Data Privacy:Smart Grid Inhibitor or Propeller

I recently moderated a session on data privacy at GridWise Global Forum 2010 in Washington D.C. Until I was asked to moderate the session, I hadn’t thought much about the topic. I wouldn’t have a problem with my utility collecting and sharing information about my energy usage patterns, and I didn’t think anyone else would either. I discovered, however, that data privacy is an issue and will be a bigger issue when utilities begin collecting customers’ usage information hourly or even more frequently.

Usage data can be turned into insight and knowledge and it’s a key ingredient for smart grid success. Many in the industry believe that for smart grid to reach its true potential, customer data will need to be shared with entrepreneurs and creative minds so they can create valuable consumer applications that are unimaginable today. Already, several third party companies have expressed interest in obtaining consumer data and connecting directly with electricity consumers.

Usage data analysis can reveal a lot about consumers’ habits and lifestyles, which concerns some people. My bank knows a lot about my lifestyle from analyzing the purchases I make with my debit card. I’ve never provided my personal information to Target, but because I use my debit card to make purchases, the company knows my name and address. It tracks my shopping habits and uses this information to create personalized coupons that it mails to my house. My credit card company knows my buying habits well too. A few months ago someone used my credit card account number to purchase items through the Internet. Within hours of the first purchase, a fraud specialist from the bank that issued my card called my home, discussed the charges with me and, when I verified they weren’t mine, cancelled the account number and began the process of issuing me a new card. I appreciate the value-added service both Target and my credit card issuer provide. Although I could say they are intruding on my privacy, I think the offerings are worth the risks of sharing my data. It’s something I must live with if I want to enjoy the conveniences my debit and credit cards provide.

I’m not sure if I’m the norm or the exception, but I know that not everyone is O.K. with sharing their information. One of the panelists who spoke during the session I moderated represented a Washington D.C. think tank that strives to protect customer data and ensure that only the least amount of data needed for a specific customer benefit or service is collected. The panelist said data should be used only for the purpose of the collection and then discarded. Another panelist had a different view and said data should be treated as a consumer feature that can be used in robust ways without creating privacy concerns. Some panelists thought customers own their data and utilities are the custodians of that data, while others thought both customers and utilities own the data. All agreed that issues regarding smart grid and data privacy are complex and utilities must thoroughly evaluate how they are going to protect, use and share data.

If utilities, third parties or both can offer products and services valuable to customers, like Target and my credit card issuer provide me, perhaps those customers will be willing to share their usage data. One panelist suggested that utilities work hard to build trust with their customers through transparency. I think her suggestion has merit and could go a long way in persuading customers to share their data. Utilities aren’t the first to face data privacy issues. Other industries have successfully tackled them. Utilities may want to take lessons from companies that have gone before.

Editor in chief TERESA HANSEN

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