LUMA announces contract to launch next phase of their Smart Meter Initiative

Rhea-AI Summary

LUMA has announced a contract with Itron to deploy approximately 1.5 million smart meters across Puerto Rico, marking a significant milestone in grid modernization. The initiative will not result in customer rate increases and will create over 150 local jobs. Itron's smart grid platform includes advanced meters and a new communications network with redundancy, featuring distributed intelligence capabilities.

The platform offers benefits including improved customer control over energy consumption, faster service restoration, better renewables integration, and enhanced grid monitoring. Installation will begin in San Juan and expand island-wide over three years. The technology includes a 15-year warranty and will integrate with LUMA's existing infrastructure.

Positive

• Creation of 150+ direct and indirect local jobs
• No rate increases for customers
• Implementation of advanced grid monitoring capabilities
• 15-year warranty on technology
• Enhanced ability to detect and respond to outages
• Improved integration of renewable energy sources

Negative

• Three-year implementation timeline indicates delayed full benefits realization

Insights

Financial Analyst

This $1.5 billion+ contract represents a significant revenue opportunity for Itron over the next three years. The deal includes 1.5 million smart meters with a 15-year warranty, suggesting strong long-term recurring revenue potential through maintenance and software services. The project's scope, combining hardware, software and network infrastructure, should yield healthy margins typical of utility modernization projects (20-30%). With Puerto Rico serving as a showcase for grid modernization in the Caribbean, this could lead to additional regional opportunities. The contract's structure, emphasizing local partnerships and job creation, helps mitigate execution risks while building valuable regional relationships.

Tech Expert

Itron's distributed intelligence platform represents cutting-edge smart grid technology, offering capabilities beyond basic metering. The system's ability to support distributed energy resources (DER) integration, including solar, storage and EV charging, positions it for future grid demands. The redundant communications network architecture demonstrates technical sophistication important for resilience against Puerto Rico's extreme weather challenges. The 15-year warranty commitment indicates high confidence in the technology's reliability. This implementation will serve as a significant reference case for similar grid modernization projects in climate-vulnerable regions.

Market Research Analyst

This contract strengthens Itron's market position in the rapidly growing smart grid sector. The comprehensive nature of the project - covering hardware, software and services - aligns with utility industry trends toward integrated solutions. The focus on renewable integration and grid resilience addresses key market demands, particularly in regions vulnerable to climate events. With utilities globally investing in grid modernization, this high-profile project enhances Itron's competitive positioning. The local employment aspect and emphasis on customer benefits demonstrate strong ESG alignment, increasingly important for utility contracts.

Itron will partner with local vendors to install over 1.5 million meters across Puerto Rico as part of its Smart Meter Initiative

SAN JUAN, Puerto Rico, Dec. 17, 2024 (GLOBE NEWSWIRE) -- LUMA announced today the completion of the open procurement process and the next step of their initiative to deploy approximately 1.5 million smart meters across Puerto Rico. This significant milestone in the modernization of Puerto Rico’s electric grid and customers will not see any rate increases associated with the initiative.

This contract is the result of a thorough and competitive process that followed all applicable laws and regulations including an open Request for Proposal (RFP). The selected vendor, Itron, a global leader in smart meter technology, will provide Puerto Rico with cutting-edge grid intelligence capabilities, enhancing the grid’s reliability, efficiency, and resilience. This contract will allow local companies in Puerto Rico to be part of the installation of the equipment, creating more than 150 direct and indirect jobs on the island.

As part of LUMA’s grid modernization efforts, LUMA will deploy Itron’s leading smart grid platform, which includes 1.5 million electric smart meters and a new communications network with redundancy that would be the first of its kind in the history of Puerto Rico. The platform features distributed intelligence grid-edge capabilities, which will give LUMA improved awareness and control of its electric grid, delivering more benefits to the people of Puerto Rico. With the platform, LUMA will improve reliability, resiliency and enhance customer service. Benefits of the platform include:

• Greater customer control over their energy consumption through better energy usage information.
• Better customer engagement and faster response for restoration of service through improved outage detection technology. 
• Improved renewables integration while enabling broader deployment of Distributed Energy Resources (DER), including rooftop solar, battery storage, EV charging at home, and microgrids.
• Support for new energy efficiency programs to engage and empower customers to better manage their usage.
• Improved situational awareness below the substation for monitoring the grid and responding to changes in grid state during blue sky days and major weather events.
  

“We are taking a major step forward in our mission to transform Puerto Rico’s electric grid into a more reliable, resilient, and sustainable system,” said Juan Saca, President & CEO of LUMA. “The installation of these smart meters is central to our long-term goal of improving service to customers and ensuring that Puerto Rico becomes a leader in grid modernization in the Caribbean.”

“We are honored to work with LUMA on this historic project to advance grid modernization,” said Tom Deitrich, president and CEO of Itron. “With Itron’s intelligent endpoints, advanced software, and proven network platform, LUMA is building a foundation to ensure greater grid reliability and resiliency, enhanced quality of customer service, and accelerated response to extreme weather events.”

The installation will begin in the San Juan region and extend island-wide over the next three years. Field crews and subcontractors, primarily hired locally, will focus on safety and quality installations throughout the project.

Selection Process and Vendor Commitment

The selection process adhered to LUMA’s strict procurement guidelines, ensuring that the chosen vendor met all regulatory requirements and demonstrated a strong commitment to delivering quality and reliability. Itron’s technology suite includes a meter software system that will allow LUMA to better monitor energy usage, detect outages, and address tampering or system inefficiencies. The selected vendor’s technology also includes a 15-year warranty and integrates seamlessly with LUMA’s existing infrastructure, enhancing overall grid performance.

About LUMA

LUMA is a Puerto Rican company that, since June 1, 2021, operates and manages the electric power transmission and distribution system in Puerto Rico. LUMA is a company driven by a mission to transform the electrical transmission and distribution system to provide all Puerto Ricans with the reliable, resilient, clean, and affordable electrical service they deserve. As a customer-centric company, LUMA’s entire workforce is focused on safely delivering an exceptional customer service experience to its 1.5 million customers.

About Itron

Itron is a proven global leader in energy, water, smart city, IIoT and intelligent infrastructure services. For utilities, cities and society, we build innovative systems, create new efficiencies, connect communities, encourage conservation and increase resourcefulness. By safeguarding our invaluable natural resources today and tomorrow, we improve the quality of life for people around the world. Join us: www.itron.com.

FAQ

How many smart meters will ITRI install in Puerto Rico?

Itron will install approximately 1.5 million smart meters across Puerto Rico as part of LUMA's Smart Meter Initiative.

When will ITRI begin the smart meter installation in Puerto Rico?

The installation will begin in the San Juan region and expand island-wide over a three-year period.

How many jobs will ITRI's smart meter project create in Puerto Rico?

The project will create more than 150 direct and indirect jobs on the island through local company involvement.

Will ITRI's smart meter installation increase customer rates?

No, customers will not see any rate increases associated with the smart meter initiative.

What warranty does ITRI provide for the smart meter technology?

Itron's technology comes with a 15-year warranty and integrates with LUMA's existing infrastructure.

What benefits will ITRI's smart meters provide to Puerto Rico?

The smart meters will provide better energy usage control, faster service restoration, improved renewables integration, and enhanced grid monitoring capabilities.