How Privacy (Or Lack of It) Could Sabotage the Grid

Nov 3, 2009

By Jules Polonetsky and Christopher Wolf

In October, President Obama announced $3.4 billion in federal grants to help build our nation’s Smart Grid.  The President said that the technology that will make up the Smart Grid will make the nation’s power transmission system more efficient, encourage renewable energy sources and give consumers better control over their electricity usage and costs.
The potential benefits are clear.  Far less obvious to many is that the smart power grid is also a smart information grid, a system that Cisco’s CEO has predicted will be bigger than the Internet. But while Internet privacy issues are limited to the Web activities of users, the Smart Grid will involve the collection of information about what goes on at people’s homes.  As Commerce Secretary Gary Locke stated this September, “The major benefit provided by the Smart Grid… is also its Achilles’ heel from a privacy viewpoint.”

This fall, the National Institute of Standards and Technology (NIST) identified several potential data privacy concerns involving Smart Grid technology. They include the threat of identity theft, the possibility of personal behavioral patterns being recorded and real-time surveillance.

Clearly, a significant amount of new and intimate consumer data will be available through Smart Grid technology.  There are numerous potential users of the data, including utility companies, smart appliance manufacturers, and third parties that may want the data for further consumer interactions.  Moreover, data that can be collected through smart meters and integrated home networks and appliances has significant value.  For example, Smart Grid systems may incorporate advanced broadband and data flow metering functionality, which can collect information about how much electricity an individual uses, which rooms he or she uses most, when, and how often.  Armed with this data, utility companies will be able to manage load requirements better and create a more efficient electricity distribution system.  In addition, device manufacturers will be able to understand better how their devices are used, allowing them to serve their customers better.  These Smart Grid features, however, raise questions about which entities will have access to individual user data and whether individual devices may be identified or tracked.

Potential Smart Grid data users, including utility companies and device manufacturers, must engage in responsible data management practices that build consumer confidence and trust.  Such trust can only be achieved if consumers feel that they are receiving sufficient information about and are in control of how their personal Smart Grid data is used.  Thus, Smart Grid data users must consider carefully how they will protect the integrity, privacy, and security of the Smart Grid data obtained from consumer usage patterns.  In addition, Smart Grid data must be gathered responsibly, securely, and with a measure of transparency and consumer control.

Only if consumers have confidence about how their data is used will there be the critical growth in Smart Grid technologies.  An individual consumer must be assured that information about his or her behavioral habits will be used only for the purposes understood and agreed to by that consumer and that it will be protected from improper use.  Without such responsible data management practices, there likely will be consumer resistance to Smart Grid technologies and a loss of consumer trust that could hinder Smart Grid deployment efforts, leading to lower demand for new products and reduced innovation.

Utility regulators and government policy-makers have highlighted the need for customer permission in using data from the Smart Grid.  However, requesting permission for data use and even communicating data management policies to users can be challenging.  Industry, academia and policy groups need to begin the research to determine how best to convey information to users regarding the privacy decisions they will make in incorporating Smart Grid technologies into their homes and lives.   Utilities and manufacturers should integrate the principles of Privacy by Design, a concept pioneered by Ontario Privacy Commissioner Ann Cavoukian, into the construction of their data infrastructures.

Taking key privacy concerns into account, before millions of dollars are spent, will ensure that the Smart Grid safeguards the future of our power system and our personal privacy.


The Future of Privacy Forum (FPF) is a Washington, DC based think tank that seeks to advance responsible data practices. The forum is led by Internet privacy experts Jules Polonetsky (former CPO to AOL and DoubleClick) and Christopher Wolf (Partner and chair of the privacy practice at Hogan and Hartson, LLP).  FPF also maintains an advisory board comprised of leading figures from industry, academia, law and advocacy groups. FPF was launched in November 2008.  More information about FPF is available at


Also on SGN:

The Smart Grid and Consumers: Unanswered Questions

The Dangers of Meter Data (Part 1)

Data Privacy and Security Issues for Advanced Metering Systems (Part 2)


The Policy of Privacy: This article gets to the root of one of my key policy concerns. Energy usage data should NOT be protected by conventional privacy laws in the same way that personal data is protected. Why? Because the nation’s overall energy stores are a public good and underpin a far-reaching national security concern. The wise use of this limited resource is paramount to our economic dominance globally and to our quality of life locally.

Energy usage data at the meter level should be public information, much like how campaign contributions are mandatorily disclosed or chemical emissions are regulated. In fact, the energy consumption of buildings (and for that matter vehicles) should be tracked just like the square footage of a building on the tax assessment. A building’s energy consumption pattern directly affects both is value and external cost to society. If we could figure out the right balance to this policy stumbling block, a whole new wave of innovation in conservation would likely flow from it.  Mark Huppert – 11/11/2009

The Policy of Privacy: Whilst I agree with Mark Huppert’s overall sentiment about how important the use of Energy is in respect to the overall ecological balance, I take real issue with his bucketing of all energy usage data. I have no problems in the use of energy being recorded, or by what building over a period (of e.g. 24 hours) What I feel is an infringement of Privacy, that could be further eroded by the bland concatenation of Energy Usage as a reason for segregating Engery Privacy from other Privacy regulations is that Energy usage can be now identified to who does what when with what. fat’s not an invasion of privacy I don’t know what is. In addition, it goes further, with smart meters a decision can be made centrally that XX Utility doesn’t want YY using electricity to cool their home down to 68 degrees, and via a smart meter can either decide to turn of the A/C or turn up the thermostat to 73 (for example) Not only is this an invasion of privacy, this is tantamount to Big Brother (1984) and moreover could lead to lawsuits should a medical condition be triggered by this remote operation. Mark might counter by saying that special cases like this could be notified to the “Central Command”, but then isn’t that putting Privacy further at risk because then Medical Data (given the example in question) which is covered by existing Privacy Legislation would need to be accessible by someone outside of the medical profession in order to ensure correct decisions are being made by a central body on behalf of a third party, who may not want that intervention in the first place.

Just a thought for discussion.  Len Inkster – 06/28/2010

How Privacy (Or Lack of It) Could Sabotage the Grid by Jules Polonetsky and Christopher Wolf – – Nov.03, 2009:


Privacy commissioner investigates BC Hydro smart meters

The Canadian Press   Jul 28, 2011 5:04 PM

Privacy Commission of BC

Office of the Information and Privacy Commission of BC


California Adopts Smart Meter Data Privacy Rules

By a 5-0 vote, California’s Public Utility Commission has unanimously adopted the world’s first comprehensive set of rules assuring consumers can access the detailed energy usage data provided by their smart meter while simultaneously protecting the data’s privacy and security.

The CPUC’s decision applies to the state’s three largest electric utilities—Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), and Southern California Edison (SCE)—which serve eight out of 10 Californians and which combined have deployed approximately eight million smart meters, with the final three million to be installed by the end of 2012.

The decision means the utilities must provide daily updates on detailed energy usage, bill-to-date, month-end bill forecast, and projected month-end energy price, to be made available on the companies’ respective web sites. This rule is similar to what Westar Energy will start providing to its SmartStar customers in Kansas.

Another provision requires tier alerts. In California, consumers pay more per kilowatt the more energy they use, with pricing rates divided into five tiers. When customers move from one price tier to the next, the utilities need to send notifications. The Commission says the notifications can be made “via e-mail, text message, tweet, chat, or some other form of rapid communication.” PG&E already provides this service.

All residents and businesses served by California’s three largest utilities have the option of switching to a time-of-use rate. So the Commission is requiring consumers be provided with a rate calculator to help them determine whether they would save money by switching to a time-of-use rate. This tool would use an individual customer’s data as collected by the utility.

The smart meters installed by California’s big three power utilities contain a Home Area Network interface, basically a radio that uses the ZigBee standard for transmitting data to homes and businesses. Currently, the interface has not been activated. But the CPUC decision requires each utility to file plans that “include an initial phase with a rollout that enables a minimum of 5,000 HAN-enabled devices to be directly connected with smart meters, as envisioned in the decisions approving the deployment of AMI (Advanced Metering Infrastructure)— even if full functionality and rollout to all customers awaits resolution of technology and standard issues.”

In addition, consumers will be able to authorize third parties to receive their backhauled smart meter data directly from the utility to support a variety of services including energy efficiency and demand response. The three major utilities will submit applications to the Commission with specific plans, including which standards they will use, expected to be the Open Automated Data Exchange (OpenADE) standard that is in its final development with NIST’s Smart Grid Interoperability Panel and the North American Energy Standards Board. The utilities, the Commission notes, “will bear no new liability for the actions of third parties” that acquire the information.

But to better protect consumer privacy and data security, the CPUC will have jurisdiction over third parties who receive data, whether gotten when providing services to utilities, or when authorized by consumers. However, the CPUC will not exercise jurisdiction over third parties who receive energy usage data directly from a device installed at residence or business that receives data via the HAN interface.

In presenting its ruling, the CPUC said it relied primarily on existing privacy law, using the Fair Information Practice Principles, developed by the United States Department of Homeland Security as its privacy framework.