Shares of Echelon Corp. (NASDAQ: ELON) were up more than 45 percent today after the maker of energy efficiency products announced a long-term agreement to supply “smart meters” to Duke Energy Corp. (NYSE: DUK).

Duke Energy has described the smart grid as one of the greatest advancements of the 21st century,” said Ken Oshman, chairman and CEO of Echelon in a statement.

Echelon’s smart meters allow households to monitor electricity usage while also sending data back to power providers. By bringing the wide area network connection point down to the neighborhood transformer, the company’s NES architecture allows a utility to pinpoint problems in its network at a very precise location, and can improve customer service, for example, by eliminating cost and time associated with outage detection.

The creation of a “smart grid” is considered by some to be essential to modernizing the U.S. power delivery system, according to many experts.

“It’s the marriage of information technology and automation technology with the existing electricity network. This is the energy Internet,” said Bob Gilligan, vice president for transmission at GE Energy, which is aggressively pursuing smart grid development. “There are going to be applications 10 years from now that you and I have no idea that we’re going to want or need or think are essential to our lives.”

However, other experts warn that a “smart grid” isn’t smart enough yet to keep hackers away.

Mike Davis, a senior security consultant with Seattle-based IOActive Inc., demonstrated how a computer worm could hop between the meters at homes and businesses within a smart grid network. Such a worm could give troublemakers remote control of the meters, allowing them to disconnect someone’s power, for example.

“Every time we redesign a new technology like this, we’re doomed to relive the ’80s and ’90s all over again and the same vulnerabilities,” he told the AP.

Duke Energy has received regulatory approval to deploy smart grid infrastructure in Ohio, and plans to launch a five-year mass deployment of smart grid technology later this year including more than 700,000 electric smart meters in Ohio. In Indiana, Duke Energy is seeking approval from the Indiana Utility Regulatory Commission to install smart grid technology, including approximately 800,000 smart meters.

Echelon said the deal could represent a revenue opportunity of $150 million. The initial order is worth $15.8 million, with deliveries expected to begin at the end of the quarter, the company said.