Smart Grids, Not-So-Smart Bloggers

Cameron Scott, a self-described “claustrophobic nature-lover” and blogger on SFGate.com recently wrote an article asking “are smart grids too smart?” The smart grid is intended to revolutionize electricity transmission and consumption, much like the Internet changed communication, by allowing utilities to use real-time data from sensors and advanced meters throughout the power grid to better understand specific supply and demand requirements, spot failed or failing equipment, and better manage their resources. Consumers can receive price signals from the utility so that they know when electricity rates are higher—and save money if they choose to lower their usage either manually (e.g. using the clothes dryer in the evening) or automatically (e.g. using a “smart” appliance that adjusts energy usage automatically based on price levels). Society benefits from having a less carbon-intensive economy.

So what’s the problem? Scott argues that this “is a hit to one’s privacy” and posits that the utility will know too much about individual consumer behaviors. There are at least three things wrong with his argument. First, this is an entirely opt-in system—consumers choose whether to respond to the price signals or not. Personally, I’d prefer to have a lower electricity bill every month. Second, most energy usage data is not sensitive information. Do I really care if my utility knows I used 30 kWh one day and 40 kWh the next? Or that I use most of my energy in the evening when I am at home? My neighbors probably know the same information just by seeing that my lights are on. Third, the doomsday scenario Scott portrays where utilities can “turn household appliances on and off” is already here and not the evil conspiracy depicted here—many households have opted-in to demand s-de management programs that reduce energy usage during periods of peak power consumption, such as shutting down an A/C unit for 15 minutes during a summer afternoon. This saves consumers money and helps reduce peak power demand.

Scott extends his criticism of the use of information to save energy by claiming privacy threats exist from proposed vehicle miles travelled (VMT) taxes. VMT taxes allow government to charge drivers more fairly based on distance traveled and time of day. This means that government can use price signals to help decrease traffic congestion—a benefit for all drivers and a way of saving energy. Scott suggests VMT taxes that use GPS signals to track time of day and distance traveled are a threat to privacy and says a better alternative is just to use the odometer. But using the odometer reading alone misses half of the benefit of VMT which is that you can use it for congestion pricing.

Of course privacy controls need to be built into these systems—but they are not serious barriers. For example, for VMT you can pay at the pump for the time and mileage already traveled and then the trip data can be automatically deleted.

Unfortunately these types of headlines distract from the benefits of these types of IT-based systems that increase energy efficiency and lower costs.

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About the author

Daniel Castro is a Senior Analyst with ITIF specializing in information technology (IT) policy. His research interests include health IT, data privacy, e-commerce, e-government, electronic voting, information security and accessibility. Before joining ITIF, Mr. Castro worked as an IT analyst at the Government Accountability Office (GAO) where he audited IT security and management controls at various government agencies. He contributed to GAO reports on the state of information security at a variety of federal agencies. He has a B.S. in Foreign Service from Georgetown University and an M.S. in Information Security Technology and Management from Carnegie Mellon University.