By Jesse Berst

St. Louis-based Aclara – a subsidiary of Esco Technologies (NYSE: ESE) – is pound-for-pound one of the top companies in the smart metering sector. Yet because it emphasizes smaller munis and co-ops instead of heavyweight investor owned utilities (IOUs), it doesn't always get the attention it deserves.

"I consider Aclara the industry leader in gas and water," says Carter Shoop, equity research analyst at KeyBank. Aclara execs told me they currently have 2.5 million smart water meters in use and 50% of the market for fixed networks for water. "And Aclara is the clear electric leader in the muni and co-op market with its powerline carrier technology," Shoop continues.

Not that Aclara is immune to the overall doldrums of the smart metering sector. In August, parent Esco Technologies reported that sales in its utility segment (of which Aclara is the biggest part) fell 12% from the same period a year ago. Despite the parent company loss for the previous quarter, Aclara CEO Brad Kitterman told me that revenues in his division are currently up 20% over 2011 – quite a feat given the current market slowdown.

The Aclara story

Aclara originally made its reputation with powerline communications, which is well-suited for rural territories. For urban settings, most IOUs have opted for RF mesh instead. Aclara has two different flavors of RF, but neither one has caught on big.

Today, Aclara has a "product portfolio to rival any company," writes GTM research analyst David Leeds. He's right. Aclara has smart meters for electric, water and gas. It also has three flavors of communications – powerline, RF star and wide-area Wi-Fi. And it also has a growing software suite, including meter data management, customer engagement and demand response.