Today the California PUC voted unanimously to adopt the world’s first comprehensive set of rules to ensure that consumers can access the detailed energy usage data gathered by their smart meter — while also protecting the privacy and security of their data.

This decision applies to the three large investor-owned utilities which serve 80% of Californians with electricity (Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison). At our last count, these three utilities had installed 8 million smart meters. By the end of 2012 they will deploy the final 3 million.

Here’s what this decision calls for…

• Web presentment. Utilities must provide via their websites the following information, updated daily: detailed energy usage, bill-to-date, month-end bill forecast, and projected month-end energy price. (Californians pay higher prices as they use more energy, progressing through up to five pricing “tiers”). This requirement is similar to what Westar Energy in Kansas will soon start providing to its SmartStar customers.
• Tier alerts. When customers move from one price tier to the next, the utilities are to provide notifications “via e-mail, text message, tweet, chat, or some other form of rapid communication.” PG&E already does this for its smart meter customers.
• Rate option calculator. Though few customers are aware of it, all residents and businesses served by California’s three largest utilities have the option of switching to a time-of-use rate. (See these residential rates for PG&E, SDG&E, SCE). The newly required calculator, which will appear on these utilities’ websites, will help consumers understand whether they would save money by switching to a time-of-use rate. This tool would use an individual customer’s data automatically from the utility.
• Real-time data. The smart meters installed by these three utilities all contain a radio that uses the ZigBee standard for transmitting data to homes and businesses. This is called the Home Area Network interface. So far this interface has not been turned on. Today’s CPUC decision requires these utilities to file plans that “include an initial phase with a rollout that enables a minimum of 5,000 HAN-enabled devices to be directly connected with smart meters, as envisioned in the decisions approving the deployment of [Advanced Metering Infrastructure] — even if full functionality and rollout to all customers awaits resolution of technology and standard issues.”
  

  How the Open Automated Data Exchange communication standard works. Click to enlarge.

• Third-party data services. Consumers will be able to authorize third parties to receive their backhauled smart meter data data directly from the utility (as opposed to data that comes directly from the meter), to support services such as energy efficiency, demand response, energy advice, and more. The three major utilities will submit to the CPUC applications with specific plans, including which standards they will use — probably the Open Automated Data Exchange (OpenADE) standard in final development by NIST’s Smart Grid Interoperability Panel and the North American Energy Standards Board. Importantly, the CPUC found: “The utilities, however, will bear no new liability for the actions of third parties which acquire information via this [mechanism].”

Furthermore, to protect consumer privacy and data security, the CPUC is exercising jurisdiction over third parties who receive data (via the backhaul mechanism) in the course of providing services to utilities, or when authorized by consumers. However, the CPUC is not exercising jurisdiction over third parties who receive energy usage data directly from a device installed at residence or business that receives data via the HAN interface.

In this decision the CPUC relied mainly on existing privacy law, using the Fair Information Practice Principles which the U.S. Department of Homeland Security developed as its privacy framework. To clarify the application of these principles, the CPUC decision includes an appendix with details of its privacy rules.

Here are the FIP principles, all of which are utilized by the CPUC:

1. Transparency
2. Individual participation
3. Purpose specification
4. Data minimization
5. Use limitation
6. Data quality and integrity
7. Security
8. Accountability and auditing

The CPUC decision — which runs to 167 pages without the five appendices — contains plenty more. CPUC Commissioner Mark J. Ferron said he hopes that “this decision will result in a more service-oriented and customer-friendly industry.”

Will it serve as a best practices model for other states and countries? Time will tell…