by K.T. Weaver, SkyVision Solutions
Utility companies dismiss privacy invasion claims by replying with simplistic, misleading statements, such as, “Just like standard meters, smart meters will measure the amount of electricity you use – not how you use it.” 
In trying to find a new and simple way to explain how smart meters are in fact invading your privacy much more than traditional meters, I thought of an analogy of comparing smart meter data collection with “mining for gold.”
In fact, Ernst & Young Global Limited got me thinking about this analogy when it recently published a document  that stated:
“Smart energy meters provide ‘gateway’ to the home”
“These smart meters will ‘talk’ directly to utility companies, providing them with a gateway to a wealth of valuable data.”
“[O]nce people get used to the smart meter, they will add more and more devices and want to control them remotely from their phone or tablet — generating a gold mine of data.”
How much data does the smart meter itself generate? A company called the MaRS Discovery District has published  that:
“A smart meter that is reporting data at 15-minute intervals will generate 400 MB of data a year; extrapolating from that, a utility implementing AMI to a million customers will generate 400 TB of data a year.”
Thus, 400 Megabytes (MB) of energy usage information is potentially being collected each year per household with a smart meter. The problem is what can be done with this huge amount of data. Consider the figure below and three (3) levels of data collection:
- First, consider a business that has your contact information such as name and e-mail address. This is referred to as “surface data.” The business can randomly attempt to contact you to market some sort of product or service. That is one minor level of possible annoyance if you are not interested in getting spam e-mails.
- Second, consider a business, such as a utility company, that collects once per month energy readings for your home. This data collection is reasonably necessary for billing purposes and is referred to as “below the surface data.” Similar data would be purchase history with other companies and demographic data for where you live that reveals some level of personal detail about who you are. Not much can be done with this data although some trends can be tabulated for targeted marketing purposes.
- Third, consider the 400 MB of smart meter granular energy usage data collected from you each year combined with the other sources of information, i.e., “surface data” and “below the surface data.” We have now advanced to the level of “Big Data” where we have collected enough information to be able to analyze the “wealth of data” to draw inferences about your behaviors, sleeping and eating routines, home occupancy, and appliance usage. As stated by Ernst & Young, “Smart energy meters provide ‘gateway’ to the home.”
The above description is consistent with a POLITICO story  from January 2015, entitled, “Smart Grid Powers Up Privacy Worries” and where it was stated:
“I think the data is going to be worth a lot more than the commodity that’s being consumed to generate the data,” said Miles Keogh, director of grants and research at the National Association of Regulatory Utility Commissioners.
All sorts of inferences about people’s private lives are potentially available from detailed energy consumption data. The number of people inside a house. Daily routines. Degree of religious observance. Household appliance usage.
“Very sensitive information can be revealed about homes, and homes are the most sacred privacy environment,” said Nancy King, an Oregon State University business law and ethics academic who’s studying smart meter deployments. Access and control of that energy usage data will be key, she added. “Most consumers are just unaware about how their data feeds into the Big Data machine and are powerless to do much about it.”
The market for the kind of Big Data energy analytics that will run the smart grid will reach a billion dollars annually in the United States and Canada by 2019, predicts analysis firm Navigant Research.
But that same data could also be a gold mine for other purposes — retailers deciding where to open their next store, marketers profiling neighborhoods with an even finer tooth comb, or in ways we have yet to even think up.
Exhaustive electricity consumption data “is a holy grail, in many ways” for marketing analysts and consumer data aggregators, said Lee Tien, a senior attorney for the Electronic Frontier Foundation. “Few other types of data get inside the home the way that electrical usage data does.”
So I hope that my “mining for gold” analogy allows you to better understand how a smart utility meter “feeds into the Big Data machine,” making it possible. Once the utility company has collected that huge amount of data about you, it can be used for profit.  On occasion, law enforcement agencies will also find the information useful for surveillance purposes.
The thing is, there is no legitimate reason for a utility company to be able to collect 400 MB of energy usage data from you each year. It is not necessary for the provision of electricity or for billing purposes, so why are the utilities allowed to do it? … It is partly because too few people are objecting to the unnecessary privacy invasion. With improved awareness, hopefully the level of opposition to smart meters will increase soon.
In reality, by utility companies being able to raise rates to pay for unnecessary smart meter investments, you the consumers are actually paying the utility to invade your privacy in the first place (and then allowing the utility to further make a profit using your data). What a deal for the utility company selling an essential service which is very difficult to do without!
Source Material and References for this Article
 Selected Quotation from a Commonwealth Edison Privacy ‘Fact Sheet’.
 “Smart energy meters provide ‘gateway’ to the home,” Ernst & Young Global Limited, 2015, available at http://wp.me/a3nav9-3yt.
 “The Evolving Digital Utility: The convergence of energy and IT,” MaRS Market Insights, August 2014, available at http://wp.me/a3nav9-3yY.
 “Smart Grid Powers Up Privacy Worries” at http://www.politico.com/story/2015/01/energy-electricity-data-use-113901.html.
 NOTE: Regarding “profit,” it was mentioned in the POLITICO article that the market for the Big Data energy analytics that will run the smart grid is predicted to reach a billion dollars annually in the United States and Canada by 2019. A reference for the anticipated return on the investment globally is provided below.
A Quote from “The Soft Grid 2013-2020: Big Data & Utility Analytics for Smart Grid,” GTM Research, available at http://www.greentechmedia.com/research/report/the-soft-grid-2013:
“In terms of market adoption, GTM Research forecasts cumulative global spending on smart-grid-related analytics to top $20.6 billion between the years 2012 and 2020, with an annual spend of $3.8 billion globally in the year 2020. We estimate that for utilities deploying these technologies, the achieved return on this investment will exceed $121.8 billion globally over the same nine-year time period.”