(San Jose, CA & Antwerp, Belgium - March 27, 2006) - Echelon Corporation (NASDAQ: ELON), a global networking company providing technology and solutions for controls, smart metering, and energy and environment management, and Ferranti Computer Systems NV, a supplier of specialized information technology (IT) services for utilities, today announced that Ferranti has entered into an agreement to become a Value-Added Reseller (VAR) of Echelon's Networked Energy Services (NES) smart metering system. Ferranti will interconnect its metering and contract management system software with the NES infrastructure to provide web-based automated meter management (AMM) solutions to support liberalized energy markets in Europe.

"The speed of deregulation in the power markets across Europe has utilities and power supply companies reinventing themselves to meet the challenges of their new business environment by lower operating costs while increasing customer loyalty," said Franky Baert, managing director at Ferranti. "Energy information systems based on the NES system and our software help utilities become more efficient and optimize business processes, leading to improved customer care capabilities as well as optimum cost visibility and control while providing a flexible, future-proof AMM infrastructure."

Ferranti provides specialized business and IT solutions, system development and integration as well as Business Process Outsourcing (BPO) and managed services, to leading organizations across selected vertical markets, including energy and utilities, industry, (public) transport and the public sector. The company has developed both hardware and software solutions to meet the diverse and changing needs imposed by the deregulation of the energy industry in Europe. Ferranti's metering and contract management system (MECOMS) software consists of a database and applications framework with several modules. By combining the modules you can create an application to meet your specific business requirements. The MECOMS software will be integrated with the NES System software to add the advanced AMM capabilities to the MECOMS solution.

Echelon's NES system provides an open, bidirectional, and extensible infrastructure that enables a comprehensive range of utility applications that can bring benefits to every aspect of a utility's operation, from metering, to customer services, to distribution operations, to value-added services.

"Ferranti's products and services are a perfect complement to NES and will enhance the NES solutions and applications that can be offered to utilities. Their experience in the European utility and IT sectors makes them a solid NES VAR partner and reinforces our program and distribution network," said Frits Bruggink, Senior Vice President and General Manager, Service Provider Group. "We believe that VARs such as Ferranti with software applications expertise in the utility environment such will help us achieve one of our key strategic goals for the NES business – that of making the NES System a standard platform upon which the most comprehensive AMM solutions are built."

The NES Value-Added Reseller (VAR) program is designed to establish Echelon's NES system as a global standard for intelligent metering systems by enabling companies that provide products and services to the utility industry to adopt and adapt the NES infrastructure as the basis for their end-to-end metering solutions sold under the NES Powered by Echelon® branding program.

About Ferranti Computer Systems NV
Ferranti Computer Systems applies consultancy, design, development, integration, support and training in innovative and productive ways to enable our clients to improve their overall performance and productivity, to gain a competitive advantage, and to improve safety and profitability. The combination of intensive partnerships with major technology vendors and our team of experienced product specialist enable Ferranti Computer Systems to offer a broad range of services: from consultancy to implementation and from software development and project engineering to support.

Ferranti Computer Systems began in 1976 as a division of Ferranti International. Ferranti has been a part of the Dutch Nijkerk Group since 1994. Ferranti boasts more than 25 year's experience in ICT consultancy, systems development and integration, network technology, managed services and business process outsourcing for a number of specific markets, such as energy and public utilities, public transport, industry and service organizations. Ferranti's customers include Huntsman, ENECO, NUON, Essent, Indexis, Delta and Schiphol Airport.

Further information regarding Ferranti Computer Systems can be found at http://www.ferranti.be.

About Echelon Corporation
Echelon Corporation (NASDAQ: ELON) is a pioneer and world leader in control networking — networks that connect machines and other electronic devices — for the purpose of sensing, monitoring and controlling the world around us. Echelon's LonWorks® platform for control networking was released in 1990 and has become a worldwide standard in the building, industrial, transportation, and home automation markets. Launched in 2003, Echelon's Networked Energy Services system is an open, extensible, advanced metering infrastructure that can bring benefits to every aspect of a utility's operation, from metering and customer services to distribution operations and value-added business. In 2005 Echelon released the world's first embedded control network infrastructure, the Pyxos™ platform, extending the benefits of networking inside machines to the sensors and actuators that make them function.

Echelon is a leader in the advanced metering infrastructure market, providing the underlying network technology for the world's largest advanced meter management (AMM) project in Italy, with over 27 million connected electricity meters. More recently, Echelon's NES System has been the winning technology for the largest European smart metering tender to date awarded by Swedish utility Vattenfall for up to 700,000 meters and was selected by Dutch utility Nuon for a 25,000 meter installation. In the case of Nuon, the NES meters are servings as the connection points for 25,000 gas meters making Nuon the first utility in the world to utilize a single, bi-directional smart metering infrastructure for an AMM solution servicing both electricity and gas meters.

Echelon is based in San Jose, California, with international offices in China, France, Germany, Italy, Hong Kong, Japan, Korea, The Netherlands, and the United Kingdom. Further information regarding Echelon can be found at http://www.echelon.com.

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Echelon, LonWorks, NES Powered by Echelon, Networked Energy Services Powered by Echelon and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries. Pyxos is a trademark of Echelon Corporation 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, development of markets for Echelon's products and services, including Echelon's Networked Energy Services (NES) system; risks associated with market acceptance of the NES system, the NES system's ability to perform as designed and its pricing relative to alternative offerings, potential production or shipment delays of NES components to Ferranti by Echelon or its production partners, the growth of the LonWorks industry worldwide, sales targets not being met, development of markets for Echelon's products and services, demand for Echelon's products and services; risks associated with Ferranti meeting production and delivery targets for NES based solutions, integration of existing Ferranti applications with the NES system, demand for Ferranti NES based solutions; 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.

Contact Information

Press Contact:
  

Julia O'Shaughnessy
Echelon Corporation
(408) 938-5357
joshaughnessy@echelon.com
    

Mike Barash
Atomic Public Relations
(415) 402-0230 mike@atomicpr.com

Greet Heylen
Ferranti Computer Systems NV
+32 (0)3 540 49 11 greet.heylen@ferranti.be