How to Read a $1.865 Billion Utility Buying Signal
Southern California Edison has been talking publicly about wanting a next-generation AMI system since at least its general rate case in May 2023. That filing was a clear signal for relevant vendors to start talking with SCE, identifying the right stakeholders and learning where the program might create an opening.
Then in March of this year, the utility put specific numbers and planning into a proposal to California regulators that began clarifying the commercial opportunity.
The big numbers are approximately 5.7 million meters at a total projected cost of $1.865 billion.
A number that size gets attention, but says little about what a vendor can pursue. The filing's details are more useful, because they begin to answer — or at least hint at — the questions that determine whether an opening exists.
What exactly is SCE going to buy?
In addition to meters, the utility's proposal describes introducing new communications hardware and software, supporting systems, enhanced sensing and analytics, distributed grid-edge intelligence and advanced local computing capabilities. Specifically, it includes a $444.6 million capitalized-software forecast within the larger program request.
It also mentions a competitive procurement process to select third-party vendors to install standard meters.
So, the filing is commercially relevant for communications providers, software and data-platform companies, systems integrators, grid-edge technology firms and OT cybersecurity vendors, in addition to meter manufacturers.
What commercial opening exists today?
The California Public Utilities Commission (CPUC) is still reviewing the proposal, and an August memo indicates the commission is examining SCE's technology choices, including whether the proposed approach adequately considers available market alternatives and competition.
That review is one reason we place the program at the Solution Exploration stage. The utility hasn't publicly opened a formal technology solicitation or AMI-specific vendor-engagement process, which means program requirements are still taking shape. Vendors who build relationships with the right SCE stakeholders now have a chance to influence those requirements before they harden.
For the meter-installation work, procurement has yet to launch, and the scope of those contracts remains contingent on approval.
The CPUC is expected to rule in the third quarter of 2027 on SCE's request to proceed with the AMI 2.0 deployment in 2029 and recover the proposed costs.
What should vendors do right now?
The answer depends on what you sell.
Technology vendors have an opportunity to develop their SCE account positions while the program remains under review. Because the CPUC is asking whether SCE adequately weighed market alternatives, evidence on interoperability, lifecycle cost, cybersecurity and integration speaks directly to the questions now in front of regulators.
Meter-deployment and field-service firms have a different task. They can prepare for the future procurement by establishing supplier qualification, safety credentials and California field experience, and by showing they can staff and quality-check a rollout measured in millions of meters.
Other vendors may find that their relevance to the $1.865 billion program remains too speculative to justify a major pursuit today.
For vendors who do see a place in the program, a bid opportunity won’t emerge until after the CPUC rules in late 2027. But when SCE eventually issues a solicitation, the vendors best positioned to answer it will likely be those who begin preparing today.
The full SCE analysis, covering the AMI 2.0 program and eleven other initiatives, is in our new Utility Buying Signals report in the Spotlight below.
WORTH READING
“How to Write a Request for Information (RFI) that Vendors Want to Respond To”
by Colin Erhardt, Harvard Kennedy School Government Performance Lab, January 2025.
Harvard's Government Performance Lab published this guide to help public agencies gather vendor input before they issue an RFP, which makes it a rare look at early engagement from the buyer's side. The section titled "What is a Request for Information?" (page 2) lists what agencies hope to learn from vendors at this stage, including whether a draft scope of work is realistic and which vendors can actually deliver it.
The "RFIs in Practice" section (pages 9–10) gives an example of what vendor input can change. It explains how Glendale, Arizona used vendor responses to tailor its RFP to what bidders could realistically deliver. Utilities don't follow government procurement rules in every respect, but the buyer's reasoning in these two sections applies directly to the requirements-shaping work described in this issue's essay.
NGC SPOTLIGHT
This issue of CONDUCTOR evaluates vendor opportunities within one SCE program in a particular phase of the utility-buying journey. Our new Utility Buying Signals Report applies the same evaluation to 12 SCE initiatives, placing each at its buyer stage and identifying what steps relevant vendors can take today.
SCE's signals are scattered across rate case filings, regulatory memos, procurement notices and program updates, and each one tells only part of the story. For each initiative, the report brings those signals together to show where SCE is in its decision process, which parts of the work appear open to outside vendors and what action makes sense at this stage. It also identifies the developments to watch for that could signal a significant change in the commercial opportunity.
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