Number of households using Opower software to triple with latest contracts

Arlington-based Opower landed its two largest contracts to date with utility providers on opposite coasts of the United States, more than tripling the number of households nationwide that could soon use its software to reduce energy consumption.

A freshly inked deal with Baltimore Gas & Electric will place the firm’s software in 1.2 million households across Baltimore and central Maryland, giving homeowners the ability to compare their usage to neighbors and predict their monthly bill.

The arrangement was the second to come to light this week after it was reported that Opower has been quietly working with Pacific Gas and Electric since last January. The California utility plans to soon unfurl Opower’s software to its 5 million users.

“Many utilities across the country are deploying smart meters as a way to improve their infrastructure and ultimately improve the customer experience, so with the meter comes a need to deliver that new information to the customer,” said Ogi Kavazovic, Opower’s vice president of marketing and strategy.

BGE began seeking a vendor such as Opower at the end of last year when the Maryland Public Service Commission tentatively approved its plan to deploy smart meters, said Mark Case, the utility’s senior vice president for marketing and regulatory affairs.

The program, which aims to reduce consumption during peak demand, angered consumer groups that said too much of the start-up costs would be shouldered by homeowners without a clear benefit to them.

“It’s exactly that concern that led to our partnership with BGE,” Kavazovic said. “With their new smart meters and the availability of this great information, we’ll be able to convert that raw data into clearly measured savings for their customers. And that’s been the missing piece in smart grid plans for a lot of utilities across the country.”

The program has since been approved because BGE restructured how it will recoup the costs and Case said installation is slated to begin during the fourth quarter of this year. It will take about 2.5 years to fully implement.

Combined, the contracts will add some 6.2 million homes to the 3 million nationwide that already have access to Opower software. The firm contracts with utility providers and collects an annual software licensing fee.

Kavazovic said he anticipates the recent deals could prompt others to follow, driving more business to a company that raised $50 million from investors last November and has tripled its staff to 180 in the last year.

“As you can imagine utilities are pretty risk averse,” Kavazovic said. “They like to pilot things and kick the tires for awhile. . . . But they’re both putting a stake in the ground and we’re hoping this will be a standard that other utilities emulate.”

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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