Echelon, Duke Sign Smart Grid Supply Deal

Echelon Corporation (NASDAQ: ELON) announced today that it has entered into a long-term agreement with Duke Energy (NYSE: DUK), the nation’s third-largest electric utility, to supply Echelon’s Networked Energy Services (NES) system as a key part of Duke Energy’s smart grid program.

Duke Energy has received regulatory approval to deploy smart grid infrastructure in Ohio, and plans to launch a five-year mass deployment of smart grid technology later this year including more than 700,000 electric smart meters in Ohio. In Indiana, Duke Energy is seeking approval from the Indiana Utility Regulatory Commission to install smart grid technology, including approximately 800,000 smart meters. The company is also laying the groundwork to bring large-scale smart grid technology to the remaining three states it serves–North Carolina, South Carolina and Kentucky.

The initial order under this framework agreement totals approximately $15.8 million with deliveries expected to begin at the end of the quarter. Assuming full deployment of the NES system, the states of Ohio and Indiana represent a revenue opportunity to Echelon of over $150 million, the company said in a release.

"An essential component of Duke Energy’s smart grid design is a scalable, open, interoperable network that supports not just the initial functions we are deploying today, but allows for additional devices and sensors to be attached to the network in the future," said Todd Arnold, Duke Energy’s senior vice president for smart grid and customer systems. "Echelon’s metering infrastructure is a key enabler of that vision with a smart grid approach that includes smart meters, smart concentrators working in conjunction with the meters, and network operating system software."

The NES advanced metering infrastructure from Echelon consists of a family of integrated, advanced electricity meters accessed via a Web services based network operating system over an IP networking infrastructure. The NES system provides utilities with information about the status, operation and health of the grid that enables them to reduce operating costs while increasing service quality.

By bringing the wide area network connection point down to the neighborhood transformer, this architecture allows a utility to pinpoint problems in its network at a very precise location, and can improve customer service, for example, by eliminating cost and time associated with outage detection.

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