Cellular for Smart Grid Gains Momentum as Itron Buys SmartMeter Maker SmartSynch

Feb. 24, 2012
As perhaps a telling sign that cellular communications have been accepted as a viable option for the smart grid, meter giant Itron, Liberty Lake, Wash., last week signed a $100 million deal to acquire SmartSynch.

The communication layer of the smart grid has been a puzzle for years. Most utilities developing smart grid capabilities have looked to private radio-frequency (RF) networks as the best way to send and receive data with intelligent metering systems for reasons of cost and control. When a few high-profile smart grid roll-outs opted last year to use existing cellular infrastructure for their communications layers, the impact was heard in smart grid circles.

As perhaps a telling sign that cellular communications have been accepted as a viable option, meter giant Itron, Liberty Lake, Wash., last week signed a $100 million deal to acquire SmartSynch, a provider of smart meters that use existing cellular networks. The deal brings together two companies that have worked in partnership on many projects for a decade, and gives Itron added flexibility to offer utilities any communication format they prefer.

SmartSynch scored a win last September that many analysts and commentators in the smart grid arena declared a game-changer. Consumers Energy, Jackson, Mich., selected SmartSynch to provide the advanced metering system that will form the foundation of a grid and meter modernization program for its 1.8 million electric customers in Michigan. That upgrade begins rolling out in Aug. 2012.

“The company’s decision to utilize existing cellular networks for large-scale, high performance smart grid communications, in lieu of building and maintaining a private network, comes after extensive research and testing of available industry solutions. It makes Consumers Energy, which serves more than two-thirds of Michigan across a 32,000-square-mile service territory, the largest U.S. utility to choose a cellular-based communication system for the smart meter deployment phase of its grid modernization program,” said a Consumers Energy press release announcing that decision.

This followed a decision by Texas New Mexico Power (TNMP), a transmission and distribution company based in Lewisville, Texas, to use smart meters from GE and SmartSynch, communicating over AT&T’s cellular network, for a smart grid deployment that began last fall in its service area along the Texas Gulf Coast.

Adding SmartSynch to its stable will open doors for Itron to use the companies’ complementary technologies to provide a solution in areas where RF mesh networks are not available, or are cost prohibitive.

“SmartSynch is a compelling strategic acquisition that strengthens our position in the industry and with our energy and water utility customers,” said LeRoy Nosbaum, Itron president and chief executive officer, in a release. “SmartSynch brings a highly complementary technology to our existing communication network offering, broadens our portfolio and enhances Itron’s ability to support our customers with their smart grid projects.”

Commentators pointed out that the thorough research and due diligence done by Consumers Energy and TNMP before choosing the cellular option would go a long way to allay concerns by other utilities. Cellular networks have advantages in their breadth of coverage — approximately 96% of utility customers and 99% of those in urban areas — and their proven performance in terms of security and reliability. Cellular providers have been busy courting makers of smart meters and substation software systems. Sprint, for example, announced deals with four companies in January to support connections to Sprint’s networks.

EM lasted reported on Itron in Sept. 2010 when it announced a strategic partnership with Cisco Systems. Itron offers metering systems for water and gas utilities as well as electrical distribution systems. Under Cisco’s strategic alliance with Itron, the two companies agreed to work together to develop an open, enterprise-class networking protocol for utilities using IPv6 internet protocols. Itron agreed to license and embed Cisco IP technology in its OpenWay meters and distribute Cisco networking equipment and software as part of its smart meter deployments. Itron continues to provide the complete solutions.