Last Monday, Jon Wellinghoff, chairman of the US Federal Energy Regulatory Commission, presented the Obama administration's vision statement for smart power grids.
He discussed regulations, markets and the environment, but unfortunately ignored security of systems and customer account information.
That was only a few months after the US Department of Energy played down reports broken in the Wall Street Journal that Chinese hackers compromised the US electricity supply grid.
Smart grids - utilities networks that respond intelligently to price signals and peak demands - are rolling out around the world over the next 20 years at a cost likely to be in the many billions of dollars. Australian power utilities and especially those in Victoria are on track to start their commercial roll-outs next month, which will continue until at least 2013.
The smart home is becoming a reality in the developed world with energy efficiency and reduction in carbon footprints riding high on the agendas of most governments. But in their rush to squeeze efficiencies from power, water and gas grids, utilities, energy regulators, governments and technology providers forgot the consumer.
To benefit from the confluence of technological advances in smart meters that are operated remotely, internet communications and smart appliances that will digitise our grids, we must first lay secure foundations for privacy of customer activity and security of the networks from attack.
Data on an individual's energy use is valuable for marketing organisations. Sure, this information should remain protected by privacy laws, but so is plenty of other personally-identifying information on the internet which seems to seep through the cracks to enter the public record.
Unsurprisingly, Google has spotted a niche and is testing PowerMeter, a secure Google gadget application to show consumers their electricity use. Google says it's being altruistic by developing this so consumers can access their personal electricity information helping them to make smarter energy choices.
But while it offers consumers useful and up-to-date information, I'm sure targeted advertising will be spammed depending on Google's analysis. This concept will spawn a thousand software developers and will probably end up being an iPhone app.
Information about energy and utility-resource use should always belong to the consumer. But just like an ISP collects download data from a subscriber for billing, utilities will keep such information for the same reason.
Smart meters should provide information to the consumer so they know who else collects and stores their usage data. Perhaps utilities should introduce their own version of the Payment Card Industry Data Security Standards (PCI DSS) to address the secure retention of customer information? Maybe they will be more diligent than organisations that are weekly caught out flouting the standard.
The key to the smart grid is the meter that is a two-way communications device with a gateway.
The problem is a lack of encryption and decent authentication so that, with some reverse-engineering, Joe Hacker can probably shut down the power to someone's home. And there may be problems with updating the meter's internal software (known as "firmware").
This affects the end-user and introduces vulnerabilities to the critical infrastructure of the grid.
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