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Could the smart grid erode privacy rights?

January 9, 2010


While smart grid technology is still in its nascent stages, its’ important to consider the impact that detailed energy use monitoring will have on consumer privacy. The very characteristics that make metered information useful for environmental initiatives also threaten deeply-held notions of privacy.

In deployment and sophistication, smart grid technology is booming. The Federal Energy Regulatory Commission (FERC) estimates that 52 million smart meters will be installed within seven years. And as analytic tools evolve, utility companies are tracking energy usage at increasingly smaller intervals. Smart-metered information, sometimes collected at one-minute intervals, can be disaggregated to show the draw of particular appliances. This information allows consumers, utility companies, and anyone else with access to see exactly what makes up a household’s electricity demands.

A customer’s electricity usage profile, in other words, can reveal what time someone took a shower and how much TV a household watches. Such detailed information can paint a fairly accurate picture of an individual’s daily life. Further, as plug-in electric vehicles and rechargeable mobile batteries increase in use, the data collected can reveal information about activities outside the home.

The data is subject to many uses and misuses. Some uses will add convenience to consumers’ lives, allowing them to manage their energy consumption and view their load histories with a single-interface. Other uses will benefit businesses, allowing, for example, sophisticated advertising breakdowns of market penetration and usage habits. And of course, on the nefarious end, there are chances for abuse. Wrongdoers could misuse the detailed information to determine if someone is home or whether a household has an electronic security system.

The environmental advantages of smart grids are also manifest. Home efficiency monitoring can notify users when an appliance is underperforming and can pinpoint energy sinks. More sociologically, smart grids enable greater energy awareness in a time when tracking and minimalizing one’s carbon footprint are increasingly salient values.

Ultimately, smart grids pose an interconnected set of concerns that sometimes point in opposite policy directions. The collection of data must be balanced with concerns for consumer privacy. Developers and policy-makers must deploy a range of policy tools and new legislation that requires disclosure and confidentiality agreements and opt-in, opt-out regimes, in order to strike the right balance between technological innovation and privacy rights.

Savvy providers will take seriously American’s deep-seeded value of privacy and will benefit from developing smart grids in a way that is attractive to users and providers alike.

For a detailed analysis of smart grids and privacy issues, see: http://bit.ly/7jHb2C

Alex Kerr

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