What provisions govern standard connection facilities in the Philippines and the upgrade of electricity
infrastructure?
2.3 STANDARD CONNECTION FACILITIES For the dual purpose of establishing unbundled connection
charges and implementation of ERC policies regarding new connections for End-users, the DU shall
identify Standard Connection Facilities for each Customer Segment. In identifying the Standard
Connection Facilities, the DU shall include the minimum facilities necessary to establish a connection for
a typical customer within the Customer Segment. The DU shall include its proposed Standard
Connection Facilities as part of its application for approval of Standard Connection Charges.
2.6.5 MINIMUM FACILITIES In designing a connection, the DU shall only require the minimum facilities
that are commercially available and consistent with current ERC-approved standards, which are
necessary to provide service to the End-user. This provision applies to both Standard Connection
Facilities as described in section 2.3, and connections requiring facilities in excess of the Standard
Connection Facilities. If the End-user, or another party requests facilities in excess of that which is
necessary to meet the Enduser’s power requirements, then all costs attributable to such excess shall be
at the requesting party’s sole cost and expense which shall be treated as a CIAC. If the DU installs
facilities in excess of that which is necessary to meet the End-user’s power requirements and such
installations are necessary to accommodate anticipated growth of additional customers, then all costs
attributable to such excess shall be paid for by the DU and treated as Electric Plant Held for Future Use.
2.7.2 NON-STANDARD CONNECTION A non-residential End-user has the right to an extension of lines or
installation of additional facilities that exceed the Standard Connection Facilities provided that the End-
user pays for any facilities in excess of the Standard Connection Facilities used to compute the Standard
Connection Charge for that End-user’s Customer Segment. Specifically, the amount to be paid by the
End-user shall equal the cost of the connection less the cost of the Standard Connection Facilities. Such
payments for facilities in excess of the Standard Connection Facilities are not refundable and shall be
treated as a CIAC. The End-user only paying CIAC on the amounts in excess of the Standard Connection
Facilities shall still pay the ERC-approved Standard Connection Charges.
Contribution in Aid of Construction (CIAC) Amounts paid by a Connection Customer for the construction
and/or extension of Distribution Connection Assets beyond the Standard Connection Facilities as
proposed by the DU and approved by ERC. The DU maintains a separate account of these amounts and
the assets never appear in rate base nor in a DU asset appraisal.
2.7.2. (modified by ERC Resolution No. 03, Series of 2012
NON-STANDARD CONNECTION FACILITIES
Non-standard connection facilities where the project is viable shall be borne by the DU. These
facilities shall form part of the DU's regulatory asset base. A project shall be considered as viable
if the cost of installing lines and facilities is at least equal to the revenue/s derived from
customer/s connected thereto within the standard asset life of such lines and facilities as
determined under existing ERC rules and regulations. However, if the project is not viable, a
non-residential End-user may be required to bear the costs for the installation of non-standard
connection facilities, subject to the provisions of the DSOAR. The said customer has the
following options: ADScCE
1.
Advance the said costs and eventually be refunded by the DU, in which case,
the provisions on cash advance and refund involving residential customers shall
apply, that is, a refund at a rate of 25% of the gross distribution revenue derived
for the calendar year until such amount is refunded.
provided however, that there shall be no acceleration of the refund period; or
2.6.9 MODIFICATION TO EXISTING FACILITIES If an End-user submits a request to have
the DU modify, rearrange, relocate, or remove any of the DU’s legally sited facilities
for any purpose that does not result in a net increase in demand or electricity usage,
the End-user shall be responsible for all costs attributed to such work. Such amounts
shall be treated as a CIAC not subject to refund. For modifications to existing facilities
that result in a net increase in demand or electricity usage and are within the defined
Standard Connection Facilities for the End-user’s Customer Segment, the associated
cost of such modification shall be that of the DU. If the modification results in facilities
that are in excess of the Standard Connection Facilities, the residential End-user shall
advance such amounts to be refunded later at a rate of twenty five (25) percent of the
gross distribution revenue derived for the calendar year for five years or until such
amounts are fully refunded, which ever period is shorter.
2.6.10 RIGHT TO PROCURE EQUIPMENT AND CONSTRUCTION Connection
Customers/Applicants shall have the right to select their own contractor and/or
equipment vendor for the equipment, construction and installation of Distribution
Connection Assets provided that the same adhere to all requirements of the
Distribution Code and any other standards approved by ERC. A Connection
Customer/Applicant wanting to self-procure equipment and construction shall only
select from contractors that have been accredited pursuant to guidelines issued by
ERC. Residential End-users located farther than thirty (30) meters from the DU’s
existing secondary voltage lines who procure and pay for services and equipment to
construct their own connection shall be eligible to receive a refund at the rate of
twenty-five (25) percent of the gross distribution revenue derived for the calendar
year for five (5) years or until such amount is fully refunded, whichever period is
shorter. The End-user shall submit to the DU all relevant invoices and proof of
payment along with a sworn affidavit from the End-user that the documents are true
and accurate. The DU shall immediately inform the ERC if it has reason to believe that
any invoices or proof of payment have been falsified and the ERC shall investigate.
Said refund shall not exceed the DU’s proposed estimate for constructing the
Connection Assets or the actual cost incurred by the End-user, whichever amount is
lower. Because the amounts paid for the construction of a connection for a residential
End-user are subject to refund, a residential customer utilizing the option to construct
their own connection shall pay the relevant Standard Connection Charge approved by
ERC.
2.
Bear the costs for the installation of lines and facilities which shall be treated as
Contribution in Aid of Construction (CIAC); or
3.
The DU may provide the non-standard connection facilities but subject to the
payment by the customer of connection charges mutually acceptable to the
parties. The said facilities shall not form part of the DU's Regulatory Asset Base
or plant in service.
From <http://liaerc.node1347.speedyrails.net/documents/859>
2.7.11 CONTRIBUTION IN AID OF CONSTRUCTION Following inspection for compliance with the
Distribution Code, any installed Connection Assets paid for by the End-user and treated as CIAC shall
become the property and maintenance responsibility of the DU, except as provided for in the following
section. Any facilities treated as CIAC shall not be subject to refund by the DU and shall not become part
of the DU’s rate base or appraised property value. If replacement of a connection paid for through a
CIAC becomes necessary, the DU shall be responsible for the costs of such replacement which shall
become part of rate base consideration. The End-user, however, has the option to pay for the
replacement.
