NewPower, Coactive Form 'Smart Homes' Alliance

Once only envisioned in cartoon families like The Jetsons or in futuristic movies, a strategic alliance between national energy provider The New Power Co. and Internet gateway provider Coactive Networks is zooming in on the first complete "smart homes" for U.S. consumers and small businesses.

The deal, announced last week, would begin with a pilot program this year in 200 homes in New Jersey and Pennsylvania, connecting customers' thermostats, meters, lighting fixtures, appliances, security systems and home automation systems to the Internet, and thereby giving them specific troubleshooting and power usage information.

As part of the agreement, TNPC, a subsidiary of NewPower Holdings Inc., will use Sausalito, CA-based Coactive technology to outfit households with telemetry e-services, such as energy management and home control.

Once established, the Internet would enable commands from outside the home or business, using wireless devices, or through service orders and changes through web site pages. It also could automate phone and e-mail alerts from remote home devices like security systems, swimming pools and even a medicine cabinet running short on a prescription. In turn, NewPower would use the Internet system to adjust thermostats during high-demand periods in exchange for rate discounts, reducing outages and establishing their generation requirements.

The move is considered a significant step for TNCP in its drive to bring cutting edge technology to consumers and small businesses to manage energy costs. The Coactive Connector residential gateway is designed to address energy management issues arising from the changing regulatory and market environment.

H. Eugene Lockhart, CEO of NewPower, based in Purchase, NY, said the alliance "will enhance our value to consumers and small businesses and introduce a new world of Internet-enabled services." He said the ability to offer telemetry e-services would "cement our relationship" with long-term customers.

Coactive CEO David Gaw said the alliance was the first "true smart home initiative" in the country. "Trends related to deregulation will continue to drive residential gateway deployments in 2001." He said "forward-thinking" energy providers like NewPower would lead the way in managing energy usage.

NewPower, formed by Houston-based Enron Corp. in 1999, expects to reach 1.2 million customers this year, with net revenues expected to be between $530 million and $540 million. In February, subsidiary TNCP said that its customer count stands at about 368,000, offering retail marketing and sales of natural gas and electricity to residential, commercial and industrial customers.

TNCP's residential customer base includes accounts in California and Ohio transferred from Enron, as well as about 285,000 natural gas customers and 20,000 electricity customers in eight states, primarily Georgia, Ohio and Pennsylvania, acquired from the Columbia Energy Group in July 2000.

NewPower has strategic partnerships with IBM, which provides the company with all back office functions, and AOL, which provides exclusive access to more than 23 million subscribers.

Carolyn Davis, Houston

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