Small Bluish Spark at Cable Lug

Blue spark going from the lug to where? From the lug to the sleeve itself? If so, that is typical of corona discharge and possibly tracking across moisture originally, but may now be tracking across a residual carbon trace. The next time it is de-energized, wipe and clean all of the surfaces with electrical cleaners.

There was a forum on a similar issue not too long ago where the cable terminations to a generator failed several times.

The blue "spark" is a discharge and should not happen on a properly terminated cable in a dry atmosphere (indoor type). If not cured, the discharge will only get worse. Carbon tracks will be created in the insulated termination, and these will grow until there is a flash over initially to earth, but this will become phase to phase fault if there is exposed metal on the phases (which seems to be the case since you can see the lug).

1. Eliminate possibility of moisture in the cable box. (may not be visible as water drops). If there is an anti condensation heater in the switchgear make sure it is working.

2. Verify the termination is the correct one for the type of cable, and has been completed properly in accordance with the termination manufacturers instructions with all the stress relieving components properly installed. It might be best to have the cable reterminated.

3. Some terminations or cable boxes require an insulated (usually heat shrink) boot to be shrunk over the terminating lug/bolts. Check if this is recommended for your instaation.

3. Using appropriate high voltage tapes it is possible to insulate the lug/bolt which would reduce the stress at the lug/insulation interface.