
	May 2008

Itron Selected by CenterPoint Energy as AMI Technology Provider

Itron recently signed an agreement with CenterPoint Energy, Inc.'s electric transmission and distribution utility for deployment of OpenWay® advanced metering infrastructure (AMI) technology in the Houston area.

Subject to regulatory approval from the Public Utility Commission of Texas (PUCT), CenterPoint Energy's deployment plans call for initial installation of OpenWay network communication infrastructure and electricity meters to meet the advanced metering and data collection needs of retail electric providers (REPs) operating in CenterPoint Energy's service territory. The contract provides CenterPoint Energy the ability to purchase up to 2 million meters if CNP ultimately moves to a full deployment across its electric service territory.

Under the agreement with Itron, CenterPoint Energy plans to begin broader deployment of OpenWay technology with the installation of up to 250,000 OpenWay electricity meters beginning in second half of 2009, with focus on establishing core AMI functionality and benefits to those customers. This initial deployment plan was submitted to the PUCT by CenterPoint on May 5, 2008 and is subject to the PUCT's approval.

Based on success in the initial deployment and further regulatory approval, CenterPoint Energy's current expectation is that it would then transition into a full-deployment phase for 2 million electricity customers in its Houston service territory, while also focusing on integration of its AMI and smart grid initiatives. CenterPoint Energy also expects to employ the OpenWay technology if it decides to automate its 1 million gas meters in the Houston area.

"Deployment of advanced metering technology will help ensure that the intended benefits of the Texas competitive retail electric market are achieved, namely that consumers have more choices and control over energy usage and costs and the ability to choose their individual electricity supplier," said Tom Standish, group president for regulated operations at CenterPoint Energy. "By proposing a phased approach to regulatory approval and AMI deployment, we have charted a course designed to create a win-win situation for both consumers and retail electric providers in our service territory. This 'modular' approach to deployment will enable us to deliver value and benefits to consumers, to initiate our AMI and intelligent grid initiatives, and also effectively manage the risk that technology projects of this size present," Standish said.

OpenWay by Itron is a new-generation, open-architecture AMI solution that features full-two way communication to every meter and is designed to meet a broad set of advanced metering, communication and control technology requirements that many utilities will face in the years to come.

"From the beginning, CenterPoint Energy has been a visionary and industry leader in moving AMI and smart grid from abstract ideas toward implementation and reality," said Philip Mezey, senior vice president and COO of Itron North America. "Our strategic relationship with CenterPoint has been an invaluable learning experience that has enabled Itron to accelerate the development and commercialization of OpenWay technology and in the process, set a new industry standard for AMI technology. We're looking forward to continuing our work with CenterPoint Energy as they begin the deployment phase of their AMI and smart grid initiatives."

OpenWay® Gets High Marks

In their Tech Take article dated April 9, 2008, SmartGrid Newsletter graded OpenWay by Itron on how well the company's AMI solution supports development of the Smart Grid. OpenWay scored 88 out of 100, and as the first full AMI solution to be graded, set the bar for future competition.

The grading was done by Erich Gunther. He is the chairman of EnerNex Corporation, which provides electric power

research, engineering and consulting services to government, utilities, industry and private institutions. Gunther also chairs the UtilityAMI / OpenHAN standards group and serves on the GridWise Architecture Council.

In summarizing his scoring, Guther wrote, "OpenWay claims to create an extensible network infrastructure suitable for deploying a wide range of Smart Grid applications, and to do so independent of underlying technology details. Our Scorecard generally confirms this claim. Given these results, OpenWay could be a first home-to-back-office integrated solution."

The scorecard consists of 0-10 ratings in 10 categories. OpenWay earned perfect 10s in the categories of Openness, Standardization, Extensibility and Self-Healing. These scores resulted from Itron's support of open standards such as ZigBee® and C12.22, and from use of mesh networking in the ZigBee home-area networking arena and in the radio-frequency OpenWay LAN (local-area network).

OpenWay's lowest score was 7 in the area of Scalability. Gunther noted in this area that "Scalability is designed in [to the OpenWay solution] but remains to be proven in the field."

Other categories in the rating system include Impact, Security, Manageability, Upgradeability, and Interactivity. In most of these areas, OpenWay rated an 8, except for a 9 in Impact. Regarding Impact, Gunther wrote, "From the home to the meter to the utility enterprise application software, a wide range of Smart Grid applications can be supported."

Smart Grid Drivers and Benefits

The North American power transmission and distribution system—"The Grid"—is considered the largest machine in the history of mankind. Unfortunately, this machine has not received serious investment or enhancement in nearly 50 years. Now, the power industry buzzes with talk of the Smart Grid, a new vision of what the grid can and should be in the digital age. Presidential candidates even mention the Smart Grid in policy statements and speeches. What are some of the forces driving all this interest in a previously invisible infrastructure, and can the Smart Grid live up to the hype?

Probably the strongest driving force behind the Smart Grid moving forward is also the industry's perennial top responsibility: reliable power. Above all, we expect the power to always be on. Recent large-scale failures of the power system, including the California rolling blackouts of 2001 and Mid-West blackout of August 2003, have highlighted vulnerabilities in our power system. Our 21st century economy demands always-on power.

A need for efficiency also drives the Smart Grid. As communities continue to consume energy but battle over where to site needed generation and transmission, we have a need to make the most efficient use of the power distribution system we currently have. Plus, a more efficient power system would save us from needing additional power plants.

Security in the age of global terrorism compels us to build a smarter grid. Our power grid is vital to our economy, our communications and our national defense. We need a grid that resists physical and cyber attack, and recovers easily and quickly if and when attacks happen.

Technology is another force behind the Smart Grid. This isn't just our continuing love of large-screen TVs and wine refrigerators. Advances in digital and communications technologies make it possible to achieve new levels of sophistication and automation in the design, operation and maintenance of the power grid.

Upgrading the power grid, making it smart, will happen project by project, layer by layer, over the next 20-30 years. Cost estimates to complete all the projected Smart Grid enhancements equal or exceed the book value of all the electricity utilities in the country. Will the investment and the effort be worth it? A more reliable power supply will keep our economy thriving. A more efficient distribution system can save us vast amounts of power, the equivalent of dozens of new power plants. Saving power will save us money, and will also reduce our emissions from burning fossil fuels for generation.

Generations before us bequeathed to us the gift of reliable electric power. It's our turn to leave the same legacy for future generations.