Naperville Sun: After feds pull plug on approved grant, Naperville left to cover full cost of $2.25M electric project

The U.S. Department of Energy’s decision to pull the plug on an approved grant to pay for half of a $2.25 million Naperville electric utility project means the city is on the hook for the full cost.

In early October, amid the federal government shutdown, federal officials announced the termination of 321 financial awards for 223 projects, totaling roughly $8 billion. States that did not vote for President Trump in the 2024 election were primarily affected, with Illinois seeing $583 million in cuts for projects.

In a news release, the Department of Energy said the projects were canceled because they did not “adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.”

Russell Vought, director of the U.S. Office of Management and Budget, made the announcement shortly after Congress forced the federal government into a shutdown. On social media, he called the grant funds that were targeted “green new scam funding to fuel the left’s climate agenda.”

The money earmarked for Naperville was to help pay for a major system upgrade to help the manage electricity outages and ensure grid reliability.

Naperville was notified of the cancellation on Oct. 2, after the city had been awarded the grant and fully negotiated terms with the department in August 2024, according to Brian Groth, the city’s electric utility director.

The city began the appeals process for the grant on Oct. 23 but there has been no resolution.

“To the best of our knowledge, this is the first federal grant that was awarded to the city and later canceled,” Groth said in an email to the Naperville Sun.

The Department of Energy did not respond to a request for comment, but according to a city memo, it was not due to any action or inaction by Naperville. Rather, the Department of Energy determined the “project no longer aligns with the agency’s priorities,” the memo said.

“This is something that the electric utility needs to do,” Groth said at the Naperville City Council meeting last week when asked whether the city should move forward without the funding. “Our system is old and realistically it seems like there may be a predetermined outcome or whatnot, so I think that moving forward with this, it’s the right time to get this done.”

The upgrade is for multiple systems in the city’s electric utility. The first is for the Supervisory Control and Data Acquisition (SCADA) system, which is used by the utility’s system controllers to remotely operate substation and field equipment, Groth said. SCADA enhances grid visibility for the electric utility, reduces outage durations and improves operational efficiency in Naperville, according to the city memo. The city’s current version of SCADA will become obsolete in 2028.

Naperville’s Outage Management System, which helps system controllers better manage electrical outages in the city, also is being upgraded, and Naperville plans to deploy one additional system to allow the utility to better “manage generation resources, storage resources and load within the city,” Groth said.

When the project is finished, there will be improved “remote operation of utility equipment and dispatching of utility crews” as well as improved communication “between departments as to the status of outages,” he said. Naperville residents will benefit from the “integration of distributed energy resources … to make a more resilient electrical grid,” he said.

Even with the loss of funding, the city still “has the financial means to complete this project without the grant,” Naperville Finance Director Ray Munch said.

“Grants typically serve as a supplemental funding source and are not the sole determining factor in whether a project is financially feasible,” Munch said, noting that the city assesses those risks “at the outset of any grant funding project to determine if it is financially feasible with or without supplemental funding.”

As a result of the grant loss, it is likely that other capital improvement projects will need to be deferred, Munch said. It is currently unknown which projects will be affected, city spokeswoman Linda LaCloche said.

“I’m curious what we do in a situation like that where the city is now on the hook for money which was allocated through a lawful process and seems sort of arbitrarily was taken,” Councilman Ian Holzhauer asked at last week’s council meeting. “Is there a way we potentially ever sue the federal government?”

Naperville City Attorney Michael DiSanto said that were the city to sue, it would likely be something “through the attorney general’s office on behalf of different municipalities in the state of Illinois.”

LaCloche said the city “has not yet reached out to state representatives or the Illinois attorney general concerning legal action or alternative funding paths,” but plans to do so in the near future.

A spokesperson for the Illinois Attorney General’s office said they are aware of the grant terminations and are “evaluating” the situation. A spokesperson for U.S. Rep. Bill Foster, D-Naperville, said Foster joined other congressmen in signing a letter demanding the Department of Energy reverse the funding cuts.

“I’m hoping we can follow the appeals process,” Councilwoman Mary Gibson told the Naperville Sun in an interview. “If this grant was awarded to us and then abruptly terminated without justification or reasoning, that doesn’t seem right to the people of Naperville or to federal taxpayers as well.”