The city of Naperville is suing the company it hired to create the online energy management system for its $22 million smart grid initiative, seeking the return of nearly $800,000 in payments made to the company since late 2010.
Calico Energy Inc. of Bellevue, Wash., failed to deliver functional software to support an electronic or "ePortal" system that would allow electric customers to view facts about their power usage, participate in cost-saving programs and eventually connect wirelessly with other electronic devices, the city alleges in a lawsuit filed Friday in DuPage County court.
Calico's failure to provide the ePortal on schedule delays completion of the smart grid initiative and will require the city's electric utility to find a way to pay a new contractor for the work.
Spokeswoman Linda LaCloche said the city is developing a request for information to determine what types of energy management software systems are available now -- roughly three years after the city entered into a $904,500 contract with Calico Energy Inc.
"Calico was not performing as provided for in the contract," City Attorney Margo Ely said. "We don't believe that they are able to perform."
Jim Leff, Calico's vice president of implementation and support services, did not return a call seeking comment Tuesday.
The city has paid Calico $779,550 and is using the legal action initiated Friday to seek repayment and additional damages that could help fund the hiring of a new ePortal developer.
The lawsuit comes after several months of delays in implementation of the ePortal, which will be designed to connect with the smart electric meters installed in 2012 for roughly 57,400 Naperville electric customers.
"We're readjusting our expectations for this component of the smart grid project," Ely said. "We are confident it will be successful."
The city's lawsuit says Calico's work developing ePortal software was supposed to be complete by July 18, 2011, but the company requested an extension, saying "its software product design was flawed."
City Council member Robert Fieseler, who is a member of an informal group of smart grid ambassadors, said the city developed a 700-point checklist for use in testing the software's effectiveness. When some requirements were met, the city began making payments to Calico, Ely said.
While the software would perform some tasks, it would fail at others. When repairs were made, new problems would crop up, Fieseler said.
The ePortal never worked well enough to be launched for the public's use.
"We weren't going to release a product that wasn't ready," LaCloche said.
Last July, Naperville gave Calico a deadline of Aug. 15 to produce a working version of ePortal software. The parties then agreed to extend the deadline until Aug. 19 and to require only a reduced-functionality version of the system, according to the lawsuit.
The company missed that deadline and on Jan. 27 notified the city it no longer has the personnel to complete the work.
"This was a big project -- a five-year project with 15 vendors, and 14 of them delivered on time, on budget and with the quality we demanded. One did not," Fieseler said about the smart grid initiative, funded half by the city and half by U.S. Department of Energy funds through the stimulus program. "The problem was Calico is a smallish company, a startup. They overcommitted not only to us but to other utility customers."
The lawsuit is expected to progress through court with a status hearing set for May 5 and a case management date of July 21. Ely said the city's legal team is "confident" the lawsuit will be able to recover at least some of the funds paid to Calico.