specified in paragraphs 32.2 and 32.3 of this Law;

30.1.7.to be responsible for the safety and soundness of energy meters and measuring devices;

30.1.8.to be fully responsible for the safety and soundness of power lines, network and equipment in own possession, their maintenance and certification;

/This sub-paragraph was amended by the Law of July 4, 2002/

30.1.9.to notify the supplier in 7 days' advance of deciding not to receive energy provided in the contract, in cases other than natural disasters, unforeseen or force majeure conditions;

30.1.10.to have connected other consumers from the lines and equipment in own possession with the consent of a holder of a license for distribution and regulated or unregulated supply;

30.1.11.to transmit and distribute energy to others through lines and equipment in own possession, to receive service charges from related suppliers in accordance with contracts;

30.1.12.to be responsible for the necessary repairs of lines, network and equipment if damages in the event of causing damage by own actions. In case of failure of a consumer to remedy the destruction or breakdown, a supplier shall have the right to perform the necessary repairs and demand from the consumer to pay for the costs incurred;

/This sub-paragraph was added by the Law of July 4, 2002/

30.1.13.to transfer the substation, lines, equipment already built to the license holder in case of constructing public residential apartment.

/This sub-paragraph was added by the Law of June 19, 2015/

30.2.Consumers that risk to incur loss of human life, national interests and serious damage to the consumer operations in case of interruption of energy supply, shall have their own backup sources of energy. A list of such consumers shall be defined by the Regulatory Commission and Regulatory Boards of provinces and the capital city depending on consumer classes.

/This paragraph was amended by the Law of June 19, 2015/

Article 31.Payment of Energy Charges and Imposition of Penalties

31.1.Accounts of payments for energy consumption to be made between suppliers and consumers shall be settled based on readings of meters certified by a relevant authority and determined according to the effective tariffs and contract prices.

31.2.Unless otherwise provided in the contract, a consumer shall have the right to claim from the supplier a fine of up to 5.0% of the value of the unsupplied or undersupplied energy.

31.3.In the event of failure of a consumer to timely or adequately pay energy charges, a supplier shall have the right to impose a penalty equal to up to 0.5% of the unpaid bill for each day of such delay.

31.4.The amount of compensation for damage and fine specified in paragraphs 31.2 and 31.3 of this Law may not exceed 50% of the total charges for the unsupplied or undersupplied energy or the charges due.

Article 32.Suspension of Energy Supply and Consumption

32.1.A state energy inspector shall suspend the operations of a license holder in whole or those of its specified equipment until the breach is remedied in the following cases:

32.1.1.occurrence of circumstances that possibly may result in threat to human health and lives;

/This sub-paragraph was amended by the Law of June 19, 2015/

32.1.2.energy equipment, lines and networks do not meet operational and safety requirements;

32.1.3.energy generated does not meet standards and quality requirements;

32.1.4.failure to obey the demands made by a state energy inspector.

/This sub-paragraph was amended by the Law of June 19, 2015/

32.2.A competent official of an energy supplier shall suspend energy supply to a consumer in the following circumstances until the breach of energy usage is remedied:

32.2.1.failure to timely pay the electricity charges;

32.2.2.arbitrary modifying of the metering equipment or its components, their seals, location or connection or disruption of their normal functioning;

32.2.3.using of electricity in a manner not specified in the contract, in case the consumer has no meters;

32.2.4.supply of electricity to another consumer of an area beyond its own consumption without the consent of the supplier;

32.2.5.emergence of natural disasters, unforeseen or force majeure events, shortage of fuel, accidents or delays in the energy supply system, emergence of conditions dangerous to human lives and to property, and danger of fire;

32.2.6.refusal of a consumer to allow entry of own premises to an authorized employee of the supplier to conduct inspection.

32.3.A state energy inspector shall suspend energy consumption of consumers until the breach of energy consumption is remedied in the following cases, in addition to those specified in paragraph 32.2 of this Law:

32.3.1.equipment, power lines or network of the consumer no longer meet operational and safety requirements;

32.3.2.breach of the technical requirements of energy consumption;

32.3.3.exceeding of the electricity capacity specified in the contract.

32.4.A state energy inspector shall in advance notify the licensor about suspending the activities of the license holder and the supplier about suspending consumption of energy by a consumer.

32.5.A state energy inspector or a competent employee of an energy supplier shall notify the license holder of suspension of its activities and the consumer on suspension of energy consumption no later than in 48 hours advance and clearly state the ground for suspension in his/her resolution, and seal equipment, meters and other necessary instruments. A state energy inspector may suspend activities of the license holder and consumption of energy by consumer without advance notice in case of possible threat to human lives, national interests and serious damages to activities of other customers.

32.6.The license holder and consumer whose activities or consumption of energy are suspended shall be prohibited from using the sealed equipment and instruments before notifying the relevant state energy inspector or the authorized employee of the supplier.

32.7.Suspension of activities and consumption of energy pursuant to paragraphs 32.1, 32.2 and 32.3 of this Law shall not affect the rights of other license holders and consumers that comply with legislation, their licenses and contracts.

Article 33.Boundaries of Network Safety Zones

33.1.Lines and networks shall have established boundaries of their safety zones. It shall be prohibited to build any gers, housing and buildings or conduct any activities other than those permitted by the network owners or possessors within such boundaries.

33.2.Governors of provinces, soums, the capital city and districts shall verify sizes of boundary lines in accordance with safety rules for lines and networks.

/This paragraph was amended by the Law of April 4, 2022/

/This paragraph was amended by the Law of June 19, 2015/

33.3.Owners or possessors of trees or shrubs planted or growing within the safety zones shall be obliged to move or cut them, if the trees and shrubs may possibly cause damage to the network or obstruct its inspection or servicing.

33.4.A state energy inspector or an authorized employee of supplier shall have the right to enter or to pass through land and premises owned or used by others which are located alongside the safety boundary. In case of failure of an owner to meet its obligations set forth in paragraph 33.3 of this Law, a state energy inspector or an authorized employee of supplier shall take steps to cut or move trees or shrubs, or where not possible to do so, to have the trees or shrubs cut.

CHAPTER SIX

CONTROL AND LIABILITY

Article 34.Monitoring Implementation of Legislation on Energy

34.1.The authorized officials and state inspectors shall exercise technical control of implementation of legislation on energy in the following areas:

/The word "professional" was removed from this paragraph by the law of November 11, 2022, and will be enforced from January 1, 2023/

/This paragraph was amended by the Law of June 19, 2015/

34.1.1.to oversee whether license holders and consumers comply with the assembly, repair, operation and safety requirements of energy facilities and equipment;

34.1.2.to oversee compliance with requirements for appropriate and economical consumption of energy and requirements for network protection;

34.1.3.to investigate and draw conclusions on accidents occurred in energy facilities and equipment and prevent future accidents;

34.1.4.to keep a registry of boilers, pressure containers, pipelines, electric and mechanical equipment; to test them within the periods set in the relevant norms and rules, to certify them and to issue permissions for their use;

34.1.5.to issue permissions for assembly and repair of steam pipelines with pressure more than 0.07 mPa and water pipelines with temperature higher than 115 C0, and to issue quality certifications for assembling and repair works.

34.2.Organizations for protection of consumer rights shall exercise public control on energy supply and grounds for the current prices and tariffs.

Article 35.Resolution of Disputes

35.1.If there is an arbitration agreement, disputes between license holders, and between license holder and consumers shall be resolved by arbitration.

35.2.Except for paragraph 35.1 of this Law, the Regulatory Commission and Regulatory Boards of provinces and the capital city shall resolve disputes between license holders and between license holders and consumers on the matters falling within their jurisdiction.

35.3.If license holder do not agree with decision from authority or its officials stated in paragraph 35.2, within 10 days after receiving the decision, they may appeal to the court.

/This paragraph was modified by the Law of January 26, 2017/

Article 36.Compensation for Damages

36.1.A guilty person shall compensate for the interruption of energy caused due to wrongful action of any consumer. Supplier and consumer shall jointly determine the amount of the damage and it shall be verified by document.

/This paragraph was modified by the Law of June 19, 2015/

36.2.A supplier shall compensate damages caused to a consumer in the course of conducting activities specified in sub-paragraph 29.1.6 of this Law.

36.3.A supplier shall not be responsible for damages incurred by a consumer at consumer's own fault during planned interruption of energy supply specified in sub-paragraph 29.1.2 of this Law, where the consumer was notified in advance.

Article 37.Liabilities for Violators of the Law

37.1.If the actions of an official violating this Law are not of a criminal nature, he/she shall be subject to liability specified in the Law on Civil Service.

37.2.A person or legal entity that violates this Law shall be subject to liability specified in the Criminal Code or the Law of Violations.

/This Article was modified by the law December 4, 2015/

Article 38.Entry into force of the Law

38.1.This Law shall become effective on April 15, 2001.

THE OF THE STATE GREAT KHURAL OF MONGOLIA L.ENEBISH