Echelon Approved As Next-Generation Meter Supplier to Consortium of Swedish Utilities

July 3, 2006

SAN JOSE, Calif.–(BUSINESS WIRE)–June 29, 2006–Echelon Corporation (NASDAQ:ELON), a global networking company providing technology and solutions for controls, smart metering, and energy and environment management, today announced that it has been selected as an approved supplier of “next-generation” electricity meters and associated infrastructure for Svenska Matsamarbetet (SAMS), a consortium of 33 medium and small sized Swedish utilities that collectively represent approximately 20% of the Swedish residential metering market. The award, made under Swedish public procurement rules, allows each SAMS member to purchase the meters and system components it requires to fulfill its obligations from any of the approved suppliers without the need for individual public tenders, saving the member utilities time and expense. Sweden is in the process of replacing all of its 5 million electricity meters in order to comply with regulations requiring monthly customer billing by July 1, 2009.

“We think the SAMS tender and our approval as a supplier of ‘next-generation’ metering systems marks another important step forward in the evolution of the electric metering market away from the basic systems of the past to the next generation systems of the future,” said Ken Oshman, Echelon’s CEO and chairman. “In fact, SAMS explicitly segmented their tender award into ‘base’ meters, with the limited features typical of legacy metering systems and ‘next-generation’ meters, with a rich set of features that can provide utilities a host of additional operational and customer service improvements. SAMS is the first organization we have seen to recognize the market shift in this way and, interestingly, the next-generation features they have specified exactly match Echelon’s Networked Energy Services (NES) systems which both Vattenfall and E.ON Sverige have recently selected. While the SAMS award is a framework agreement and not an award for a fixed quantity of meters, we believe that the direction set by Vattenfall and E.ON Sverige, two of the largest utilities in Sweden with deep experience in metering systems, and the ability for SAMS members to purchase the same market-proven solution creates a very good opportunity for Echelon to deliver the NES system to a significant portion of the SAMS market.”Echelon’s NES System provides an open, bidirectional, and extensible infrastructure that enables a comprehensive range of utility applications that can bring benefits to every aspect of a utility’s operation, from metering, to customer services, to distribution operations, to value-added services. By choosing the NES System, SAMS members can expect to have better control over energy usage and save substantial cost in monthly meter reading and other areas of their operations while providing improved customer service. More information about the NES system can be found at http://www.echelon.com/metering.

About Svenska Matsamarbetet

SAMS (Svenska Matsamarbetet/The Swedish Meter Cooperation) is a cooperation between 33 independent energy companies whose main purpose is to purchase new metering hardware before legislation demands monthly readings of all electricity meters. The consortia consists of Ale Elforening, Bergs Tingslags Elektriska AB, Bodens Energi Nat AB, Boras Energi Nat AB, Energiverken i Halmstad Elnat AB, Eskilstuna Energi & Miljo AB, Goteborg Energi AB, Gotene Elforening, Habo Kraft AB, Harjeans Nat AB, Harnosand Elnat AB, Harryda Energi AB, Jamtkraft Elnat AB, Jonkoping Energi Nat AB, Kungalv Energi AB, Lerum Energi AB, Ljusdal Elnat AB, Lulea Energi Elnat AB, Mariestad Toreboda Energi AB, Malarenergi AB, Molndal Energi AB, SEVAB Nat AB, Sundsvall Energi Elnat AB, Soderhamn Elnat AB, Tekniska Verken i Linkoping AB, Telge Energi Nat AB, Tidaholms Energi AB, Umea Energi Elnat AB, Vaggeryds Elverk AB, Varberg Energi AB, Varbergsortens Elkraft, Vasterviks Kraft Elnat AB, and Ystad Energi AB.

About Echelon Corporation

Echelon Corporation (NASDAQ:ELONNews) is a pioneer and world leader in control networking — networks that connect machines and other electronic devices — for the purpose of sensing, monitoring and controlling the world around us. Echelon’s LonWorks® platform for control networking was released in 1990 and has become a worldwide standard in the building, industrial, transportation, and home automation markets. Launched in 2003, Echelon’s Networked Energy Services system is an open, extensible, advanced metering infrastructure that can bring benefits to every aspect of a utility’s operation, from metering and customer services to distribution operations and value-added business. In 2005 Echelon released the world’s first embedded control network infrastructure, the Pyxos(TM) platform. The Pyxos platform extends the benefits of networking inside machines to the sensors and actuators that make them function and expands the reach and power of LonWorks control networks.

Echelon has been a leader in the advanced metering infrastructure market, providing the underlying network technology for the world’s largest advanced meter management (AMM) project in Italy, with over 27 million connected electricity meters and more recently, winning tenders to provide the NES system to 700 thousand to 1.1 million customers for utilities in Sweden, The Netherlands and Australia.

Echelon is based in San Jose, California, with international offices in China, France, Germany, Italy, Hong Kong, Japan, Korea, The Netherlands, and the United Kingdom. Further information regarding Echelon can be found at http://www.echelon.com.

Echelon, LonWorks, NES Powered by Echelon, and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries. Networked Energy Services Powered by Echelon and Pyxos are trademarks of Echelon Corporation in the U.S. and other countries. Other product or service names mentioned herein are the trademarks of their respective owners.

This press release may contain statements relating to future plans, events or performance, including statements regarding Echelon’s selection as an approved supplier to the SAMS consortium. Such statements may involve risks and uncertainties, including risks associated with Echelon’s ability to secure orders from any of the SAMS member; once an order is secured, the ability of the NES system and NES meters to perform as designed, potential production or shipment delays for NES meters and other components; the risk that the application of U.S. generally accepted accounting principles could significantly affect the method of calculating, and the timing of, NES revenues that Echelon expects to recognize under the trial; risks that the deployment and system integration activities with Echelon and other participants in SAMS installations are not successful, do not meet their target dates, do not expand or gain momentum, cause Echelon to be liable for penalties or cause a SAMS member to terminate its relationship with Echelon under the award; and other risks identified in Echelon’s SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact:
Echelon Corporation                                
Julia O’Shaughnessy, 408-938-5357                     
joshaughnessy@echelon.com                             
or
Atomic Public Relations
Mike Barash, 415-402-0230            
mike@atomicpr.com


Source: Echelon Corporation

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