Enabling smart grid technology has been touted as an important step to improving the United States’ energy grid. “Smart grid” systems use computer-based remote control and automation to improve energy efficiency for both utilities and customers.[1] Smart grid technology allows consumers to view the cost of energy throughout the day, and use energy when prices are down at off-peak times, thereby lowering costs and increasing efficiency. Other benefits of using smart grid technology include enhanced cyber-security, enabling renewable, intermittent sources of energy greater access to the grid, and integrating electric vehicles.[2] Although smart grid technology offers many benefits, there are some problematic issues that need to be dealt with in order to successfully deploy the technology throughout the United States in order to modernize the grid. Two pressing issues are cyber-security and privacy concerns stemming from the use of smart grid technology.

First, with the increased use of computers to run the electricity grid come increased risks of cyber attacks that could have crippling effects on the economy and basic services within the United States.[3] Linking the crucial transmission system to the Internet makes it a valuable –and vulnerable – target. While it is encouraging that the Department of Energy is taking steps to develop technology to detect cyber-security vulnerabilities in smart grid components,[4] it does make one wonder what steps are being taken to protect smart grid components that are already in operation in both industrial and residential areas. The data that smart meters, a component of the smart grid, capture and convey information from homes or businesses to the grid could also be valuable to hackers, as the information can be resold to marketers.

Second, privacy concerns have been raised by individuals and communities with regard to smart grid technology in residential homes. More specifically, smart meters, which are electrical devices that record the consumption of energy in the home and communicate that information back to the utility, have been a cause of concern. Smart meters typically report information back to the utility in fifteen minute intervals; this helps the utility and consumer use energy when the costs are the lowest.[5] Smart meters collect far more information than traditional meters, and it is the use, storage, and protection of this data by utilities that have raised privacy concerns. Individual states have taken a look at the problems, and utilities have also made an effort to educate their consumers about smart meters. State utility commissions need to lead in setting privacy standard minimums for utilities within their jurisdiction. If utilities want to avoid public resentment and have greater success with implementing smart grid technology, they should work to educate citizens about the role of smart meters within the smart grid, and about their privacy policies. Smart grid technology offers many benefits; addressing the cyber-security and privacy concerns surrounding the implementation and use of the technology will enable a smoother transition throughout the United States.