ESCO Technologies Inc. has announced that its Distribution Control Systems, Inc. (DCSI) subsidiary finalized a contract with PG&E to provide equipment, software and services to PG&E in support of the electric portion of PG&E's Advanced Metering Infrastructure (AMI) Project.
The current AMI program plan provides for the coverage of about five million electric endpoints over a five-year period after the commencement of full deployment, which is contingent on satisfactory system testing, regulatory approval and final PG&E management approval. System testing and regulatory action are currently expected to be concluded by the end of the third quarter of calendar 2006. The total anticipated contract value from commencement through the five-year full deployment period is approximately $300 million. Annual purchase order releases are anticipated.
Vic Richey, chairman and chief executive officer, commented, "While we were notified of our selection in June, we are extremely pleased to have the commercial arrangement with PG&E completed. Our teams spent a considerable amount of time developing the program baseline to be certain the requirements were well understood. We're gratified by PG&E's confidence in us, given the scale and complexity of this AMI Project. Our team at DCSI has invested a great deal of time and money preparing to satisfy large scale AMI requirements for both PG&E and other similar sized investor-owned utilities. In order to meet PG&E's needs, we will be deploying a next generation of DCSI's TWACS(R) software, which is being designed to efficiently handle the additional levels of communication dictated by the size of the service territory and the frequency of reads that are required under a time-of-use or critical peak pricing scenario. One by-product of deploying our next generation software is that although we will be performing services for and providing hardware to PG&E during our fiscal 2006, the accounting guidelines provide that revenue cannot be recognized until the final software configuration is deployed, which is currently scheduled during our fiscal 2007.
"We look forward to helping deliver the benefits that PG&E envisions for its customers under its AMI program. We expect to be well positioned to do the same for other IOUs that are actively considering following PG&E's lead in implementing comprehensive AMI solutions."