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ENFORCEMENT DECREE OF ACT ON THE CREATION AND FACILITATION OF USE OF SMART GRIDS

ENFORCEMENT DECREE OF ACT ON THE CREATION AND FACILITATION OF USE OF SMART GRIDS

Presidential Decree No. 23312, Nov. 23, 2011

CHAPTER Ⅰ GENERAL PROVISIONS

Article 1 (Purpose)

The purpose of this Decree is to provide for matters delegated pursuant to the Act on the Creation and Facilitation of Use of Smart Grids and matters necessary for the enforcement thereof.

CHAPTER Ⅱ BASIC PLAN FOR SMART GRIDS, ETC.

Article 2 (Establishment and Implementation of Basic Plan for Smart Grids)

(1) When the Minister of Knowledge Economy intends to establish and implement a basic plan for the creation and facilitation of use of smart grids (hereinafter referred to as "basic plan") pursuant to the Act on the Creation and Facilitation of Use of Smart Grids (hereinafter referred to as the "Act"), he/she shall consult thereon in advance with the heads of related central administrative agencies.
(2) When the Minister of Knowledge Economy establishes or revises the basic plan, he/she shall give public notice thereof.

Article 3 (Insignificant Revision to Basic Plan)

"An intended revision to any of insignificant matters specified by Presidential Decree" in the proviso to Article 5 (3) of the Act means a revision to a matter that does not affect any essential matter in the basic plan and a modification to a detailed matter of a project or the time schedule for the implementation of a project relating to any matter under Article 5 (2) 2 through 11 of the Act within the scope of the objectives or orientation of the relevant policy.

Article 4 (Establishment and Implementation of Implementation Plans for Smart Grids)

(1) If the Minister of Knowledge Economy considers it necessary for the establishment and implementation of an implementation plan for the creation and facilitation of use of smart grids under Article 6 (1) of the Act (hereinafter referred to as "implementation plan"), he/she may request cooperation to the head of a related central administrative agency, a local government, or any other corporation, organization, or institution that participates in the creation and facilitation of use of smart grids.
(2) When the Minister of Knowledge Economy establishes or revises an implementation plan, he/she shall give public notice thereof.

Article 5 (Institutions Required to Consult in Advance)

"An institution specified by Presidential Decree" in Article 7 of the Act means a business specializing in the construction of infrastructure for smart grids under Article 8 (2) and attached Table 1.

Article 6 (Establishment and Implementation of Plans for Conversion of Smart Grids, etc.)

(1) When the Minister of Knowledge Economy intends to establish a plan for the conversion of smart grids pursuant to Article 9 (1) of the Act (hereinafter referred to as "conversion plan"), he/she shall collect opinions thereon from suppliers and users of electric power and smart grid businesses.
(2) A　conversion plan shall include the following matters:
1. Matters regarding the construction of infrastructure necessary for conversion into smart grids;
2. Matters regarding the support for the distribution and proliferation of devices and products for
smart grids;
3. Matters regarding the improvement of systems for the efficient introduction and replacement of devices and products for smart grids;
4. Other matters that the Minister of Knowledge Economy considers necessary for holding public hearings for the collection of opinions of interested parties, assuring suppliers and users of electric power of their participation, and implementing the conversion plan efficiently.
(3) When the Minister of Knowledge Economy designates eligible areas, eligible devices and products, eligible services, and eligible business entities pursuant to Article 9 (3) of the Act, he/she shall consider the following matters:
1. The degree of improvement of energy consumption efficiency, including the saving of electricity and the maximum reduction of electric power;
2. The prospects for the realization of smart grid technologies;
3. The degree of positive response of residents to smart grids;
4. The amount of support from local governments, including budget;
5. The prospects for the development of smart grid technologies and other matters that the Minister of Knowledge Economy considers necessary.
(4) More detailed matters necessary for the designation of eligible areas, eligible devices and products, eligible services, and eligible business entities under paragraph (3) shall be determined and publicly notified by the Minister of Knowledge Economy.

Article 7 (Support for Research and Development)

"Activities specified by Presidential Decree" in subparagraph 3 of Article 10 of the Act are as follows:
1. Development of standards for smart grid technologies, products, services, etc. under Article 17 of the Act;
2. Substantiation of smart grid technologies under Article 19 (1) 2 of the Act;
3. Promotion of practical use and commercialization of outcomes from research and development of smart grids;
4. Promotion of extension and utilization of equipment, facilities, etc. for research on smart grids.

CHAPTER Ⅲ ESTABLISHMENT OF INFRASTRUCTURE FOR SMART GRIDS AND FACILITATION OF USE OF SMART GRIDS

Article 8 (Registration of Smart Grid Businesses, etc.)

(1) A person who intends to register his/her business as a smart grid business pursuant to Article
12 (1) of the Act shall file an application for registration with the Minister of Knowledge Economy in the form prescribed by Ordinance of the Ministry of Knowledge Economy.
(2) The criteria for the registration of smart grid businesses under Article 12 (1) of the Act and the scope of their business activities shall be as set out in attached Table 1.
(3) Upon receiving a registration application under paragraph (1), the Minister of Knowledge Economy shall accept the registration, unless the application does not meet the criteria for the registration or the scope of business activities under attached Table 1.

Article 9 (Registration of Changes to Smart Grid Businesses, etc.)

(1) When a smart grid business intends to register a change pursuant to Article 12 (2) of the Act, it shall file an application for modification to registration in the form prescribed by Ordinance of the Ministry of Knowledge Economy.
(2) "Material information specified by Presidential Decree" in Article 12 (2) of the Act means the following information:
1. Trade name;
2. Representative;
3. Principal place of business;
4. Professional human resources;
5. Capital.

Article 10 (Subsidization for Input Costs)

(1) Projects for which a smart grid business is eligible for the subsidization for input costs pursuant to Article 14 (1) of the Act shall be as follows:
1. Projects for the collection, provision, and utilization of smart grid information, including the distribution of electronic electricity meters;
2. Projects for the distribution and proliferation of devices, products, and services relating to smart grids, including infrastructure facilities for charging electric motor vehicles and devices for storage of energy;
3. Other projects considered necessary for the realization of public interests, including publicness and safety of smart grids.
(2) A smart grid business that intends to obtain full or partial subsidization for input costs pursuant to Article 14 (1) of the Act shall file an application with the Minister of Knowledge Economy, along with documents evidencing that the relevant project falls under paragraph (1).
(3) More detailed matters necessary for the procedure for the subsidization for input costs under paragraph
(2) shall be determined and publicly notified by the Minister of Knowledge Economy.

Article 11 (Standards for Certification)

(1) Standards for the certification under Article 15 (2) of the Act shall be as follows:
1. The Korean Industrial Standards under Article 12 of the Industrial Standardization Act or international standards prescribed by the International Electro-technical Commission shall be met in regard to the stability and interoperability of smart grids and the security of devices and products for smart grids;
2. The maintenance, management, and follow-up management of the quality of devices, products, and services for smart grids shall be performed appropriately.
(2) More detailed matters regarding standards for certification under paragraph (1) shall be determined and publicly notified by the Minister of Knowledge Economy, subject to prior consultation with the heads of related central administrative agencies.

Article 12 (Standards for Designation of Certifying Agencies)

A person who intends to have his/her business designated as a certifying agency pursuant to Article
16 (1) of the Act shall meet the following standards:
1. It shall be a non-profit corporation or a non-profit organization;
2. It shall not receive any financial or other support from a person who intends to obtain certification and shall be independent in all aspects of its certification activities;
3. It shall have an organizational structure exclusively responsible for certification and at least two professional experts in regard to matters under subparagraphs of Article 15 (1) of the Act;
4. It shall have regulations on certification with regard to smart grids, including the procedure for certification and the fee rates set in accordance with the method of calculation under Article 18 and attached Table 2.

Article 13 (Designation of Central Districts, etc.)

(1) When the Minister of Knowledge Economy intends to designate an area as a central district of smart grids pursuant to Article 18 of the Act (hereinafter referred to as a "central district"), he/she shall establish an implementation plan for the creation of the central district, including the following matters:
1. Matters regarding the objectives, strategy, and system for implementation of the project for the central district;
2. Matters regarding the smart grid technology applicable to the project for the central district;
3. Matters regarding the procurement of financial resources necessary for the implementation of the project for the central district;
4. Other matters necessary for the efficient implementation of the project for the central district. (2) The Minister of Knowledge Economy may designate an area as a central district in his/her discretion or upon a request from the Special Metropolitan City Mayor, a Metropolitan City Mayor, a Do Governor, or a Special Self-Governing Province Governor (hereinafter referred to as a "Mayor/Do
Governor").
(3) Matters that shall be taken into consideration in designating an area as a central district pursuant to paragraph (2) shall be as follows:
1. The area shall be appropriate for the accomplishment of the objectives of the project for the central district;
2. The degree of positive response of residents to the project for the central district shall be high;
3. The plan for the procurement of financial resources for the project for the central district shall be appropriate and practicable;
4. The project shall conform to the basic plan;
5. Other matters that the Minister of Knowledge Economy considers necessary, including the prospects for the extension of construction and use of smart grids to surrounding areas.
(4) When a Mayor/Do Governor intends to make a request to designate an area as a central district pursuant to paragraph (2), he/she shall prepare an implementation plan for the creation of the central district which includes the following matters, and shall submit it to the Minister of Knowledge Economy:
1. The area requested to be designated as a central district;
2. Details of the project for the central district;
3. The grounds on which it is requested to designate the area as a central district;
4. Details of the budget, human resources, etc. that a Mayor/Do Governor can provide for the project for the central district;
5. Other matters that shall be considered in designating the area as a central district under paragraph
(3).
(5) When the Minister of Knowledge Economy intends to designate an area as a central district, he/she shall submit the case to the Power Policy Council under Article 47-2 of the Electricity Business Act.
(6) When the Minister of Knowledge Economy intends to designate an area as a central district, he/she shall give public notice of the purposes and details of the designation, the designated area, and other relevant matters through the Official Gazette and shall notify the competent Mayor/Do Governor thereof.
(7) Except as provided for in paragraphs (1) through (6), matters necessary for the designation of a central district shall be determined and publicly notified by the Minister of Knowledge Economy.

Article 14 (Designation of Institutions Assisting in Promotion of Smart Grid Industry, etc.)

A person who intends to have his/her institution designated as an institution assisting in the promotion of the smart grid industry under Article 19 (1) of the Act (hereinafter referred to as an "assisting institution") shall meet the following standards:
1. The institution shall be an incorporated foundation established for the purposes of the construction and facilitation of use of smart grids pursuant to Article 32 of the Civil Act;
2. The institution shall have a record of performance of the business activities under subparagraphs of Article 19 (1) of the Act for not less than two years;
3. The institution shall have an organization exclusively responsible for the performance of business activities under subparagraphs of Article 19 (1) of the Act and not less than 20 professional experts in such business activities;
4. The institution shall meet other requirements that the Minister of Knowledge Economy considers necessary and give public notice in relation to the promotion of the smart grid industry.

CHAPTER Ⅳ COLLECTION, UTILIZATION, AND PROTECTION OF SMART GRID INFORMATION

Article 15 (Petition for and Administration of Mediation)

(1) If a smart grid business intends to apply for mediation pursuant to Article 23 (5) of the Act, it shall file a petition for mediation with the Minister of Knowledge Economy in the form prescribed by Ordinance of the Ministry of Knowledge Economy along with relevant documents.
(2) When the Minister of Knowledge Economy reviews a petition for mediation under paragraph (1) and mediates in such dispute, he/she shall hear opinions of the parties concerned and may conduct factual investigations or hear opinions from an assisting institution, if necessary.
(3) The Minister of Knowledge Economy shall prepare a proposed settlement agreement after reviewing an application under paragraph (2) and present the proposal to the applicant and the parties concerned and may recommend them to accept the proposal.

Article 16 (Businesses subject to Inspection on Performance of Information Protections)

"A person that meets the standards prescribed by Presidential Decree with regards the number of users and other relevant matters, among smart grid service providers" means a person who collects and processes personal information under Article 22 of the Act, including names and resident registration numbers, with which an individual can be identified, (hereinafter referred to as "smart grid information") and whose smart grid services were used by not less than 3,000 users per day as of the end of the previous year: Provided, That the following persons who fall under the category of other service providers in attached Table 1 shall be excluded herefrom:
1. A person who has successfully passed the safety inspection on information protection under Article
46-3 (1) of the Act on Promotion of Information and Communications Network Utilization and
Information Protection, etc. and Article 42 of the Enforcement Decree of the said Act;
2. A person who has obtained certification of the information protection and management system under Article 47 of the Act on Promotion of Information and Communications Network Utilization and Information Protection, etc.;
3. A person who has successfully passed the inspection on performance of measures for the protection of major infrastructure facilities for information and communications under Article 5-2 of the Act on the Protection of Information and Communications Infrastructure: Provided, That major infra- structure facilities for information and communications designated by the Minister of Knowledge Economy pursuant to Article 8 (1) of the Act on the Protection of Information and Communications Infrastructure shall be excluded herefrom.

Article 17 (Procedure for Inspection on Performance of Measures for Protection of Smart Grids, etc.)

(1) When the Minister of Knowledge Economy intends to conduct an inspection pursuant to Article
27 (1) of the Act as to whether a smart grid business complies with the guidelines under Article
26 (3) of the Act, he/she shall notify the smart grid business thereof in advance.
(2) The Minister of Knowledge Economy may conduct an inspection based on documents, via the Internet, or by any other means or assign public officials under his/her control to visit a place of business together with an engineer under the National Technical Qualifications Act or any other expert in smart grids to conduct an inspection in order to ensure that the guidelines under paragraph (1) are complied with. In such cases, each public official and an engineer under the National Technical Qualifications Act or any other expert in smart grids shall carry with them their identification certificates indicating their authority and produce them to people concerned.
(3) When the Minister of Knowledge Economy intends to conduct an inspection as to whether a major
infrastructure facility for information and communications under the proviso to subparagraph 3 of Article 16 complies with the guidelines under paragraph (1), he/she shall consult thereon with the Director of the National Intelligence Service in advance.

CHAPTER Ⅴ SUPPLEMENTARY PROVISIONS

Article 18 (Fees)

The fees under Article 32 of the Act shall be paid in cash or by electronic money or electronic payment through an information and communications network, and the fee rates shall be as set out in attached Table 2.

Article 19 (Entrustment of Administrative Affairs)

Pursuant to Article 35 of the Act, the Minister of Knowledge Economy shall entrust the Smart Grid
Association under Article 20 of the Act with the following administrative affairs:
1. Preparation and management of statistics about smart grids under Article 8 (1) of the Act;
2. Receipt of registration and modified registration of smart grid businesses under Article 12 of the
Act and verification of details thereof;
3. Development of standards for technologies, products, and services relating to smart grids under
Article 17 (1) of the Act.

Article 20 (Guidelines for Imposition of Fines for Negligence)

Guidelines for the imposition of fines for negligence prescribed in Article 39 (3) of the Act shall be as set out in attached Table 3.

ADDENDA

This Decree shall enter into force on November 25, 2011.

Criteria for Registration of Smart Grid Businesses and Scope of Their Business

Activities (pertaining to Article 8 (2))

Notes

1. Capital

(a) In the case of a corporation, 'capital' means paid-in capital, and both paid-in capital and total shareholder equity on the balance sheet prepared within the latest one year (referring to actual capital equal to the balance of total assets

less total liabilities) shall be at least the capital on the criteria for registration respectively: Provided, That in the case of any corporation other than a stock company, contributions to the corporation shall be deemed its capital.

(b) In the case of a proprietorship, the appraised value of its assets shall be deemed its capital, and the appraised value of assets means the appraised value of the assets provided for the registered business.

2. Professional experts

(a) 'Professional experts' mean full-time technical experts, but a person whose technical qualification is suspended or whose business is subject to suspension

pursuant to the National Technical Qualifications Act or any other Act or subordinate statute shall be excluded herefrom. If the number of technical experts fail to meet the criteria for registration, vacancies shall be filled within

one month.

(b) An industrial engineer under the National Technical Qualifications Act shall be deemed to be qualified as an engineer.

(c) The Minister of Knowledge Economy may recognize a middle-grade or higher-grade technician as an engineer, among technicians in the relevant field recognized pursuant to the Construction Technology Management Act and

legislation subordinate thereto and the Electric Technology Act and legislation subordinate thereto, the Electrical Construction Business Act and legislation subordinate thereto, and the Information and Communications Construction

Business Act and legislation subordinate thereto.

Fees (Pertaining to Article 18)

Method of calculation: The fees under Article 32 of the Act shall be calculated using the following rates:

1. Fee for issuing a letter of certification: 50,000 won;

2. Testing fee for the certification of a device or product for smart grids: An amount set by a certifying agency for each tested item, subject to prior consultation with

the Minister of Knowledge Economy;

3. Evaluation fee for the certification of a service or a building for smart grids: The fee shall be set by adding fixed actual costs under the standards for the calculation

of prices for engineering projects as determined and publicly notified by the Minister of Knowledge Economy pursuant to Article 31 of the Engineering Technology Promotion Act.

Guidelines for Imposition of Fines for Negligence (pertaining to Article 20)

1. General Guidelines

(a) The guidelines for the imposition of a fine for negligence according to the number of violations shall be applied to cases where fines for negligence have been

imposed for identical violations during the latest three years. In such cases, the dates of application of the guidelines for the imposition of a fine for negligence according to the number of violations shall be the date of imposition of a fine for

negligence and the date on which an identical violation is discovered after the imposition.

(b) If a violation constitutes two or more violations in imposing a fine for negligence,

the heaviest fine for negligence among applicable fines for negligence shall be imposed.

(c) An imposing authority may reduce a fine for negligence by one-half of the fine

for negligence under subparagraph 2 in any of the following cases: Provided, That the foregoing shall not apply to an offender who owes a delinquent fine for negligence:

1) Where an offender falls under any subparagraph of Article 2-2 (1) of the

Enforcement Decree of the Act on the Regulation of Violations of Public Order;

2) Where it is found that a violation has been caused by minor negligence or a mistake;

3) Where it is found that an offender had endeavored to correct or eliminate the

violation of the Act;

4) Where it is found necessary to reduce the amount on any other ground, taking into consideration the degree, motive and consequence of a violation.

(d) An imposing authority may increase a fine for negligence by one-half of the

amount of the fine for negligence under subparagraph 2 in any of the following cases: Provided, That the amount so increased shall not exceed the maximum amount of a fine for negligence under Article 39 of the Act:

1) Where it is found that the nature and degree of a violation is serious and the damage caused by the violation to consumers and others is great;

2) Where the state of a violation of the Act persists for not less than six month;

3) Where it is found necessary to increase the amount on any other ground, taking into consideration the degree, motive and consequence of a violation.

2. Specific Guidelines