Enel and Echelon Finalize Agreement to Network 27 Million Italian Homes with LonWorks Technology

Sunnyvale, Calif.-June 30, 2000 - Echelon Corporation (NASDAQ: ELON), the leader in networking everyday devices, and Enel SpA (NYSE: EN; Milan: ENEL), the largest publicly traded electric utility worldwide, announced today the signing of an R&D agreement under which Enel and Echelon will cooperate to integrate Echelon's LonWorks® system into Enel's remote metering management project called "Contatore Elettronico". Pursuant to this project, Enel expects to provide (on a three year rollout period) approximately 27 million Italian households with electricity digital meters, capable of being integrated into a complete home networking infrastructure. The Contatore Elettronico project is expected to allow Enel to offer consumers more accurate and timely meter readings and innovative tariff schemes (subject to regulatory approval) facilitating energy savings; moreover, the project is expected to allow the delivery of value added services. The platform introduced by Enel's Contatore Elettronico project is planned to be an open system that will allow other operators to provide their value added services. The signing consummates a Memorandum of Understanding signed by the two companies earlier this year.

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Enel has also entered into an agreement to purchase 3 million shares of newly issued Echelon common stock for a purchase price to be based on the average trading price prior to the closing (subject to a minimum price of $87.3 million USD and a maximum price of $130.9 million USD). As part of the stock purchase agreement, Enel has agreed to hold the shares for a minimum of three years; however, if the R&D agreement is terminated due to a material breach by Echelon, then Enel may sell the shares thirty days after public announcement thereof. Enel will assume a seat on Echelon's Board of Directors. The closing under the stock purchase agreement is conditioned upon approval under US antitrust legislation (Hart-Scott-Rodino Act) and certain other conditions.

"We are very pleased to be able to consummate our agreement so quickly," said Franco Tatò, CEO of Enel. "Having this agreement in place allows us to move forward with all possible speed to make our vision of intelligent power a reality." "This is a watershed event for the utility and home networking industries," said M. Kenneth Oshman, Echelon's chairman, CEO, and president. "It will support the creation of the largest infrastructure in the world for networking everyday devices in Italy. It represents a large and immediate opportunity for home appliance, heating, security, and other manufacturers to adopt and deploy intelligent LonWorks devices. We expect this project to accelerate the adoption of LonWorks networks among device manufacturers and utilities around the world." Enel expects to begin installing metering systems in the second quarter of 2001 with initial services being remote meter reading, remote connect and disconnect, and demand-side management. Enel expects to integrate a wide range of Echelon products in its system, such as devices for every meter to enable communication over the existing power lines based on the Neuron® chip and Echelon's PLT-22 power line technology, data concentrators, LNS(tm) network operating system software, and gateways to enable communication to indoor devices. The procurement of such components will be conducted in accordance with EU public procurement procedures. Echelon expects product deliveries to begin within the first half of 2001 and to ramp up to mature run rates over the subsequent years.

About Echelon Corporation Echelon Corporation (NASDAQ:ELON) is the world leader in networking everyday devices. The company offers a comprehensive line of hardware and software products for automating building, home, industrial, transportation, and utility applications using LonWorks networks, an international, cross-industry, open standard for interoperable device networks. Echelon is Bringing the Internet to Life(tm) by linking the millions of everyday devices connected with LonWorks networks to the Internet. Echelon is based in Sunnyvale, California, with international offices in China, France, Germany, Japan, Korea, The Netherlands, and the United Kingdom. Further information can be found at http://www.echelon.com. About Enel SpA Enel SpA is the principal electricity company in Italy and the largest traded electric utility (New York Stock Exchange - EN and Milan - ENEL) worldwide with the leading position in the generation, transmission, distribution and supply of electricity. The company, with 1999 revenues in excess of L40,000 billion (approximately $20 billion) and 79,000 employees, serves more than 29 million customers. Enel's most significant business outside its core electricity operations is its 51% interest in WIND, a joint venture in the telecommunications industry with Deutsche Telekom and France Telecom. WIND launched its convergent fixed and mobile telephony services on March 1, 1999 and as of today has already reached more than 3.3 million customers. Further information can be found at http://www.enel.it.