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Article updated: 1/15/2013 10:37 PM

Naperville smart meters project over budget

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Setup of the Naperville Smart Grid Initiative will cost the city at least $1.7 million more than was budgeted, but city staff members said Tuesday the increased cost also pays for extra work that will make the upgraded meter system more secure.

Cybersecurity measures, backup hardware at the municipal center and additional system testing and integration are included in a $450,000 change order to the city's contract with West Monroe Partners councilmen approved Tuesday night.

"We got additional security, we got a backup system, we have additional software functionality that we either didn't know existed or didn't know we would need," said Mike Bevis, Naperville's chief procurement officer. "That's how these things evolve."

Councilmen simultaneously approved a $759,103 fourth phase contract with West Monroe for project closeout work, which includes implementation of the meter program and an optional service that will provide Naperville residents information aimed at helping them reduce energy demand.

The additional expenses approved Tuesday bring the total cost for the smart meter initiative, which is designed to upgrade the city's $360 million electric network to provide more efficient, cost-effective and reliable service, to $23.6 million, from $21.9 million. An $11 million federal grant provided half of the project's initial funding.

"All in all, this project at its cost is a great benefit to the residents considering what we get in physical assets," Councilman Grant Wehrli said.

Bevis said the city still is negotiating one final contract for conservation and voltage reduction software, which is expected to be brought before the city council in February. That contract will put the project further over budget, but Bevis said the city will seek credits from vendors and additional grant money from the federal Department of Energy to help lower the overage.

The fourth phase contract makes up the majority of the funding approved Tuesday night with the support of all councilmen except Councilman Doug Krause.

Krause asked how going over budget on the smart grid project would affect taxpayers and electric rate payers.

Mark Curran, the city's director of electric utilities, said electric rates will not rise more than the 2 percent increases already scheduled for May 1 and again for May 1, 2014 and May 1, 2015. The city's capital improvement plan will absorb additional funding for the smart grid initiative by reprioritizing projects and using savings when contracts come in under budget, Curran said.

While Curran said system testing and integration of multiple technologies has taken "longer than we anticipated," activation of smart meters installed last year at 57,400 residences is expected to begin in March. Until then, Rickman Contract Services will continue manually reading meters under a $371,000 increase to a $1.5 million contract also approved Tuesday night.

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