Esco to provide PG&E with electric meter reading technology
Ladue-based Esco Technologies Inc. said Wednesday it signed an agreement with utility provider Pacific Gas and Electric Co. to provide a different type of electric meter reading equipment.Though the contract is only worth $5 million, the deal could set up future orders from the San Francisco-based utility while strengthening a relationship that investors once thought was less certain.
The news sent Esco shares surging 11 percent Wednesday.
The agreement calls for Esco's Aclara RF Systems Inc. to provide PG&E with 88,000 radio frequency electric meter reading systems for use in northern California.
PG&E already uses a similar Aclara system for gas meter reading.
Esco received orders last year for more than 350,000 gas units and it has received orders for approximately 500,000 additional units so far this fiscal year.
Esco also supplies PG&E with its TWACS electric meter reading equipment, which transmits meter data through power lines rather than radio frequency.
When Esco got this contract in 2005, PG&E was considering TWACs for broader application in California. But the utility decided in June to look at other competing vendors and technology.
Vic Richey, Esco's chairman and chief executive, said the agreement is significant because it may set up future agreements between Esco and PG&E.
"It validates the product and gets us re-engaged with a customer that had taken a pause on a piece of the contracts," he said. "It will be harder for someone to come in and displace us now because (PG&E) is getting a significant number of our products deployed."
Richey said he expects to see Esco update more PG&E gas meters with this technology this year.
He also said Esco could get a significant portion of future orders for electric meter readers, but he noted that PG&E is updating that system more slowly and it could still choose a different provider.