Echelon Corp shares soared 40 percent Monday on news that the company has entered into a long-term agreement to supply smart meters to electric utility Duke Energy Corp.

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, it said.

Echelon's smart meters allow households to monitor electricity usage while also sending data back to power providers.

Duke, the third-largest U.S. electric power company, plans to install more than 700,000 smart meters in Ohio and is seeking approval from the Indiana Utility Regulatory Commission to install smart grid technology, including about 800,000 smart meters, Echelon said.

The creation of a smart grid is considered by some to be essential to bringing the U.S. power delivery system into the 21st century. Experts envision a network that will wring new efficiencies out of thousands of miles of power lines and open the door to more development of renewable electricity sources, the introduction of smart appliances that turn themselves on and off, and a fleet of electric cars.

Duke is laying the groundwork to bring large-scale smart grid technology to the remaining three states it serves, Echelon said.

Echelon shares were up $3.33 to $11.63 in morning trade on Nasdaq, while Duke Energy shares fell 1.5 percent to $15.43 on the New York Stock Exchange.