A recent survey by the Smart Grid Consumer Collaborative confirms what many other research studies have concluded: Most utility customers view their incumbent provider as their trusted energy advisor — yet they are open to other entities if they seem more responsive to their needs. To maintain a leadership position, utilities must move beyond their traditional role of supplying electricity, water and gas, and become active participants in their customers’ decisions relating to environmental priorities, expenses, comfort and convenience.
Despite billions spent on modernization infrastructure, too little attention (and urgency) has been paid to delivering meaningful interfaces, price incentives and effective consumer engagement. Those gaps have left the door open to unregulated third parties that are ready to capitalize on an explosion of personal usage data. If nimble innovators can follow Uber’s strategy and respond to consumers’ energy aspirations more effectively and independently, utilities risk losing their primary status with their customers. Rather than trying to stuff the genie back into the bottle and limit access or compete outside their areas of expertise, utilities would do well to partner and collaborate with trustworthy technology companies and nonprofits — thereby sharing responsibility for maintaining the public’s trust.
When internet-based e-commerce was first introduced to the public in the mid-1990s, many consumers were initially afraid to make purchases online, wary that their credit card and other financial information could be stolen. Internet pioneers voluntarily adopted SSL (Secure Sockets Layer) compliance standards to protect themselves and others in the supply chain. Online retailers began showing icons of locks in browser windows as a visual cue to reassure consumers that any financial data submitted to that website to make a purchase would be protected and kept private. Twenty years later, e-commerce is ubiquitous because customers were provided reassurance at a critical juncture.
A CRITICAL JUNCTURE FOR CUSTOMER-AWARE ENERGY USE
Our industry has invested countless hours to develop standards and protocols to share energy usage data, so that technology and service innovators could provide compelling applications and devices. Tremendous excitement (and considerable public and private investment) has been based on the premise that, when armed with timely data and trend analysis of their energy use, consumers will voluntarily make choices to reduce or defer consumption. Through research and experience, we’ve learned that consumer willingness to modify behavior is based on their personal priorities (financial, environmental, comfort and independence) and response to meaningful incentives. This extends to personal investments in equipment and automation that fits their budgets and preferences.
Nikolas Rechtiene, Sacramento Municipal Utility District’s customer strategy project manager, sees a significant opportunity for the industry. “As automation and the Internet of Things (IoT) expand into homes and businesses, the value of energy consumption data expands along with it. This is true for both utilities and third parties, who increasingly will look to provide customers with value propositions that align utility and consumer desires. Examples could include load shape management to help reduce bills, or meeting renewable portfolio goals by simplifying the self-generation permit process.”
CONSUMER EXPECTATIONS AROUND PRIVACY
Just as they want their account and payment details to be kept secure, consumers expect their private usage data to be safeguarded. This includes whether it’s for personal feedback tools, a response to monetary incentives or for predictive analytics source data. If the customers’ personal information and behavior changes are monetized, they are more likely to be agreeable if they share in the profits either through reduced rates, rebates or credits.
Consumer Advocate Kristin Munsch, deputy director of the Citizens Utility Board of Illinois, is an active participant in the Illinois Open Data Access Framework. “We started by looking at what utilities promised in the way of AMI deployment, and how to capitalize on that. Access to their usage data seemed to be key. In many ways, the biggest risk could be if utilities make it difficult for customers to share their usage data with third parties that are delivering programs to save customers money.”
The Illinois process raised new questions for utilities, customers and commissions to consider. The framework lays out expectations for the technical aspects (what intervals are collected, how soon should customers be able to see that information and other processes). Munsch continues, “It also makes clear that this is customer data — which in turn led to some surprising discussions. If that’s true, does that mean the utility could not share usage data with a third-party contractor who is trying to address a power-quality issue or a system-connection issue and needs that information? What about designing efficiency programs or working with a research institute?”
“For customers, it is important to identify what risks we’re talking about,” Munsch said. “There is a big difference between usage data, which would be transferred over a wireless network, and personal payment data, which is web-based as with most other vendors. Utilities are very careful with personal information when customers pay utility bills the same way they bank online. Is that different than how we should treat usage data? The former is potentially very valuable to a range of folks, while the latter is very valuable but mainly to customers, the utility and distributed energy resource providers. The biggest worries are still the old-fashioned ones: customers getting into a bad deal with a third-party energy supplier, or being slammed by a supplier or cell phone provider.”
Utilities are very careful with personal information when customers pay utility bills the same way they bank online. Is that different than how we should treat usage data?
Amy Reardon, data management and reporting, Energy Division of the California Public Utility Commission (CPUC), sees data privacy as a significant issue for commercial and industrial customers. “We find some companies are worried that trade secrets will get out as to how much energy they are using. It could signal the company is going into production on a new product or is ramping production up or down.”
GOOD NEWS AND GOOD NEWS
The good news is that well-managed data sharing and protection is an achievable goal, consistent with current best practices of responsible organizations. For consumers to be able to take full advantage of sharing their energy data with authorized third parties, interests, risks and rewards need to align.
As are other regulatory bodies, the California PUC is looking for best practices to help update current guidelines for IT and standardization concerns, as well as customer and utility authorization. A data access stakeholder group, the Energy Data Access Committee (EDAC), was formed in 2014 to advise the CPUC about energy data access policy and practice. The EDAC consists of state energy regulators (CPUC and California Energy Commission), California’s four investor-owned utilities, local governments, universities, consumer advocates and other nonprofit organizations. The EDAC, which meets quarterly, established requirements under which researchers and government agencies may request customer usage data, while maintaining customer privacy. The effort started with demand response programs and the EDAC believes it could have broader applications. The group is working on recommendations to enable use cases for local governments seeking data for climate action planning.
There also have been national efforts by the U.S. Department of Energy Office of Electricity Delivery and Energy Reliability (DOE OE), to facilitate best practices and reassure consumers that their privacy is being protected. Green Button and Green Button Connect were early efforts that established standardized data formats and communication protocols between interval meters and third-party services and applications. Orange Button extended the approach to solar data and providers.
CLOSING THE LOOP WITH CUSTOMERS, UTILITIES AND TECHNOLOGY PROVIDERS
Recognizing that the technology landscape continues to evolve as more real-time data sensors and controls are deployed, disaggregation apps are developed, and cloud computing becomes standard practice, DOE OE in coordination with the Federal Smart Grid Task Force, facilitated a 22-month multi-stakeholder effort. DOE’s initiative brought together stakeholders from across the industry (utilities, regulatory bodies, consumer and privacy advocates, technology providers, and associations) to write a voluntary code of conduct for data privacy through a transparent and consensus-driven process that included public, open meetings and industry-led work groups.
The resulting DataGuard Energy Data Privacy Program is positioned to reassure customers that sharing energy data with responsible third parties will not compromise their privacy. When utilities, technology and service companies adopt this voluntary code of conduct, then advocates and regulators can be confident that customer usage data is carefully and reasonably protected. The guidelines are intended as a baseline so each jurisdiction can establish incentives and constraints appropriate to their local drivers and players.
1. Customer Notice and Awareness
Customers should be aware of data collection and privacy policies, as well as choices and responsibilities.
2. Customer Choice and Consent
Customers should be able to control access to their data.
3. Customer Data Access
Customers should be able to access their data in a standard, convenient and timely manner.
4. Data Integrity and Security
Customer data should be as accurate as reasonably possible and secured against unauthorized access.
5. Self-Enforcement Management and Redress
Customer data practices should be reviewed and updated on a regular basis.
BENEFIT OF CONSUMER AWARENESS
A key element of the DataGuard program is the logo mark , which can be used to reassure consumers on websites, mobile apps, data consent forms, packaging and marketing materials that their utilities, service providers and developers of purchased applications and devices have agreed to make privacy concerns a priority. Like the lock on the now ubiquitous e-commerce sites, a simple visual cue lets customers know that they are dealing with responsible and trustworthy organizations — without having to research standards or read the fine print on privacy policies.
Good actors are already doing the right things — why not make it easy for consumers to continue to see utilities as their primary, trusted energy advisor, helping them select goods and services from reliable partners?