Imagine a device that could tell an observer everything you do in your home, down to how often you eat microwave dinners, how often you wash your towels, even what brand of washer-dryer you wash them in. If you re one of millions of consumers who s had a smart meter installed as part of a nationwide push to modernize the electric grid, you don t have to imagine it you ve got one.

Smart meters typically measure energy usage in a home at 15-minute intervals. These modern meters can help utilities implement time-of-use pricing plans that encourage their customers to cut back on energy usage during times of peak demand. They can help individuals identify opportunities to conserve energy, and save on electric bills, in something much closer to real time than a monthly bill allows.

Smart meters also collect far more information than traditional meters. Austin Energy, for example, went from managing 20 terabytes of data per year in 2007 to more than 100 today, says Andres Carvallo, the utility s former chief information officer, now the chief strategy officer for Grid Net, a company that develops software for smart-grid systems. That huge increase in the volume of data being collected represents a new logistical challenge for utilities, and a new area of concern for consumer privacy advocates.

Utilities historically have not been deeply embedded in users' lives. They give us power, we pay a bill, says Jules Polonetsky, director of the Future of Privacy Forum. Technological changes will create a real intimate relationship between consumers and the utilities providing them power, Polonetsky says.

What that intimate relationship will look like what kind of data power companies will collect, how long they ll store it, and who will have access to it under what circumstances is a question currently being debated as smart-meter technology is introduced to more consumers homes. In California, for example, the state public utility commission recently released a draft ruling governing smart grid rollouts, but the ruling concluded only that utilities should have to answer a set of specific questions regarding the protection of private data.

It s in the interests of both consumers and industry to incorporate privacy protections in the new smart grid from the beginning, says Elias Quinn, who produced a report on privacy for the Colorado Public Utilities Commission. It s difficult to move forward with a smart meter rollout without first answering the key question of who owns the data the devices generate, says Jim Greer, the senior vice president for asset management and engineering at Oncor, an electric distribution and transmission company in Texas. Consumers in Texas must give specific permission to allow any third party access to their personal data, including information captured by smart meters, Greer says.

Not every state has tackled the privacy concerns raised by smart meters, however. In some states, rules regarding the protection of a consumer s billing and account information, for example, may need to be re-evaluated once that billing information reaches this new level of minute-by-minute detail, Polonetsky says. Beyond who owns the data, new privacy policies should also provide for anonymization of data whenever possible, and should address the question of how long data need to be retained, he says.

The energy industry may come to resemble the banking industry, where a certain base level of security is guaranteed, but consumers can grant specific third-party service providers access to their own data to help them track and manage it, Carvallo says. Ideally, utilities should offer consumers a variety of options with different levels of privacy protection that then come with different possibilities for tracking and managing energy consumption, he says.

As utilities increasingly move toward time-of-use pricing that differentiates between peak and off-peak usage, however, there will be a certain base level of real-time data they ll have to collect, Quinn says. Even state-by-state variation in privacy regulations could prove unwieldy if grid modernization ultimately requires more coordination between states and regions, he says.

Privacy advocates and industry professionals say that utilities have a huge education effort ahead of them in order to make sure consumers understand what kind of data the new meters collect, what it means to release that data to third parties and the conservation and savings this data makes possible. Oncor, for example, has a roving smart home that travels to state fairs, demonstrating new technologies. Staff in the demonstration home answer privacy questions as they come up, Greer says.

Consumers should also be on the lookout for materials their utility may distribute on smart grid initiatives, Polonetsky says. Increasingly the mailings, the inserts, the communications you re going to be getting, which you ve been getting for years, warrant a much closer look, he says.