Echelon (s ELON) might not have the biggest name in the smart meter biz, but it has scored an initial deal with one of the largest utility partners. The company, which has been a strong seller in the European market for several decades, said Monday that it signed a $15.8 million agreement to supply Duke Energy (s DUK) with smart meters.
Duke, the third-largest electric utility in the United States, is planning a five-year mass deployment of smart grid technology later this year in Ohio that will include more than 700,000 smart meters, which provide real-time information about energy use and enable two-way communication between a utility and a consumer. Duke is seeking regulatory approval to install about 800,000 smart meters in Indiana. The utility is “laying the groundwork” to bring smart grid technology to the other states it serves — North and South Carolina and Kentucky — and has a total 4 million customers.
The initial deal for Echelon is for just a portion of the total number of smart meters eventually needed in Ohio and Indiana. Duke said a full smart meter rollout in those two states represents a $150 million revenue opportunity for Echelon, assuming full deployment of its smart meter systems. While snagging all of Duke’s customers in Ohio and Indiana would be great news for Echelon, the company no doubt also has its sights on the remainder of Duke’s service territory.
Duke has been one of the fastest-moving utilities to adopt smart grid technology. It has announced plans to partner with Cisco to “fast-track” development of its smart grid. Under that partnership, Cisco will provide digital communications architecture for Duke’s electricity network and work with the utility to develop and install home energy management devices. Echelon’s meters would speak to the utility’s back office over Cisco’s communication network.
Duke has applied for $214 million in stimulus grants from the federal government for the installation of smart meters. The stimulus package allocated more than $3 billion in funding for smart grid technologies. If Duke receives that grant, that should be good news for Echelon.
While Echelon has a strong footprint in Europe, the company is less advanced in the U.S., where other smart meter makers have been busy inking deals, including Itron (s ITRI) with Southern California Edison and San Diego Gas & Electric and General Electric (s GE) with Pacific Gas & Electric (s PCG) and Oklahoma Gas & Electric.