Echelon's Smart Metering System Chosen by New Zealand Energy Services Company for Consumer Electricity PilotNES System from Echelon to provide network infrastructure for multiple service providers(San Jose, CA– October 4, 2004) - Echelon Corporation (NASDAQ: ELON), the leader in device networking software, components, and infrastructure products, today announced that its Networked Energy Services (NES) system has been chosen by NGC Holdings Limited (NGC) of New Zealand for a smart electricity metering pilot project. The pilot is part of NGC's strategy to actively pursue new growth opportunities by providing an integrated energy meter asset and information service, primarily to energy retailers. NES meters will be installed in up to 600 customer premises in the two trials that comprise the pilot – one in Christchurch in conjunction with Orion New Zealand Ltd., and the other in the Wellington and Auckland regions in conjunction with Vector Electricity. Both Orion and Vector are electricity distribution companies. NGC will be evaluating its business case for a smart metering and value-added service infrastructure, which also involves energy retailers and service providers in the New Zealand energy market. The company intends to utilize the NES system's distinctive capabilities including the ability to remotely conduct scheduled and unscheduled meter readings, connection and disconnection of premises, tariff changes, load control, and theft detection. According to NGC Chief Executive Phil James, "We chose the NES system because of Echelon's global leadership in the field of device networking and its open approach to developing systems suited to the increasing liberalization of energy markets worldwide. The ability of the NES system to meet our company's competitive needs while simultaneously providing the infrastructure for value-added services in the face of a rapidly changing regulatory environment was a key factor in our selection process." NGC is New Zealand's largest independent (from energy retailer and network owners) energy metering services provider. The business is predominantly in New Zealand, but recent initiatives have provided the opportunity to expand into Australia. NGC owns electricity meters and related equipment at approximately 860,000 homes and businesses throughout New Zealand, or about 45% of the New Zealand electricity metering market. The NES system is targeted at the advanced automated metering market. The underlying communications technology and basic architecture used in the NES system is already employed in over 17 million networked electricity meters. Utilities or service providers can embed the NES system within their electricity distribution network, enabling it to function as an infrastructure that communicates metering data across a combination of low voltage power lines and any wide-area network infrastructure, including broadband (wired, wireless or over electrical wire), cellular and modem connections. The system is comprised of smart meters, data concentrators (located at the distribution transformers), and system software. Authorized service providers can use the NES system to access the meter as well as any device located inside the premise to which the meter is attached with the addition of a router. "NGC is in a unique position to provide the electricity metering, service, and distribution companies in New Zealand with a single, smart metering infrastructure for their core metering needs as well as future value-added services," said Bea Yormark, Echelon's president and COO. "The New Zealand energy market is a very complex environment, with generators, network owners, energy retailers, and metering typically controlled by different companies in any given service area. We believe that the NES system is an ideal solution for such an environment– allowing a multi-service approach on a single network infrastructure." About Echelon Echelon is a co-organizer with LonMark® International of the LonWorld® Exhibition, the world's largest event devoted to the networking of everyday devices, to be held October 20-21 in Shanghai, China. More information on the show can be found at http://www.lonworldexpo.com. ### Echelon, LonWorks, LonWorld, LonMark, and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries. Other product or service names mentioned herein are the trademarks of their respective owners. This press release may contain statements relating to future plans, events or performance. Such statements may involve risks and uncertainties, including risks associated with uncertainties pertaining to the timing and level of customer orders, demand for products and services, development of markets for Echelon's products and services; risks associated with the successful implementation and completion of NGC's pilot project, ability of NGC to partner with metering, distribution or other energy related companies; and other risks identified in Echelon's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Contact Information
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