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Compliance Monitoring Report – Stellenbosch Local Municipality of 19

COMPLIANCE MONITORING

REPORT OF STELLENBOSCH

LOCAL MUNICIPALITY

Monitoring Date: 02 September 2015


All enquiries and correspondence to be directed to the Head of Department,

unless indicated otherwise, by means of a formal letter signed by the Head

of Department: Electricity Licensing, Compliance and Dispute Resolution.

Tel: 012 401 4794

National Energy Regulator

Kulawula House

526 Madiba Street

Arcadia

Pretoria

PO Box 40434

Arcadia

0007

Tel: +27 (0)12 401 4600

Fax: +27 (0) 12 401 4700

www.nersa.org.za

DISCLAIMER

The content of this report is based on information and evidence obtained from both

the licensee and site verification of plant condition conducted during the monitoring

process. Should this report not be accurate, the licensee must, in writing and within

fourteen (14) days of receipt of this report, advise NERSA about such inaccuracies.


TABLE OF CONTENTS

EXECUTIVE SUMMARY................................................................... 4

1. INTRODUCTION ........................................................................... 5

2. METHODOLOGY .......................................................................... 6

3. NERSA AND STELLENBOSCH LOCAL MUNICIPALITY

DELEGATES ................................................................................. 6

4. GENERAL INFORMATION ON STELLENBOSCH LOCAL

MUNICIPALITY ............................................................................. 7

5. AUDIT FINDINGS ......................................................................... 7

6. STELLENBOSCH’S PERFORMANCE ON NERSA

COMMUNICATION ....................................................................... 8

7. PROGRESS ON THE IMPLEMENTATION OF THE CORRECTIVE

ACTION PLAN .............................................................................. 8

8. PLANT CONDITION DURING AUDIT VS. MONITORING TIME 12

9. CONCLUSIONS .......................................................................... 18

10. RECOMMENDATIONS ............................................................. 18

11. NEXT STEP .............................................................................. 19


EXECUTIVE SUMMARY

The National Energy Regulator (NERSA) conducted a compliance audit on

Stellenbosch Local Municipality (‘the Licensee’) from 09 to 10 September 2013 to

determine its level of compliance with the licence conditions. The objective was to

determine the compliance of Stellenbosch Local Municipality with the legal,

financial and technical conditions of the electricity distribution licence. During the

audit, Stellenbosch Local Municipality representatives gave an overview that

addressed, among others, the staff complement, asset management,

infrastructure development, the maintenance strategy and infrastructure projects

done to date.

After the audit, the findings were recorded in a draft report and forwarded to the

Licensee for management comments with regard to the correctness of the findings

in order to finalise the report. On 15 January 2014, Stellenbosch Local Municipality

sent the management comments to NERSA. These were received well within the

prescribed timeframe. The report was then considered final by NERSA and

Stellenbosch Local Municipality was then requested to send NERSA a signed,

time-bound corrective action plan (CAP) to address the highlighted instances of

non-compliance.

On 23 May 2014, Stellenbosch Local Municipality sent a CAP for NERSA’s

perusal, which was found to be acceptable as it addressed the issues highlighted

by the audit. The National Energy Regulator instituted a monitoring regime to

ensure and enforce the implementation of the CAP. On 02 September 2015, the

National Energy Regulator conducted a monitoring exercise on the implementation

of the CAP at Stellenbosch Local Municipality. The monitoring exercise was

conducted in order to determine progress made in the implementation of the CAP.

The National Energy Regulator is of the view that addressing issues raised during

an audit will help Stellenbosch Local Municipality to be a more efficient and

effective licensee.

This is a report on all the findings as per the audit and presents the status quo in

terms of the progress made to address the instances of non-compliance

highlighted during the audit. During the monitoring exercise, NERSA conducted

site inspections to verify progress made in the implementation of the CAP. The

level of improvement is presented in detail in Section 7 of the report.


1. INTRODUCTION

1.1 Overview

The National Energy Regulator (NERSA) is required to monitor and assess

whether the electricity suppliers comply with the conditions of their licences.

The Energy Regulator approved a compliance monitoring framework for

electricity distributors in 2011, which acts as a guide on how compliance

audits and monitoring must be conducted. The framework is also supported

by the Electricity Regulation Act, 2006 (Act No. 4 of 2006) (‘the Act’) Chapter

4(a) (vii), which states that ‘the Regulator must enforce performance and

compliance; and take appropriate steps in the case of non-performance’. The

National Energy Regulator conducts the compliance audits on licensed

electricity distributors annually.

The National Energy Regulator regulates the energy industry in accordance

with Government laws and policies, standards and international best

practices in support of sustainable development. The organisation issues

licences to electricity distributors and therefore requires audits to be

conducted against key licence obligations. It is the National Energy

Regulator’s mandate to monitor and enforce compliance with the licence

conditions as per the Act. This monitoring process enforces and ensures

improvement and sustainability of the licensees for the betterment of the

Electricity Supply Industry (ESI), which will lead to improved quality of supply

and service to customers.

1.2 Monitoring and Enforcement Objectives

The key objectives of the compliance monitoring and enforcement of the

corrective action plans are to:

a) enforce implementation of the corrective action plans;

b) help the licensee not to lose sight of critical matters that need to be

corrected;

c) help the licensee to start doing self-monitoring in terms of their

performance against licence conditions;

d) help the licensee to ensure that the quality of service and supply does

not decline; and

e) inform the Energy Regulator of the progress made by the licensee in

the implementation of the corrective action plans.


2. METHODOLOGY

A corrective action plan template was developed and sent to Stellenbosch

Local Municipality (‘the Licensee) to populate all the instances of non-

compliance highlighted during the audit, together with the intended corrective

action plan (CAP) with target dates of implementation. This is to be used by

the National Energy Regulator to monitor the progress made and to establish

whether the timelines in the CAP were realistic and addressed the issues

highlighted during the audit.

The CAP was sent to the National Energy Regulator after being signed by

the relevant officials of the Licensee. The National Energy Regulator agreed

on the CAP and initiated a monitoring process, which robustly monitors

progress. Progress is checked against target dates and remedial actions are

implemented on an ongoing basis. Proof and supporting documents are

requested and presented to the National Energy Regulator’s officials during

the monitoring process. Site verification was also done to compare the

current plant condition against the plant condition during the audit.

3. NERSA AND STELLENBOSCH LOCAL MUNICIPALITY

DELEGATES

NERSA was represented by the following officials:

Ms Bulelwa Gobe Compliance Monitoring Engineer

Mr Matodzi Mudau Compliance Monitoring Technician

Mr Velly Malaza Senior Distribution Compliance Engineer

Mr Bennie van Heerden Financial Compliance Officer

Ms Vuyelwa Poswa Dispute Resolution Officer

Stellenbosch Local Municipality was represented by:

Mr Jan Coetzee Manager Electrical Services


4. GENERAL INFORMATION ON STELLENBOSCH LOCAL

MUNICIPALITY

Stellenbosch Local Municipality is the electricity distribution licence holder for

the supply area with licence number NER/D/WC024 and supplies electricity

to Stellenbosch and Franschhoek. It has three bulk supply points with an

installed capacity of 230 MVA and a maximum demand of 77 MVA. At the

time of the audit, the Licensee had 28,359 customers, which are categorised

as follows: 20,788 prepaid domestic; 5,667 domestic credit meters; 1,523

commercial and 391 industrial customers. The total geographical area of

Stellenbosch Local Municipality is approximately 3,996 km².

5. AUDIT FINDINGS

At the time of the audit, the following was highlighted to the Licensee as areas

that need attention and improvement:

a) There were a number of unfunded positions that needed to be filled.

b) The budget for maintenance was at 6.53%.

c) There was no maintenance plan, although maintenance was being

done, and no masterplan.

d) The vegetation at the Golf Substation needed attention.

e) There were no lightning protectors at the Golf Substation and not

enough lighting at the substation.

f) There were missing cables trench covers at the back of the

switchgear in Paradyskloof Substation and no single line diagrams

were displayed.

g) Some mini-substations were old, leaking oil and need to be replaced

(Lovell mini-substation, and Rokewood mini-substation had shifted

from its base).

h) The hinges of the mini-substation in Jaftha Singel were rusted and

doors could not be opened.

i) The open switchgear at Franschhoek Cellars was very old and needs

to be replaced.

j) The mini-substation in Langrug is too close to the house and the lock

had been stolen from the door.

k) Some wooden poles were rotten and should be put on a replacement

programme.


l) Trees and vegetation under the lines were not properly managed as

in some cases plants were in contact with the network structures.

This could cause unplanned outages in rainy and windy conditions.

m) The pole-mounted transformer in Sha Monix was leaking oil and the

200kV transformer in Van Riebeeck was very old and needs to be

replaced.

6. STELLENBOSCH LOCAL MUNICIPALITY’S PERFORMANCE

ON NERSA COMMUNICATION

In October 2013, the National Energy Regulator conducted a compliance

audit on Stellenbosch Local Municipality to determine its level of compliance

with its licence conditions. This audit was followed by a number of emails

from the National Energy Regulator to Stellenbosch Local Municipality. This

communication was sent directly to Stellenbosch Local Municipality’s

Electricity Manager. During this communication, Stellenbosch Local

Municipality’s Electricity Manager cooperated and responded in a satisfactory

manner and on time.

7. PROGRESS ON THE IMPLEMENTATION OF THE

CORRECTIVE ACTION PLAN

Stellenbosch Local Municipality displayed commitment in the implementation

of the CAP. Almost all the major concerns were addressed and this satisfies

one of the objectives of the monitoring process, namely that licensees must

not lose sight of the critical matters.

The table below depicts the progress made at the time of the monitoring of

the implementation of the CAP that was submitted to NERSA to address the

instances of non-compliance.


Table 1: Progress from audit to monitoring stage

Non-compliance Corrective action Target date Target date for

completion

Condition or progress during monitoring/condition on

monitoring day

Unfunded posts to be filled Report to Council to fill these

posts in the next two financial

years

2014/15

financial year

2015/16 financial

year

R2 500 000.00 was allocated for posts. Two operators had

been appointed. Adverts had been placed for electricians,

however they either did not meet the minimum

requirements, or did not honour the appointment. Initially

positions were only advertised in the Western Cape, but

there were no suitable candidates. There is an intention to

advertise nationally.

Approximately 40 old

substations to be replaced

To replace +- four sub-

stations per year on the

capital budget

2013/14

financial year

2022/23

financial year

The initial plan was to do four substations per year. Three

substation switchgear projects were completed in 2013/14 viz.

Boord s/s switchgear, Sonneblom s/s Switchgear 11 kV and

Tindal Switchgear 11kV at a cost of R2,200,000; R2,000,000 and

R1,500,000 respectively. The one not done catered for the 66kV

line which also needs attention.

2014/15 Financial Year: Six were to be done. Polkadraai s/s and

Lower Dorp s/s were completed. Papagaairand s/s switchgear

(11kV), Bosman s/s switchgear (11kV), Jan Marais s/s Switchgear

(11kV), Coetzenburg s/s switchgear (11kV) and Lower Dorp s/s

switchgear were in the 2014/15 capital budget. Polkadraai and

Lower Dorp have been completed, the other four is awaiting

installation.

2015/16 Financial Year: The capital budget of 2015/16 shows

allocation for the following switchgear: Brandwacht, Devon Valley

11kV, Krige s/s, SDR Kliniek s/s 11kV, Koch s/s 11kV, Kerk s/s

11kV and Tenant s/s 11kV. It was reported that all parts for all

these substations have been bought, except one, and the

substations are awaiting installation.

Compile a proper

maintenance plan to

address maintenance

backlog in the network

A master plan and

maintenance plan to be

compiled during 2014/15

June 2014 June 2015

A draft master plan was shown to the team. Stellenbosch Local

Municipality is awaiting a final masterplan. It was reported that the

maintenance plan will done after the finalisation of the masterplan.


The Dassenberg overhead

line must be refurbished

urgently

The line will be replaced

partly with an underground

cable and the rest will be

refurbished

2014 June 2015

It was reported that a bigger portion of the line has already been

replaced with underground cable. The rest will be concluded by

the end of the 2015/16 financial year.

The vegetation at the Golf

Substation should be

attended to and the trees

under the lines should be

cut

Work completed

Vegetation is attended to from time to time, but is not 100%

because of constant rain.

Not enough lighting was

available for doing work in

the Golf Substation; during

night hours there were

dark or blind spots on the

lighting system available

Additional temporary lighting

will be added when work needs

to be done at the substation.

Ongoing

Portable/mobile lighting is provided when needed

No lighting protectors were

visible at Golf Substation

There are lightning protectors

inside the substation on the

feeder cables.

It was reported that these have been connected.

There were missing cable

trench covers at the back

of the switchgear in

Paradyskloof Substation

and there were no single

line diagrams

Trench covers have been

replaced. The single line

diagrams are not kept at the

substation, but are with

individuals working on the

substation.

Work was being done in most substations. Some floors have been

done and others not yet.

Single line diagrams have now been displayed, and the

programme to replace metal trench covers with plastic has started

in some substations.

Some mini-substations

were old, leaking oil and

need to be replaced (Lovell

& Rokewood)

Will be addressed in the new

financial year

Mini-substations are being replaced and the old oil was replaced

and others are being reconditioned.

No safety signs were

visible on the outside of

the mini-substations

(Stiebeuel & Jaftha)

Work completed There were still no safety signs on Jaftha mini-substation.

The open switchgear at

Franschhoek Cellars was

very old and needs to be

replaced

Will be done in the new

financial year

ongoing

The mini-substation in

Langrug is too close to the

house and the lock has been

stolen from the door

Work completed

It was moved to the sportsground.


The mini-substation in

Rokewood shifted from its

base


financial year

The licensee was afraid to shift the base as they did not want to

put strain on the cables and blow terminations. It was filled in with

sand so that it does not erode.

The hinges of the mini-

substation in Jaftha Singel

were rusted and the door

cannot be opened


financial year

Still the same.

Some wooden poles were

rotten and should be put

on a replacement

programme. Trees and

vegetation under the lines

were not properly

managed as in some cases

plants were in contact with

the network structures,

which is a big concern. In

some instances, the lines

were entangled in the

trees, which could cause

outages in rainy and windy

conditions.

The poles will be replaced in

the new financial year and the

cutting of trees and vegetation

is in progress.

Some overhead lines are now underground.

Vegetation management is ongoing, however the frequent rain

poses a challenge.

The pole-mounted

transformers in Sha

Monix was leaking oil

and the 200kV

transformer in Van

Riebeeck was very old

and needs to be

replaced


financial year

Transformer has been replaced.


The table above indicates that Stellenbosch Local Municipality implemented

the majority of the activities outlined in the CAP as highlighted during the

audit. Implementation of the CAP will improve the Licensee’s level of

compliance with the distribution licence conditions. During the office session

of the monitoring, some supporting documentation to substantiate the above

feedback was provided to NERSA officials.

8. PLANT CONDITION DURING AUDIT VS. MONITORING TIME

The photos below depict the condition of the network equipment during the

audit compared to the condition during the monitoring process.

8.1 Golf Substation

Poor vegetation management in 2013 Vegetation management improved in 2015

Water in the cable trenches in 2013 Less water in the cable trenches due installed water pump in 2015


8.2 Paradyskloof Substation

This substation was in the budget for upgrade at the time of the

monitoring, as one of the items under Stellenbosch’s CAP as

recommended during the audits.

Missing trench cover in 2013 trenches still open, to be replaced with plastic ones in 2015.

2015 single line diagrams have been displayed as recommended in 2013

8.3 SS Boord Substation

This substation is one of the 40 substations planned for an upgrade in

response to the recommendation made during the audit. At the time of

the monitoring the old oil type Reyrolle indoor breaker were replaced with

new indoor breaker.


Old oil type Reyrolle indoor breakers at SS Boord Substation in 2013 New ABB SF6 indoor breaker in 2015

Missing cable trench cover SS Boord in 2013 Trench covers replaced with plastic ones in 2015

Batteries at SS Boord in 2013 New battery charger and batteries in 2015

8.4 Lower Dorp Substation

This substation was not audited in 2013 however, due to its condition it was

included by the Licensee on the list of the 40 substations planned for an

upgrade in response to the recommendation made during the audit. At the time

of the monitoring the old indoor breakers were replaced with new indoor

breakers and in the process of commissioning while a new charger was also

installed. The floor was reconstructed and new plastic trench covers were

installed.


Fault finding and testing of equipment in 2015 Construction at Lower Dorp Substation in 2015

Installation of a new 11kV breakers Newly reconstructed floors trench opened due to work in progress

8.5 Koch Substation

The upgrading of Koch Substation had already started at the time of

monitoring. The old wooden door was replaced with a new steel door.

However, not everything has been addressed as the Licensee reported that

the switchgear has been delivered, but has not been installed yet. The floor

will be reconstructed as well.

Koch Substation door in 2013 New Koch Substation door in 2015


The floor of Koch Substation in 2013 Koch substation floor in 2015, not done yet project in place

Old transformer (2013) at Koch Substation Refurbished transformer at Koch in 2015

Very old transformer connection at Koch in 2013 Refurbished transformer with new connections in 2015

8.6 Mini-Substation Report

The most glaring findings in 2013 were the absence of warning signs, poor

vegetation management and rust. It is obvious that the Licensee has

implemented the corrective action plan as most of these problems have been

addressed.


No safety or warning signs in 2013 Still no warning signs in 2015

Poor vegetation management at Golf S/S (2013) Vegetation management done, but still needs attention at Golf

S/S (2015)

Mini-substation rusted in 2013 Mini-substation replaced and relocated to the sportsground

8.7 Overhead Lines

Stellenbosch Local Municipality has again done well by acting on the

recommendations that were presented in 2013. There was an old overhead

line (Dassenburg line) with an old switching link and a pole-mounted

transformer, and rotten wooden poles. The NERSA recommendation was

adhered to, the worst portion of the line at the time of the monitoring was

converted to an underground system and the transformers were replaced with

mini-substations. The work is ongoing as the rest of the line will be done in

phases.


Old fuse links in 2013 Fuse link removed line undergrounded in 2015

Transformer leaking oil on old line in 2013 mini-substation switch replaced pole-mounted transformer 2015

At the time of the audit in 2013, the team inspected a number of substations

that had very old switchgear, among other problems. The team was then

informed of the intention to replace these. During the monitoring exercise in

2015, some of these had already been replaced, others were being installed

and the budget was presented as evidence of work to be done in the current

and following financial year. This has proved to NERSA that Stellenbosch

Local Municipality is committed to continually improving the quality of service

and quality of supply.

9. CONCLUSIONS

Stellenbosch Local Municipality has a satisfactory process of implementing

the corrective action plan. The Licensee has made noticeable progress on

instances of non-compliance that were identified during the initial audit.

10. RECOMMENDATIONS

It is recommended that Stellenbosch Local Municipality should continue to

prioritise the implementation of the CAP to improve the level of compliance

with licence conditions and impose a self-monitoring regime.


11. NEXT STEP

There are still instances of non-compliance that need to be addressed by the

Licensee. As a result, the Energy Regulator expects the Licensee to

implement the corrective action plan until all the instances of non-compliance

have been fully addressed in order to improve the Licensee’s level of

compliance. The National Energy Regulator will continue to monitor the

Licensee’s implementation of the corrective action plan on an ongoing basis

to ensure that all the findings are addressed. Once the remaining projects in

the CAP have been concluded, the Licensee must send a closeout report to

the National Energy Regulator. It is expected that the Licensee will then

implement a self-monitoring regime to ensure that the improved areas do not

deteriorate back to a situation of non-compliance.

All communication should be forwarded to the Head of Department, unless

indicated otherwise, by means of a formal letter signed by the Head of

Department:

The Head of Department

Electricity Licensing, Compliance and Dispute Resolution

National Energy Regulator

PO Box 40343

Arcadia

0007

Fax: +27 (0)12 401 4700

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