Will the smart grid protect consumer privacy?

Computerworld - A big shot of stimulus money awarded last month is sure to accelerate the transformation of the U.S. power grid into a massive network capturing data about much of what we do inside our homes. But will we trust this new "smart" grid with our data? I think the answer to that question will depend on the first impressions we get from the privacy and security offered by our power companies. Up until now, however, it hasn't been obvious to the average consumer what those protections are.

As announced by President Obama on Oct. 27, the Department of Energy has awarded $3.4 billion in stimulus money to 100 smart-grid projects. Each project had to drum up its own matching funds, meaning the overall investment will top $6 billion. According to the department's estimates, the awards will result within three years in 18 million homes -- or 13% of all U.S. households -- getting the smart meters necessary to convert to the smart grid.

Why the government interest in this new power network? It's all about saving energy, reducing American dependence on foreign oil and securing the grid against terrorists, according to supporters. And I couldn't find any opponents, other than those opposed on principle to government-industrial subsidies.

Here's how it will probably look to you and me.

If we live in Austin, Boulder, Baltimore or one of the other cities that won an award, at some point in the near future we'll receive an invitation from our power company to allow it to install an advanced-metering infrastructure (AMI) meter at our home. The AMI will wirelessly transmit its data back to headquarters.

If we live in a rural area, this invitation may also come along with an offer to sign up for broadband-over-power-line (BPL) -- to get Internet access through our power outlets.

Next, we'll receive instructions to log in and create an account on our power company's Web site. Through our account, we'll be able to view our energy usage, outlet by outlet, in 15-minute increments. We'll also be able to see the associated rates charged for the different time periods. It won't take much review of our accounts to conclude that avoiding the peak hours of energy usage -- 3 p.m. to 8 p.m., when rates are correspondingly high -- for doing things like running a load of laundry will be money on the table for our taking.

Strategizing on when to run power-heavy activities will become especially important to owners of electric cars. Recharging an electric vehicle can consume half of a home's daily use of power. A whole neighborhood of homes recharging their cars at the same time could crash the local power grid. With a smart-grid account, however, you and I will be able to program our cars to recharge at 2 in the morning.