Section 1. In General. - Any plan for expansion or improvement of distribution facilities shall be reviewed and approved by the Commission to ensure that all capital projects are optimized and that the contracting and procurement of the equipment, assets and services have been subjected to transparent and competitive bidding and purchasing processes to protect public interest. Applications of this nature shall be governed by the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects.

Section 2. Application for Approval of Major Electric Capital Projects. - The application for the approval of any Major Electric Capital Project/s, as the same is defined in the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects shall comply with the formal requirements in Rule 3 and shall be accompanied by the following supporting documents:

(a) Description of the Project
(b) Justifications for the Project (include the adverse effects of the non-implementation of the proposed Project(s) and impact or benefits of the proposed Project(s) on the system)
(c) Options/Alternatives considered in lieu of the proposed Project(s)
(d) Five-year Historical and Forecast Planning Data consistent with the Distribution Development Plant (DDP)
(e) Technical Analysis (Simulation and/or Computation)
(f) Projected Financial & Economic Cost Analysis
1. Impact/effect on rate base of the proposed Project(s)
2. Net Present Value, Internal Rate of Return and Benefit/Cost Ratio analysis (include analysis of the alternatives)
(g) Conceptual Engineering Design and Drawings
(h) Project Cost Estimates which have to be in reference to a specified design and bill of materials in the latest Manual of Construction Standards submitted to the ERC
(i) Project Financing Plan
(j) Proposed Gantt Chart Schedule (include Bidding and Procurement Schedule)
(k) Board Resolution or Secretary’s Certificate approving the proposed Project(s)
(l) Sworn Statement from the authorized representative of the Electric Utility that an application for approval from the concerned agencies that may have interest in the proposed project has been filed /or shall be filed by (specify date of filing and furnish ERC a copy within 5 days upon filing)
(m) Sworn Statement from the authorized representative of the Electric Utility that the proposed major capital project is consistent with the DDP. Projects which are not included in the DDP need justification.

Section 3. Application for Approval of Major Non-Electric Capital Projects. - The application for the approval of any Major Non-Electric Capital Project, as the same is defined in the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects shall comply with the formal requirements in Rule 3 and shall be accompanied by the following supporting documents:

(a) Description of the Project
(b) Justification for the Project
(c) As-built Design and Drawings, if applicable
(d) Actual Project Cost
(e) Projected Financing Plan
(f) Gantt Chart Schedule
(g) Board Resolution or Secretary’s Certificate approving the proposed project/s
(h) Sworn Statement from the authorized representative of the Electric Utility that an application for approval from the concerned agencies that may have interest in the proposed project has been filed or shall be filed, if applicable

Section 4. Issuance of Provisional Authority. - Upon filing of the application, the Commission may, on its own or upon motion, grant the issuance of a Provisional Authority (PA) based on the allegations of the application and on such other documents attached thereto or submitted by the parties. The Commission, if necessary, may schedule a hearing for the issuance of a PA not later than thirty (30) days from the filing of the application. Thereafter, the Commission shall issue a ruling either granting or denying the PA stating clearly the reasons therefor, within seventy five (75) days from the filing of the application.

Section 5. Decision. - Any application for the approval of Major Capital Projects and/or Major Emergency Capital Projects shall be decided by the Commission within ninety (90) days from the time the applicant formally offers its evidence; otherwise, the application shall be deemed approved upon the lapse of said period.

Section 6. Permit Fee. - For the authorization and approval of Major Capital Projects and/or Major Emergency Capital Projects, an electric utility shall be required to pay a permit fee based on the existing schedule of ERC Fees and Charges.

Section 7. Referral to the Distribution Management Committee or Technical Consultant. - The Commission may refer to the Distribution Management Committee or engage the services of a consultant at a reasonable cost, in the evaluation of any Major Capital Project application submitted to it for approval. The applicant shall be charged an amount equivalent to the expenses incurred by the Commission in engaging the services of the consultant, and said expenses shall be recovered by the applicant as part of the capital expenditure of the project being evaluated.

Section 8. Reportorial Requirements. - In addition to the foregoing, the electric utility shall comply with the reportorial and other requirements contained in the Guidelines to Govern the Submission, Evaluation and Approval of Electric Distribution Capital Projects.