Who is Responsible for Educating Consumers About Energy Data Privacy?
- October 10, 2011
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The Smart Grid presents a number of challenges to policy-makers and utilities, but perhaps none is more vexing than the question of who will educate consumers about the rewards and risks of energy consumption data that can be derived from smart meters and increasingly from products that can disaggregate electricity “signatures” to determine usage of specific devices behind a meter.
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.