Echelon wins first major U.S. smart meter contract from Duke
Smart meter maker Echelon has landed a $15.8 million contract from Duke Energy that would allow the North Carolina-based utility to deploy more than 120,000 meters across its service area. But with Duke planning to install more than 1.5 million meters over the next five years, the deal could balloon to as much as $150 million.
Duke’s five-year roadmap already includes the installation of 700,000 meters in Ohio, and it’s waiting on regulator approval to deploy 800,000 more in Indiana. Whether or not it will turn to Echelon again to fill these orders is unknown — it’s certainly not bound to do so. This initial contract is more like a pilot program, with Duke testing the pricing and execution. But regardless, Echelon’s stock jumped 40 percent on the Nasdaq when news of the deal hit this morning.
This isn’t the first time Duke has worked with Echelon. The utility installed about 60,000 of the company’s meters in homes in Cincinnati. This was Echelon’s first American toehold — and Duke is still its only U.S. utility client to date. Most of its meters have been deployed in Europe, where the power-line infrastructure is more amenable to Echelon’s technology. Significantly, it is supplying the 30 million meters for Italian utility Enel’s massive deployment spanning 21 countries.
To improve its traction in the U.S., Echelon is working to diversify its products to work better with wireless networks. For example, it struck a deal with T-Mobile USA to include cellular radios in its meters to beam data back and forth between utilities and consumers. This move is probably what won it continued business from Duke.
Duke is one of the utilities applying for the full $200 million in stimulus funds (the maximum allowable amount) from the Department of Energy for smart grid adoption. Echelon stands to benefit greatly from the number of utilities that plan to roll out massive smart metering initiatives with DOE funds. That being said, it will need to compete with other formidable meter makers like Landis+Gyr and Itron. The latter just debuted new technology at the start of the month and reported a 38 percent increase in profit for the second quarter.
The deal with Duke (and impending stimulus infusion) couldn’t have come at a better time for Echelon, which recently lost a major contract with an Eastern European utility (as yet unnamed) due to the global credit crunch.
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About the Author, Camille Ricketts
Camille is the lead writer for GreenBeat. She came to VentureBeat from Google where she worked on its traditional platforms team, particularly in TV. Before that, she was a reporter for the Wall Street Journal in New York and London. Follow her on Twitter at @camillericketts, and follow VentureBeat on Twitter at @venturebeat.
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