Are you ready to test your knowledge about electricity data and the privacy of that data?  And beyond Smart Grid discussions, as more devices are communications-enabled, the Internet of Things will produce enormous amounts of new data that can profoundly impact our privacy.  Here are a few questions:

1. Smart meters provide electricity data that lets utilities spy on consumers.  T/F 
2. My electricity data doesn’t have value to anyone but me.  T/F
3. A kilowatthour (kWh) can’t tell my utility exactly what appliances have been using electricity.  T/F
4. Utilities need to do more to ensure that my electricity data is protected.  T/F
5. The new Green Button initiative will
   1. Result in my electricity data being sold to the highest bidder
   2. Give me control over my electricity data and who may view or use it
   3. Automatically post my electricity data to my Google+, Facebook, and LinkedIn pages.

Here are the answers. 

1. False.  While smart meters can communicate the amount of electricity that you are consuming in your home, special hardware and software that you install within your home is needed to disaggregate the stream of electrons flowing into your home and break it down to what flows to individual components.  A smart meter can offer a more time-granular view of electricity consumption, and that data could allow you to infer that spikes or declines in use correspond to operation of specific equipment  – particularly the biggest guzzlers like clothes dryers, pool pumps, and heating/ventilation/air conditioning (HVAC ) systems.   There are companies that take smart meter data and create suggestions to help you reduce electricity use, but those suggestions are based on inference and analytics comparing your usage against a peer group with similar variables for location, size of home, number of occupants, etc.
2. False.  Your electricity consumption data has enormous potential value to you and to others.  For instance, think about how your internet search data has value to advertisers.  Similarly, analysis of your electricity data could reveal information that would be valuable to businesses that want to sell products or services to you.  If you choose to share your data with a company in exchange for any value-added services, you’ll want to obtain a detailed description of exactly how they use that data, how they protect that data from unauthorized access, and if they want the ability to sell that data (anonymized or not) to others.   
3. True.  A kilowatthour is a unit of measurement that is one kilowatt of power expended in one hour.  It can’t tell you or your utility what that kilowatt was used for, anymore than the miles per gallon (mpg) metric can tell you or your friendly state trooper how fast you’ve been driving your car or where you’ve been driving it.  You could make inferences about the lavishness of your lifestyle by a monthly kWh consumption compared to a peer group.  But a kWh number won’t tell you or your utility how much electricity was spent chilling your 3000 bottle wine collection.  You can get that information if you install special devices, but the utility will never know.
4. True.  Smart meters do collect more electricity consumption data than dumb meters.  That data can help us recognize the true total cost of operation (TCO) for our equipment and our lifestyles.  Utilities must re-examine their existing policies and practices to ensure that they can securely communicate and store data needed to continue the safe, reliable, and cost-effective delivery of electricity.  We already have too many horror stories about how insurance companies and retailers compromise personal, medical, and financial information.  We don’t want to see utilities or third party service providers making similar errors with our electricity data.  See this blog for more information about ongoing activities to help utilities incorporate the policies and best practices to protect consumers’ electricity data.
5. The correct answer is b.  The recently-launched Green Button initiative models the successful Blue Button initiative that makes it very easy for consumers to “have timely access to their own electricity data in consumer-friendly and computer-friendly formats.”   You own your electricity data, and you can choose who may have access to it (aside from the utility that has legitimate needs for “revenue-grade” data to accurately bill your electricity use.)  However, and this is a big caveat, as consumers we need to know how the companies with whom we share the data will use it  and protect it from unauthorized access or use.  Just as we have expectations that retailers secure our credit card information, we should have similar expectations of any companies that we allow to access our electricity data.

Energy consumption data provides sufficient information to describe patterns of behavior that could constitute remote surveillance.  Used appropriately, this is valuable information that can help consumers build awareness and make intelligent choices about energy consumption.  However, and this is a big caveat – this information could also be quite valuable to vendors and service providers who want to learn more about consumer habits, lifestyles, and choices in order to more effectively target marketing campaigns to them.   

Two sessions at the recent EnergySec Summit West addressed privacy issues, which are inextricably linked to security issues.  There is a growing body of work focused on the privacy protections for energy consumption data, including a recent California Public Utilities Commission (CPUC) ruling that considers primary uses of energy consumption data.  Primary uses include analysis of a consumer’s data to identify opportunities for energy savings through actions that range from shifting energy use to hours with cheaper rates and recommendations on replacement of inefficient devices coupled with rebate program information.  As defined by the CPUC, primary users are utilities, their authorized service providers, and consumers.  Secondary users of energy consumption data include appliance manufacturers, data aggregators, agencies, law enforcement and other governmental entities, and advertisers.  Just to be extra confusing, secondary users are also called third parties, and include service providers such as wired and wireless communications carriers. 

There are two troubling aspects to this ruling and to other ongoing work.   First, almost all of the discussion presumes that utilities own the energy consumption data and have the primary relationship with the consumer.  That may be true today, but perhaps future business models and technologies will offer new options in which third parties – those service providers –have the primary relationship with consumers, and do not use smart meters to obtain their data.  Utilities are in the background, delivering electricity, but no value-add services.  Secondly, although the CPUC ruling is quite good about requirements for utilities to make all data available to consumers, there is no direction about how consumers will be educated. 

This lack of guidance about the education of consumers is a real concern.  This is new data, and consumers need to be aware of the potentials for abuse.  It is quite likely that utilities will follow the lead of financial institutions and communications carriers, and produce densely worded privacy policies that appear as an annual insert in one of our bills.  How many consumers read those inserts in the mail or privacy pages on a website?  What we need is plain and simple communications that clearly state the value of this data, and consumer rights around it.  We need consensus around who is responsible to deliver this information, and how educational campaigns are funded.  Without effective education, we may be consigned to learn the hard way about what energy consumption data says about our behaviors within our homes – just like many early adopters of Facebook discovered in posting details about their lives.   Without effective education, we may gain insights, but lose the opportunities for financial compensation in providing access to our data to third parties.  Without effective education, we’ll know much more about how to protect ourselves from electrical hazards, but not the ones generated by energy consumption data. 

• meter accuracy – smart meters are have been perceived to create falsely high bills 
• environmental health concerns about radio frequencies (RF) 
• control – who decides how energy consumption data is used and technology choices

The first two areas of concerns were addressed in my previous blog. 

The subject of control and smart meters reflects societal challenges about management of systems complexity, privacy, and technology choices.  For example, control is one of the reasons given for why backyard organic gardening is increasing in popularity.  Food production today is complex and far removed from our visibility or control, but we can regain a modicum of both by growing our own food.  Taken to its extreme, we could all be like Mark Zuckerberg and only eat meat from animals we’ve personally killed.   Isn’t it ironic that this act of control is coming from someone whose company makes it so difficult for Facebook users to control their privacy settings?     

An increasingly complex, interdependent, technology-driven and globally interconnected world can leave us wondering what is actually within our control.  Smart meters are a visible part of a very complex electrical system that is invisible to most people.  Utilities created electrical grids that go without notice until they don’t work.  Many consumers don’t know if their electricity comes from clean or dirty sources nor its true costs, all of which can vary over the course of the day.  So when utilities say that smart meters deliver benefits of improved performance, reduced costs, and increased information for consumers, it needs to be offered in the context of the greater Smart Grid vision and objectives.  Without it, consumers can develop suspicions that they aren’t being told everything – and without the complete vision – they are right.

One smart meter concern speculates that these devices are spies on our home activities and result in loss of privacy control within our four walls.  Yes, smart meters gather and transmit energy consumption data to a utility.  Smart or dumb, electric meters measure consumption but don’t distinguish between watts used by a dryer, dishwasher or TV.  A smart or dumb meter measures the amount of electricity being used, not how it is being used, who is using it, or why it is used.  A smart meter simply delivers that data wirelessly or via power line carrier (PLC) back to the utility at a scheduled interval.  There is a significant amount of activity in the USA focused on ensuring that utilities have guidelines about use, storage, and sharing of that information, and strong privacy protections are inherent to these activities.  As long as proper energy data privacy guidelines are enacted (as states like California are doing), consumers maintain control over their data and their privacy.

Utilities are businesses that function as regulated monopolies, and the absence of choice in who provides electricity may translate into a sense of a lack of control for many consumers.  A lack of control contributes to a lack of trust – monopoly status leaves utilities with weak incentives to create relationships with consumers that build trust, although they should focus serious attention on their consumer relationships.  Consumers who do not trust utilities, or feel they have no selection control in service providers may be suspicious of the technology decisions made by utilities.  Therefore, something as visible and disruptive as a smart meter, which is affixed to a dwelling wall triggers controversy that doesn’t exist for selection of pole top or padmount transformers widely deployed throughout the USA. 

And that’s the crux of smart meter concerns – they are visible symbol of a complex, technology-driven system that is not understood by consumers. Smart meters are also disruptive – they portend changes to billing plans, utility relationships, and consumer relationships with electricity. 

That is why it is vitally important for consumers to be educated about the bigger picture of Smart Grid benefits and the strong supporting role played by smart meters. They don’t just offer timely information about energy usage.  They will enable consumers to use new micro generation and storage technologies and leverage these assets with utilities.  Smart meters will help avoid investment in new generation plants and concomitant rate increases.  Smart meters will help us reduce reliance on energy sources that emit CO2. 

When it comes to the electrical grid, the contributions that smart meters play in delivering the full benefits of the Smart Grid are complex and not easily broken down into sound bites.  But knowledge is power, and understanding the real concerns about smart meters will help utilities create and deliver the best communications to secure trust and support for smart meters and the big Smart Grid picture.

1.  A Thinking of You to my electric utility, and to all the hardworking employees there who work so diligently to ensure my ongoing reliable and safe delivery of electricity in spite of an aging infrastructure.  I do appreciate the great service you provide.  However, don’t rest on your laurels.  There’s lots of work to be done to regain the hearts and minds of other ratepayers who don’t have such a positive view of you.  You might start with more education about the consumer benefits of smart meters – within your company as well as to your customers.  Not enough ratepayers know that these will help everyone manage their electricity use and help avoid the investment in new peak power purchases or equipment, thereby saving all ratepayers money and reducing CO2 emissions.
2. A Thanks for Being There greeting to California representative, Jackie Speier, who just introduced HR 654 to protect Internet users’ personal information.  Called the “Do Not Track Me Online Act of 2011”, it delivers an opt-out capability for consumers regarding the collection and sale of their online history.  This bill sets up a “do not track” feature that consumers could invoke to prevent detailed data gathering about search history.  According to a recent USA Today poll, 70% of Facebook members and 52% of Google users are either “very concerned” or “somewhat” concerned about their privacy, so, if passed, this bill would enable everyone to get a small measure of protection for some online activity.  However, the bill does not address broader privacy issues, and it does not address whether or not energy use data is a form of online data.  (As I mentioned in previous blogs, Smart Grid leaders need to clearly articulate what types of information is collected by smart meters and/or gathered by Home Energy Management System (HEMS) solutions in order to avoid consumer concerns about their energy use privacy.  So far, there’s little evidence that lawmakers or regulators are considering this new type of data in their development of online data legislation.)
3. A You’re Special sentiment to all the auto manufacturers introducing electric vehicles (EVs) to the American market.  The latest turmoils in the Middle East should serve as sobering reminders of the incredible risks the national and world economies face because of dependencies on oil.  Further amplification of that need to disentangle our economy from oil comes from today’s headlines about gas prices topping $4 a gallon this year.  There’s no amount of drilling that gets around the fact that more countries like the fast-developing economies of China and India are competing for the remaining supplies of petroleum, and these will go to the highest bidders.  Yes, we need more affordable models and rapid build-out of a charging infrastructure, but these are surmountable problems that create local jobs.  Did Henry Ford stop building cars because there were more stables than gas stations when he started his company?
4. A Don’t Stop message to the growing numbers of application developers that are entering the Smart Grid sector.  While much initial attention has been given to the HEMS market, developers should keep in mind that the entire electrical infrastructure needs upgrading, and much of it will be done with software.  From sophisticated communications capabilities to distributed intelligence for complex event processing to knowledge retention and training applications, the need for software is growing, and existing vendors, many of whom have hardware expertise, won’t be able to develop and support quality software on their own.

Like many introductions of past technologies or services, our knowledge of best practices and management lags behind the discovery of unintended consequences.   Do you recall when credit card receipts used to display the full card number?  It didn’t take long for unsavory characters to collect discarded receipts and go on spending sprees.  Credit card issuers and consumers didn’t think through the consequences of this display of information.  Many are learning the hard way today about posting information on social media sites.  There are recent news reports of insurance companies patrolling sites like Facebook to determine if claimants with back injuries just competed in marathons or completed other strenuous physical endeavors.  Doing much of the work previously done by insurance investigators, photographic evidence is voluntarily supplied with these updates.  Just like mom said, honesty is the best policy – and now we know why – you avoid the unintended consequences.                                                                                                                                                   

Many companies employ Chief Privacy Officers (CPOs) to develop and enact guidelines for the use and management of consumer data.  These companies also have documented policies for internal handling of data as part of employee training.  The four cornerstones of good privacy program development cover people, policy, process, and technology.  Privacy by Design identifies seven principles for good programs, including a proactive stance, end to end lifecycle protection, and respect for user’s privacy.  Utilities and vendors of Home Energy Management Systems (HEMS) should implement good privacy programs now.  These programs should emphasize protected handling of the minimum amounts of personally identifiable information because as far as data breaches are concerned, security professionals agree that it’s a matter of when, not if, these breaches will occur.  Privacy, like security, needs to be built into all products that monitor and/or manage energy consumption. 

Beyond the privacy concerns, there’s one other issue about energy use data that needs discussion – the topic of data use or exploitation.  Google, Facebook, and Amazon devised many profitable ways to sell or use information based on search history, purchase patterns, or like attributes.  There’s no doubt that HEMS solutions can collect vast amounts of use data about appliances and that utilities and other vendors may have authorized access to it. 

The bottom line question is:  who owns the value of that energy use data?  In the case of investor owned utilities, should regulators insist that proceeds of sales of anonymized energy use data be disbursed to ratepayers instead of shareholders?   And in the case of energy service providers, whether a utility or another vendor, there are a range of questions about how that data could be used that must be answered to avoid the mis-steps and abuses of privacy that we have seen from some social media sites.  Transparency will be critical to developing consumer confidence in Smart Grid technologies and programs, and all players planning to work with energy use data need to be aware of the responsibilities they have in building trust about that data.  Abuse or careless handling of this data could have the unintended consequences of damaging consumer support of Smart Grid projects.

The most pressing privacy challenge regarding energy consumption data is the need for education. Consumers need to understand what constitutes energy consumption data and potential privacy concerns.  Utilities and energy service providers need to learn the best practices for collection, transmission, use, and storage of energy consumption data.  Regulators and lawmakers need to consider the policies and laws that can help or hinder protection of personal and business energy consumption data.  Let’s examine a few examples that can help us ensure privacy of sensitive information and how it might be used. 

The Payment Card Industry Data Security Standard (PCI DSS) covers security management, policies, procedures, network architecture, and software design practices for merchants who store, process, or transmit credit card data.  The sponsoring industry association, the PCI Security Standards Council, offers certification courses for companies and individuals to ensure compliance competencies and auditability.  Most electric utilities are already aware of the PCI DSS policies because the vast majority of them accept credit cards for payments.  Could similar policies be applied to the transmission and storage of energy consumption data?  Certainly.  What is less certain is whether all energy data should be considered as sensitive as personal credit card data.

The ability to identify energy consumption data as belonging to you or to me is important to our discussion about privacy.  Consider a financial budgeting service like Mint.com.  Consumers voluntarily enroll with this site and share their personal financial data on bank and investment accounts in order to obtain information on how to manage their financial assets.  The site makes it very clear in their privacy policy that they may anonymize and aggregate personal information to sell to advertisers for marketing purposes or researchers studying consumer spending habits.  Your information, minus personal identifiers, has value to other businesses.  However, this company is hoping that you’ll find that the value of their free services outweighs any qualms about being the target of unwanted marketing campaigns. 

The energy consumption data that utilities can collect has high value for consumers and other parties.  Just look at grocery and drug stores, which offer voluntary enrollment programs that entice consumers to allow their purchases to be tracked through use of a card scanned for each transaction.  For the retailer, this behavioral information can be mined to develop detailed views of spending habits, analyzed to determine what store promotions would be most appealing, and sold to other firms.  Participating consumers enjoy reduced prices and special promotions – so they have received some value in exchange for reduced privacy in their spending habits.  Will we see utilities and energy service providers offering rebates on bills in exchange for our consent to allow them to analyze that information for internal use and or use by other companies?

This question may be answered at the complimentary Energy Collective webinar on Wednesday, September 8^th at 10AM Pacific time.   Join us to build your knowledge about developing the right energy use data practices and policies. 

Could the new personal energy consumption data that will be available through new Smart Grid technologies and services have the potential for malicious as well as beneficial use?  The answer is yes.  Leaving aside all discussion of security, here are my answers to the questions posed last week to help you understand the need for strong privacy protections of our personal energy consumption data:    

1. Who “owns” my personal energy consumption data?  Me.  I own it, and I give permission to service providers to have access to it.  Of course, the entity that delivers electricity must have certain data to bill customers for the total amount of energy consumed, just as electric utilities have that stewardship of that information today.
2. What rules govern its availability, storage, and disposal?  This is a murky area.  There are few policies in place today about managing access, storage, and disposal of personal energy consumption data.  There are state and federal laws about personal information, but these are typically focused on data that does not include energy use.  Therefore, we need to ensure that laws address personal energy consumption data and clearly identify ownership and authorization rights. 
3. Who makes these rules and how are they enforced?  It would be nice to have a comprehensive federal law that governs personal energy consumption data, so that state regulators, municipalities and co-ops could develop regulations that align to it.
4. What are potential commercial uses of my personal energy consumption data?  Here are a few hypothetical situations, with two caveats.  First, these examples deliberately exclude Home Energy Management Systems, which can take this data and save us money and reduce our carbon footprints.  Second, these are purely hypothetical musings.  Much like information is collected to form your credit score, in the future third party entities might collect personal energy consumption information to form a carbon footprint score or an energy score.  This information might be purchased by potential employers or landlords to determine if you will be an energy guzzler in their operations or properties.  Market research firms might analyze personal energy consumption data and extrapolate lifestyle information so they can target ads and promotions to you.  Insurance companies might develop new calculations that tie energy consumption to health or longevity. 

This may all be possible, but it should only occur with our explicit consent for our data to be used by these third parties.  If they can make a compelling case of the benefits that accrue to us for this commercial use of our data, I’ll listen.  

To learn more about information that smart meters can deliver, join me at the Metering, Billing/MDM America conference in San Diego on March 7-10.  This annual event draws innovating utilities, meter manufacturers, and thought leaders to discuss not only theory but reality in Smart Grid deployments.

For my Silicon Valley readers, don’t miss the Sustainable Silicon Valley/Santa Clara University Smart Microgrid event on February 23 to hear about this local university’s plans to take their microgrid and make it a smart microgrid.

Shout Out

If you are interested in a green career, there’s a new book, Green Careers for Dummies, by Carol McClelland, PhD that delivers an excellent education for readers into a wide range of job possibilities and how to position their education, skills, and interests into fulfilling careers – including Smart Grid careers.  I particularly liked how careers are divided into categories such as Careers in Rebuilding the Infrastructure and Providing Green Products and Services.  These categories help readers target their interests and clearly describe dynamic new career areas like the Smart Grid as well as identify example job positions and important industry and market trends.  I highly recommend it.