Few Americans know who Dr. Ann Cavoukian is — but in Canada and Europe she’s famous as Canada’s official privacy commissioner.

Last week, over lunch at Distributech (a leading annual smart grid event), Cavoukian explained privacy law to me. In turn, I explained the smart grid and smart meters to her — including how eMeter’s EnergyIP software platform protects consumer data privacy.

Here’s what I learned from her…

Cavoukian’s job is to make sure the Canadian government adequately protects consumer privacy. Her duties include:

• Reviewing government decisions and practices that concern data access and privacy.
• Researching access and privacy issues.
• Providing comments and advice on proposed government legislation and programs.
• Educating the public on data access, privacy, and personal health information laws and related issues.

She notes that the US almost had privacy commissioners. However, that provision got left out of legislation passed in the 1970s. Instead, the Federal Trade Commission (FTC) generally fulfills this role — although the FTC has been silent so far regarding smart meter data.

Cavoukian said she discovered smart meters last year and is fascinated by them. More importantly, she brings a simple and pragmatic approach to smart meter data privacy. It’s actually an international standard now: Privacy by Design, adopted Oct. 29, 2010, by the Annual Conference of Data Protection and Privacy Commissioners in Israel.

This concept is incredibly simple: To ensure privacy (and make it easy and cost effective), include it in your initial system design.

This is rather like building a house to withstand earthquakes: it’s easy to throw some more rebar into the foundation before you pour the foundation — but reinforcement gets difficult and expensive after the house is built.

Cavoukian has updated this standard to apply directly to smart grid. She set forth seven principles for smart grid systems:

1. Plan for privacy from the very beginning. Privacy principles should be part of the smart grid’s overall project governance framework, and privacy requirements should be included in system designs.

2. Make privacy the default. In smart grid systems, consumers should never have to take action to ensure their privacy.

3. Systems and practices. Privacy must be a core functionality in the design and architecture of how the smart grid operates — an essential design feature.

4. Avoid goal conflicts. Avoid any unnecessary tradeoffs between privacy and legitimate objectives of smart grid projects.

5. Comprehensiveness. Smart grid systems must build in privacy end-to-end, throughout the entire life cycle of any personal information collected.

6. Transparency and accountability. How the smart grid works, and how consumer data is collected and used, must be visible and transparent to consumers.

7. Respect. Privacy is a feature, not a bug. Smart grid systems must be designed with respect for consumer privacy as a core foundational requirement.

Peter Drucker wrote: “The best way to predict the future is to create it.” But creating the future means determining the future.

As an industry, if we are out front of regulators and adopt privacy principles based on sound international standards, we are less likely to face new and potentially burdensome regulations. At the same time, we’ll achieve our shared goal of ensuring consumer data privacy.