Itron has publicly announced four smart meter contracts - the two in California, as well as one with Texas utility CenterPoint Energy and one with Michigan utility DTE Energy – and said last month that some may see delays while others may move faster than first expected. Those AMI, or advanced metering infrastructure, meters stand in contrast to AMR, or automatic meter reading, meters that involve an older technology that allows them to be read automatically but doesn't involve two-way communication.
This isn't the first time Itron has seen analysts concerned over lags in utility smart meter deployments (see Itron Reports Strong Third Quarter). Utilities can be slow to adopt new technologies and must get approval from regulators for major investments like smart meter networks.
But the large-scale growth in utility smart meter deployments (see Smart Meter Installations Grow Nearly Fivefold) is bringing to the fore issues of security for these networks, which allow utilities to remotely shut off and restart meters, send and receive power usage data from them and use them for potential future applications like linking to energy monitoring and saving devices in customers' homes.
Silver Spring Networks, which makes smart meter communications and networking gear based on Internet protocol (IP), says that some smart meter makers use proprietary networking technology that, if installed en masse, could stall the industry's growth by stifling competition and the development of new technology.
Itron and other smart meter makers like Sensus say their technology is based on open standards, and other smart grid-related companies have different interpretations of what constitutes open standards (see Smart Grid: A Matter of Standards).
But the issue doesn't extend only to competition. Proprietary networking standards also could be more open to security threats, Eric Dresselhuys, vice president of markets at Silver Spring, said last week at DistribuTech.
"Security threats to the [utility] industry are real," Dresselhuys said. "That's why we feel we need the most secure, reliable set of security protocols around – which are based on IP."
The issue arose last week when Itron and fellow smart meter makers Landis+Gyr and Aclara sent a letter to U.S. Senators asking that language in the stimulus bill now making its way through Congress drop language that would tie the use of open standards -- specifically, IP – to receiving part of $4.5 billion in grants now aimed at smart grid deployments (see Traditional Meter Makers Say Stimulus Favors New Smart Grid Companies).
Schuman said he generally supports open standards in smart meter deployments, but added that defining the term is difficult for an industry in its infancy.
"It's probably better for everybody if we do move to open standards. It allows for more robust application development," he said. As for security, "I'm in the boat that open standards are better for security, because you open it to development by guys who really know what they're doing."
On the other hand, "In a lot of ways, I don't like the federal government using language in the stimulus to pick winners and losers this early in the game," he said. "I think they should leave that to the industry and the customers."
"Where I'm having difficulty is seeing who actually has open standards," he added. "Even if you use IP for your communications protocol, you can be all proprietary at the application level."
The issue is further complicated when it comes to whether the means of physically transmitting data from and between smart meters to utilities is based on open standards –something that rival smart meter communications networking companies Trilliant and SmartSynch have noted may apply to Silver Spring's technology.
Still, the push for open standards appears to be picking up steam in the industry.
"We prefer smart grid technology companies that take a page out of the playbook of telecom, focusing on open standards software leveraging IP and other open protocols," Thomas Weisel Partners analyst Jeff Osborne wrote in a research note last week.
Companies at DistribuTech told the firm that "it could cost upwards of $1 million just to write applications to some of the quasi open software systems out there that metering vendors have developed in an attempt to be partner agnostic," Osborne wrote.