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Computerworld - The rollout of smart grid technologies into U.S. homes raises several data privacy issues lawmakers need to recognize and address, a new U.S. Department of Energy report (download PDF) cautions.

The concerns over privacy are related to the collection and use of energy consumption data gathered from homes in which the technologies are going to be installed over the next several years, the department report noted.

"Consumer-specific energy usage data has enormous potential to enable utilities or other third-party service providers to help consumers significantly reduce energy consumption," the Department of Energy noted.

However, it said that "because such data can also disclose fairly detailed information about the behavior and activities of a particular household," controls need to be implemented for ensuring the data is collected, used and shared in line with privacy expectations.

A smart grid basically uses digital technology to transmit, distribute and deliver power to consumers in a more reliable and efficient manner than traditional electricity systems.

A key component of such a grid is smart-metering technology, which is used for collecting energy consumption data from homes and transmitting it back to power distributors. Data from these devices will be used by utilities for billing purposes, to manage their networks and calculate demand better.

The technology also is designed to let consumers view their energy usage patterns in near-real time and to help them make decisions to better manage that usage and associated costs.

Future generation smart meters will allow consumers to identify the energy consumption of individual appliances within their homes to help them weed out costly energy usage habits.

The smart-meter data that enables this kind of energy management can also provide a detailed profile of the behavior and activities of a particular household, the report noted. The ability to tie that data to an individual or a household makes the data especially sensitive, the department said.

One of the biggest issues that needs to be resolved is the manner in which third parties should be allowed access to consumer energy usage data, the department said. While that data can be very sensitive, it can also help companies provide people with innovative new energy management products and services. In some cases, it can be used to deliver highly targeted marketing messages, the report noted.

However, it should be the consumer who decides whether and for what purposes a third party is allowed to access or receive usage data, the DOE said. Consumers need to have access to their usage data and should be allowed to make informed choices about allowing third-party access to their information.

Polices need to be in place to ensure that utilities do not share consumer energy usage data with third parties without the consumer's authorization. Third-party requests for user authorizations would need to clearly spell out the type of data being sought, the reasons it is being sought and whether it will be used for targeted advertising purposes.

Third parties that are authorized to access consumer data will need to ensure the privacy, integrity and security of the data and use it only for the purposes for which they were authorized.

Consumer acceptance of smart grids "depends upon the development of legal and regulatory regimes that respect consumer privacy, promote consumer access to and choice regarding third-party use of their energy data," the report said.

Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at  @jaivijayan, or subscribe to Jaikumar's RSS feed . His e-mail address is jvijayan@computerworld.com.

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