Next Steps For Smart Grid

Issue Brief

Smart Grid technology is coming. Over the next few years 17 million American homes will be equipped with advanced electric meters enabling two-way digital communication between your home and your utility. It’s not a moment too soon because the current business model for electric power is a relic of the 1930s. Utilities go on contract for routine demand. They haul coal to burn at power stations or lash up nuclear reactors to supply that demand. A slightly wider base supplies surge demand up to the level of anticipated “peak” power. On hot summer afternoons, these extra sources kick in so everyone can run their air conditioners at once. Naturally, that’s expensive, but for decades utilities were set up to supply for peak demand and charge one fixed price per kilowatt hour – no matter what.

Smart Grid technology opens the door to changing all that, with benefits ranging from conservation and cost savings to making better use of wind and solar power and even setting up home stations for electric vehicles. The first benefit of Smart Grid ought to be clueing in users to off-peak demand. With a Smart Grid and a green-friendly rate schedule in place, customers will be able to monitor the electricity they use at home and work with utilities to shift their usage to off-peak timeslots. Ultimately, a more flexible grid can channel and maximize electricity from renewable sources.

Of course, as with most revolutions, there’s a potential down side. Smart Grid implementation will create a lot more consumer data. Transmission of data from the home to grid domain is a top area of concern. The energy usage of your dishwasher or your neighbor’s washing machine may not be very exciting data, but could it be vulnerable to cyber espionage, or worse? Wireless technology such as some advanced meters use is notoriously vulnerable. Utilities also may not be used to thinking about cyber security priorities such as social engineering threats. Imagine data tampering that distorts home electricity usage or slows systems and leads to service disruptions. No thanks. All the green glory of Smart Grid could tarnish in one big consumer data breach or local blackout.

Smooth implementation of Smart Grid demands data protection. This is an area where an ounce of prevention is better than a pound of cure. Smart Grid implementation can prioritize cyber security and consumer data protection up front. A key difference working in favor of Smart Grid is that since utilities are already highly regulated, expanding the provisions to meet Smart Grid needs should be straightforward. This is not like the open territory of the internet where regulation is harder to achieve.

The good news is the National Institute of Standards and Technology – who are not geeks, but some of the ultimate cyber experts – just released a draft 256-page report on preventing vulnerabilities and assuring information privacy with Smart Grid. By the time the report goes final in March of 2010, it should deliver a comprehensive, proactive set of standards so states and utilities can do Smart Grid implementation right. The NIST task force isn’t trying to impose a single standard but to ensure interoperability and to protect each domain from home to transmission grid to distribution while keeping the whole grid functioning.