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ARTICLE II – RULES PERTAINING TO DISTRIBUTION CONNECTION ASSETS AND SERVICES

Effects of the DSOAR
• Published in the Manila Standard on February 2, 2006 • Effective on February 17, 2006 • Repealed ERB Res. No. 95-21 as amended
– All technical provisions were transferred to the DSOAR

• Complements the Magna Carta

Dispute Resolutions (Art. 1.10)
• Rules of Procedure Governing Complaints Filed with the CAS • Consumers can file complaints with the ERC • Defendant has 10 business days to answer from receipt of the order or date of the conference whichever comes earlier • Pre-hearing conferences are set to resolve issues amicably • If no settlement, case will undergo hearing; but may be heard using summary procedure • Summary Procedure applies to: – Claims involving not more than P200T – Issue is incapable of pecuniary estimation • Status quo is maintained for cases of violation of contract

Standard Connection Facilities (Arts. 2.3-2.4)
• The DU shall identify standard connection facilities for each customer segment • Unbundled Standard Connection Charge for each customer segment • DSOAR Rules provide for methodology for computing Standard Connection Charge • Standard Connection Facilities and Standard Connection Charges are subject to ERC approval • Within 180 days from effectivity of Customer Segment Guidelines, DUs shall submit an application for approval of unbundled standard connection charges (SCCs) for each customer segment

New Connection Points or Modifications to Existing Connection Points (Art. 2.5)
• The connection applicant shall complete a Connection Application provided by the DU in accordance with the provisions of the DSOAR Rules and the Distribution Code • For residential customers – add the requirement of an undertaking by the owner to be solidarily liable with the applicant-tenant for regular bills incurred after the applicant leaves the premises (Magna Carta for Residential Electricity Consumers) • All connections and disconnections of service shall be made by the DU • Service drops, service entrance, service switches or breakers, underground service and groundings shall be governed by the PEC and ERC rules and regulations

Right to Extension of Lines and Facilities – Residential Consumers (Arts. 2.6.1-2.6.2)) • Customer is within 30 meters from DUs existing secondary low voltage lines, he has the right to extension of lines and facilities • Customer is beyond 30 meters, he may advance cost of line and additional facilities subject to reimbursement from the DU through:
– Issuance of notes payable – Refund at the rate of 25% of gross distribution revenue derived from the calendar year or 5 years, whichever comes earlier – Purchase of preferred shares

Right to Extension of Lines and Facilities – Residential Consumers (Art. 2.6.3) • Transformer for the sole use of a single residential customer – customer to pay the actual cost of the transformer and such – payment shall not be subject to refund and will be treated as a Contribution In Aid of Construction

• Not applicable if –
– installation of the transformer is part of the Standard Connection Facilities for the Enduser’s Customer Segment; or – due to the isolated nature of the customer.

Right to Extension of Lines and Facilities – Non-Residential Consumers (Art. 2.7)

• Expense of the utility • For equipment and facilities to be installed are within the levels found in the Standard Connection Facilities used to compute the Standard Connection Charge for that end-user’s customer segment

Standard Connection Facilities

Standard Connection Facilities

Non-Standard Connection Facilities

Engineering and Design (Arts. 2.6.4 & 2.7.3)
• DU shall be responsible for the engineering, design and inspection of all line extensions • End-user to provide all information pertaining to load characteristics required to develop the design. • Free Service to the end-user and become part of the DU’s operation and maintenance expense account

Minimum Facilities for the Design (2.7.4)
• DU to require only minimum facilities consistent with the Distribution Code • Cost of facilities in excess of minimum facilities shall be the sole expense of the requesting party and treated as Contribution in Aid of Construction (CIAC) • DU requests for facilities in excess of minimum shall be considered as Electric Plant Held for Future Use • Design the line extension from the nearest existing source of available capacity to the End-user’s delivery point along the shortest practical route. • Design also an alternative route in anticipation of additional customers, additional costs shall be at the DUs sole cost and expense and considered Electric Plant Held for Future Use

Easements (Arts. 2.6.8 & 2.7.7)
• Residential customers – located beyond 30 meters shall advance the cost for the easement subject to the refund scheme of extension of lines and facilities • Non-residential customers – DU to obtain rights of way at the sole expense of the end-user

Procurement of Equipment and Construction (Arts. 2.6.10 & 2.7.9)
Residential Customers • Connection Customers/applicants have the right to select own contractor and/or equipment vendor for the equipment, construction and installation of Distribution Connection Assets • Customers beyond 30 meters of DU’s existing secondary low voltage lines are eligible to receive a refund at the rate of 25% of gross distribution revenue for the calendar year for 5 years until such amount is fully refunded, whichever is shorter. Non-Residential Customers • Connection Customers/applicants have the right to select own contractor and/or equipment vendor for the equipment, construction and installation of Distribution Connection Assets • Ownership of the said Connection Assets will be given to the End-user under the following conditions: – End-user shall transfer ownership of said facilities to the DU in the event that any portion of these facilities become necessary to provide service to other Connection Customers. Such facilities shall then be subject to the proportionate sharing provision of Section 2.7.10 of the DSOAR;

Procurement of Equipment and Construction (Arts. 2.6.10 & 2.7.9)
Residential Customers • 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 is lower • Since amounts paid for the construction are subject to refund, the residential customer shall pay the relevant Standard Connection Charge approved by the ERC Non-Residential Customers – Facilities owned by the End-user will be restricted solely for the use of that end-user – End-user agrees to procure and pay for all necessary maintenance services for the owned facilities; and – Only those facilities that pass through private property may be owned by the End-user

Proportionate Sharing of Line Extension Costs – Non-residential customers only (Art. 2.7.10) • Any end-user is allowed to connect to facilities treated as CIAC • Within 5 years from construction, end-user shall pay DU a CIAC equivalent to one-half of the CIAC paid by the previous end-user times the proportionate ratio of the distance utilized by the newly connecting end-user plus any added facilities in excess of the standard connection facilities • DU shall return the CIAC paid by the newly connecting end-user to the end-user/s who originally made the CIAC in proportion to the relative amounts originally paid by each.

Contribution in Aid of Construction
• Any facility treated as CIAC shall become the property and maintenance responsibility of the DU • Not subject to refund by the DU and shall not become part of the DU’s rate base or appraised property value. • Necessary replacements shall be at the expense of the DU and shall become part of rate base consideration. • End-user has the option to pay for the replacement.

Metering Provisions (Art. 2.11)
• All meters including instrument transformers – tested and sealed by ERC prior to installation • Calibrated to as close to zero error as possible • Plus/minus 2% - tolerable limits but resulting only from wear and tear • Plus/minus 3% - tolerance limit at any load to be allowed to remain in service • Test and seal meters once every two (2) years

Effects of Meter Testing (Arts. 2.11.6 & 3.5.7)
• Stop Meter with no evidence of tampering – DU to recover a maximum period of 3 months (Ridjo Tape case) • Defective Meter with no evidence of tampering – DU to recover a maximum period of 6 months • Fast Meter – customer to recover overbillings equivalent to a maximum – period of 6 months

Proper Installation of Meters (Art. 2.11.1)
– Meter is easily accessible and visible for reading and testing – Located on outside wall or private pole with a height between 1.52 meters to 3 meters – Location subject to exemptions – Borne by the utility except:
– Customer requests for relocation – Meter installation fails to meet the conditions due to improvements made by the customer

ARTICLE III. RULES PERTAINING TO SERVICE TO THE CAPTIVE MARKET

Bill Deposits – applicable to all customer classes (Art. 3.4.1)
• Applicants for new and additional service shall be required to pay bill deposits • Equivalent to the estimated monthly billing of the applicant • Adjusted yearly • Earn Interest equiv. to :
 incorporated in the WACC, otherwise, the prevailing interest rate for savings deposit approved by the BSP – residential customers  Interest rate for savings deposit – non-residential customers

• Bill deposit may be reimposed if, after refunding, the customer defaults in the payment of monthly bill

Bill Deposits – applicable to all customer classes (Art. 3.4.1)

• • • •

applicants with established credit relocate their electric service no bill deposits applicants lose credit when they default in paying their bills • additional account - separate deposit

Meter Deposits – Applicable to all customers (Art. 3.4.2)

• All customers are exempt from payment of meter deposits • Customer shall shoulder cost of meter replacement if he caused the loss or damage of the meter • Meter deposits of existing customers are to be refunded

Bills and Billing Formats (Art. 3.5)
• Bills are rendered monthly • Bills shall conform with the format approved by ERC • Format to include info that when disputes cannot be settled, they can be elevate to ERC • Pay bills within:
– 9 days from receipt – residential – 10 days from receipt – non-residential

Estimated bills – DSOAR intro (Art. 3.5.4)
• Use estimate due to:
– Force majeure – Outside the control of the DU

• Bills using estimates are only allowed when the meter fails to register the consumption for the entire billing period • More than two consecutive bills using estimates are not allowed

Estimated bills (Art. 3.5.4)
• Any of the following methods in the order of priority shall be used to estimate usage
– Average daily usage of the customer during the portion of the billing period registered by the meter applied to the remaining days in the billing period – The average usage of the customer during the preceding 3 months – The usage of the customer during the same month of the preceding year – If time of use rates and metering are applicable, then the estimated bill shall rely on the relevant time of use load profile data during the previous month

Estimated Bills (Art. 3.5.4)
• After using 2 consecutive estimated bills, the DU shall:
– Read the meter during the next billing cycle and adjust the estimated bills accordingly; or – Take an initial meter reading following the next billing cycle as if service was starting anew and no charges will be levied on the customer for the skipped billing cycle

Adjustments of Billing Errors (Art. 3.5.7)
• Errors due to pilferage are governed by the RA 7832 and its IRR • Errors from defective/stop meters are governed by the Magna Carta • Other billing errors shall be subject to the following: • Refunds:
– Overpayments - computed back to the date on which the error commenced, – error or omission is due to the fault of the DU
• a bill for undercharge be computed for a period not exceeding 3 months

Billing Disputes (Art. 3.6)
• Prompt investigation of complaints • DU to inform complainant of action taken thereon within 15 days from receipt of complaint • DU shall inform customer of right to file complaint with the ERC

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