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Echelon Corporation (ELON) Message Board

  • elonverylong2 elonverylong2 May 20, 2008 3:40 PM Flag

    jime rogers duke energy -4.4 million smart streetlights

    We have the tools and smarts to create a greener energy future

    Can we really go "green" to achieve big-time energy savings?

    For one solution hidden in plain sight, look outside at the streetlight closest to you. Energy-wise, it's probably a Neanderthal — burning significant power dusk to dawn, based on old technology, its glow polluting the night skies.

    In just the top 10 U.S. metro areas, the 4.4 million streetlights each year burn roughly 3 billion kilowatts of power, sending 2.3 million metric tons of carbon into the atmosphere.

    But the kilowatts, the carbon emissions and the dollar costs to local governments could be cut in half. That's the claim of Robert Grow, director of government relations for the Greater Washington Board of Trade.

    Grow's prescription: Replace all of today's sodium vapor and other older streetlights with the latest light-emitting diodes (LEDs). The payoff for our cities and suburbs: Daily energy use, dollar outlays and carbon emissions would fall dramatically; the LED bulbs would last far longer than current models; and the light could be directional, lowering light pollution from populated areas.

    In fact, based on a system now being installed in Norway's capital, Oslo, Internet servers connected to an LED network can log and report energy consumption, collect information from traffic and weather sensors, calculate the availability of natural sunlight and moonlight, and make constant adjustments for optimal driving or walking conditions.

    The LED installations are expensive but could be paid off by energy savings in roughly five years. The yearly savings for the 10 big metros would be the equivalent of taking 213,000 cars off the roads, or consuming 132 million fewer gallons of gasoline, according to Grow.

    Are LEDs a rare exception? No way, I concluded recently after talking with Jim Rogers, CEO of Duke Energy, a major South-Midwest utility. Heavily coal-dependent, Duke is America's third-largest emitter of carbon dioxide and currently plans at least one major coal and one nuclear power plant to meet growing demand for electricity.

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    • >>Micro, what are your thoughts on ELON going forward?<<

      Would you be so kind as to focus that question down a bit?


    • >>It's not his fault copper is freaking expensive<<

      A lot of companies have been hedging their commodity prices, to avoid just this sort of event. So while I tend to agree with you, others might blame management for not planning ahead and being more proactive with regard to commodity prices.


    • Micro, what are your thoughts on ELON going forward?

    • >>I don't think I ever knew the precise terms, just that it occurred around 12.50.<<

      The average price of the repurchased shares was ~$7.30.

      >In March and August 2004, March 2006, and February 2007, our board of directors approved a stock repurchase program, which authorizes us to repurchase up to 3.0 million shares of our common stock in the open market, in accordance with Rule 10b-18 and other applicable laws, rules and regulations. Since inception, we have repurchased a total of 2,204,184 shares under the program at a cost of $16.1 million. The stock repurchase program expired in March 2008.<< (10-Q)


    • Those are good points, I agree that execution is the key. I would argue that if you take the accounting BS away (that was just stupid on their part), from the business perspective they have executed quite well in 2007 and starting in 2008. I would like to see LWI growing quicker but NES is where the real revenue is going to come from in the near term (in my opinion). Heck, if their name were Enernoc, this would be a $20 stock. They seem to get away with making no money on a big potential market.

      When you think about it, after the Enel deal they recognized the meter opportunity and basically went into start up phase to develop the technology, introduce it to utilities worldwide and launch the product. In 4-5 years, they went from concept to $110 million in potential 2008 revenue in NES and have shipped 1 million meters. That is pretty impressive in my opinion.

      With the backlog issue, I don't really know what to say about that. I think the con calls are funny because they are damned if they do and damned if they don't. KO can't talk about what they are working on in specifics without getting sued so he has to speak in generalizations. And he gets crushed for it. I wish we lived in a perfect world where they could give us their opportunities and we could assess the likelihood of them closing. But we don't live in that world. If KO says, "we are working on a 500K meter deal which we believe will close in 2008 but is not done yet" the stock would go up 5 points. And if the deal didn't materialize, they would have 5 law firms breathing down their throats because they "misled investors". That is called being between a rock and a hard place.

      Now, on the April 30 call KO mentioned that "they hadn't announced 1 or 2 things because they were dotting the i's and crossing the t's". As an exec team, they need to get better about getting whatever news they have out to the public quicker. That is where I fault them.

      Don't get me wrong, I have plenty of complaints about the way the stock is performing. But I don't blame KO for all of it. It's not his fault copper is freaking expensive and the fed cut interest rates. Those are the two of the main reason for the earnings adjustment. I'll blame him for the other parts that he can control (restatment costs, etc.).

    • Mpark - I guess my concern is that management are doing this to offset the dilution caused by generous (excessive?) granting of stock options. If all we're doing is shrinking the capital base because it got overly extended in recent years as a result of tasty option handouts, we're no better off. Its almost a guilty recognition of this fact, low returns on cash aside.

      I'm not complaining about my stake in the company b eing increased while I do nothing, but hey, why not use the same cash to attract/reward these guys initially?

      Your point about what this technology is worth to someone is the big issue here. After 20 years, it still hasn't got to a stage where its the accepted standard or leader (maybe that point isn't too far off). Every new order gets us closer to that goal and the possibility of high multiple returns increases. Can echelon execute well enough to secure enough of the market to ensure that? The jury's out on that for now, hence the SP.


    • I think the buyback serves two purposes:

      - Better use of their cash than letting it sit there with little return because of low interest rates. I think from managements point of view if the interest income can't add to earnings (as they guided that it won't) then they might as well support the stock and add value that way.

      - I think the management team also realizes that consolidation is going to happen at some point. And right now, Echelon is cheap. Their performance hasn't merited the stock to move up but I guarantee you there is some large company out there who realizes that the smart grid and smart devices are the way of the future, and in Echelon you have a company that has invested 20 years developing these two technologies. I am long this stock but I am not delusional enought to tell you they are worth $10 billion or some crazy number. But I think it is safe to say that they could be worth more than $500 million to someone.

    • Cheetah,

      I don't think I ever knew the precise terms, just that it occurred around 12.50.

      We could probably enjoy a buyback tomorrow, but the price would have to be closer to 100 a share than 10. So it is unlikely.

    • Bill - I remember the buy back program from a few years back. Do you know if, having agreed the scale of it, the board have a deadline to complete it by? And is it a case of giving the brokers a limit to work to (in which case the support level becomes pretty obvious) or do these guys have discretion to buy, say at higher levels, on a rising day?

      I've got to say, my experience of stock buy-backs is pretty mixed, with a lot of evidence to suggest they are a wasteful exercise (especially with negative cash-flow companies). If its a smokescreen to appease investors whilst they ramp up expenses (something elon are pretty good at), that makes it doubly bad.

      What odds on a takeover this year?

      All the best


    • as we can all read here jim rogers from duke speaks on echelon system.
      In fact, based on a system now being installed in Norway's capital, Oslo, Internet servers connected to an LED network can log and report energy consumption, collect information from traffic and weather sensors, calculate the availability of natural sunlight and moonlight, and make constant adjustments for optimal driving or walking conditions.
      ''jime is going the long way with echelon. i dont think we talking only smart streetlight is next for duke energy...our board is full with shorts in this days..they can echelon look bad.but we can all read this one...this look good.


      • 1 Reply to elonverylong2
      • Remember that in the US streetlights belong to the municipalities, not the power companies.

        So Duke might be instrumental in encouraging their customers to modernize their public lighting, in order to save on electric bills. But I do not believe Duke is in direct control of these streetlight networks.

        Today looked like a good buy at 11.75. My next limit order is just above 11. We might get a spike downward on the open but I do not expect it to stay there.

        A few years ago we had a stock buy back in place and it seemed to stabilize the price at around 12.50.

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