The 2003 blackout in the northern and eastern U.S. and Canada which caused a $6 billion loss in economic revenue is one of many indicators that the current electrical grid is outdated. Not only must the grid become more reliable, it must also become more efficient, reduce its impact on the environment, incorporate alternative energy sources, allow for more consumer choices, and ensure cyber security. In effect, it must become smart. Significant investments in the billions of dollars are being made (...) to lay the infrastructure of the future Smart Grid. However, the authors argue that we must take great care not to sacrifice consumer privacy amidst an atmosphere of unbridled enthusiasm for electricity reform. Information proliferation, lax controls and insufficient oversight of this information could lead to unprecedented invasions of consumer privacy. Smart meters and smart appliances will constitute a data explosion of intimate details of daily life, and it is not yet clear who will have access to this information beyond a person’s utility provider. The authors of this paper urge the adoption of Dr. Ann Cavoukian’s conceptual model ‘SmartPrivacy’ to prevent potential invasions of privacy while ensuring full functionality of the Smart Grid. SmartPrivacy represents a broad arsenal of protections, encapsulating everything necessary to ensure that all of the personal information held by an organization is appropriately managed. These include: Privacy by Design; law, regulation and independent oversight; accountability and transparency; market forces, education and awareness; audit and control; data security; and fair information practices. Each of these elements is important, but the concept of Privacy by Design represents its sine qua non. When applying SmartPrivacy to the Smart Grid, not only will the grid be able to, for example, become increasingly resistant to attack and natural disasters—it will be able to do so while also becoming increasingly resistant to data leakage and breaches of personal information. The authors conclude that SmartPrivacy must be built into the Smart Grid during its current nascent stage, allowing for both consumer control of electricity consumption and consumer control of their personal information, which must go hand in hand. Doing so will ensure that consumer confidence and trust is gained, and that their participation in the Smart Grid contributes to the vision of creating a more efficient and environmentally friendly electrical grid, as well as one that is protective of privacy. This will result in a positive-sum outcome, where both environmental efficiency and privacy can coexist. (shrink)