Echelon and Eaton to Extend the Smart Grid Into the Home

Echelon Corporation (NASDAQ:ELON) today announced that Eaton Corporation has become a value-added reseller of Echelon’s Networked Energy Services (NES) System and that Eaton will incorporate its home automation product line for energy management, enhanced comfort and safety with the NES System. The agreement will focus on utilities and electricity providers in Europe, the Middle East and Africa (EMEA). The announcement was made today at the Metering Europe event in Barcelona, Spain.

The European Union (EU) recently announced a goal to increase energy efficiency by 20 percent by 2020, and many countries have announced obligatory adoption of advanced metering systems in order to meet the goal. Echelon and Eaton’s collaboration will provide a complete solution to extend the smart grid into homes and help meet these regulations.

Echelon recently announced new products and a series of enhancements to its Networked Energy Services (NES) System. The newest generation of Echelon’s smart meters includes a Multipurpose-Expansion Port (MEP) interface that can enable communication with Eaton’s home automation product line over a wireless radio frequency (RF) connection.

As a result, actual energy consumption can be presented in clear and concise terms. The end user will be able to regulate consumption in real time and see a clear record of energy use to enable informed energy consumption decisions. The MEP port can also enable utilities and electricity suppliers to communicate with homes to enable demand response applications to help reduce peak loads.

"Eaton and Echelon share a vision of the smart grid that encompasses everything from generation to distribution to consumption. We are making this vision a reality with our new combined solutions by delivering improved comfort, safety and energy management, assuring invaluable energy savings linked with peace of mind,” said Günter Idinger, senior vice president and general manager of Eaton’s Electrical Power Distribution Components Division in EMEA.

"We are excited to partner with Eaton to enable them to offer a complete energy management solution that adds intelligence to the grid and extends it into the home,” said Ken Oshman, Echelon’s chairman and chief executive officer. "This collaboration exemplifies the flexibility of the NES System, and the innovation of companies like Eaton, who are making a difference in reducing energy consumption worldwide.”

The NES advanced metering infrastructure consists of a family of highly integrated, advanced electronic electricity meters accessed via a Web services based network operating system over an IP networking infrastructure. Much more than a simple AMI system focused on billing related services, the NES System provides utilities with a wealth of information about the status, operation and health of the grid that enables them to reduce operating costs while increasing service quality.

Echelon’s NES technology is used by utilities worldwide in Austria, Denmark, Finland, Germany, Italy, The Netherlands, Russia, Sweden, Switzerland, the United States, and other countries.

For more information regarding Echelon’s NES System visit www.echelon.com/nes.

About Eaton Corporation

Eaton Corporation is a diversified power management company with 2008 sales of $15.4 billion. Eaton is a global technology leader in electrical components and systems for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. Eaton has approximately 70,000 employees and sells products to customers in more than 150 countries. More information about Eaton can be found at http://www.eaton.com.

About Echelon Corporation

Echelon Corporation (NASDAQ: ELON) is leading the worldwide transformation of the electricity grid into a smart, communicating energy network, connecting utilities to their customers, enabling networking of everyday devices, and providing customers with energy aware homes and businesses that react to conditions on the grid.

Echelon's NES System – the backbone for the smart grid – is used by utilities to replace existing stand-alone electricity meters with a network infrastructure that is open, inexpensive, reliable, and proven. The NES System helps utilities compete more effectively, reduce operating costs, provide expanded services and help energy users manage and reduce overall energy use. Echelon's LonWorks® Infrastructure products extend the smart grid, powering tens of millions of energy aware, everyday devices made by thousands of companies – connecting them to each other, to the electricity grid and to the Internet. LonWorks based products work together to monitor and save energy; lower costs; improve productivity; and enhance service, quality, safety, and convenience in utility, municipal, building, industrial, transportation, and home area networks.

More information about Echelon can be found at http://www.echelon.com.

Echelon 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, and development of markets for Echelon's NES System; risks associated with market acceptance of the NES System; risks associated with the ability of the NES System and NES meters to perform as designed and potential production or shipment delays for NES components; 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.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6066626&lang=en