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Compliance Monitoring Report – Stellenbosch Local Municipality Page 1 of 19
COMPLIANCE MONITORING
REPORT OF STELLENBOSCH
LOCAL MUNICIPALITY
Monitoring Date: 02 September 2015
Compliance Monitoring Report – Stellenbosch Local Municipality Page 2 of 19
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.
Compliance Monitoring Report – Stellenbosch Local Municipality Page 3 of 19
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
Compliance Monitoring Report – Stellenbosch Local Municipality Page 4 of 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.
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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.
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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
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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.
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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.
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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.
Compliance Monitoring Report – Stellenbosch Local Municipality Page 10 of 19
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.
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The mini-substation in
Rokewood shifted from its
base
Will be addressed in the new
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
Will be addressed in the new
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
Will be addressed in the new
financial year
Transformer has been replaced.
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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
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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.
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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.
Compliance Monitoring Report – Stellenbosch Local Municipality Page 15 of 19
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
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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.
Compliance Monitoring Report – Stellenbosch Local Municipality Page 17 of 19
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.
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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.
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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