Silver Spring Networks (SSNI), the smart grid networking upstart that has built its business on big contracts with big utilities, announced Monday that it’s setting its sights on the smaller, more scattered municipal and cooperative utility market -- and not just for smart meters, but for entire “smart city” solutions.

The Redwood City, Calif.-based company’s new “cost-effective and ready-to-deploy smart grid offering” for the muni and co-op market starts with networking infrastructure, hardware, head-end software, and professional services for advanced metering infrastructure (AMI) for electricity, water and gas. The platform can also support Silver Spring’s demand response, distribution automation and other “critical municipal infrastructure applications,” according to Monday’s announcement, which could include a lot more than smart meters and energy-specific networks.

Silver Spring, which broke the industry’s IPO drought with a successful public offering two weeks ago, made its announcement at the Kissimmee, Fla. meeting of the American Public Power Association, a group representing municipal utilities. Along with member-owned rural electric cooperatives, these 3,000 or so small to mid-size, publicly owned utilities represent about 40 million customers across the United States.

The Muni and Co-Op Smart Grid Opportunity

That’s a market worth going after, even if it does represent a different set of challenges than the big, investor-owned utilities like Pacific Gas & Electric, FPL, Oklahoma Gas & Electric, Baltimore Gas & Electric, Commonwealth Edison and Progress Energy that now make up the lion’s share of Silver Spring’s revenues.

Silver Spring has made it clear that it needs to expand its share of revenues that come from ongoing services, whether that be expanding management contracts for big AMI customers, adding more demand response and distribution automation business, or layering on other applications, such as electric vehicle charger management,solarpanel monitoring, or home area network (HAN) connectivity, onto its existing networks.

The company does have some big muni customers to prove out its ability to serve smaller utilities’ needs. California’s Sacramento Municipal Utility District, or SMUD, is deploying multiple solutions over its Silver Spring AMI network, including distribution automation, and HAN communications.  It’s also supporting the city’s “Smart Sacramento” energy efficiency, home energy management and distributed renewable integration project, which got a nod from PowerGrid International as the year’s "Best Smart Grid Project" at January’s DistribuTECH conference in San Diego, Calif.

At the same time, Silver Spring is far from the only one targeting the muni and co-op market. Giants like General Electric, SAIC and Oracle have created smart grid services platforms aimed at smaller utilities, though they’ve had slow going so far in growing their customer rosters. Munis and co-ops are also the targets of partnerships like the AMI-demand response platform on offer from Aclara and Calico Energy, which seek to simplify the deployment and management of multiple smart grid systems for smaller utilities.

GTM Research has pegged U.S. rural cooperative smart grid spending at a cumulative $4.1 billion from 2013 to 2017, or about 10 percent of the country’s cumulative smart grid market over the next five years. As for municipal utilities, which range in size from massive (Los Angeles Department of Water and Power, Austin Energy, etc.) to tiny, GTM Research projects cumulative smart grid spending of $4.5 billion to $9 billion from now until 2017.

From Smart Grid to Smart City?

One week before its IPO, Silver Spring announced a new project with CPS Energy, San Antonio, Texas’ municipal electric and gas utility, that points to how the company might look to expand beyond traditional smart grid realms and into broader “smart city” functions. As part of San Antonio’s “New Energy Economy” initiative, the Silver Spring partnership includes not only AMI, but “increased energy efficiency, automating energy distribution, and improving grid reliability,” all as part of laying the “groundwork to implement smart energy and Smart City technology across CPS Energy’s service territory.”

San Antonio’s long-range plan includes the idea of networking such disparate devices as streetlights, environmental sensors, traffic signals, parking meters and EV charging stations. Silver Spring CEO Scott Lang echoed some of those concepts in Monday’s muni/co-op platform launch, saying that the company plans to build “future Smart City services such as streetlight control, traffic management, and other municipal infrastructure applications” into its platform.

Silver Spring claims that “this unified networking and software solution provides a much higher endpoint to concentrator ratio, higher levels of reliability, broader geographic coverage, and is more cost-effective than existing Smart City solutions.” A statement like this calls into question what the company is comparing itself to, of course. “Smart city” technologies, such as they are, are limited to the pilot scale at present, even if those pilots are pretty big affairs such as South Korea’s Songdo project, or the smart city collaborations underway by such players as IBM, Cisco, Microsoft and Intel in showcases around the world.

They’re also supported by a dizzying array of communications and networking architectures, of which the local wireless connectivity type that Silver Spring provides via its AMI networks would appear to be only one of many options. Silver Spring has built its networks on IPv6, the latest version of Internet Protocol, which could simplify its integration into the broader move to machine-to-machine communications via IPv6 networks.

Of course, Silver Spring and other AMI mesh networking vendors with 900-megahertz mesh networks deployed throughout most of the United States haven't had a standard for the physical communications (i.e., radios) in their devices, which provides a challenge to IP interoperability. Cisco, the IP-for-smart-grid champion that’s working with vendors including Itron and Alstom, has made much of this point in positioning its own IPv6-compliant mesh networking technology as a more viable future alternative.

At the same time, Silver Spring and its its competitors have been working with IEE on the 802.15.4g standard for interoperability in the 900-megahertz space, and have shown interoperability via a pan-industry partnership called the Wi-Sun Alliance (which includes Cisco). At the same time, they've been integrating across different communications technologies, from ZigBee low-power wireless networks for home area networks (HAN) to 3G and 4G cellular for regional, point-to-multipoint coverage.

While Silver Spring has almost exclusively worked in the electric side of the utility industry, Monday’s announcement notes that it also supports water and natural gas meters via its AMI networking platforms -- an important addition in competing with coequals such as as Itron, Elster, Sensus and Landis+Gyr that also network water and gas meters in different combinations.