Protecting the Trail of Customer Data
Published: December 23, 2009
Balancing the risks of managing customer data privacy with the benefits of potential energy savings is like walking a tightrope. Although information security has been around for as long as utilities have, recent smart grid efforts have highlighted this issue. With the advent of smart meters, utilities have more detailed data than ever before on their customers’ usage. Enhanced load profiles and other techniques allow utilities to use these data to better target demand-response and energy-efficiency programs and to provide feedback for customers to help them control their energy costs and consumption.
The prospective benefits of having all this data—both for customers and for utilities—are significant, but there is a risk that the utility may be implicated in an unintended breach of privacy, which can lead to a loss of customer trust. The backlash could be ugly. Compounding this concern, smart meters and the utilities that are installing them are already experiencing resistance. Some customers are seeing higher bills after smart meter installation even though they were told that a smart grid with smart meters would ultimately help consumers save money. (One theory is that smart meters are more accurate than the slower-reading rotary dial meters they are replacing.)
How will your customers respond to the fact that their utility knows when they are at home, on vacation, in the shower, or cooking dinner? In the interest of saving energy, consumers may be at ease with sharing those data. However, in addition to concerns about data security, there are important legal questions related to who owns the data and who should have access to it. Should energy data be made available to third parties such as Google PowerMeter, Microsoft Hohm, Tendril, and local governments? Even if these organizations view meter data as a strategic asset and want to use it to provide new services that could deliver energy savings, demand savings, and cost savings, in addition to lowering greenhouse gas emissions, how will customers feel about their data being shared?
In the white paper SmartPrivacy for the Smart Grid: Embedding Privacy into the Design of Electricity Conservation (PDF), Dr. Ann Cavoukian, information and privacy commissioner for Ontario, Canada, recommends creating clear utility policies and procedures that include:
- Minimizing any identifiable customer information to keep customers from being linked back to a specific address
- Using a unique identifier number that cannot be linked back to the customer without their consent
- Providing assurances to customers that their information is protected
When preparing to roll out a smart grid program, be sure to address these customer concerns. Managing customer perceptions and fears and carefully crafting communications about these issues is critical to maintaining trust. Utilities should emphasize security, control, and privacy in their smart grid communications and create policies and procedures that make this trust viable.
Groups such as the Future of Privacy Forum and Privacy by Design are helping the energy industry plan ahead. Both organizations recommend including protection of privacy guidelines in smart grid plans.
E Source is tracking the implications of having more detailed customer energy-use data than ever before and we are providing best practices for utilities to proactively address information security and privacy. We recently hosted Smart Grid Data Privacy, a web conference about information security, and you can download and listen to the archived recording. You can also find a wealth of smart grid research through the E Source Resource Center.
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About the Author
EXECUTIVE VICE PRESIDENT, E SOURCE MEMBER SERVICES
Kenneth Black, executive vice president for Member Services at E Source, has worked in the electric and gas utility industry for more than 25 years and has extensive experience in energy services, demand-side management, marketing, marketing research, and business development. Over the years, Ken has developed and launched many new products and services for utilities and energy service companies and written numerous articles and reports in his areas of expertise. Before joining E Source, he was a founding partner of Public Energy Services LLC, where he helped utilities develop and manage energy service businesses. He also worked for PECO Energy (now Exelon) and Entergy. Ken has a BA in biology and an MBA in marketing from Temple University.