Updated: Can Silver Spring Networks produce enough smart grid gear to keep its utility customers happy? That was a question repeated by members of the Maryland Public Service Commission on Thursday as they grilled a Baltimore Gas and Electric official over the utility’s proposal to build a smart grid using Silver Spring’s equipment.
Mark Case, the senior vice president of strategy and regulatory affairs for BG&E, revealed during the hearing that Silver Spring told BGE “that they have 50 percent capacity in their plant in terms of how many AMI meters they can put out. They can double the capacity with a 90-day notice.”
Clarification: Silver Spring says it does not have a plant, nor does it produce meters. The company said through a spokeswoman that Case was referring to the maximum production capacity that Silver Spring has in place with multiple global contract manufacturing partners in
relation to the level of production that it is currently using. She
writes,” This model is one commonly used throughout technology
manufacturing and is simply a way to ensure that the production
capacity is available to meet possible future needs, quickly and cost
effectively.”
Case portrayed Silver Spring’s ability to ramp up as a good thing and assured the commission that equipment delivery shouldn’t be an issue. But wait. Running a factory at half the capacity is usually a sign of production issues or poor customer demand. A supplier that can’t manage production to meet a delivery schedule will not only cause deployment delays but also lose money.
This isn’t the first time that Silver Spring has seemed to be under delivering. In a PG&E report on why the utility fared miserably in explaining the workings and benefits of smart meters to its customers, PG&E noted that Silver Spring hadn’t delivered as many meters as it wanted at one point: “SSN safety stocks remain below target as SSN is unable to provide a consistent supply. Discussions to resolve production issues are ongoing with SSN.”
Silver Spring is a high-profile, venture-backed company that has managed to win major utility customers. Case pointed out during the hearing that 3.6 million of the roughly 16 million smart meters installed in 15 states so far come from Silver Spring – its network adapters go into meters made by other manufacturers such as Landis + Gyr and General Electric. Silver Spring, which also sells a host of other communication equipment and software, has fared well enough that it’s been working on an IPO.
We contacted Silver Spring to find out about Case’s comment about its production status. In an email reply, Warren Jenson, COO of Silver Spring, skirted the question about the factory runrate. He said whatever PG&E said in its report was a “dated comment” because “there is no scaling issue to our knowledge.” Here is the rest of his quality-assurance remark:
“We work with multiple global partners to ensure we have ample ability to scale our production to meet client demands and can accelerate quickly to fulfill their requirements. Our clients around the world are pleased with our demonstrated ability in this area. Should BG&E be successful in moving forward with its smart grid project, we are confident we will be able to successfully support their timelines.”
For more research on the smart grid check out GigaOM Pro (subscription required):
Report: Open Source & the Smart Grid
Home Energy Management: Consumer Attitudes and Choices
Cisco Seizes Smart Grid Low Hanging Fruit
Image courtesy of Silver Spring Networks
Comments have been disabled for this post