How California’s Smart Grid Privacy Ruling Will Affect the Industry

The California Public Utility Commission came out with a proposed ruling (PDF) earlier this month aimed at clearing up all the questions about who owns and controls data that passes through smart meters, utility back-office platforms and customers’ in-home devices. It also sets out to define who’s responsible for all that data.

In my latest research at GigaOm Pro (subscription required), I break down the ruling’s implications for the three big California utilities it applies to — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric — as well as anyone that wants to work with them on the smart grid.

CPUC is the first major regulator to issue such sweeping guidance on how data privacy should shape the smart grid. But don’t expect the new ruling to end the arguments between privacy advocates and the startups, telcos and IT giants that want to use that data to deliver in-home energy services. That’s because some of the ruling’s new suggestions are likely to displease both sides. Indeed, CPUC’s decision opens as many questions as it answers.

Privacy advocates, like the Electronic Frontier Foundation and the Center for Democracy and Technology (PDF), demand the commission press its authority to protect utility customers’ energy data at any cost. But corporate and private interests — Google (s GOOG), Microsoft (s MSFT), Intel (s INTC), HP (s HPQ), Belkin, Honeywell (s HON), etc. — want access to customer energy data to find new ways to save energy and make money while doing so — with the customers’ permission, of course.

But when does the customer “own” the data? That’s a tricky question. Utilities in most states are considered to be custodians, rather than owners, of the energy data that comes from their customers. Still, they own the smart meters that deliver the data, and the back-office IT that calculates bills — and they’ve got to protect that data from misuse.

At the same time, CPUC is demanding California’s big three utilities figure out how to give their customers all the data they’re legally entitled to. That is, any in-home energy management technology the customer buys and installs on their own should give them ownership over the data it contains. Things get more complicated if those systems want to access utility data to save money on installing gear to collect it themselves, however, as Google’s PowerMeter home energy platform is doing for about 11,000 SDG&E customers today.

In short, there are tons of unanswered questions in CPUC’s ruling, however heroic its 140-page effort is. Expect some of the parties that have already argued in the case (Verizon (s VZ), AT&T (s T), Tendril, Control4, EnerNOC (s ENOC) and others) to weigh in on this latest document — as well as privacy and consumer advocacy groups. Check out CPUC’s website for more details, and stay tuned for some serious debate.

Image courtesy of Trinfar! via Creative Commons license.