News + Events
Getting Smarter About Privacy Through the Smart Grid: What Lies Ahead?
June 30, 2010
“Smart Grid,” the current buzz for electric utilities, will enhance utilities’ abilities to gather and store information about consumers and is pushing the electric utility industry to the forefront of consumer privacy regulation. Smart Grid technologies may reveal information about residential customers and their activities within their own homes. Some of the information electric utilities may soon know, and, in some instances, already know, include when their customers are home, doing their laundry, using their computers, as well as other acts.
This new source of information poses obvious privacy concerns. Various federal agencies, including the Department of Energy (DOE) and the Federal Communications Commission, have launched proceedings aimed at regulating how electric utilities can collect, report, manage, share, use, and disclose the information the Smart Grid will generate. These proceedings could affect the prospects of future privacy legislation beyond the immediate issues related to the Smart Grid.
In May, the DOE requested comments on the privacy and data security issues raised by the Smart Grid. The DOE proposes using the Fair Information Practice Principles (FIPPs) adopted by the Department of Homeland Security as a template for managing consumer data held by electric utilities. The FIPPs are a set of principles that provide a framework for data collection and management practices.
More ominously for consumers in general is that the DOE Inquiry also seeks comment on that recurring privacy question: who “owns” the data? Typically, the debate concerns whether the consumer, to whom the information relates, or the company, who collects the information, owns the personal information collected. The DOE Inquiry, however, may add a third stakeholder to the debate – the federal government. Because energy consumption data is an intricate part in formulating energy efficiency policies, some commentators have suggested that the government should “own” the energy consumption data generated by the Smart Grid.
Since the utility industry is not the only industry where cutting-edge technology creates new means to gather and generate personal information, these DOE privacy proposals may have a broader effect beyond the utility industry. The FIPPs are generally more burdensome and comprehensive than many privacy laws implemented at the state and federal level, and the DOE’s adoption of the FIPPs could signal a paradigm shift in the federal privacy landscape. Those monitoring privacy efforts should follow the DOE proceeding because the DOE considers giving the federal government an ownership right in a private company’s customer data. Other agencies could follow suit or at least parallel the DOE’s efforts.