Naperville city council presentation - City of Naperville

CALL TO ORDER:A. ROLL CALL:B. SMART GRIDNAPERVILLE CITY COUNCIL MEETINGCOUNCIL CHAMBERS – MUNICIPAL CENTERFINAL AGENDA12/07/20096:00 p.m. – CLOSED SESSION7:00 p.m. – OPEN SESSION FOR PUBLICC. FY11 FISCAL FORCAST #2D. ADJOURNMENT:Any individual with a disability requesting a reasonable accommodation in order toparticipate in a public meeting should contact the Accessibility Coordinator at least48 hours in advance of the scheduled meeting. The Accessibility Coordinator can bereached in person at 1350 Aurora Avenue, Naperville, IL., via telephone at 630-420-6725 or 630-305-5205 (TDD) or via e-mail at manningm@naperville.il.us. Everyeffort will be made to allow for meeting participation.

Case For Supporting theSmart Grid Investment GrantDecember 7, 2009Business in the Right Direction. Go West.

AgendaIntroductionBackgroundProposed SolutionBenefitsCostsTimeline & ApproachQ&A2

INTRODUCTIONExecutive SummaryWhat are we proposing? Endorsement of Naperville Smart Grid Initiative project Approval to proceed with DOE negotiations for a $10,994,110Grant Approval of $10,994,110 in matching funds to completeNaperville’s Smart Grid InitiativeWhy will it be good for Naperville? Lower energy costs and better demand-side managementReduces wholesale bulk power purchases from IMEAProvide customer usage feedbackControls energy cost delivery with Time of Use ratesPrepares for upcoming plug-in cars and customer-owned alternative energysources Empower customers to lower their electric bills Utility and customers will save through demand-side savings andenergy efficiency improvements in the distribution network3

INTRODUCTIONExecutive Summary (continued)Net Benefit of $81M over 15 years (NPV of $52M)5

BackgroundARRA grant overviewReasons for grant application6

BACKGROUNDAmerican Reinvestment & Recovery Act (ARRA) In 2008, President Obama enacted ARRA to stimulate innovation andjob creation in several economic areas Specifically, the U.S. Department of Energy (DOE) issued Smart GridInvestment Grants (SGIG)Designed to advance the DOE’s “Smart Grid Functions,” which advance thetechnology and interoperability of the grid, manage functions without humanintervention, and use digital controls to manage and modify electricity demand andcongestionWinning applicants demonstrated:• Shovel-readiness• Highly secure communications network• Sound business case• Technology interoperability• Detailed project planOut of over 500 applicants, Naperville’s proposal was one of 100approved, and the only utility receiving SGIG funding in Illinois7

BACKGROUNDNeed for better demand-side management LoadReasons for SGIG ApplicationThe electric peak load on the system is roughly 380 Megawatts (MW)1.5 million Megawatt Hours (MWH) annuallyGenerated by 145,000 citizens, as well as commercial and industrial clientsElectric load is expected to keep growing with the growth of electronic devices in thehome plus the addition of PHEV’s coming to Naperville over the next 5-10 years Purchased bulk power contract will changeNaperville‘s power is directly purchased wholesale in a fixed 4-year contract tohedge risk against rising electricity costsIn 2011, the contract will shift to IMEA rates with a demand and energy componentThe demand component will significantly impact overall energy costs• This creates an opportunity to use Time of Use rates to shift customer demandto off-peak periods to lower wholesale power purchase costs8

BACKGROUNDReasons for SGIG Application (continued)Respond to macro trends in the electric utility industry Environmental concernsGreenhouse gasesCarbon cap & tradeIntroduction of renewable methods of energy generation Shifting grid demandsPHEV/EV impactsBi-directional flow (net metering) Customer choicesSource of power (e.g. renewables: solar, wind, geothermal)When to consumeData-driven decision makingIncentives to conserveWith current systems, Naperville is limited in capability tosupport these trends9

BACKGROUNDWhat’s driving these changes?Environmental DriversCarbon cap & trade, greenhouse gases,support for renewables, foreign oildependencyTechnical DriversSupport customer choice, gridinteroperability, aging infrastructure,customer choice, PHEVs, cyber securityNATIONAL TRENDS•8.3 million smart meterscurrently deployed•18 million smart meterswill be deployed throughStimulus Grants• Future load increase fromPHEVs (President’s goal of1 million cars on the roadby 2015)REGIONAL TRENDS•ComEd holding pilot with130,000 smart meterseven without a grant•ICC driving ComEd toimplement Smart Gridtechnologies by approvingrecovery in rate baseLOCAL TRENDS•Move to IMEA rates in2011 require betterdemand sidemanagement to controlcost• Rising usage = risinggeneration•Increasing interest inrenewables• Successful pilot programs• Online billing adoption(already 20% in Naperville)10

Proposed SolutionOverviewBenefitsCosts11

SOLUTIONARRA GrantProposed Solution & OutcomesWith financial resources constrained in the current economy, Naperville seeks a DOEGrant provided by the American Recovery and Reinvestment Act stimulus bill to drivethese projects to completion on an expedited time scheduleOnce the DOE grant and Naperville financing is successfully obtained, projects can beginVisionFinish the Naperville Smart Grid Initiative and realize the benefits by providing themissing infrastructure, software applications, and data management capabilitiesOutcomesDecreased demand: Shifting load to off-peak times saves moneyImproved efficiency: Having customers help enable efficiency and decrease demandwith the help of customer usage feedback and improved efficiency in the distributionnetworkPrepare for future generation and loads: Support distributed renewable generation inNaperville with net-metering, and support Plug-in Hybrid Electric Vehicle charging12

SOLUTIONHow to Achieve the Outcomes Enable new optional rates that can provide lower cost off-peakelectric prices (Time of Use rates vs. flat rates) Provide customers with tools that encourage decreased demand andincreased efficiency (ePortal and home display) Distribute electricity more reliably and efficientlyKey Components• 57,323 smart meters, including theinfrastructure to support water meters• Time of Use and Critical Peak Pricing rates• Customer home energy displays with realtimeusage information (optional)• Enhancements to Customer InformationSystem• Enhancement to website including ePortalwith hourly usage information• Automated substations and distributionpoints• Complete fiber build to all substations• Load Control Relays to reduce peakdemand• Meter Data Management System• Outage and Distribution ManagementSystems• Marketing and customer changemanagement programs• Asset Management System that interfaceswith citywide initiative13

SOLUTIONExample: Customer Usage Information Customers can view theirpeak vs. non-peak usage: Hourly, view historichourly usage throughcustomer ePortal(available to all customers) Real-time, through ahome energy display(optional) Using this data, acustomer may move theirenergy usage to non-peakhours to take advantageof Time of Use rates anddecrease overall usage tosave moneyExample: Real-time Home Energy Display14

SOLUTIONCustomer PrinciplesSecurity & Privacy All customer information will be secure and safe because of existingNaperville policies and stringent requirements from the DOE grant Measures to ensure customer privacy include the following:Will not release energy usage (consumption) data on single customers through theFreedom of Information Act (FOIA)May release aggregate data for trending to outside parties, but customer informationwill be removed (e.g. personal identifiable information, PID)Will use single and bulk customer information for Naperville’s internal businesspractice, engineering studies, and cost estimatesTransparency & Customer Relations Naperville will be as open as possible with spending and projectstatus to the general public and federal agenciesWill leverage city website to communicate project updatesTransparency will also be apparent through DOE and Recovery.gov website Active communications to customers on the changes being made toelectric service, their additional choices, and their related benefits15

SOLUTIONWhat are the benefits?Lower PeakDemandFewer LineLossesFewer PowerInterruptionsDecreasedEnergy UseLowerConsumerCostsLowerCarbonEmissionsJobs Createdor Saved26 Megawatt(6.31%)reductionduring peakperiods by20231.5% annualline lossreductionby 20235% annualreduction ofcustomeroutageminutesby 2012Totaldecrease of819Gigawattsby 2023Approx.$22,000,000saved by2023180,000‐tondecrease ingreenhousegases by2023139 jobscreated overthe 3yearproject *Demand-side savings = lower wholesale power purchase = lower cost* Job details:• 4.5 full time equivalent (FTE) directly to utility• 70.5 FTE consultants, contractors, and vendors• 64 FTE indirectly to utility suppliers and utility/ESCO jobs16

SOLUTIONWhat are the benefits? (continued)OperationalBenefits• Reduced outages• Improved power quality• Resource optimization• Less manual inspection• Remotedisconnect/reconnect• Reduction in meterreading expenses• Fewer outage-relatedcalls• Improved bill accuracy• Replaces aginginfrastructureFinancialBenefits• Reduction in energy theft• Fewer uncollectableaccounts• Reduction in energydemand• Reduced consumptionthrough rates,technologies, and systemupgrades• Aligns with existingcitywide AssetManagement projectSocietal /CustomerBenefits• Reliability improvements• Reduced greenhousegas emissions• Improved bill accuracy• Customer usagefeedback and choice• Enable distributedrenewables• Support PHEV smartcharging => lessdependence on foreignoil17

SOLUTIONHow much will it cost?Forecasted Cash Needs Year 1: $7,528,574 Year 2: $12,149,362 Year 3: $2,310,284Personnel &BenefitsFinancial Summary$1,932,639 9%Equipment $11,650,936 53%ContractedServices$8,404,647 38%Subtotal $21,988,220 100%The DOE grant requiresall money be spentwithin 36 monthsLess: FederalFunding from DOEGrantNaperville’sTotal$10,994,110 50%$10,994,110 50%18

Approach and TimelineHow will it happen?Next steps19

APPROACH AND TIMELINEHow will it happen? Several concurrent projects will be executed over 36 monthsA three-year roadmap will establish how to manage and execute all projectsMilestones by Year2010•Procurement &Implementation of AMIand MDMS•Initial smart meterdeployment•CIS modificationscompleted• Distribution networkefficiency pilot (voltageconservation)2011• Asset, project & workflowmanagement system•Home Area Networkoffered to customers•Deploy Substation &Distribution Automation•Deploy OutageManagement &Distribution Managementsystems• Introduce customer Timeof Use/Critical Peak Pricingrates2012•All Smart Meters deployed• Finished customereducation programs• Projects completeProject Management and Quality AssuranceCustomer Change Management20

APPROACH AND TIMELINEHow will it happen? (continued) Joint teams led by internal and external subject matter experts Collaboration between DPU-E and other city departments Program and Change Management Office oversees project planning,execution, and status reportingProgram & ChangeManagement Office21

APPROACH AND TIMELINEImmediate next stepsCity Approval to ProceedNegotiate with DOEHow do we move forward?Next 45 daysSmart Grid Initiative Consultant RFPCreate Reporting Process and PlanCreate a Integrated Resource andImplementation PlanCreate DOE Level 1 and Level 3 ProjectPlanSubsequent30 daysCreate DOE Reporting Plan22

SummaryWhat are we asking for? Endorsement of the Naperville Smart Grid Initiativeproject Permission to negotiate and finalize the $11 millionaward with Department of Energy for councilapproval (January 2010) Commitment for matching funds of $11 million inbonds $7 million 2010 $4 million 201123

Q&ABusiness in the Right Direction. Go West.24

AppendicesFuture proof pointsSmart Grid Initiative DetailsFAQs25

Future Proof PointsCustomer Defined Load Control and Home AutomationDistributed Renewable Generation – (e.g. Solar, Wind, Geothermal)Plug-In Hybrid Electric Vehicles (PHEV)/Electric Vehicles (EV)26

FUTURE PROOF POINTSCustomer-defined load control By utilizing a Home Area Network (HAN) capable device, a customercan accurately gauge their energy usage and make intelligentdecisions related to the following:Utilization of resourcesTiming of energy consumptionPrice of energy when load is activated Customers can remotely monitor and actively control their energyusage profile via Internet based customer portals Example:Program air conditioning and pool heaters to run at the most efficient periods of theday, along with the cheapest timesA customer sees an increase in price through customer usage feedback, andproactively curtails their energy consumption27

FUTURE PROOF POINTSSupport of distributed renewables (net metering) Customers ambitious enough to procure their own renewable powersystems will be able to actively participate in energy-recoveryprograms with the City of Naperville Customers could also contribute electricity to the overall grid and becompensated for the effortThe AMI solution, IT systems and Smart Meters will support net meteringNet metering is the ability to keep track of how much energy along with when it istransferred to the home or to the network Bi-directional communication between the meters and theinfrastructure will allow the network to monitor the impact of“Distributed Renewable Generation” on the Naperville distributionnetwork28

FUTURE PROOF POINTSPlug-in Hybrid Electric Vehicle (PHEV) charging Federal goal of 1M PHEV/EV cars on the road by 2015A benefit of TOU pricing is hybrid vehicles can be charged during the mostcost-efficient period of their inactivity – typically during the night.Significant penetration of PHEV/EV will require smart grid solutions to avoidadditional build out of the distribution networkOne PHEV can add 50% or more load to the average home energy load29

Smart Grid Initiative DetailsSummary of initiativesDetailsTimelineMetricsBenefit detailsDOE requirements30

SMART GRID INITIATIVETechnology Project DescriptionSummary of InitiativesTools and rates that decrease demand and increase efficiencyCustomer InformationSystem (CIS)ePortalAdvanced MeteringInfrastructure (AMI)Meter Data ManagementSystem (MDMS)Smart MetersHome Area Network(HAN)Upgrade existing CIS to supportadvanced pricing and ePortalDevelop as an add-on to theNaperville CIS applicationCreate an RFP and implement AMItechnologiesCreate an RFP and implementMDMSCreate an RFP and install SmartMetersPromote optional customerinstallation of Home Area NetworkAllows for advanced pricing programs and to provide information for newdemand response programsAchieves energy conservation by enabling customers to view their energyconsumption for any period via the InternetAllows for two-way communications between the customer’s home meter andNaperville DPU-EEnables utilities to manage large volumes of meter data generated fromadvanced metering infrastructure (AMI) systemsIdentifies consumption in more detail than conventional meters and transfersthat information back to Naperville DPU-E for remote monitoring andtroubleshooting, customer data presentation, remote disconnect/reconnectand billing purposesAn extension of smart metering intelligence into the home itself, connectingthe meter to major power-consuming devicesLoad ControlManagement System(LCMS)Time of Use/Critical PeakPricing ratesInstall for remote control of bothcommercial and residentialcustomer loads. Optional customercontrol, optional utility control withcustomer incentive.Implement Time of Use and CriticalPeak Pricing rate structuresProvides direct load control of select customers, or unique load of customers,during high-load conditions or emergency system eventsDemand response enablers that encourages and rewards load shifting andbehavioral change31

SMART GRID INITIATIVEDistribute electricity more reliably and efficientlyTechnology Project DescriptionSummary of Initiatives (continued)Geographic InformationSystem (GIS)Distribution Automation(DA)Substation Automation(SA)Volt/VAR OptimizationApplicationEnterprise AssetManagement System(AMS) and Project/WorkFlow ManagementSystems (WFMS)Outage ManagementSystem (OMS)Distribution ManagementSystem (DMS)Acquire NAP-wide SU-ELA or equivalentpricing structureFinish installation of feeders not alreadyautomatedComplete full connectivity and enable allsubstation-automated devicesCreate an RFP and install software andremote sensorsAcquire and install capacitorsInterface with city-wide NAMS initiativeImplement Outage Management SystemImplement Distribution Management SystemIntegrates hardware, software, and data for capturing, managing,analyzing, and displaying all forms of spatially referencedinformationAllows for monitoring of critical feeders to reduce outage durationsand helps alleviate overload conditionsEnables data acquisition from the power grid in a decentralizedstructureProvides for a flat 120-volt distribution feeder profile andplacement/control of capacitors at the appropriate locations alongthe feeders for voltage support and to supply VARs as neededSystematic method of prioritizing and referencing enterprise assetsto continuously provide adequate service coverage, whileminimizing human and capital expenses required to deliver suchperformanceDispatches outage orders from the Outage Management System,sending crews via the shortest route and tracks crew locationsClassify and identify outage conditions for proper staffing and repairof fault conditionsSecures the SCADA functionality of devices located on thedistribution system32

SMART GRID INITIATIVEProject ElementsDetermine Modifications to CIS to enable AMICustomer Information System (CIS)Evaluate and upgrade the existing CIS application to Allow for advanced pricing programs Provide information for new Demand Response ProgramsDetermine ePortal strategy based on advanced functional capability of the current CIS tomeet or not meet advanced rate structuresTimelineElement / Task Deliverable Start FinishProcure CIS Module Determine Requirements Dec 2009 Jan 2010Install Interval PricingModuleCut Over ExistingCustomersInstall and Run Validation Pilotw/ Smart MeterConvert Installed Smart MeterCustomersFeb 2010 Sep 2010Sep 2010 Nov 201033

SMART GRID INITIATIVECustomer Information System (CIS) – ePortalDevelop ePortal as an add-on to the CIS applicationBased on capability, or lack thereof, of advanced modules from SunGard HTE to supportadvanced ratesePortal Strategy & DevelopmentE-Portal Strategy and development will include a wide team of people from Marketing, IT, DPU-Eand Customer ServiceThis will provide an upgraded CIS for Smart Meter functionality and achieve energyconservation by enabling customers to view their energy consumption for any period viathe Internet34

SMART GRID INITIATIVEAdvanced Metering Infrastructure (AMI)Project Elements AMI procurement, installation, and meter deployment Create RFP and install Smart Meters Create RFP and implement Load Control Management SystemTimelineElement / Task Deliverable Start FinishProcure AMI System Initiate Contract with Vendor Sep 2009 Apr 2010Install AMI CommunicationSystemAMI Infrastructure Site Completion Apr 2010 Oct 2010Field Install Smart MetersTest & Verify Remote DataAcquisition57,000 Meters installed at Customer’spremiseMeter data being received accuratelyand flowing through to customer billJul 2010 Feb 2012Aug 2010 Aug 201035

SMART GRID INITIATIVE COMPONENTSAMI ComponentsAdvanced Metering InfrastructureAllows for two-way communications between the customer’s home meter and NAPIncludes the hardware and software that creates a two-way communications network between AMImeters and the backbone that connects to the utility business systems, allowing collection anddistribution of the AMI information to customers and the utilityThis infrastructure must provide the connectivity to all the meters in our service territory, which has avery wide variety of coverage requirements, from urban to rural and from outdoor meters to those ina basement, or metering closetSmart MetersThese meters identify consumption in more detail than conventional meters and transfer thatinformation through a communications network back to NAP for monitoring, customer datapresentation, and billing purposesInstallation portion will be able to be separated from AMI and Smart Meter RFP if Naperville wantsto deploy or use other vendorLoad Control Management SystemInstall for remote control of both customer load and NAPProvides Naperville with direct load control of selected participating customers, or unique load ofcustomers, during high-load conditions or emergency system events. Customer incentives will beavailableTry to move this up work with AMI system, so it can be used to get customer feedback, history, andassist in training the customerThis will help the advanced rate development based upon the lessons learned during deployment36

SMART GRID INITIATIVE COMPONENTSMeter Data Management System (MDMS)Project ElementsEnables utilities to manage large volumes of meter data generated from AdvancedMetering Infrastructure (AMI) systemsTeam composed of vendor, representative from Naperville IT area, and an experiencedsystem integratorWill involve substantial time to configure and testSubject Matter Expert engineers can be brought in to do this work This will be constructing the data system design What events will be stored in MDMS or other system, e.g. PI Server.TimelineElement / Task Deliverable Start FinishPlan – AnalyzeCompleted ProjectRequirementsNov 2009 Feb 2010Design- BuildTechnical ArchitectureSystem CodeApr 2010 Jul 2010Test- Train- Conversion – Deploy Testing/Training Process Plan Jul 2010 Dec 201037

SMART GRID INITIATIVE COMPONENTSRequest for Proposal for AMI technologiesProject Elements Combined RFP effort for the following:Advanced Metering InfrastructureMeter Data Management SystemSmart MetersLoad Control Management SystemHome Area NetworkTimelineElement / Task Deliverable Start FinishDevelop RFP Request for Proposal Jan 2010 Jan 2010Collect Proposals All proposals returned from vendors Mar 2010 May 2010Vendor Selection Vendor chosen to implement solutions May 2010 June 201038

SMART GRID INITIATIVE COMPONENTSNaperville Asset Management System (NAMS)Project Elements Implement Asset (AMS) & Project/Work Flow Management System (WFMS) Provides for data warehouse pulling from many data sources to manage projects,resources, and workforce Systematic method of prioritizing and referencing enterprise assets to continuouslyprovide adequate service coverage, while minimizing human and capital expensesrequired to deliver such performance Dispatches outage orders from the Outage Management System, sending crews viathe shortest route and tracking crew locations Allows for the streamlined creation, management, and processing of capital andoperating projects utilizing available data.TimelineElement / Task Deliverable Start FinishPlan-Analyze Completed Application requirements Jan 2010 May 2010Design-Build Technical architecture System Code May 2010 Mar 2011Integrate with GIS & OMSTest-Train-DeployTest GIS, OMS, EMS Interfaces CaptureWorkforce Effectiveness Capture AssetPreservation BenefitsTesting process planTraining PlanMar 2011 Aug 2011Aug 2011 Oct 201139

SMART GRID INITIATIVEOutage and Distribution Management SystemsProject Elements Outage Management System (OMS) Classify and identify outage conditions for proper staffing and repair of fault conditions Industry expert resources may be needed to assist in this implementation Distribution & Energy Management Systems (DMS, EMS) Secures the SCADA functionality of devices located on the distribution system Industry expert resources may be needed to assist in this implementation Analyze and determine whether or not to implement a centralized or decentralizedsystemTimelineElement / Task Deliverable Start FinishExecute RFP Select Vendor Aug 2010 Dec 2010Plan-Analyze Completed application requirements Sep 2010 Mar 2011Design-BuildDesign Support OMS Integration andSystem codeApr 2011 Aug 2011Test-Train-Deploy Testing process plan and Training Plan Sep 2011 Nov 201140

SMART GRID INITIATIVE COMPONENTSDistribution and Substation AutomationProject Elements Distribution Automation (DA) Allows monitoring critical feeders to reduce outage durations and helps alleviate overload conditions Need to begin with the distribution planning guidelines and use local Naperville engineering staff tocoordinate schemes Substation Automation (SA) – complete all 16 substations Enables data acquisition from the power grid in a decentralized structure Will work with the local Naperville substation engineering staff on strategy and deployment Volt/VAR and Phase Balancing – create an RFP, install software and remote sensors, andacquire and install capacitors• Provides for a flat 120-volt distribution feeder profile and placement/control of capacitors at theappropriate locations along the feeders for voltage support and to supply VARs as neededTimelineElement / Task Deliverable Start FinishPlan-Analyze Completed Requirements Oct 2010 Jan 2011Design-Build Design DA Circuits Jan 2011 Apr 2011Test-Train-Deploy Testing process plan Apr 2010 Jun 201141

SMART GRID INITIATIVE COMPONENTSTime of Use (TOU) & Critical Peak Pricing (CPP)Project Elements Negotiate new rate Study customer market data Create rates to maximize new contract Market to customers for energy efficiency and behavioral shiftsTimelineElement / Task Deliverable Start FinishRate Study Analysis Rate Study Report Jan 2011 Jan 2011Design- Build Rates Completed Rate sheets Jan 2011 Mar 2011Implement RatesMarketing Plan Roll OutCustomer Adoption ReportMar 2011 Jun 201142

SMART GRID INITIATIVE COMPONENTSHome Area Network (HAN)Project Elements Develop a customer knowledge program These are promoted and supported by Naperville, but purchased and installed by eachcustomer at their discretion An extension of smart metering intelligence into the home itself, connecting the meter to majorpower-consuming devices This can be started in 2011, after all the system components have been defined A local person can drive this, working to create the ecosystem partners, train them, and get themessage to the customers createdTimelineElement / Task Deliverable Start FinishPlan-Analyze Completed Physical Requirements Jan 2011 Apr 2011Design-BuildCreate HAN equipment add-on proceduresCreate HAN interface to LCMSEnable Local Contractors for InstallationsApr 2011 Sep 2011Deploy HAN Devices Testing Process Plan Sep 2011 Nov 201143

SMART GRID INITIATIVE COMPONENTSTimelineAll project elements are planned to be completed within the DOE-required36-month time frame.44

SMART GRID INITIATIVE COMPONENTSCustomer-level MetricsThese KPIs enable the quantification of demand and energy savings along with adoption rates of thedifferent customer programs at a level that enables Naperville to continually evaluate and optimize thecustomer programs and solutions.45

SMART GRID INITIATIVE COMPONENTSDistribution Network MetricsThese metrics are associated with the Volt/Var optimization solution that will optimize distribution networkpower quality and efficiency.46

APPROACH AND TIMELINEGrant ObligationsProject oversight from Department of Energy (DOE), including annual reviews,performance monitoring, site visits, and assistance in issue resolutionReportingWill measure actual performance vs. project estimatesMust comply with monthly, quarterly, annual financial and operational reporting requirements• Monthly progress reporting via web-based project management tool• Quarterly ARRA reporting requirements• Semi-Annual Reporting on Smart Grid Metrics/Results• Special status report (for developments that have significant impact on project)• Final Scientific/Technical Report and supporting dataDOE will provide standard templates for data collection (to define build/impact metrics withmapping to benefits)Federal Audit Audit is required for all federal grants over $500,000ReimbursementAll money is reimbursed on a bi-weekly basisDOE approving official will approve invoice no later than 30 days after received, unless billing isimproperDOE funds be spent within 36 months of Grant Award47

FAQsSystem reliability questionsSecurity/privacy questionsCustomer service questions48

FAQsHow will this increase reliability?System Reliability Questions All Smart Grid Initiative components will work in tandem to increaseoverall system reliability. Specifically, the following components willhave a direct effect on improving reliability:2-way flow of meter information through AMILoad control management systemDistribution AutomationVolt/VAR pilotOutage ManagementHow will this shift demand? Customers have a financial incentive to move their high-consumptionactivities to non-peak times. As a result, less consumption will occur during peak times, and moreconsumption will occur during non-peak times.49

FAQsSecurity/Privacy QuestionsWill my information be secure? Naperville will implement stringent cyber-security standards tocomply with the DOE Smart Grid Investment Grant requirements.Will my data stay private? Naperville will continue to apply its current policies, including thefollowing:Will not release energy usage (consumption) data on single customers through theFOIAMay release aggregate data for trending to outside parties, but with customerinformation (personal identifiable information, PID) removedWill use single and bulk customer information for our internal business practice,engineering studies, and cost estimatesSigned court order required to release data to law enforcementUnusual trending will continue to be documented• Although Naperville will not actively mine meter data in such a manner, suspiciousactivity will be reported to the proper authorities.50

FAQsSecurity/Privacy Questions (continued)What will Naperville do to prevent a security breach? Naperville will have the following steps in place to ensure security:Adherence to Department of Energy cyber security standardsPeriodic scheduled internal and external security auditsTechnical and physical controls (e.g. passwords, locks, encryption)Smart Grid “Lab” for testing security configurationsScheduled reviews with Department of Energy to ensure compliance is up to date The creation of a Smart Grid Security and Privacy Handbook willensure that all the security procedures, designs, implementations,and policies are supported throughout the project lifecycle.51

FAQsCustomer Service Questions (continued)What if I don’t want to participate? A customer does not have to participate in Time of Use rates orCritical Peak Pricing. However, changes to the ePortal and meters will be made regardlessof customer participation. All customer meters will be replaced.52

Page: 54 - Agenda Item: B.CITY OF NAPERVILLEMEMORANDUMDATE: December 4, 2009TO:FROM:SUBJECT:Douglas A. Krieger, City ManagerAllan L. Poole, Public Utilities DirectorProposed 5-Year Capital Improvement Program Budget FY2010-11thru FY2014-15 with Smart Grid DOE GrantACTION REQUESTEDForward this memorandum to the City Council to supplement the Power Point presentation to bemade by West Monroe Partners and city staff at the December 7 workshop on the NapervilleSmart Grid Initiative and the U.S. Department of Energy (DOE) Smart Grid grant award.BACKGROUND/DISCUSSIONFor the past 3 years the 5-year Capital Improvement Program (CIP) budget for the Department ofPublic Utilities-Electric has been held to no more than $12 million per year or $60 million total.Included in this capital budget have been major components of the Naperville Smart GridInitiative (NSGI) with $8.4 million proposed over the next 5 year period.The $8.4 million has included completion of Substation Automation, Distribution Automation,SCADA upgrades, Asset Management, and computer server additions. The grant application toDOE this past August included all of these components and the installation hardware andsoftware of Smart Grid metering, referred to today in the electric utility industry as an AdvancedMetering Infrastructure and Meter Data Management (AMI/MDM).With the DOE 50% matching grant and Naperville’s equal share, our revised 5-year CIP is asfollows:Proposed 5-Year Capital Improvement Program BudgetFY 2010-11 thru FY 2014-15 with Smart Grid DOE GrantRevisedProposed CIP less Bond Issuance Proposed CIP5-Year Smart Grid Smart Grid For City with Smart GridYear CIP Components Components 50% Share ProjectFY10-11 $12.066 $1.855 $10.211 $7.000 $17.211FY11-12 $12.122 $1.762 $10.360 $4.000 $14.360FY12-13 $11.525 $1.610 $9.615 $9.915FY13-14 $11.755 $1.705 $10.050 $10.050FY14-15 $11.920 $1.470 $10.450 $10.450Totals $59.387 $8.402 $50.985 $11.000 $61.985***All values above are in million dollars***The following bullet points are made in reference to the above chart as follows:FINAL - City Council Meeting - 12/7/2009 - 54

Douglas A. Krieger, City ManagerPage 2December 4, 2009Proposed 5-Year CIP Program Budget with Smart Grid DOE GrantPage: 55 - Agenda Item: B.• Revised 5-year budget at $61.985 is $2.598 million or 4.37% higher with Smart Grid-City 50% portion ($11.0 million) than proposed Budget ($12 million/year x 5 = $60million)• With DOE Smart Grid 50% Matching Grant Award, the City benefits with $11.0 millionin additional assets at no cost• City benefits by completing Smart Grid components beyond planned $8.4 million forSubstation Automation, Distribution Automation, SCADA Upgrades, and AssetManagement to the $22.0 million level which includes all of these and the SmartMetering for all customers• City completes Smart Grid in a 3-year period with DOE Grant rather than a much longerperiod well beyond 5 years and benefits much sooner with reduced wholesale powerpurchases (both for demand and energy costs) and rate savings for our correspondingcustomersRECOMMENDATIONForward this memorandum to the City Council for their additional information as related to theSmart Grid workshop presentation on December 7, 2009.ALP/mmFINAL - City Council Meeting - 12/7/2009 - 55