Why buy a smart meter when you can hire an electronic meter reader for less than half the cost?

That’s one way to describe Blue Line Innovations’ PowerCost Monitor. Since 2004, the Canadian startup has been building sensor devices that clip onto an old-fashioned, spinning-dial, electromechanical meter, and broadcasts that data to a household gateway device.

From there, that data can be connected via common standards such as Wi-Fi, ZigBee and the like, or one of Blue Line’s own in-home displays. So far, Blue Line has deployed about 225,000 of its PowerCost Monitors in the United States and Canada, at a cost of about $100 per household -- or, about half the cost of a typical smart meter.

About 40 percent of those sales so far have been through retail channels like Lowe’s, Fry’s Electronics and Amazon, where they can be deployed on their own or via partners like the now-discontinued Microsoft Hohm and Google PowerMeter home energy platforms.

But the larger and faster-growing part of Blue Line’s business is with utilities, CEO Peter Porteous said in an interview last week. That can include utilities that want to add increased meter-to-home functionality to their existing smart meters -- or, perhaps, to avoid the expense of a smart meter deployments altogether.

Making Smart Meters More Connected

Take Blue Line’s recently announced deployment with Honeywell in Canada’s Ontario province, its first publicly announced partnership with the energy management giant. Blue Line is deploying about 20,000 PowerCost Monitors to support Honeywell’s demand response and energy efficiency project with three utilities.

Ontario has had universal smart metering since 2010, but because it has dozens of utilities choosing different technologies, not all work the same. For instance, many of Ontario’s smart meters lack a ZigBee radio to connect the meter to devices in the home -- one reason Blue Line was enlisted to help Honeywell in its Ontario projects, Porteous said.

Blue Line also offers web and mobile interfaces to connect customers and utilities to home energy data, along with such tools as monthly bill projection models based on recent cumulative consumption patterns, temperature, seasonal patterns, and the like.

Beyond that, PowerCost Monitor can also deliver enhanced functionality to smart meters that only “ping” back their data every hour or so to the utility, he noted. In fact, if it can hook via cellular or broadband to the utility, the PowerCost setup can bypass the advanced metering infrastructure (AMI) channel entirely, he said.

“Even where utilities have deployed fully broadcast-capable smart meters, we’re seeing some say, our hands are so full trying to digest that data and use it for operations, we’re not going to get involved in the consumer-facing side,” he said. Indeed, a recent survey from Oracle found that U.S. utilities are lagging their smart meter deployments in terms of actually putting all that data to use.

Blue Line completed a 30,000-home pilot with big utility Hydro One back in 2007, and went into full deployment in 2010 with Ontario’s province-wide smart meter rollout. So far, about 60,000 of its deployed units are in Ontario, Porteous estimated, with partners including Honeywell, Canadian startup PowerWatch, smart thermostat maker Energate and other partners.

An Alternative to Smart Meters

But where Porteous sees Blue Line’s market really opening up is among those utilities that haven’t yet deployed smart meters, or may never do so.

“The numbers would suggest that probably 50 percent of the utilities in the U.S. just aren’t going to make the step up to a fully integrated AMI network,” he said. “Now we can give them a taste of both consumer engagement and demand response.”

Indeed, hundreds of small municipal utilities and rural electricity cooperatives across North America may be unable to justify the cost of a full-bore AMI deployment.

Blue Line, on the other hand, can deploy for half the cost of a typical AMI deployment, and give pretty much everything a smart meter can -- with the critical exception of control. A PowerCost Monitor only reads the meter; it doesn’t tell it what to do. That means remote connect and disconnect or emergency shut-off features are out.

Still, those are only a few slices of the overall smart meter business proposition. Meanwhile, adding a radio or pager-controlled smart thermostat can “give them a taste of both consumer engagement and demand response,” Porteous said, at a price well below the cost of a smart meter, plus a smart thermostat.

Of course, Blue Line uses a proprietary 433-megahertz wireless network that’s good at penetrating walls and other typical household barriers, but doesn’t conform to the key standards being promulgated for the smart grid -- a fact that could be a challenge in the future.

Blue Line also relies on someone else’s communications from home to utility. Still, lots of homes have some sort of broadband internet connection, and cellular can reach a lot of those that don’t. There’s a big debate in the smart grid industry over public vs. private networks for controlling key grid assets. But pretty much everyone has turned to broadband to get pilot home area network (HAN) projects running, while very few utilities have turned on their ZigBee meter-to-home radios yet.

That, in turn, could open opportunities for Blue Line via partners like People Power. The startup is working with its home town utility, the City of Palo Alto Utilities, to deliver smart-meter-type functionality from old-school meters, via Blue Line’s gear and People Power’s software.

Earlier this year, Palo Alto utilities also decided to put off installing its own smart meter network, saying it would cost too much. If even the municipal utility of one of Silicon Valley’s key high-tech hubs is leery of spending too much on smart meters, that may bode well for new markets for the Blue-Line-plus-partner strategy for a smart meter alternative.