Echelon Corp. (ELON) has entered a pact to supply its smart-meter system to Duke Energy Corp.’s (DUK) smart-grid program in a deal that could bring Echelon more than $150 million for the first two states it’s introduced in.
Duke has already received regulatory approval to roll out smart-grid infrastructure in Ohio, including about 700,000 smart meters, and plans to start a similar program in Indiana.
If Duke fully deploys Echelon’s system in the two states, the deal could total $150 million for Echelon. The initial order is for $15.8 million, with deliveries expected to start at the end of the quarter.
Duke smart-grid executive Todd Arnold said Echelon’s metering infrastructure will enable the company to achieve its plan of an open, interoperable network that supports not only the initial functions but also allows for additional devices to be added to the network in the future.
Echelon’s system provides electronic electricity meters accessed via a Web-based network operating system. It provides information about the status, operation and health of the grid that Echelon said allows companies to cut operating costs and boost service quality.
Smart-grid projects boost utility profits because the companies make a return on their investments in the electric system. The projects would allow utilities to expand their investments likely at a faster pace.
Electric utilities have been vying for $3.4 billion in federal funding for the upgrade of meters and other components of the nation’s power-delivery system. The billions of dollars are aimed at speeding the installation of so-called smart-grid technologies, moving them from test projects to widespread installation.
The grant program, which was part of the economic-recovery package passed in February, could provide a boost to utilities at a time when new spending faces resistance from regulators concerned about cash-strapped consumers.
via Article – WSJ.com.