REPUBLIC OF THE PHILIPPINES

ENERGY REGULATORY COMMISSION

SAN MIGUEL AVENUE, PASIG CITY

IN THE MATTER OF THE ENERGY REGULATORY COMMISS!ON

APPLICATION FOR APPROVAL
OF CAPITAL EXPENDITURE
PROJECTS FOR CALENDAR
YEAR 2016, WITH PRAYER FOR
PROVISIONAL AUTHORITY
R ECEIIVE01
Dte
1me:
:n2tziJ

ERC Case No. 201 6-_RC

m
DAVAO LIGHT AND POWER
COMPANY, INC. (DLPC),
Applicant.
x------------------------x

APPLICATION

Applicant DAVAO LIGHT AND POWER COMPANY, INC.

(DLPC), by counsel, to this Honorable Commission, respectfully
states:

1. DLPC is a corporation duly organized and existing under

and by virtue of the laws of the Republic of the Philippines, with office
address at C. Bangoy Sr. St., Davao City. It is the grantee of a
legislative franchise under Republic Act No. 8960 to operate the
electric light and power distribution system in the Cities of Davao and
Panabo, and in the Municipalities of Carmen, Sto. Tomas and Braulio
Dujali, Province of Davao del Norte (the "Franchise Area"). DLPC
may be served with orders and other processes of the Honorable
Commission through its undersigned counsel at the address indicated
below,

2. DLPC's Third Regulatory Period (3 rn' RP) covers the

period from 1 July 2014 to 30 June 2018. However DLPC must still
undergo the reset process and is currently awaiting the final rules to
govern the filing of its 3( RP reset application.

3. This notwithstanding, Republic Act No. 9136, or the

Electric Power Industry Reform Act of 2001 ("EPIRA"), under Section
23 thereof, obligates a distribution utility, such as DLPC, to provide
distribution services and connections to its system for any end-user
within its franchise area consistent with the distribution code. Further,

1
distribution utilities share in the objective of the EPIRA to ensure the
quality, reliability, security and affordability of the supply of electric
power. 1

4. Thus, for DLPC to pursue its mandate under its franchise

and the EPIRA, it is necessary for DLPC to continuously invest in the
improvement of its system and services to better serve its customers.

5. As such, DLPC, in pursuit of its duty to better serve its

customers, and in accordance with Section 20 (b) of Commonwealth
Act No. 1462, hereby applies for the approval of the Honorable
Commission to implement its Capital Expenditure Projects (CAPEX),
which for Calendar Year ("CV") 2016.

6. DLPC's 2016 CAPEX program is categorized as follows:

a. Substation Projects;
b. Upgrading of Distribution Lines Projects;
c. Other Network Projects; and
d. Non-Network Projects.

7. The CAPEX projects under the category of Substation

Projects are as follows:

7.1. The Additional 100 MVA, DRA Substation

Upgrade Project involves the purchase and installation of an
outdoor type, 100 MVA, 138/69kV three phase transformer,
associated breakers and equipment. This project is necessary
as the current 2 x 50 MVA power transformers in the DRA
Substation will soon reach critical levels. The said project will
provide additional capacity and will aid in carrying the incoming
load growth in the northern part of DLPC's franchise area.

7.1.1. This project is connected to the following

complementary projects:

7.1.1.1. The 138 kV Line New DRA from NGCP

Bunawan to DRA Substation Project, which involves
the construction and installation of a new 1.8 km,
138kV, single-circuit #795 MCM ACSR subtransmission
line from NGCP-Bunawan to Don Ramon (DRA)
substation, together with the necessary accessories.

1 Section 2 (b) of the EPIRA.

2 Public Service Act

2
 This project will aid in providing capacity and reliability
on the 138 kV supply of the DRA substation, especially
when the IOOMVA additional capacity becomes
operational. Notably, this new line will increase the
transmission capacity for the DRA substation, which will
aid in avoiding overloading of the existing line.

7.1.1.2. The 69kV Line New DRAI from DRA

Substation to Panacan (Landmark GOABS) Project
involves the construction and installation of a 69 kV
line, poles, line accessories, disconnection switches
and other materials and equipment from the Panacan
(Landmark GOABS) to DRA substation. This project is
necessary to provide much needed capacity for a
looping system between ERA and DRA substations.
Without this in place, the ERA-DRA loop system
between the two substations will not be realized and
will negatively impact the supply continuity of the
served area.

7.2. The New Panabo Substation Project involves the

construction of an indoor type, 25 MVA, 4 feeder, 69/13.8 kV
substation in the Panabo area. This project is essential as this
will answer for the load growth in Panabo City.

7.2.1. This project is related to the following

complementary projects:

7.2.1.1. The 13.8 kV Line New, PBOI, New

Panabo Substation take off to Panabo Bus Terminal
Project relates to the construction and installation of a
feeder, poles, and associated materials and equipment,
for the proposed New Panabo Substation. This new
feeder will be interconnected with Bunawan Feeder 2.

7.2.1.2. The 13.8 kV Line New, PB02, New

Panabo Substation take off to UM Highway Project
involves the construction and installation of a feeder,
poles, and associated materials and equipment. It
intends to tie up Panabo and San Vicente substations
to cater load transfers between the two substations.

7.2.2. Without these complementary projects, the

risk exists that a large number of customers will experience
power interruption during contingency situations affecting
Bunawan, San Vicente and Panabo, or during scheduled
maintenance undertakings.

3
 7.3. The New Switching Station-Holcim Project
involves the construction of structures and installation of In and
Out ring bus breakers, switches, controls and other equipment
in the proposed Holcim Swithching Station. This Project will
enable related substations to receive power supply from two
sources in a loop through SCADA remote operation. Through
this, the automatic switching of sources during switching
scenarios is achieved and the outage duration of Holcim and
adjacent substations will be minimal.

7.3.1. This project is connected to the

complementary 69kV Line New-DRA2 From llang
Highway to Holcim Switching Station Project, which
involves the installation of a 69 kV line, poles, and
associated materials and equipment. This complementary
line project is a pre-requisite in completing the 69kV loop for
the Industrial North Area served by the DRA substation. This
69kV Line New project will provide additional incoming 69kV
source for HOLCIM and other customers connected in the
69kV loop. Without this project, there is a risk that Holcim,
and other customers connected to the loop, will have no
access to supply in the event that the NGCP-Bunawan is in
contingency situations or during scheduled maintenance
activity.

7.4. The R. Castillo Substation In-Out Project involves

the construction of structures and installation of In and Out ring
bus breakers, controls and other equipment in the proposed R.
Castllo Substation. This project will enable related substations
to receive power supply from two sources in a loop through
SCADA remote operation. With the project in place, the
automatic switching of sources during switching scenarios is
achieved and the outage duration of the R. Castillo Substation
during fault conditions will be minimal.

7.4.1. This project is related to the complementary

69kV Line New ERA to R. Castillo Project, which involves
the installation of a 69 kV line, poles, and associated
materials and equipment. This complementary line project is
intended to supplement the intended utilization of the
proposed In-Out breaker scheme for the R.Castilo.

8. As regards the "Upgrading of Distribution Lines

Projects" category of the 2016 CAPEX program, these projects
involve the rehabilitation or upgrade of existing lines, poles and
equipment, and/or installation of new lines, poles and associated
equipment in various areas within DLPC's Franchise Area. The

4
projects under this category are necessary to boost the reliability and
flexibility of the system by providing additional line capacity between
the interconnected substation and feeder system of DLPC. Further,
the projects herein will provide additional safety to customers by re-
conductoring the existing bundled line construction that traverses
private properties to a single wire upgraded rating capacity modified
to avoid line hazard and obstruction. The projects under this
category are listed in Table 1, including the complementary projects
of the aforementioned Substation Projects. The major components of
this category are:

8.1. The "13.8kV Underground Distribution System -

2nd of 5 phases" Project, which basically involves the
conversion of overhead lines, located in the downtown area, to
an underground distribution system. This project is aimed at
minimizing safety hazards contributed by power and
communication overhead distribution lines. This is a
continuation of Phase 1, covering the seat of local government
of Davao City.

8.2. "Line Rehabilitation! Maintenance," which

involves (i) Replacement of old wooden or dilapidated 138kV
structures and fixtures; (ii) Replacement or relocation of various
69kV structures and fixtures, with wires and accessories,
including those works upon the request of the Department of
Public Works and Highway; (iii) Replacement of various primary
and secondary structures and fixtures with wires and
accessories for maintenance; (iv) Conversion or Upgrade of
various rural distribution line structures and fixtures with wires
and accessories; (v) Installation of new and replacement of
leaking insulators and arresters, load break switches or
sectionalizer, fault current indicators, and tree wire and line
markers; and (vi)Typhoon Failure Containment for 69kv and
13.8 kV lines.

8.3. The "Rotten Poles and Transformer

Replacement" Project, which involves the replacement of
rotten poles with steel poles together with distribution
transformers with pole top hardware and accessories in order to
protect the public from the hazards posed by the possible
collapse of said rotten poles. This project at the same time aims
to maintain reliability and reduce service interruptions due to
dilapidated poles and overloaded transformers.

8.4. The "New Application" Project, which involves

securing additional transformers, poles, wires, line hardware

5
 and other distribution apparatus needed for providing service to
new applicants. This project enables DLPC to effectively cater
and supply new applicants with their energy requirements.

8.5. The "Rural Electrification" Project, which relates

to the new line extension to rural areas with transformer
additions and capacitor or voltage regulator installations. This
project will contribute in providing reliable and continuous
supply to the areas in need within DLPC's Franchise Area.

8.6. The "Substation Rehabilitation and

Maintenance" Project, which involves the replacement of
defective, non-SCADA, non-recording and old meters, relays
and annunciators. The replacement will enable DLPC to
remotely control relays through SCADA. Further, the additional
data recording feature enables event logging for post-fault
analysis. There will likewise be installation of additional CCTVs
in DLPC's substations. Furthermore, old oil circuit breakers will
be replaced with new SF6 circuit breakers, old and defective
69kV and 15kV disconnect switches will be replaced with new
ones and construction of new control room will be undertaken to
accommodate protection and control requirements. A shift will
likewise be made from run-to-failure mode of maintenance to
condition-based maintenance. Lastly, critical spare inventory for
major equipment will be undertaken especially to those items
that have long acquisition lead times.

9. "Other Networks Projects" are listed in Table 1. A major

component under this category is the "Installation and Replacement
of Residential Meters" Project, which involves the installation of
new electronic meters and also the replacement of defective or
electromechanical meters, including accessories, for residential
consumers. This pro-active service maintenance program aims to
shorten the continuing meter replacement from 20 years into 6 years.
In this manner, the end-consumers are not inconvenienced by the
existing reactive approach as regards meter replacement.

10. The projects under the category "Non-Network Projects"

are likewise listed in Table 1. The major components of this
category are:

10.1. The "Repairs and Expansion of Office Buildings,

Equipment and Utilities" Project pertains to the expansion,
construction and repairs undertaken of office, office utilities,
health, safety and security systems together with the acquisition
of associated furniture and fixtures. This project is for the
 purpose of providing safe, healthy and ambient working
environment to DLPC's employees and visiting customers.

10.2. The "Computer Equipment" Project is for the

implementation of the Human Capital Management (HCM),
Meter Data Management (MOM) and replacement of old
computer units and other related IT related equipment. HCM is
critical to the delivery of safe and efficient service to the
customers. The HCM optimizes the DLPC workforce to provide
efficient, cost-effective services in order to respond quickly to
changing business needs. The HCM ensures that the OLPC
workforce is highly competent and well-prepared. The MOM
serves as the data repository and date mart for the planned
Automatic Meter Reading/Advance Metering Infrastructure
(AMR/AMI). This goes hand in hand with the aim of OLPC to
replace the electro-mechanical meters to electronic smart
meters. Lastly, old and obsolete computer units and other
related IT equipment will be replaced in order to mitigate the
risk of systems failure which may lead to disruption of services.

11. The total estimated cost of DLPC's CY 2016 CAPEX is

Php 1,180,063,191.00 and the complete list of DLPC's 2016 CAPEX,
together with its estimated cost, is as follows:

PROJECT SUMMARY

DESCRIPTION COST

SUBSTATION PROJECTS

Substation upgrade, DRA 5/5, additional 100 MVA Php94,790,016

New Panabo 5/S Php94,489,000

In-Out, R.Castillo Substation (1st Phase) Php36,938,000

New Switching Station, HOLCIM Php50,068,955

UPGRADING OF DISTRIBUTION LINES

New Lines Project Php203,304,330

138kv Line New DRA from NGCP Bunawan to DRA Phpl7,338,398

substation

69kv Line New DRA1 fr DRA Ss to Panacan (Landmark Php53,220,925

GOABS)

7
 69kv Line New DRA2 fr hang Highway to Holcim Switching Php4,556,132
Station

69kV Line New, DRA4, Steel Asia to Bunawan Public Php3,870,244

Market

69kV Line New,ERA2, RCastillo Ss In and Out Line Phpl,036,328

69kv Line New, Puan Switching Station Take Off Php594,456

13.8kv Line New, Maa 4 from Jade Valley to Juhiville Php2,454,499

13.8kv Line New, MAT 4 to Crossing Langub Phpl,078,048

13.8kv Line New, PBO1, New Panabo 55 Take off to Php955,461

Panabo Bus Terminal

13.8kv Line New, P802, New Panabo Ss Take off to UM Php472,097

Highway

13.8kv Line New, RCA5, fr Holy Cross of Agdao to Agdao Phpl,322,617

flyover

13.8kv Line New, Tug 4 from Tugbok Ss to Cahinan Php8,887,275

downtown

13.8kv underground Distribution System (2nd of S Php100,000,000

phases)

Line Upgrade Phpl2,608,627

69kV Line upgrade, Era 1, Roxas 3-way GOABS to P. Reyes Phpl,326,932

S/s

69kv Line upgrade, Era 2, Citi Hardware Bajada to Php7,002,258

Pam pa nga S/s

69kv Line upgrade, STA 1, from Sta. Ana S/S to Davao Phpl,007,750
Central Warehouse

13.8kv Line upgrade, TAD2, from TAD S/S to PN 0775876 Php2,538,879

13.8kv Line upgrade, Tad 4, Route to Camihing Php732,808

Line Rehabilitation/Maintenance Php57,489,398

Line Reclosers Phpl8,277,792

Emergency Php8,771,935

91
 Rotten Pole and Transformer Replacement Php3l,109,885

Voltage Correction Phpl2,045,213

New Application Phpl4l,071,275

Rural Electrification Php32,044,532

Subdivision Electrification Php7,760,805

Substation Rehabilitation and Maintenance Php34,541,432

DTHER NETWORK CAPEX

Street Lights and Signal Systems Phpl4,495,008

Installation, Replacement and Maintenance of Industrial and Php23,751,917

Commercial Meters

Installation and Replacement of Residential Meters Php170,051,439

[NON-NETWORK CAPEX

Telecommunication Phpl6,961,096

Tools and Work Equipment Phpll,810,120

Transportation Phpl0,599,000

Acquisition of Land - For New Binugao Substation which Phpl6,840,000

construction will start in 2017 and additional area for Victoria
Substation which upgrading and re-configuration will also start in
2017

Buildings and Improvement, Office Equipment, Furniture and Php52,405,352

Fixtures and Miscellaneous Equipment

Computer Equipment (Software & Hardware) Php35,355,914

TOTAL Php 1,180,063,191.00

Table 1: 2016 CAPEX Projects

12. The detailed justifications, technical analysis, economic

analysis and alternatives considered, if availing, for DLPC's CAPEX
program for CV 2016 are discussed in detail in Annex "A" of this
Application.

13. The proposed CAPEX for CV 2016 will not have a direct
impact on the current rates of DLPC until approved by the Honorable

ff
Commission as part of DLPC's Regulatory Asset Base in the next
applicable Regulatory Period.

ALLEGATIONS IN SUPPORT OF THE PRAYER

FOR PROVISIONAL AUTHORITY

14. Public interest and necessity requires the immediate

implementation, without delay, of the subject CAPEX projects. The
loading and reliability constraints of the current substations are
reaching critical levels, necessitating the upgrade and/or construction
of the relevant substations. Aside from these, in the event that the
CAPEX projects are not immediately implemented, the consumers
may suffer from prolonged power interruptions and additional Toad
coming from existing and new customers may likewise not be
accommodated. These negative consequences, which are
detrimental not only to the economy of the areas covered by DLPC,
but also to the livelihood and everyday lives of the consumers may be
mitigated by the immediate approval of the DLPC 2016 CAPEX
projects.

15. Thus, pending final approval, there is an urgent need for a

provisional authority for DLPC to immediately implement its proposed
2016 CAPEX projects. In support of the prayer for the grant of a
provisional authority, attached as Annex "B" is the Judicial Affidavit of
Mr. Reynold B. Felix, Assistant Vice President of DLPC for
Engineering-Support.

16. The foregoing CAPEX for CY 2016 are

indispensable for the systematic and economic expansion and
rehabilitation of DLPC's distribution facilities and ensuring compliance
with safety, performance and regulatory requirements. The benefit
arising from these CAPEX projects will ultimately redound to the end-
consumers of DLPC in terms of continuous, reliable and efficient
power supply.

WHEREFORE, in view of the foregoing, DLPC respectfully

prays that this Honorable Commission:

1. Pending trial on the merits, immediately issue a

PROVISIONAL AUTHORITY authorizing DLPC to implement its
Capital Expenditure Projects (CAPEX) for Calendar Year ("CY")
2016.

10
 2. After due hearing, render judgement making the approval of
the Application permanent.

Other reliefs just and equitable under the premises are likewise
prayed for.

Taguig City for Pasig City, 09 August 2016.

DAVAO LIGHT AND POWER COMPANY, INC.

By:

KATRINA M. PLATON
PTR No. 2816499 / January 18, 2016/Taguig City
IBP Lifetime No. 706864 / Makati City
MCLE Compliance No. V-0018713/April 13, 2016
Roll No. 38338

PTR No. 28,$498 / January 18, 2016/Taguig City

IBP No. 1025702 / January 15, 2016 / RSM
MCLE Compliance No. V-0002586 I June 9, 2014
Roll No. 55895

LEVy-CA,RLO C. LOPEZ
PTR No. 281S60 I 9ánuary 18, 2016 / Taguig City
IBP No/102579'l /January 15, 2016/ RSM
MCLE CpliancNo. V-0014960 / March 4, 2016
/ /Roll No. 59128

\— 16th Floor, NAC Tower

32nd Bonifacio Global, Taguig City
Telephone No. 886-2348/Fax No. 886-2405

11
 VERIFICATION & CERTIFICATION OF NON-FORUM SHOPPING

I, Reynold B. Felix after having been duly sworn in accordance with law,
depose and say:
1. I am the Assistant Vice President —Engineering Support of Davao
Light and Power Company, Inc. ("DLPC"), the applicant in the present
case;

2. That I have caused the preparation and filing of the foregoing Application;

3. That I have read the same and that all allegations contained therein are
true and correct of my own personal knowledge and belief and/or based
on authentic records of DLPC.

4. That DLPC has not commenced any other action or proceeding involving
the same issuels with the Supreme Court, the Court of Appeals or any
other tribunal or agency; and

5. That to the best of my knowledge, no such action or proceeding involving

the same issue/s is pending with the Supreme Court, the Court of Appeals
or any other tribunal or agency. Should I hereafter learn that a similar
action or proceeding has been filed or is pending with the Supreme Court,
the Court of Appeals or any other tribunal or agency, I hereby undertake to
report such fact within five (5) days to the Honorable Commission.
Further affiant sayeth none.
IN WITNESS WHEREOF, I have hereunto set my hand in Davao City, this
AUG 0 9 2Lgust 2016.

Reynold B. Felix
Affiant

SUBSCRIBED AND SWORN to before me in, this A1liaâ 2016 2016,

by the affiant who exhibited to me Drivers License No. L02-86-0281 93 with
expiry on September 20, 2018 issued by the Land Transportation Office and
his Community Tax Certificate No. 14407772 issued in Davao City on
February 1, 2016.'

Notary Public
Doc. No. -
Page No. !L.
ATTY. ERIC J JERO, CPA
Book No.
Series of 2016 Notarial comrfljs$on Ser:
1No. 066-2016
commission ExpfrQs on Dber 2t 'Al,

12