The smart grid industry is targeting the little utilities out there. In the past few months, we’ve seen multiple partnerships and smart-grid-as-service offerings launch, all seeking to serve the scattered and mostly untapped U.S. electric cooperative and municipal market.

On Monday, On-Ramp Wireless and ElectSolve joined the fray, announcing they’re linking their respective wireless and software technologies to “provide cooperative and municipal utilities with a pre-validated, pre-integrated Smart Metering and critical infrastructure monitoring solution.” Their targets are the nearly 3,000 U.S. utilities with fewer than 250,000 customers, which could well make up the fastest-growing market of 2012.

It’s an interesting linkup of technologies. San Diego-based On-Ramp has proprietary, low-power, long-range wireless technology that it’s deploying in pilot projects with Southern California Edison and San Diego Gas & Electric, as well as with South Korea’s Jeju Island project.

On-Ramp was founded in 2008, and raised $11 million of a $14.7 million round in June 2010, along with an undisclosed investment from General Electric and its Ecomagination venture capital partners. But while it has worked with SDG&E to link meters and other devices across 4,000 square miles of territory, it hasn’t yet hooked up any commercially deployed smart meters.

That changes on Monday, when On-Ramp plans to announce integration with GE’s I-120 single-phase residential meters (PDF), Jonas Olsen, On-Ramp’s vice president of marketing and business development, told me in an interview. Working with ElectSolve, On-Ramp wants to see meter manufacturers and other vendors incorporate its Ultra-Link Processing technology into their equipment, he said.

The idea is to "deliver the radio that goes into the meter, all the way to delivery of data from that meter or data to be sent to the meters at our head-end device,” he said. On-Ramp does have some smart meter customers, he said, though he wouldn’t name any partners or projects.

On-Ramp also has successfully tested its ability to manage GE’s meters for instant reads, remote disconnects and other more advanced features, and it can currently integrate with MDM from both ElectSolve and Ecologic Analytics, Olsen said.

ElectSolve, for its part, is one of the country’s last big, independent meter data management (MDM) software providers, specializing in the small utility market, with about 1 million meters across more than 40 deployments. That differentiates it somewhat from the bigger MDM players in the market, like eMeter (bought by Siemens) and Ecologic Analytics (bought by Landis+Gyr).

ElectSolve integrates with a number of smart meter vendors and networking providers, including Elster, Sensus and Tantalus. At the same time, it also helps utilities manage outage management systems, SCADA integration and other operations-side technologies. On-Ramp’s technology can penetrate walls and manhole covers at a lower cost than competing systems, Jonas said, which could open applications beyond smart meters.  

While the 200 biggest investor-owned utilities only make up about six percent of the country’s utilities, they have about 68 percent of the country’s power customers. They’ve also been the first to deploy smart meters en masse, which means they’ve largely picked which vendors they’re using for their multi-million meter projects.

The country’s 2,000 or so municipal utilities and public power entities, on the other hand, only serve about 15 percent of the country’s customers, and the 900 or so rural electric cooperatives have about 13 percent of the population. But they’ve been far less aggressive in rolling out smart meters, given their limited customer base and cost constraints.

That also means they’re largely an untapped market, and smart grid vendors have been noticing this. General Electric is rolling out its smart grid as a service platform at multiple municipal utilities, and competitors like SAIC's smart metering service offering, IBM’s smarter cities platform and Lockheed Martin’s demand response platform for electric co-ops are also targeting the market.

We're also seeing interesting offerings from vendors delivering utility-owned technology. Smart meter networker Aclara and smart grid platform provider Calico Energy announced last week that they’ve built a Demand Response Management System aimed largely at Aclara’s existing customer list of some 200 utilities, many of them smaller munis and coops.

Industry watchers agree that simplicity of use and low cost are going to be critical for smart grid technologies that want to serve the smaller utility market. It’s also a good idea to link power, water and gas together in a single system for city utilities that don’t want to build three separate networks for those infrastructures -- something that On-Ramp and ElectSolve provide.

We’re sure to see more partnerships and integration projects for the small utilities emerge at this week’s DistribuTECH conference in San Antonio, Texas -- stay tuned for details.

Tags: aclara, calico energy, california, demand response, ecologic analytics, efficiency, electsolve, emeter, energy efficiency, general electric, ibm, itron, landis+gyr, on-ramp wireless, siemens