Balancing Smart Grid Data and Consumer Privacy

By: Constance Douris, Contributor

Lexington Institute


Technologies on the electric grid allow for two-way communication and the transfer of data between utilities and customers. Information from the grid enables customers to decrease electricity costs and boosts the reliability of the grid infrastructure. Such information also equips third-party providers with data to create new energy-saving products and services. When electricity infrastructure is damaged as a result of a physical attack or natural disaster, data allows for quicker response times, boosting the overall security of the grid.

The two types of data collected by smart grid technologies are personally identifiable information and consumer-specific energy usage data. Personally identifiable information includes an individual’s name, address and telephone number. An example of consumer-specific energy usage data is the total electricity used at various times in a day. This kind of information, fused with unique load signatures generated by electrical appliances, could be used for legal and illegal real-time surveillance.

Methods to remove personal information from electricity usage data already exist. Solutions include aggregation, encryption and steganography. However, anonymizing data requires computational time and effort. There are also additional costs to store, process and transfer large amounts of information. How these extra expenses will be paid for must be determined.

Utilities are hesitant to share usage data even though it provides many benefits to customers, businesses and operators of the electric grid. This reluctance is due to the costs required to process and transfer such data. In addition, utilities may be at legal risk if information is improperly disclosed or if a customer’s privacy is violated. Due to these obstacles, electricity data is underutilized.

Consumer usage data is so valuable that some predict it eventually may be worth more than the distribution of electricity. Even so, over half of states in the U.S. lack policy for electricity data access. Without guidelines, customers, businesses and grid operators lack the information they need to make better decisions on the grid. In addition, personal information potentially may be shared in a manner not desired by customers.

The grid must encourage innovation and make electricity usage available to customers and businesses all while respecting consumers’ personal privacy and security. States that have implemented such policies include California, Texas, Illinois and Vermont. These actions will be analyzed and compared to inform other states of elements they could incorporate into future policies to allow customers, businesses and grid operators access to critical data.