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By Jeff St. John

Echelon (NASDAQ:ELON) has a new partner to bridge the gap between its smart meters and home energy controls – Eaton Corp. (NYSE:ETN).

The two companies said this week that they'll be marketing a combination of Echelon's networked energy services smart meter system and Eaton's home automation system to utilities in Europe, Africa and the Middle East.

While Echelon does have U.S. utility Duke Energy (NYSE:DUK) as a customer, Europe is where the San Jose, Calif.-based company does most of its smart meter business. Its technology underlies a 30-million smart meter deployment in Italy, and it has about 2.5 million more meters deployed or under contract elsewhere in Europe (see Echelon Expands Euro Smart Meter Biz).

Eaton is one of the big players in building automation systems, an industry where Echelon's LonWorks platform also plays a role. Other building automation heavies include Johnson Controls (NYSE:JCI), Honeywell (NYSE:HON), Siemens (SI), Schneider Electric (OTCPK:SBGSF) and new entrant Cisco Systems (NASDAQ:CSCO) (see Cisco Rolls Out Building Management 'Mediator').

But those automation systems are aimed at big office buildings and factories, not homes. Getting the cost of residential energy control systems down to the amount a typical homeowner is willing to pay – or a utility can afford to subsidize – is a trickier matter (see Utilities Mull Price Points, Policies for Home Energy Management).

Echelon said its newest meters will include a portal that can hook up to the radios that run Eaton's home automation systems, which includes its high-end Xanura system.

There's a lot of activity underway in linking smart meters to home energy management systems.

Examples include General Electric's (NYSE:GE) partnership with home energy networking startup Tendril and Itron's partnerships with EnergyHub and OpenPeak, as well as smart meter networking provider Silver Spring Networks' purchase of home energy portal developer Greenbox and smart grid software startup GridPoint's acquisition of Lixar (see stories here, here, here and here).

Of course, utilities will have their own choices of technologies they'd like to integrate. But with smart meter-enabled home energy management systems still in pilot stage, there's still time for such partnerships to sell electricity providers on the advantages of going with an already integrated system (see The Elusive Smart Meter-Demand Response Combo).