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Smart Grid Technology and Privacy: Where to Look and Where to Begin
-- By GreggBadichek - 04 Nov 2015
Introduction
Smart grid technology would rely on real-time data collected from electricity consumers; this data would sync to each household’s existing internet environment, and, as "Internet of Things" architecture, would contain information similar to that sent out by the average American "smart phone" thousands of times daily.[1] The aggregation of data from several devices, combined with real time electricity usage data, creates an observable, real-time collage of all activities in a household. That data allows the grid machines to automatically measure, send, receive, and shift energy toward the most efficient allocation of resources, promoting consumer control over energy;[2] but what of consumer control over information?
Economics of the Smart Grid
Smart grids will severely reduce demand at the retail level. Utilities selling energy on a smart grid will thus need to recoup significant capital expenditure while suffering a loss in hourly power sales. Utilities will need to shift from volumetric kilowatt-per-hour sales to fixed monthly costs based on peak-period usage.[3] Peak-period demand rates will more accurately reflect the demand the user places on the system, allowing the utility a reasonable cost-recovery without increased sale volume. Consumers meanwhile can lessen their peak-demand with smart grid tech, ultimately decreasing their rates and the stress they place on the distribution system.
Decoupling volumetric sales from rate recovery and capital reinvestment will move utilities to performance and reliability-based rate recovery. A service industry focusing on reliability will analyze smart grid data to discover gaps in service and areas needing improvement. Thus, using the new software and sensor tech, utilities will collect and scrutinize consumer data with greater precision than ever before.
Current Legal Approaches
Data Control
A solution to privacy problems arising from data control would require anonymization of that data in the long-term. In other words, prohibition on storage of personally-identifying metrics that could show trends over time. That information would likely serve utilities desiring to improve their service, but would cost users privacy that they did not intend to sell. Utilities currently use volumetric data to predict trends more rudimentarily.
A legal regime would therefore either require significant disclosure to users that their information may be so retained. Currently, “internet of things” technology provides wholly ineffectual disclosures, so it is difficult to determine that smart-grid disclosures would be useful. A more successful solution might require utilities to display the precise data that it collects on a regular basis, and field consumer complaints before a fact-finding ALJ.
So long as the operative software on the smart-grid remains obscure, consumers will never be able to understand how their data is collected. As utilities are part of a regulatory compact, and this software intimately affects consumers' lives, the code should be made reviewable under government order. A greater number of reviewers will detect privacy problems and solutions more effectively than the utility alone. Thereafter legal challenges against privacy invasions will gradually create a regulatory regime.
Law Enforcement
Under current Fourth Amendment doctrine, information collected via smart meter communications and retained by utility companies lacks constitutional protection against warrantless search and seizure; placement in the hands of a Third Party essentially removes the reasonable expectation of privacy underlying that protection.[4] Law enforcement officials, of course, use utility records frequently in criminal investigations. The utility to investigators of data poured into the smart grid would dwarf that of the dumb grid.
Еhe Supreme Court in Riley v. California, 134 S. Ct. 2473 (2014), indicated that the traditional distinction between reasonable and unreasonable expectations of privacy is obsolete in the digital context, where the bulk of private data is digital, and flows to countless third parties. Legal challenges to warrantless collection of smart grid data should therefore seize upon the Court’s language. The Fourth Amendment argument, specifically, would likely focus on this data’s total representation of activities in the home—the very raison d’être of the Fourth Amendment.
The Future
Current legal approaches are insufficient. It is a categorical error to imagine the smart grid as an unremarkable element of the "Internet of Things." The smart grid does not merely offer convenience in exchange for data. Ubiquitous dumb infrastructure on which most rely is ripe for smart reformatting, and the lack of wide-scale distributed renewable energy in the near future mean that centralized grid(s) featuring incentives such as smart metering, in conjunction with somewhat limited distributed energy generation, will appear soon.[5] Consumers will not have a say in that. Yet the legal regimes now chasing electron flows are not designed to facilitate user privacy. We must ask whether the end points, consumer homes, will serve the consumer. Serving the consumer requires consumer discretion in regards to how software absorbs and transmits their information. But this market is not like Facebook: on the one hand, providers must be able to improve the smart-grid, particularly in early stages; on the other hand, consumers cannot “opt out” of smart grid use if their service area-utility uses that technology.
Rate-return mechanisms and data-driven, consumer-owned energy routers as smart as the grid would put us on the right path. Volumetric pricing creates cost distortions, where utilities are encouraged to increase electricity sales and use consumer data to that end. An alternative is rate return based on peak-load, aggregate demand monthly, and implementation data-driven, consumer-owned energy routing machines that maintain data in the home. Consumer data could therefore serve distributed generation goals and net metering, without necessarily flowing to others on the grid. These simple steps would reveal no more user data than does the current dumb-grid regime.
[1] The Smart Grid and Privacy, Electronic Information Privacy Center. https://epic.org/privacy/smartgrid/smartgrid.html
[2] What is the Smart Grid? U.S. Department of Energy. https://www.smartgrid.gov/the_smart_grid/smart_grid.html
[3] The Future of the Electric Grid: An Interdisciplinary MIT Study, 2011 at pp. 191–92. https://mitei.mit.edu/publications/reports-studies/future-electric-grid
[4] See Maryland v. Smith, 442 U.S. 735 (finding no expectation of privacy in phone records “voluntarily conveyed” to a telephone company or utility records “voluntarily conveyed” to a utility company).
[5] The smart grid can be implemented with current technology, but certain endpoint features, such as wide-scale distributed generation and storage of intermittently generated renewably-sourced energy, remain in the research and development phase. |
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