Post # 55 -- Smart Meter Privacy Remains a Major Concern

IDC Energy Insights, a Massachusetts-based research and consulting firm, has released a new study – Utility CIOs: Living in a Smart Grid World – presenting results from a survey of "North American utility executive IT leaders." While generally focussed on the role of IT specialists in their companies' smart grid initiatives, the study (summarized here) shows that privacy fears remain in the hearts of many utility customers.

Indeed, according to the survey, privacy has emerged as the number one concern related to data security and management, with data governance as an emerging concern. As utilities implement new initiatives such as smart metering, data volumes are expected to increase significantly. While management and integration of this data are themselves priorities, IDC's respondents overwhelmingly reported data privacy as the key element of IT strategic plans for security. In particular, the study found that customers have a great deal of concern about how their data is being used and distributed.

Beyond the issue of privacy, IDC finds that most utilities have an strategic plan for information technology that takes smart grid into account. However, and surprisingly, one third of the utilities surveyed stated that their IT departments are not involved in developing business cases for new initiatives such as renewable generation, energy efficiency, smarter distribution grids, and smart metering. In fact, in the case of 13% of utilities, IT does not become involved until the project is well under way.

On wonder whether this lack of upfront engagement by utilities with their IT professionals -- which in a curious way mirrors many utilities' lack of upfront engagement with their customers on smart grid issues -- is the cause of at least some of the difficulties utilities have encountered when trying to convince their customers (and regulators) of the benefits of smart meters and other smart technologies.

Post # 31 -- Public Power Group Call for DOE-NARUC Collaborative on Smart Meter Privacy

Two related smart grid issues, growing increasingly important as smart meter rollouts move forward, are access to and ownership of individual consumer energy information contained in smart meters. See Post ## 3, 4, and 5. Given the overlap of federal and state jurisdiction of electric utilities (state regulation of local distribution, federal regulation of transmission), the question keeps recurring: just who should be write the rules.

This month, the American Public Power Association (APPA), representing more than 2,000 non-profit, publicly-owned electric utilities around the United States, called on the Department of Energy (DOE), which had solicited comments about current and future grid communications requirements, to create a privacy working group with the National Association of Regulatory Utility Commissioners (NARUC) to provide states with policy guidance.

NARUC, the association representing the state public service commissioners, already has a collaborative smart grid working group with the Federal Energy Regulatory Commission, the agency with core federal responsibility over wholesale electric markets and electric transmission -- and which has been specifically charged by Congress to develop standards and protocols necessary to insure interstate smart grid functionality.

The proposed new DOE/NARUC advisory group would act as an alternative to more overt government actions, such as legislation or rulemakings, to address smart grid consumer data access and consumer privacy issues. According to APPA's comments, “public power utilities typically rely on state law and legal precedents, local ordinances, and guidance from their governing bodies to set policy.” APPA argues that, for the most part, privacy and data access policies should be determined at the state and local level.

At the same time, APPA recognizes the need for federal guidance is such areas as “identifying areas of agreement and disagreement regarding privacy and data access issues.” APPA asserts that the proposed NARUC/DOE group would allow DOE to provide continued support to the states by “compiling examples of policy guidelines and sample privacy policies.”

It is unclear whether APPA had previously discussed this proposal with either NARUC or DOE staff. And such collaborative efforts, especially involving a group like NARUC (with essentially at least 50 constituencies), often get bogged down by all their moving parts. Moreover, considering that a fully developed smart grid will be an interstate grid at its core, APPA may be minimizing the federal government's role.

Still, APPA is the principal proponent of public power in the United States, and its comments further highlight the continuing importance of the privacy issues presented by smart meters.

Post # 5 - Who Owns Your Data (continued)?

As discussed in prior posts, an important smart grid issue is ownership of consumer data “embedded” in the new generation of smart meters. The traditional electric meters currently attached to our homes or businesses typically are read no more than once a month by the local electric company. Moreover, these meters only show gross electric usage since the last reading. But the new smart meters have the potential to exponentially expand the data points collected, the speed of collection, and the frequency of collection. And that is the whole point. By giving both the electric company and the customer real-time information about the customer’s electric usage, the electric company can better plan energy delivery and the customer can better focus on his or her real-time energy expenditures.

But there is also a downside -- or, perhaps more correctly, a potential (but serious) concern. As discussed in Post # 4, smart meters effectively will be mining data from the electric customer, presenting obvious privacy and data ownership issues.

In that regard, in a recent filing with the California Public Utilities Commission (CPUC), the Center for Democracy and Technology (CDT) and the Electronic Frontier Foundation (EFF) presented their concerns and recommended new rules on the collection and use of smart grid data. (This filing can be found here).

The CDT and EFF point out that new digital meters could collect data 750 to 3,000 times a month. Such detailed and granulated metering, the CDT and EFF fear, will make it possible to put together a picture of household life: when the people who live there get up, when they get home, what appliances they use most and when they go on vacation. Thus, the CDT and the EFF propose the adoption of “Fair Information Practice Principles” that call for informing consumers about what data is collected and how it is used and giving them control over who can see their data -- even if it is stripped of personally identifying information like names and addresses. The two groups would also limit what data can be collected and for what purposes and make utilities accountable for how third parties use customer data.

The CDT/ETF proposal is extremely rigorous, and it will be interesting to see the response by industry groups; state agencies, such as the CPUC, which regulate retail electric sales; and federal agencies like the FERC and the Office of Science and Technology Policy.

The smart grid debate has tended to focus on technical and cost issues. But as the smart grid is actually rolled out, and especially as smart meters appear destined to be the principal point of contact between the smart grid and retail customers, data ownership and control increasingly will be part of the debate.