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Itron Inc. has reached an agreement with San Diego Gas & Electric (SDG&E) to replace or upgrade the utility’s 2.3 million electric and gas meters with Itron OpenWay technology for its smart meter initiative.

Itron will provide its OpenWay electric meters and gas modules and Itron Enterprise Edition Meter Data Management software, as well as implementation, project management and installation services for the utility’s smart meter project. The agreement must be approved by the California Public Utilities Commission (CPUC).

“We are excited to have yet another forward-looking utility choose our OpenWay system for its smart meter strategy,” said LeRoy Nosbaum, Itron chairman and CEO. “SDG&E joins a growing list of OpenWay users who are providing their customers advanced technology that will allow them to integrate their choice of smart appliances and other energy-management devices and software.”

Itron’s OpenWay system provides a foundation for smart metering and supports smart transmission and distribution grids by providing a two-way communication network between the utility and each meter. OpenWay provides interval data collection, time-of-use metering, load-limiting remote disconnect and reconnect, outage detection, net metering capability and ZigBee home area network connectivity, which empowers customers to participate in energy management and conservation.

“Our challenge was not simply to select a reliable, leading-edge technology for the advanced utility meters, but also to choose a technology that could support our customers’ choices on how to take advantage of the energy-usage information that will be available to them,” said J. Chris Baker, SDG&E vice president of information technology. “OpenWay offers the flexibility to incorporate new ideas in the future.”

SDG&E’s smart meter initiative and funding gained CPUC approval in 2007. SDG&E plans to begin deploying the new system broadly in February 2009, with completion by the second quarter of 2011.