Privacy and the Smart Grid: A Policy-Making Case Study

Abstract

In the modernization of the United States electricity grid, the United States is moving towards the creation of a Smart Grid. The first step is the installation of Smart Meters which transmit electricity usage from the residence or the business to the utilities periodically throughout the day and provide consumers with information to alter their usage behavior. The frequent reporting of electricity usage data has triggered privacy concerns surrounding the ability of Smart Meters to reveal personal and private information about customers and their activities within their homes. These privacy concerns are significant because they may hamper the deployment of the Smart Grid, as appears to be happening in Europe. This paper presents a case study of the development of legislation to create privacy standards for the Smart Grid in California. California is leader in its deployment of Smart Grid infrastructure with over 6 million Smart Meters installed. This paper discusses the author’s experience staffing a bill (Senate Bill 837) for California Senate Majority Leader Dean Florez to mandate privacy standards for electricity usage information in California. This paper evaluates the impact of timing, legislative politics, stakeholder input, and legislative oversight. While SB 837 was not a success in creating privacy standards for the Smart Grid, the act of moving SB 837 through the Legislature presents several important lessons about the policy-making process, and the impact of legislative oversight.