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.

The proposed privacy rules are based on the Fair Information Practice (FIP) Principles, which originated in 1973 and have subsequently become the basis of many privacy laws in the USA and many other countries.  Descriptions of these principles and additional information about data privacy can be found at the Organisation for Economic Cooperation and Development (OECD) website.

The CPUC assessed how the FIP principles map to provisions in the Public Utility Code and a California law passed in 2010 – SB1376 – that specifically addressed energy use data.  Analysis determined that there is clear alignment with five principles – Transparency, Individual Participation, Purpose Specification, Use Limitation and Data Security.  The principles that did not have direct linkages are still considered to be “consistent with California law and policy objectives”.

As part of this proposed decision, the California IOUs must deliver pricing, usage and cost data to residential customers, including bill-to-date, bill forecast data, projected month-end tiered rate, a rate calculator, and notifications to customers as they cross rate tiers.  The IOUs must also improve customer access to wholesale electricity prices.  California takes another step closer to realtime pricing with the requirement that the IOUs must initiate studies within 6 months on how to provide this information to customers.  And the IOUs must start pilots that provide consumers with direct access to the information in smart meters and support for HAN-enabled devices.  These are all exciting developments to accelerate new service offerings that help consumers manage their energy consumption and demonstrate the value of the ongoing investments in smart meters and other Smart Grid technologies. 

The decision also responded to questions about the jurisdiction of the CPUC over data created by smart meters and those obtaining access to this data through utilities.  Regardless of how the data is obtained – from smart meters or from third party devices, the CPUC stated it will ensure equal regulatory treatment for third parties who acquire usage data from the utility via a smart meter or through an internet-connected device.  However, it ducked the question about whether or not it has the authority to regulate either the customer or other entities that acquire any energy usage data that bypasses the utility.  A separate phase of this proceeding will address whether or not these rules apply to gas corporations, community choice aggregators, energy service providers, and other electric utilities outside of the IOUs. 

The full Commission has to act on this proposal, and has the options to enact some or all of it; modify some or all of it; or ignore it and prepare its own decision.   Comments may be filed on this proposed decision, and I’m sure we’ll see a number of parties offering reactions. 

These data privacy policies are crucial to help deliver promised Smart Grid benefits to California consumers, and should be implemented as soon as possible.  To avoid confusion on the part of consumers, the same privacy policies and practices should be extended to all parties that could gain consumer-authorized access to that energy use data, regardless of whether it is obtained from the utility or from another source. 

Second, there are no quick fix solutions to bridge gaps between perception and realistic risks.  It will take time to bridge this communications gap in the form of trust-building actions as well as significant shifts in utility and regulatory cultures.

If utilities and policy makers do not seriously engage in risk communications (which is a very different practice from crisis communications) there is real danger in solidifying public perceptions that make it difficult, if not impossible, to deploy the Smart Grid solutions needed to improve our energy security and grid reliability and reduce Greenhouse Gas (GHG) emissions.   In northern California, public opinion is already building that smart meter benefits accrue to utilities, while the risks are borne by ratepayers.    It’s not true, and public perception doesn’t have to trend this way.

Humans develop their perceptions of risk through a number of factors, including control, choice, source of risk (human-made or natural), risk/benefit tradeoffs, trust, and awareness.   For instance, smart meters are man-made sources of radiation – although in exposure amounts much lower than those produced by mobile phones, baby monitors, and other wireless devices.  Those devices, however, have immediate benefits to people, so the risks are discounted.  Our sun is a source of naturally-occurring radiation, and skin cancer kills over 8,700 Americans each year.  But citing statistics about the number of cancer deaths each year from the sun won’t change the false perception that smart meters are far worse for their health than spending a day outdoors without sun protection.  Education about the benefits of smart meters (and the risks of not deploying them) are needed to change perceptions.

Choice and trust are two hot button issues for smart meters.  Some objections have focused on the way in which smart meters have been deployed – people weren’t informed about smart meters, and therefore weren’t asked for permission to install.  The feeling of having no choice just riles up people, particularly if they don’t trust the actions of their local utility.  The newness of smart meters also makes the technology suspect to some population segments, especially if they subscribe to the opinion that “if it ain’t broke, don’t fix it.”  This group lacks the knowledge of the problems in the existing electrical grid, and who can blame them?   Utilities and regulators have done a fine job of engineering and managing a reliable electrical infrastructure that we take for granted.   

So how do we solve this communications gap?  We start by having a conversation about the electrical grid, the choices in energy sources, and the solutions that focus on energy security, improved grid reliability, and reduced GHGs.  People need to know the true financial and economic costs of power outages, and how different Smart Grid technologies reduce overall outage time and increase reliability metrics.  In other words, what are the risks of not implementing these solutions.  The same dialog needs to occur around smart meters.  Smart meters help consumers manage electricity use through automated and manually controlled changes in consumption, particularly during periods of peak electricity use.  Smart meters make it possible to avoid investment in new fossil fuel sources of generation for peak demand, and that reduces GHG emissions.  What are the risks of not using smart meters?  Increased construction of peak power plants using natural gas which results in increased GHGs and most likely rate hikes to cover the costs of construction and operation of these minimally used plants.  If we take no actions at all, we could have rolling blackouts.

Risk communication introduces messaging that has been absent so far and helps close the communications gap between utilities and their consumer segments.  For more discussion about how the Smart Grid impacts interactions between utilities and consumers, join me at this webinar on March 30 titled The Smart Grid and the Customer Experience.  I’ll be moderating a panel discussion with industry experts to learn more about tools and tactics for utilities to build support for Smart Grid initiatives across all consumer constituencies.

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.

The relationship of electricity and water is particularly intertwined – it takes electricity to move and treat water, and water is quite often used to make electricity.  For instance, the state of California moves a great deal of water from the northern part of the state to the south.  Transporting one acre-foot of water – the typical amount consumed by two families of four in a year – requires 3000 kWh per year.  One acre-foot of water (the amount of water covering 1 acre to a depth of 1 foot) equals 326,000 gallons and weighs 2.7 million pounds.  The California Energy Commission (CEC) figures that 20% of the state’s electricity and 30% of its natural gas consumption are dedicated to water transport or treatment.  A five minute faucet flow uses approximately the same energy as letting an incandescent 60-watt light bulb burn for 14 hours. 

There is a great deal of attention given to the aging electrical grid infrastructure, and with good reason.  The current electrical grid has reduced reliability and transmission losses that cost the economy dearly.  We need to fund massive investment in the water infrastructure for similar reasons.  The water systems in many cities and municipalities in the USA are characterized by aging water pipes that leak and are at risk for full collapse.  The waste of potable water through this unreliable infrastructure cannot be sustained for much longer – especially in high growth regions where current water resources are not sufficient for continued consumption rates. 

The water infrastructure needs basic upgrading to stop the leaks, but it also needs sophisticated sensors to track and measure water use.  Just like we use smart meters to provide much more detailed and instantaneous information about electricity use, we need better feedback mechanisms that communicate and analyze water use.  Information leads to awareness and knowledge, and efficient use And that’s the crux of another problem.  We can add clean renewable sources of electricity to the grid in the form of solar, wind, and geothermal production to accommodate growing populations.  We can’t make more water – we can only use and reuse the water that is on the planet.

According to the Environmental Protection Agency’s WaterSense site, reducing water use has definite positive impacts on the environment and economy.  Intelligent use of water lets us reduce the need for investments in new infrastructure and reduces the strain on the current, aging infrastructure.  We talk about energy efficiency as the low hanging fruit in Smart Grid discussions, and we need to view water efficiency in the same light, and add intelligent devices and more communications capabilities to optimize this infrastructure as we are already doing for the electrical Smart Grid.

A few weeks ago I had the opportunity to discuss, well, no, that’s the wrong verb to describe the scenario.  I had the chance to bow on bended knee to humbly suggest to a representative of my local utility that it could improve its messaging about the benefits of smart meters and Smart Grid technologies in general, and target messaging to women in particular.  The response, delivered in the chilliest of tones was that since the utility had a woman at the head of the marketing effort, that demographic was more than amply covered.  No, sorry, it’s not covered.  Not even close.       

It is employee attitudes like this that will kill Smart Grid support, which is needed at both the taxpayer and ratepayer levels.  It is employee attitudes like this that have utility CEOs despairing of successfully effecting change within their own organizations*.   It is attitudes like this that torpedo any possibility of a utility being the trusted advisor to help consumers manage significant changes in their relationships with energy.  And the saddest realization of all is that while consumers overwhelmingly expect utilities to offer advice about energy consumption, utilities like the major IOU (Investor Owned Utility) in my area are serving up plenty of material for future business school courses about how to squander trust in utilities through a lack of interest in ratepayer communications.    

There are smart utilities out there that have successfully enlightened their customers about smart meters and Smart Grid benefits, and it would be fantastic if all utilities actively shared successes and failures to facilitate the development of practical advice.  The smart utilities understand that today’s ratepayer relationship may migrate to a customer relationship in the future, and that customers will have choices about energy suppliers.  These same utilities also understand that sustaining and growing trust relationships will help engage consumers to be enthusiastic participants in residential demand response programs and energy efficiency programs. 

So when you read the definition of the Smart Grid in the Smart Grid Dictionary, the point about bi-directional communications is more than an evolutionary change in a network, for some utilities, it’s a revolutionary change in their behaviors.  You may not always like what you hear from your ratepayers, but start listening now and building rapport to deliver the complex messages about the Smart Grid and the benefits to consumers.  And Smart Grid solution vendors need to remember that the Smart Grid is more than just wealth creation for them.  It won’t happen without value creation for consumers. 

To all the hard-working, dedicated, and insightful PG&E employees who understand the importance of enlightening consumers about Smart Grid initiatives and are working to do that, thank you from the bottom of my heart.  I support your efforts, and I am sorry that you have to deal with colleagues who just don’t get the fact that Smart Grid success is contingent on ratepayer and taxpayer support.  Maybe if you post “It’s the Consumer, Stupid” signs in the office, the message will sink in. 

*IBM global study of utility CEOs:  70% anticipated turbulent change within their organizations about Smart Grid, and from one year to the next reported a 19% drop in their expected success in managing that change.

What does this have to do with smart meters?  Everything.  NBC didn’t just broadcast the Olympics, they promoted the schedule of events to build interest and excitement about these games.   Newspapers and web sites also identified the dates and times and provided those “human interest” angles in stories.  If I had to work to get the information about the dates and times the US/Canada games were playing, well, I probably would have missed two great games.  But NBC knew that to get its’ message to the widest possible audience, it had to repeat the game schedule (multiple times), tell me where to find more information (multiple times), and continue to advertise the game right up to the moment the puck hit the ice.

Those of us in the Smart Grid business spend a considerable amount of time thinking, talking, and prognosticating about utilities, new technologies, the changing relationship that consumers will have with electricity.  We understand the benefits, the motivators, and the complex, phased deployments of smart meters.  However, the vast majority of the American population doesn’t know, and doesn’t care about anything to do with the Smart Grid.  There are too many other things going on in their lives to pay attention to it. 

Their attention will shift to smart meters only when they get that utility bill insert or letter that tells them they are going to get one soon.  At that point in time, utilities have the opportunity to really educate their residential ratepayers about the benefits that smart meters will deliver.  Some utilities deliver a reasonable amount of education even before this interaction opportunity.  However, many do not, to the collective detriment of future Smart Grid rollouts. 

Now imagine if utilities acted more like NBC competing for consumer attention.  The messages have to be repeated multiple times using different communication channels and social media to get to the demographic groups that are least likely to pay attention to Smart Grid topics.  To educate ratepayers about smart meters, rather than just sending a billing insert, they would reach out to communities and deliver educational talks about smart meters and their ties to energy efficiency and conservation.   Utilities would create tools that offer interactive discussion of smart meters, the new information that consumers can obtain from them, and some examples of how other ratepayers have learned to manage their energy usage to lower their bills.  Add a plan to educate utility resources that interact with the public, and you have the start of a Consumer Enlightenment Model in action. 

Utilities need to understand that the mission to keep the lights on is not enough these days.  The safety and reliability mission must also include education about the consumer benefits of smart meters and other Smart Grid technologies.   The focus on the consumer is a real game-changer, and it is critical to the success of Smart Grid rollouts.

The Metering, Billing/MDM America conference begins next week in San Diego.  The latest technologies will be here, but I’ll be seeking interesting discussions about how utilities and their vendors will communicate the value of smart meters to consumers.

The National Institute of Standards and Technology (NIST) is diligently working on Smart Grid standards with a focus on interoperability and security.  There is a two-day workshop going on right now between NIST and vendors of Smart Grid solutions to develop these standards.    

Some may argue that proprietary solutions are inherently more secure than open solutions. Unfortunately, proprietary systems are just that more vulnerable to any threat.  Let’s use an example from biology.  Which organism is the stronger – the one that is out in the environment, exposed to various germs that improve its immune system and ability to combat infections, or the one that lives in a bubble and is prey to the first biotic threat because its immune system has no defense experience?  We all know the answer to that question. 

Software must be open and interoperable, or else as consumers we will all pay the price in higher utility costs, more expensive solutions, and less reliable energy networks.  It must also be secure.  Security has become a hot button issue, as noted at the recent Black Hat conference, where 2 sessions identified vulnerabilities in smart meters and network configurations and 1 session focused on weaknesses in Zigbee, a wireless networking specification favored for Home Area Networks (HANs).    

Security concerns cover everything from physical access to a meter all the way to the sophisticated types of attacks perpetrated on Internet-connected sites and networks .  Let’s face it, anything can be vulnerable, so it’s a matter of reducing the losses suffered at any point of attack.  Our centralized grid worked very well, but it is the wrong overall network architecture for the bi-directional flow of electricity and information that is the essence of the Smart Grid.  A distributed architecture – one that accommodates distributed generation – minimizes the security risks by spreading generation, transmission, and distribution functions – even down to microgrid proportions.

What are some of the other common software characteristics for Smart Grid solutions in addition to being open and secure?  It should be scalable.  If it is meter software, it should work from hundreds of meters up to millions of meters.  If it is a utility billing or enterprise resource planning type of solution, it has to manage large amounts of data, and filter the meaningful data for that utility’s operations. 

Smart Grid software also has to be flexible with regards to latency of data.  Some applications will require real-time data, while others can take data at times of least network traffic to avoid congestion situations.  For example, the sensors that monitor transmission conditions for lines or equipment need real-time communications back to operations centers.  Electricity usage information from my meter may not need real-time communication capabilities, but might need to be sent more frequently than once a month. 

Smart Grid software solutions also need to incorporate Web design principles where appropriate to offer the most intuitive user portals for sharing information and managing distributed generation arrangements with utilities.    Many of these characteristics will be covered at the upcoming Green Software Unconference on August 19^th in Mountain View, CA.  I hope to see you there!

It’s a tough job – and the Commissioners are asking good questions such as “What should they do to encourage utilities to deploy Smart Grid solutions in absence of firm standards for interoperability and security?”  “What are the benefits that new technologies bring to consumers, and what are the costs to consumers?”  How do they prioritize all the many efforts that can be deployed in the Smart Grid arena to maximize beneficial impacts?  Here are three topics that are getting lots of time in their sessions. 

Smart meters – interoperability

Everyone is concerned about standards for interoperability for meters – ensuring that meters from different manufacturers deliver common data that can be managed by Home Energy Management Systems (HEMS).  Consider the implications of interoperability decisions.  The right decisions mean that consumers get more information and control of their energy consumption at the right price points.  The wrong decisions can mean increased consumer costs for energy and services that are not as information-rich as they could be.  No commission wants to structure regulatory policies that influence utility choices of technologies that are proprietary and unable to connect to the larger regional grid.  Commissioners are careful to want to avoid picking winners and losers in technology solutions, but understand that they need to help utilities make smart decisions that reflect not only the regional interests but national grid interests as well. 

Smart Grid – security

Critical infrastructure – ranging from transmission lines and distribution substations to the internal computer networks and software that manages customer information and billing – is the focus of many discussions about secure protection.  As the Smart Grid will use more networked applications for demand response and energy efficiency programs as well as more automation and optimization of transmission and distribution systems on a greater interconnected scale, it is vitally important that networks are secure and architected to provide layers of authorized access to private virtual networks.  There are a lot of potential threats to overall grid reliability and stability out there, and the public utility commissions and staff are well aware that their policies can have national security implications.

Smart energy devices – registration

The Smart Grid will have smart energy devices – specifically meters and energy storage devices, such as electric vehicles or home batteries.  Some Commission staff members are talking about numbering plans for these devices, because whether these are IP addresses or phone numbers, it entails literally millions of new addresses or numbers to be allocated for their use.  In addition to fixed devices like meters, electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) will also require addresses or phone numbers to support roaming charges – so no matter where your electric car is charging or discharging, the debit or credit is posted to your utility account. 

Fascinating stuff, and there are no easy answers out there.  What are the implications for you, dear readers?  You need to be aware of the decisions that your Public Utility Commissions are making since they can impact your energy bills, and give you a bigger role  and better tools in consuming energy in smart and sustainable ways.  The Commissioners and their staffs want your educated feedback to help them ensure that your regulated utilities are effective and active participants in building the Smart Grid and giving you the energy services you want and need.