compliance monitoring report of kwadukuza … report was then ... these include training of...

COMPLIANCE MONITORING

REPORT OF KWADUKUZA

MUNICIPALITY

Monitoring Date: 07–08 December 2016

2

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

This is a final report considered a true reflection of the implementation of

the CAP based on information and evidence obtained from both the licensee

and site verification of plant condition conducted during the monitoring

process.

3

TABLE OF CONTENTS

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

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

1.1 OVERVIEW ................................................................................................. 5

1.2 MONITORING AND ENFORCEMENT OBJECTIVES ............................................. 5

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

3. NERSA AND KWADUKUZA MUNICIPALITY DELEGATES ........................ 6

4. GENERAL INFORMATION ON KWADUKUZA MUNICIPALITY ...... ERROR!

BOOKMARK NOT DEFINED.

5. AUDIT FINDINGS .......................................................................................... 8

6. KWADUKUZA MUNICIPALITY’S PERFORMANCE ON NERSA

COMMUNICATION ............................ ERROR! BOOKMARK NOT DEFINED.

7. PROGRESS ON THE IMPLEMENTATION OF THE CORRECTIVE ACTION

PLAN ........................................................................................................... 09

8. PLANT CONDITION DURING AUDIT VS. MONITORING TIME ................ 24

9. CONCLUSIONS .......................................................................................... 31

10. RECOMMENDATIONS ............................................................................... 32

11. NEXT STEP ................................................................................................. 32

4

EXECUTIVE SUMMARY

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

KwaDukuza Municipality (‘the Licensee’) from 27 to 29 October 2014 to determine

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

the compliance of KwaDukuza Municipality with the legal, financial and technical

conditions of the electricity distribution licence. During the audit, KwaDukuza

Municipality representatives gave an overview, which addressed, among others,

the staff complement, asset management, infrastructure development, the

maintenance strategy and infrastructure projects done to date.

After the audit, 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 make the report final. On 05 February 2015, KwaDukuza Municipality

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

prescribed time frame. The report was then considered final by NERSA and

KwaDukuza Municipality was then requested to send NERSA a signed, time-

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

compliance.

On 19 June 2015, KwaDukuza Municipality sent a CAP for NERSA’s perusal and

this 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 07 and 08 December 2016, the

National Energy Regulator conducted a monitoring exercise on the

implementation of the CAP at KwaDukuza Municipality. The monitoring exercise

was conducted in order to determine the 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 KwaDukuza Municipality to be a more efficient and

effective licensee.

This report depicts all the findings as per the audit and presents the status quo in

terms of the progress that has been made at the time of the monitoring 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 depicted in detail

in Section 7 of the report.

5

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),

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 the 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.

6

2. METHODOLOGY

A corrective action plan template was developed and sent to KwaDukuza

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 on 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 instigated a monitoring process that 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 KWADUKUZA MUNICIPALITY DELEGATES

NERSA was represented by the following officials:

Mr Bongani Nhlabathi Compliance Monitoring Engineer

Ms Bulelwa Gobe Snr Engineer: Distribution Compliance

Ms Vuyelwa Poswa Dispute Resolution Officer

Mr Morris Mafuyeka Compliance Monitoring Technician

Mr Sanele Zulu Compliance Monitoring Technician

KwaDukuza Municipality was represented by the following:

Mr Nick Hall Director: Electrical Operations

Mr Nhlakanipho Biyela Director: Electrical Planning

Mr Nceba Dambuza Senior Manager: Electrical Operations

Mr Roderick Lue Manager: Electrical Reticulation, South

Mr Christo Prinsloo Manager: Electrical Distribution, South

Mr Vijay Sing Manager: Electrical Distribution, North

Mr Bheki Mpanza Manager: Electrical Reticulation, North

7

4. GENERAL INFORMATION ON KWADUKUZA MUNICIPALITY

KwaDukuza Local Municipality is an electricity distribution licence holder with

licence number NER/D/KZ292 and its supply areas are Dolphin Coast/Ballito

TLC, iLembe Regional Council and KwaDukuza/Stanger TLC as per

Schedule 1 of the licence. It has three bulk supply points with an installed

capacity of 422MVA and a maximum demand of 137MVA. The network

consists of 25.2km of 33kV Medium Voltage (MV) underground cable,

258.64km of 11 kV Medium Voltage (MV) underground cable, 452km of Low

Voltage (LV) underground cable, 460.95.km of 11 kV MV overhead lines and

646km of LV overhead lines.

It has 42,775 customers, which are categorised as follows: 30,769 prepaid

domestic; 10,459 domestic credit meters; 1,545 commercial; and 2 industrial

customers. The total geographical area of KwaDukuza Local Municipality is

approximately 710 km², with Electrical Network of approximately 525 km².

At the time of the monitoring, it was highlighted that all instances of non-

compliance that were noted during the initial audit have been addressed, with

the exception of staff vacancies. However, the Licensee did manage to fill

positions that were considered to be a priority to enable the Electricity

Department to deliver on its mandate. It was also mentioned that the Council

have approved a five-year plan, starting from the 2015/16 financial year, to

address vacancies that were highlighted during the October 2014 Electricity

Compliance Audit.

A recently reviewed master plan that caters for the Licensee’s network and

customer growth for the next five years is currently in place. The Licensee also

still pays its bulk purchases on time and regularly. The achievements of the

Electricity Department under the leadership of the Municipality were quite

significant. The exemplary performance and the commitment displayed by the

Electricity team of the Licensee should be something that all licensees aspire

to.

8

5. AUDIT FINDINGS

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

that need attention and improvement:

a) The critical vacancies must be filled.

b) The KwaDukuza Local Municipality must indicate a clear position on the

ring-fencing status of the electricity business.

c) KwaDukuza Local Municipality should budget sufficient funds (6%) for

maintenance of the electricity network as required by the NERSA tariff

guideline.

d) The Licensee should ensure that all mini-substations are placed on well-

constructed plinths to prevent the mini-substations from sinking in.

e) The Licensee should apply to NERSA to amend Schedule 1 of their

Electricity Distribution Licence.

f) Vegetation management should be prioritised as certain areas that were

inspected during the audit indicated a lack of vegetation management.

g) Dust guards should be installed at the main entrance of the switching

rooms as certain switch-rooms had immense dust accumulation at the

time of the audit.

h) The Licensee should fast-track the upgrades undertaken so as to alleviate

penalties for exceeding their NMD.

i) The Master Plan and single line diagrams at some of the substations were

not accurate and need to be reviewed.

j) The Licensee must ensure that all the tariffs are implemented as approved

by NERSA.

k) Power quality measuring and monitoring must be implemented.

l) A control centre must be put in place.

m) Old and leaning wooden poles must be replaced.

n) All transformers leaking oil and all old silica gel needs to be attended to.

o) Line spacers must be installed at all the lines prone to gale-force winds.

6. KWADUKUZA MUNICIPALITY’S PERFORMANCE ON NERSA

COMMUNICATION

In October 2014, the National Energy Regulator conducted a compliance audit

on KwaDukuza 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 KwaDukuza Municipality. This communication

was sent directly to KwaDukuza Municipality’s Electricity Manager. In all this

9

communication, KwaDukuza Municipality’s Electricity Manager cooperated

and responded in a satisfactory manner as indicated below.

Table 1: KDM’s response record

NERSA REQUEST DATE OF

REQUEST

LICENSEE

RESPONSE

DATE OF

RESPONSE

Request for

Management comments

on draft report

08/12/2014 Management

comments sent

05/02/2015

Request for Corrective

Action Plan

01/04/2015 CAP sent 19/06/2015

Monitoring notification 19/10/2016 Positive response 28/10/2016

Monitoring exercise 01/12/2016 Positive response 05/12/2016

7. PROGRESS ON THE IMPLEMENTATION OF THE CORRECTIVE ACTION

PLAN

At the time of the monitoring, it was highlighted that all instances of non-

compliance that were noted during the initial audit have been addressed, with

the exception of staff vacancies. However, the Licensee did manage to fill

positions that were considered to be a priority to enable the Department to

deliver on its mandate. It was also mentioned that the Council have approved

a five-year plan, starting from the 2015/16 financial year, to address vacancies

that were highlighted during the October 2014 Electricity Compliance Audit.

These include training of electricians to operate at High Voltage (HV) as the

Licensee’s plans to build a 132kV substation have been approved. All old oil

circuit breakers that were obsolete and dangerous to operate have also been

replaced by new technology vacuum type circuit breakers. High Voltage yard

stones have been filled in at all substations inspected during the audit. Neutral

Earth resistors, weeds, traces of oil on HV circuit breakers and transformers

were all addressed by the Licensee during the monitoring period.

Fire-extinguishing equipment’s service dates were not exceeded during the

monitoring period and all substations had logbooks that were regularly

updated. The single line diagrams for the Licensee’s network were available

and up-to-date, however the Licensee still needed to print these in size A0

before mounting them in all substations. The gantries and ancillaries in all

inspected substations were in good condition. The oil level and winding

10

indicators highlighted that levels were within the acceptable minimum levels.

The silica gel on all inspected transformers also attested to good maintenance

practices.

The Licensee has also installed an additional 20MVA firm capacity to its

network since the audit was conducted. The building of the CBD and Hyde

Range substations have been finalised and commissioned. The upgrades that

were noted in Umkhobongo switching station and Business Park substation

are also an indication that the Licensee’s risk management strategies are in

place. A Master Plan that addresses network developments and customer

growth until the 2021/22 financial year was submitted to the audit team.

The Licensee’s application to amend the electricity distribution licence to

reflect the correct areas of electricity supply is currently being processed by

the Energy Regulator. There is a very good working relationship between the

different departments within the Municipality, particularly between Finance,

Procurement and the Electricity Department. The Accounting Officers

(Municipal Manager, the Executive Director and the Chief Financial Officer)

were also mentioned as they fully support the Electrical Department to ensure

it delivers on its mandate.

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

implementation of the CAP that was submitted to NERSA. The numbering on

the table corresponds to the sections as indicated in the Final Electricity Audit

Report that was conducted in October 2014.

11

Table 2: CAP Implementation Progress

Non-

compliances/audit

findings

Corrective

action planned

Financial

implications/Comments

Target date for

starting of

action

Target date for

completion

5.1.1. Departmental Structure (vacancies)

a) 1 X Executive

Director Elect

Services

Post been

Advertised x5 –

No successful

candidates

Section 56 Employee Re-advertised –

Nov 2016

Possible interviews

& appointment

March 2017

b) 1 X Director

Elect Services

Vacant Task Level 19 Budget Constraints n/a

c) 3 X Managers

Elect Services

Advertised and

filled during 2015

Task Level 15 Interviewed Sept

2015

3 X Appointed

October 2015

d) 1 X Manager

PMU


e) 1 X Manager

PMS


f) 2 X Engineering

Technicians PMS

Vacant Budget Constraints n/a

g) 1 X Engineering

Senior Eng.

Planning


h) 1 X Engineering

Technician

Planning

Advertised

November 2016

Task Level 11 Interviews Jan/Feb

2017

Appointment

March 2017

12

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

i) 2 X Technical

Assistance

Operations


j) 8 x Electricians Advertised

November 2016


2017

Appointments

Feb/March 2017

k) 1 X Draftsperson

(GIS Technician)


l) 2 X Senior

Handymen

Advertised during

2016

Task Level 7 Interviews during

2016

Appointments

November 2016

m) 2 X Principal

Clerks Operation


n) 2 X Workshop

Clerks Operation


o) 1 X Principal

Clerk Planning

Advertised

November 2016


2017

Appointment

March 2017

p) 1 X Technical

Data Capturer


q) 2 X HWLM

System

Controllers

Not on

Organogram

(Asset)

n/a It is an asset n/a

r) 2 X Secretaries

Operation

1 X Advertised –

November 2016


2017

Appointment

March 2017

13

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

s) 1 X Secretary

Planning

Customer

Service


t) 17 X Handymen

Electrical

Vacant - Budget Constraints n/a

u) 14 X General

Assistants

Vacant - Budget Constraints

v) 1 X Cleaner

Operations


w) 1 X Cleaner

Planning


5.1.4. Area of Supply

The Licensee’s

Schedule One still

makes reference to the

TLCs

KwaDukuza

Municipality

Revised Schedule

One, Application

sent to NERSA –

Nov 2016.

No financial implications on

KDM, application in progress.

Scheduled

meeting with

NERSA – 07&08

December 2016

KwaDukuza

Municipality

Revised ‘Schedule

One’, Application

sent to NERSA for

consideration.

5.5.2 Quality of Supply (QoS)

14

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

The Original Power

Quality Recorders

(PQR) installed have

become obsolete.

KwaDukuza

Municipality

installed new

recorder at (i)

Sappi, (ii)

Lavoipierre Sub

(iii) and awaits

delivery of two

new additional

PQRs

Supply and Installation of PQR (i) R 120,000 (ii) R 90,000 (iii) R 167,991

i) Sappi –

2014/2015

installed.

ii) Lavoipierre –

2015/2016

iii) 2xNew PQR –

Jan 2017

i) Sappi –

2014/2015

installed.

ii) Lavoipierre –

2015/2016

iii) Shakaskraal &

Lavoipierre

Substations -

new PQRs –

Jan 2017

6. Plant Conditions

6.1.1. Lavoipierre 33/11kV Substation

a) Yard stones had

been removed

Upgrading

completed –

stones replaced

during 2015

Tender MN 152 Total Tender amount =

R 2.360Million

2015/16 financial

year

2015/16 financial

year

b) Cable exposed

due to

construction

Upgrading

completed –

cables placed into


R 2.360 Million

2015/16 financial

year

2015/16 financial

year

15

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

newly constructed

cable trenches

c) 33kV breaker are

old, but still

fictional

New 33kV

breakers installed


R 2.367Million

2015/16 financial

year

2015/16 financial

year

d) Silica-gel of

transformers to

be replaced

Silica-gel replaced

in 2014/15 &

again in 2016/17

financial year

Procurement -Stock Item at

Stores

2014/15 financial

year

Silica-gel replaced

in 2014/15 & again

in 2016/17

e) Single line

diagram not

updated

Drawings updated

by Consultant

n/a 2015/16 financial

year

2015/16 financial

year

f) Expired fire

extinguisher

Supply and

installation of

extinguisher

Replace 21xFire

extinguishers at a cost of

R19,967

2016/17 financial

year

2016/17 financial

year

6.1.2. Industrial 33/11kV Substation

a) Vegetation in the

substation was

not well

maintained

Poisoning &

removal of

vegetation –

ongoing on a

quarterly basis, by

Cost to remove vegetation , per (33/11KV) substation Is R2,032.50, (conducted on a 3 month basis)

2014/15 -

Poisoning &

removal of

vegetation –

ongoing on a

quarterly basis, by

Poisoning &

removal of

vegetation –

ongoing on a

quarterly basis, by

16

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

using a service

provider

using a service

provider.

using a service

provider.

b) Transformer

No.1 had signs of

oil leaks.

Repairs were

done during

2014/15 financial

year by a

specialist/service

provider

2x New installed 10MVA Transformers were still under warrantee

and all the oil leak were

repaired by the supplier at

their cost

Repairs were done

during 2014/15 by

a specialist/service

provider

Repairs were done

during 2014/15, by

a specialist/service

provider

c) Silica-gel was not

well maintained.

Silica-gel was

replaced during

2014/15 & again

in 2016/17

financial year


Stores

Silica-gel was

replaced during

2014/2015

financial year

Silica-gel was

replaced during

2014/15 & again in

2016/17 financial

year

6.1.3 Glenhills 33/11kV Substation

a) Vegetation in

substation yard

was not well

maintained

Poisoning &

removal of

vegetation –

ongoing on a

quarterly basis, by

using a service

provider

Cost to remove vegetation , per (33/11KV) substation Is R2,032.50, (conducted on a 3 month

basis)

2014/15 –

Poisoning &

removal of

vegetation –

ongoing on a

quarterly basis, by

using a service

provider

Poisoning &

removal of

vegetation –

ongoing on a

quarterly basis, by

using a service

provider

17

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

b) Silica-gel was not

well maintained.

Silica-gel was

replaced during

2014/15 & again

in 2016/17

financial year


Stores

Silica-gel was

replaced during

2014/15 financial

year

Silica-gel was

replaced during

2014/15 & again in

2016/17 financial

year

c) Transformer No.

1 had signs of oil

leaks

Service provider

appointed, did

repairs and

maintenance

during 2015/16

10 MVA Transformer was

repaired and serviced by a

specialist/service provider at

a Cost of R 70,860-00

Service provider

appointed, did

repairs and

maintenance

during 2015/16

Work completed

during 2015/16

financial year

d) Current

transformers

(CTs) & boxes

lying on the floor,

not stored in

proper place –

safety hazard.

Service provider

appointed, did

repairs and

maintenance

during 2015/16

Work done during daily

routine maintenance

Service provider

appointed, did

repairs and

maintenance

during 2015/16

Service provider

appointed, did

repairs and

maintenance

during 2015/16

e) Firefighting

equipment (fire

extinguisher) was

not mounted in a

designated area

Fire extinguisher

installed in

designated place

– 2015/16

Replace 21xFire

extinguishers at a cost of

R19,967

Fire extinguisher

installed in

designated place –

2015/16 financial

year

Fire extinguisher

installed in

designated place –

2015/16 financial

year

18

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

6.1.4. Shakaskraal 33/11kV Substation

a) Signs leading to

the HV yard has

faded

Signs replaced –

2015/16 financial

year


Stores

Signs replaced –

2015/16 financial

year

Signs replaced –

2015/16 financial

year

b) Cooling fins –

signs of rust on

both

transformers 1 &

3

No oil leaks on

transformer No.1

and 3 – Priority

was the

replacement of

cooling fins at

Ballito sub and the

upgrading of

cooling fins at

Chaka’s Rock

substation, the

next priority for

2017/18 financial

year, will be

Shakaskraal

cooling fins.

Shakaskraal substation,-No cost has been incurred to remove signs of rust on cooling fins (No oil leaks). The next priority for

2017/2018 financial year will

be Shakaskraal substation,

cooling fins upgrade.

No oil leaks on

transformer No.1

and 3 – Priority

was the

replacement of

cooling fins at

Ballito sub and the

upgrading of

cooling fins at

Chaka’s Rock

substation. The

next priority for

2017/18 financial

year will be

Shakaskraal

cooling fins.

The upgrading of

cooling fins at

Shakaskraal

substation will be

the next priority for

the 2017/18

financial year.

19

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

c) Transformer No.

2, had been

removed from

the Substation at

the time of Audit,

due to repairs

Transformer No. 2

was repaired, re-

installed and

energised during

2015/16

10MVA Transformer was repaired , reinstalled , at the following Cost i)Testing=R45,144 ii)Transport= R237,255 iii)Repairs= R699,907

Transformer No. 2

was repaired,

installed and

energised during

2015/16

Transformer No. 2

was repaired, re-

installed and

energised during

2015/16

d) Silica gel of

Transformer

No.1 shows lack

of maintenance

Silica gel was

replaced during

2014/15 financial

year


Stores

Silica gel was

replaced during

2014/15 financial

year

Silica gel was

replaced during

2014/15 financial

year

e) NER of

Transformer No.

1, was in poor

condition

NER of

Transformer No.1

was upgraded

during 2015/16

financial year

Been upgraded at a cost of =

R 53,000-00

NER of

Transformer No.1

was upgraded

during 2015/16

NER of

Transformer No.1

was upgraded

during 2015/16

f) Installed fire

extinguishers’

service date had

expired

Fire extinguishers

were replaced

during 2015/16

Replace 21xFire

extinguishers at a cost of =

R19,967

Fire extinguishers

were replaced

during 2015/16

Fire extinguishers

were replaced

during 2015/16

6.1.5. Sheffield 33/11kV Substation

20

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

No concerns

raised

n/a n/a n/a n/a

6.2.1. Hydrangea Switching station

a) Switch room was

being refurbished

at time of audit

Completed

2015/16 financial

year

Construction , supply & installation of MV (11KV)equipment =R 3,770,080-07

Completed

2015/16

Completed

2015/16

6.2.2. CBD 11kV Switching station

a) Switch room was

being refurbished

at time of audit

Completed

2015/16 financial

year

Construction , supply & installation of MV (11KV) equipment =R 6,798,226-43

Completed

2015/16

Completed

2015/16

b) Logbook not yet

available

Logbook provided

2015/16

n/a Logbook provided

2015/16

Logbook provided

2015/16

6.2.3. Mini-Substation 500kVA

a) Enclosure was

not placed on a

well-constructed

cement plinth.

Concrete plinth

was covered with

soil

n/a n/a n/a

b) Poor

housekeeping

bottles lying in

Area was cleaned

2015/16

n/a Area was cleaned

2015/16

Area was cleaned

2015/16

21

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

the vicinity of the

mini-sub

c) Labelling was not

well coordinated

Labelling was

corrected during

2015/16

n/a Labelling was

corrected during

2015/16

Labelling was

corrected during

2015/16

6.2.6 T02/461 Pole mounted Transformer(Lindelani)

a) Mango fruit tree

grew below pole-

mounted

transformer – to

be removed.

Tree to be

removed – which

was duly done in

2016


routine maintenance

Tree was cut

during 2016

Tree was cut

during 2016

6.3. Overhead lines

a) Ageing overhead

lines – Lindelani

township

KDM upgraded all

11kV lines on a

phased-in basis

(to cater for 29

wards) from 2001

to 2016/17

financial years

Upgrading of 0.91Km ( Phase 4)=R 350,000-00

KDM upgrade all

11kV lines on a

phased in basis (to

cater for 29 wards)

from 2000/01 to

2016/17 financial

years

KDM upgrade all

11kV lines on a

phased in basis (to

cater for 29 wards)

from 2000/01 to

2016/17 financial

years

22

Non-

compliances/audit

findings

Corrective

action planned

Financial


Target date for

starting of

action

Target date for

completion

b) Trees

encroaching on

the overhead

lines

KDM prunes

encroaching trees

at all overhead

lines quarterly, on

an ongoing basis


routine maintenance

KDM prunes

encroaching trees

at all overhead

lines quarterly, on

an ongoing basis

KDM prunes

encroaching trees

at all overhead

lines quarterly, on

an ongoing basis

c) Two poles were

leaning over on

the 11kV

Compensation

overhead line

KDM is upgrading

the Compensation

11kV overhead

line on a phased-

in basis from

2013/14 to

2016/17. The

leaning poles

were upgraded

during 2015/16

Tender MN 212/2015 Upgrading of 0.93km of 11KV

overhead line =R322,499

KDM is upgrading

the Compensation

11kV overhead

line on a phased-in

basis from 2013/14

to 2016/17. The

leaning poles were

upgraded during

2015/16

The leaning poles

were upgraded

during 2015/16

23

8. PLANT CONDITION DURING AUDIT VS. MONITORING TIME

KwaDukuza Municipality had completed all projects that it had undertaken at

all its major substations and switching stations during the monitoring period.

All old HV oil circuit breakers have been replaced by new technology air

vacuum type circuit breakers. KwaDukuza Municipality had added an

additional 15MVA capacity as old 5MVA transformers had been replaced by

10MVA transformers and a new substation with a firm capacity of 10MVA had

recently been commissioned. The single line diagrams have been updated for

the entire Municipality’s electricity network, however these still need to be

printed on A0 and be placed in all designated places. The fire-extinguishing

equipment was available in all inspected substations and switching stations

and the service dates had not been exceeded at the time the monitoring was

conducted.

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

audit compared to the condition during the monitoring process.

8.1 Substations

8.1.1. Lovoipierre 11kV Substation

Yard stones removed due to construction. In 2016, yard stones well placed in the HV yard.

Old breaker, emergency lights and surge In 2016, old breaker replaced with new 33kV

arrestors. breaker.

24

Silica gel shows signs of poor maintenance. Silica gel was replaced in 2014/15 financial year

yet showed signs of poor maintenance in 2016.

Plinth for the new proposed main breaker. In 2016, the new 33kV main breaker was placed

on a well-constructed plinth.

Expired fire-fighting equipment. In 2016, the fire-fighting equipment did not exceed

the service date.

25

Old HV switchgear panels with proper labelling. In 2016, the switchgear in same state as during the

audit.

8.1.2. Industrial 33/11kV Substation

Transformers in good condition but silica gel In 2016, the silica gel of the transformers had

not maintained. been replaced.

Signs of poor vegetation maintenance. In 2016, the vegetation was managed and yard-

stones are well placed.

26

8.1.3. Glenhills 33/11kV Substation

Visible signs of oil leak on transformer No.1 In 2016, the transformer had been refurbished and

there were no oil leaks.

Silica gel shows signs of poor maintenance. In 2016, the silica gel had been replaced with new

silica gel.

Firefighting equipment not in place. In 2016, the fire extinguisher was in place with its

service date not exceeded.

27

8.1.4. Shakaskraal 33/11kV Substation

Safety signs to HV yard illegible. In 2016, no changes made since the audit.

Trf No.2 out for service and adequate yard In 2016, Trf No.2 was back in service and in good

stone. condition.

Expired firefighting equipment. In 2016, the fire-fighting equipment did not exceed

its service date.

8.1.5. Priority 1 Substation

This substation comprises 2x10MVA power transformers and has a

firm capacity of 10MVA. It has been recently commissioned and the

audit team was informed that the substation is still under warranty

28

for the next 8 months for unforeseen damages to the equipment and

switchgear. It was noted during the monitoring period that all MV

panels have been colour-coded to ensure clear identification of

incomer, bus-coupler and load panels. The Licensee is commended

for this initiative as it reduces accidental operation of switchgear,

particularly for new electricians.

The pictures below depict the condition:

HV yard comprises 2 x 10MVA transformers. HV Panel colour-coded for clear identification.

8.1.6. Business Park Substation

The substation has been recently refurbished to cater for a load

growth of 8MVA within the supply area of the Licensee. The old oil

circuit breakers have been replaced by new air vacuum type circuit

breakers. The Licensee added new panels in the switch room to

cater for the newly installed transformer.

The pictures below depict the condition:

Refurbished HV yard with an added transformer. HV panel with new vacuum circuit breakers.

29

An added panel to cater the newly installed transformer.

8.2. Indoor Switching Substations, Mini-Substations, Pole-Mounted

Transformers and Overhead Lines

8.2.1. Hydrangea Switching Substation

The 11kV Alstom indoor breakers were also new and in good

condition with all the status indicators operational. The panels were

properly earthed with the cables and feeders properly designated.

The floor inside the switch-room was painted with oil resistant paint

and was skid free. All trench covers were in place and properly

installed. The logbook was also available and updated.

The battery back-up system was in place and operational. The

batteries were in a proper cabinet and well maintained as the

battery solution level was within the specifications of maximum and

minimum levels. The voltage and current indicators on the charger

were operational and the charger was functional. The battery

terminals were clean and no corrosion was observed.

8.2.2. CBD 11kV Switching Substation









30





8.2.3. Nkabongo Switching Station













8.2.4. 11kV/400V Mini-Substation (Jupiter Drive, Steve Biko Area)

Mini-sub not placed on a proper plinth & In 2016, work on the mini-substation plinth was

switchgear labelling not correctly done still in progress.

31

8.2.5. T02/461 Pole-Mounted Transformer (Lindelani)

Tree growing underneath the transformer. In 2016, the tree had been removed from

underneath the transformer.

8.2.6. Overhead Compensation 11kV line

Compensation overhead line with two poles In 2016, the line had been upgraded and no

leaning more than 5°. leaning poles were noted .

9. CONCLUSIONS

KwaDukuza Municipality made significant progress in addressing the non-

compliances highlighted by the audit. This is confirmed by the filling of some

key vacancies, the completion of the major projects in all substations that were

started during the compliance audit period, the regular updating of the list of

qualified switching personnel and ensuring that fire-extinguishing equipment in

all substations and switching stations is serviced as required. An additional

15MVA firm capacity has also been added through a newly built substation

and a refurbished substation. Plans to build a new Dukuza 132/33/11kV

substation have been approved and the Licensee is the process of appointing

contractors to build this substation. A recently reviewed master plan that caters

for the Licensee’s network and customer growth for the next five years is

currently in place. The Licensee still pays its bulk purchases on time and

32

regularly. The achievements of the Electricity Department under the leadership

of the Municipality were quite significant. The exemplary performance of the

Licensee should be something that all licensees aspire to.

10. RECOMMENDATIONS

It is recommended that KwaDukuza Municipality maintains the current level of

performance to continuously improve its level of compliance with licence

conditions and impose a self-monitoring regime to ensure that it does not

deteriorate back to non-compliance.

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. Further monitoring exercises to be conducted

by the Energy Regulator on the Licensee will be communicated to the Licensee

in due course.

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

Licensing, Compliance and Dispute Resolution: Electricity

National Energy Regulator

PO Box 40343

Arcadia

0007

Fax: +27 (0)12 401 4700

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