Smart meters can generate considerable data about how consumers use energy services. But who "owns" that data? This thorny issue makes it challenging to balance the consumer's reasonable expectation of privacy with the utility's goal of providing better service while enhancing grid operations.
Next week, at European Utility Week, Larsh Johnson (Chief Technology Officer for eMeter, a Siemens business) will participate in a panel discussion exploring these issues.
"Smart metering grew out of the consumers' need to know, in order to make better choices about energy use," said Johnson. "At the same time, grid operators also have a need to know. They need visibility into the performance of their power delivery system, as well as the ability to monitor problems related to aging infrastructure and supply capacity constraints. Also, utilities need consumer data to be more proactive about helping consumers save money."
Johnson noted that many European nations are only just now getting started with smart meter rollouts, and that consumer privacy laws in the EU tend to be quite strict. This creates a paradox.
Many European consumers will be paying for smart metering through distribution charges. Also, grid operators intend smart metering to enable system-wide benefits such as integrating more renewable energy, and offering demand response programs and dynamic rate choices that enable consumers to play a more active role in grid optimization and energy efficiency programs as well as save money. However, the collection of smart meter data may be limited by privacy concerns -- in some cases requiring consumers to "opt in" to allowing the data collection. Given current consumer privacy considerations, benefits to consumers and to the grid may be limited.
The challenge for European grid operators is to educate consumers about the collective value of energy data (and thus encourage regulators to grant utilities rights to collect their data), while also protecting consumer privacy. Johnson suggests that other industries which gather and use consumer data in order to deliver and improve service could offer lessons to the European energy industry.
For example, in the Netherlands, consumers currently get to decide how often their meter gets read by the grid operator -- which could be as infrequently as once per quarter, or per year. This sharply limits the availability of energy usage data, which effectively prevents European grid operators from deploying most of the energy saving and load management applications commonly used by many U.S. utilities -- and which also enable numerous benefits of smart metering.
"That situation is akin to telling wireless providers that they can provide cell phone service to customers, but they can only collect data about the total call minutes each customer uses, not additional call data such as the time, duration or location of calls," explained Johnson. "It's hard to plan and operate a cell network without more detailed usage information. Utilities have never had customer energy data beyond total consumption, but now with smart metering they have the capability to manage their networks more efficiently while providing better customer service. However, current regulations are often constraining their ability to achieve this goal."
One key might be for European utilities to work with regulators to define how energy data can, and cannot, be used. "Energy consumers aren't just buying kilowatts; they're buying a service," said Johnson. "If you are the operator providing that service, you have a legitimate need to gather and use data directly related to providing that service. That should define a service provider's rights to consumer data."
Extending the comparison to the telecom industry, Johnson argues that telcos are strictly prohibited from selling a mobile phone user's call data to Apple to help Apple sell more iPhones. Similarly, energy consumers should know that their energy service providers are not able to use their personal information for purposes other than providing their energy service. Consumers should have sole control over which, if any, third parties are granted access to their data. However, service provider's rights to use customer usage data is a basic aspect of service agreements in other similar industries.
"In the energy industry, we need to transform discussion about energy data from "ownership" to rights-of-use and privacy," Johnson said.