How Federal Legislation Could Change Digital Energy Data

The emergence of the smart grid means that a wealth of energy data is starting to pour from the power grid. Utilities and startups want to leverage that data to deliver services to customers and make money in the process — all while protecting that data from misuse. California has made some recent steps to introduce data privacy rulings around consumer energy data, but a new Senate bill introduced last week would move these questions to a national stage.

The federal Electric Consumer Right to Know Act, or e-KNOW Act, has the support of smart grid industry advocacy group Demand Response and Smart Grid Coalition (DRSG) and member companies like Schneider Electric, Tendril and others (PDF). While the current gridlock in Congress makes passage of any bills uncertain this year, it’s likely that e-KNOW will serve as an important template for federal energy data regulations down the road.

Federal Versus State Rules

The e-KNOW Act would put a single federal agency, the Federal Energy Regulatory Commission (FERC), in charge of setting guidelines for just how the bill’s requirements are to be enforced. A bill that runs only 10 pages long can’t settle every detail, of course, and e-KNOW would give FERC up to six months to establish “minimum national standards” for states and utilities to adopt. FERC will be asked to work with the Department of Energy, the National Institute of Standards and Technology and state utility commissions to set up these rules.

This would be a major change in the way utilities are now regulated, which is mainly on a state-by-state basis. Besides California, states such as Texas, Pennsylvania and Colorado are also busy working on their own rules. No doubt smart grid industry groups like DRSG and others are eager to see how such overarching federal rules will help, or hinder, the ways they plan to do business, and how they may affect or alter the state-by-state rules they’re already looking to comply with.

The Balance of Making Data Available and Keeping it Private

Under e-KNOW, utilities will need to offer customers with smart meters access to the data from the meter itself. That in turn could provide an incentive for utilities that haven’t yet to switch on their meters’ meter-to-home networking systems. Smart grid players that can help utilities make the transition smoothly could reap those benefits by landing more utility contracts.

The bill also says that customers own their own data and can share it with third parties of their choosing. For utilities that haven’t given customers smart meters yet, the act requires an alternate route by which to share data from the utility, such as a system like Google’s PowerMeter, which delivers backhaul data from utilities to customers.

At the same time, utilities would be required to protect customers’ data security and privacy. In fact, e-KNOW appears to prioritize these requirements over data delivery, stating that any system that utilities choose “shall not interfere with or compromise the integrity, security, or privacy of the operations of a utility and the electric consumer.”

Just how utilities and smart grid vendors will both deliver data in the fastest, most technologically advanced means possible and protect that data from misuse or theft remains to be seen. Some smart grid companies are seeking to monetize customer energy data, whether by analyzing it to improve the service they deliver to customers or putting it to their own moneymaking uses. We’ll see if these business plans conflict with consumer data privacy policies to emerge from e-KNOW.

The Costs Involved

E-KNOW states that customers should be able to access their energy data “free of charge” but also would allow utilities to “recover in rates the cost of providing the information, if the cost is determined reasonable and prudent.” In other words, utilities can pass the costs on to customers via rate increases rather than up-front charges.

Some observers have noted that the costs of giving consumers their energy data could quickly overwhelm utilities, particularly when privacy protections need to be taken into account. Startups or businesses that can offer utilities a cheap yet secure technology and business model for getting this data delivered to customers will likely see a lot more acceptance with utility customers.

Question of the week

How might federal legislation on consumers’ right to know their own energy usage data change the smart grid industry.
Relevant analyst in government
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