It's the file that tells ELS what the light setup of the car is. Where the Environmental lights should flash, what flash patterns work, headlight/taillight flashers, arrow boards ect. It's not needed, you can use the default ones included in ELS, but if it's been included with the model it means it's probably been tailored for that specific model to enhance the feel/realism.
I haven't played LCPDFR in over a year but I'm pretty sure it just goes in a folder in your main directory, and then you link it up in the els config file. It should be in the els manual or the installation instructions for the model.