With more relaxed regulatory environments than investor-owned utilities and potentially more advanced communications networks to build upon, municipal-owned utilities can be nimble and effective in smart grid deployments.

Earlier this month, in response to a troubled $100 million smart grid project, the city of Boulder, Colorado voted to establish a municipal light and power utility to displace investor-owned utility Xcel Energy. The project, Smart GridCity, has come under fire with cost overruns and lofty expectations and supporters of the switch say local control will accelerate smart grid distribution upgrades and help provide renewable energy to the city.

In contrast to Boulder's stalled smart grid project, the city of Naperville, Illinois is quietly moving forward with a citywide deployment to radically improve grid efficiencies.

In late 2009, the municipal utility launched the $22 million Naperville Smart Grid Initiative, funded by a matching $11 million U.S. DOE grant as part of the American Recovery and Reinvestment Act (ARRA). The ambitious project involves utility infrastructure upgrades and grid efficiencies designed to increase reliability, manage costs, and develop a proactive customer service unit.

With more than 57,000 residential and business customers, the utility manages 388 MW of energy annually and is considered a $356 million asset. Under a continuous improvement model, the city utility was already planning to complete a smart grid in the next 10 to 15 years. But the $22 million cash infusion has accelerated grid improvement plans "with customers now expecting to see benefits in the next year or two," said Nadja Lalvani, communications director for the city of Naperville.

The initiative calls for installing smart meters for all residential and commercial customers, with the choice of fixed-rate or time-of-use pricing and new tools and programs to monitor and control energy usage. The plan includes a commitment to renewable energy technology and integration of electric vehicles, with a projected cost savings of $30 million over the next 15 years, said Lalvani.

Customer communication has been a defining part of the smart grid initiative strategy. "We want to really empower customers with more choice and more control of their energy costs," said Lalvani with the project offering an interactive web portal and programmable thermostats.

Where other utilities have struggled with customer communication about smart meter installations and grid benefits -- notably Northern California's PG&E and Central Maine Power -- the Naperville city utility has taken a decidedly proactive approach in its customer outreach. The city utility developed a smart grid customer bill of rights, created a customer privacy advocacy handbook, and recruited volunteers to serve as smart grid initiative "ambassadors" to share information about the program with community groups and neighborhoods through house parties. They also offer a non-wireless smart meter installation option for customers fearful of the health effects of smart meters.

Still, despite the customer outreach efforts, the Naperville Smart Reader Awareness Group has stood firmly against the initiative. Last week, the group delivered 4,209 signatures to the city clerk to qualify a referendum to permanently stop the smart meter project. A vote on the referendum is expected in March 2012.