DEPARTMENT OF ENERGY STAKEHOLDER INITIATIVES

Eric LightnerDirector, Federal Smart Grid Task Force

June 8, 2015

Presentation for National Association of State Utility Consumer Advocates

Advance foundational science, innovate energy technologies, and inform data-driven policies that enhance U.S. economic growth and job creation, energy security, and environmental quality, with

emphasis on implementation of the President’s Climate Action Plan to mitigate the risks of and enhance resilience against climate change.

The Office of Electricity Delivery and Energy Reliability (OE) drives electric grid modernization and resiliency in the energy infrastructure. OE leads the Department of Energy’s efforts to ensure a resilient, reliable, and flexible electricity system. OE accomplishes this mission through research, partnerships, facilitation, modeling and analytics, and emergency preparedness.

OE Mission

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OE’s mission aligns with the Department’s strategic goals:

OE’s Activities and Programs

CATALYST: OE encourages new ideas and business models through competition in prizes and challenges, open source software and data downloads, and voluntary participation in standards development activities.

“Apps for Energy” Challenge

Green Button Initiative Smart Grid Interoperability Panel/ NIST

GridWise Architecture Council

Open Source Software & Toolkits

CONVENER: OE brings together technical and policy expertise, along with a national, system-wide perspective, to facilitate a coordinated strategy to meet emerging energy challenges, and to support a secure and resilient energy system.

North American SynchroPhasor Initiative (NASPI)

Electricity Advisory Committee

State and Regional Technical Assistance

Emergency Response (ESF-12) Technical Workshops / Case Studies

Federal Smart Grid Task Force

State and Local Energy Assurance

RESEARCH SUPPORT: OE invests in cross-cutting research at national laboratories, universities, and private industry (including small business), and sponsors the transition of results to a broad set of vendors and utilities, moving innovations into useful applications.

Operations & Planning Tools

Energy Storage

Microgrids

Advanced Modeling

CyberSecurity Smart Grid Demonstrations

Distribution Optimization Outage Management Systems

Smart Grid Investment Grants

Future of the Grid Initiative

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Initiative Overview• DOE facilitated; Industry led• 2-year multi-stakeholder process• Participants: Utilities, consumer advocates, vendors,

third parties, state and federal governments• Released on January 12• High visibility & support from the Obama Administration• Transparent process with and all documents posted at

www.smartgrid.gov/privacy • Rebranded as

DataGuard|Energy Data Privacy Program

Voluntary Code of Conduct (VCC)for Smart Grid Data Privacy

For utilities and third parties providing consumer energy use services. Focuses on protecting consumers. Establishes common practices that protect the access, use, and sharing of customers’ electricity usage and related data.

For utilities and third parties providing consumer energy use services. Focuses on protecting consumers. Establishes common practices that protect the access, use, and sharing of customers’ electricity usage and related data.

Rebranded for Consumers

• Marketing theme: Protection. Knowledge. Choice.• New website under development:

www.dataguardprivacyprogram.org • Available early July

DataGuard Program

• Not a regulation. A voluntary program. • Legally enforceable by FTC under their mission to protect consumers

from deceptive and unfair practices.• Adopting companies expected to publicly commit to conformance with

and observance of the VCC concepts and principles. • High level principles that allows maximum flexibility in implementation

• Application of the principles and concepts is entirely up to the adopting entity.

• Adopted in its entirety, but limited exceptions allowed (due to laws, regulatory guidance, governing documents) if clearly noted.

• Frame customer data policies and practices that balance relevant needs/goals:

Encourage innovation by making data available to the market Protect customer privacy and confidentiality Provide customers access to their own data Respect existing laws, regulations, governance

policies, and business environments

Elements of the Code

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Notice & Awareness: How the customer learns what he or she needs to know to exercise informed choice.

Choice & Consent: Describes requirements for processes that allow the customer to control access to his or her data for Secondary Purposes

Customer Data Access: Describes requirements for procedures that allow customers to access their data, identify possible inaccuracies, and request they be corrected.

Data Integrity & Security: requirements for a cyber security risk management program, and methodologies for creating Aggregated or Anonymized Data.

Self Enforcement Management & Redress: Describes requirements for actions by Service Providers who voluntarily adopt the Code to ensure that they comply with it.

Focus Groups to Gauge Consumer Sentiment

• 18 Focus groups conducted by private firm (New South Research) • Took place across the country• Partnered with utilities• Purpose: Determine consumer sentiment regarding

– How consumers’ perceptions and trust vary among different industries– Consumer attitudes towards utilities with regard to data privacy– Reactions to a Privacy Code of Conduct for energy usage

• Group respondents included – Smart meter and Non-smart meter users– High income, high education– Lower income, lower education – Tech savvy– Small business users– Rural and urban– Owners and renters

• Feedback consistent for all groups

Objective: To gain an in-depth understanding of consumer perceptions of data privacy in utility companies and to solicit feedback on a Privacy Code of Conduct

Objective: To gain an in-depth understanding of consumer perceptions of data privacy in utility companies and to solicit feedback on a Privacy Code of Conduct

Consumer SentimentConsumer Reaction to the Code

Perceived Value of the Code Proactive: Respondents felt that a utility adopting the code was being proactive

about caring for and serving their customers

Education: It educates customers about how their personal usage data is being stored, processed, and disposed.

Trust: Knowing that a provider has opted in to a voluntary code builds trust and improves perceptions of that utility

Uniformity: The code was appreciated because it provided an explanation of how utilities will process sensitive data and respondents are currently unfamiliar with their utility’s data privacy habits.

Reassurance: It gave utilities a way to let customers know that their data was being protected and that a company is looking out for their best interest.

“I view it as a good thing because I feel like if they subscribe to it they voluntarily are trying to protect my data which is a good thing.”

68% of respondents thought that the Code was a great idea. 68% of respondents thought that the Code was a great idea.

“They are setting a good example, there is a code of ethics that everybody can follow and by them doing it they are setting a good example for everybody else, and it makes you feel

better about them.”-South

“There is a whole bunch of people involved in this and it makes me feel that someone is looking out for me. Just a little bit.” -Southwest

“I think by being more proactive and showing people that you’re going to have a recourse if something does happen, because of this consumer advocate thing—

that’s a big plus to me, especially if it works.”–MidAtlatntic

Perceptions of Utilities Adopting The Code

In general, respondents have more positive perceptions of utilities that choose to adhere to the Privacy Code of Conduct. These companies are trusted more because they are perceived as looking out for the customer’s best interest.

In general, respondents have more positive perceptions of utilities that choose to adhere to the Privacy Code of Conduct. These companies are trusted more because they are perceived as looking out for the customer’s best interest.

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Code was perceived to have many more strengths than weaknesses.

Consumer Sentiment Consumer Reaction to the Code

• Gives the customer choices• Consistency across all companies• Properly discarding information after a

certain amount of time• Consumer advocate involvement• Creates uniformity in how data is

processed • Adds some regulatory force to the utility

industry• Creates uniformity in how data is

handled• Involvement of the Department of

Energy

PROS

• Involvement of the Department of Energy

• There is no one to enforce the code• The use of weak language like

“guidelines” and “high level principles”• Do not like that it is voluntary

CONS

What can you do?Increasing Awareness

• Has you utility adopted DataGuard?

• Why or Why Not?

• Talk to your utility or commission about the benefits

Partnered with the GridWise Alliance to determine the changing operational, business and policy requirements needed in the electricity industry over the next 20 years to facilitate the industry’s transformation

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Workshops in Seattle, Dallas, Durham, and New York City National Summit in Washington, DC Input from over 400 industry stakeholders – including

policymakers, utility representatives, vendors, and game changers

Final report published in December Available at: www.smartgrid.gov/future_grid

The Future of the Grid Phase IEvolving to Meet America’s Needs

New Approach to Understanding Challenges

• Looked at the grid in the context of the entire value chain

• Allowed an understanding of – the grid as an enabling platform – the evolving role of grid operators

• Illuminated necessary changes in – Utility business models – Regulatory framework

Future Electric System

Evolving Grid Operations

Evolving Business

Model

Evolving Regulatory

Model

Planning the Transition

Characteristics: Electric System of the Future

Generation• Will be both centralized and

distributed• Will be both dispatchable and

non-dispatchable• Microgrids will be complementary,

not a replacement

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Consumers Will have different expectations

and demand new options Prosumers

Markets Wholesale and retail Third party non-regulated

competitive players

Balancing Supply and Demand Will become increasingly

complex and important

Energy Storage Will not replace the need

for “dispatchable” options

Evolving Grid Operations: Key Themes from Workshops

• Will still want and need a grid• No longer just a delivery “pipe” => two-way power flow• Must be agile and “fractal” - flexible, adaptable,

responsive • Enabling platform for very dynamic and complex system• Capable of supporting robust retail market transactions• Capable of coordinating wholesale and retail functions

(operational and market) will be essential• Distribution grid will look and act more like transmission

grid• Balancing supply and demand - increasingly complex and

important

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Evolving Grid

Operations

Evolving Business Model

Evolving Business Model: Future Value Propositions for Grid Operator

Supporting/implementing public policies Integrating all types of generation – agnostic to where it

comes from Increasing grid efficiency Optimizing asset utilization Maintaining a safe and reliable grid Enabling highly reliable and resilient energy services to end

consumers Enabling customers to provide services back to grid Facilitating a retail market for consumers to buy and sell

services Identifying most cost-effective way to achieve outcomes

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Evolving Regulatory

Model

Evolving Regulatory Model: Challenges for Regulators

Providing regulatory clarity in time of significant change

Aligning regulatory process to embrace speed of change and technology innovation

Balancing pubic good with the needs and desires of individual consumers

Addressing consumers’ obligations to the grid as well as utilities’ obligations to consumers in the future

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Recommendations

• Establish clear and comprehensive guiding principles to develop a unifying architecture to ensure interoperability across the entire grid

• Create a transition framework for guiding investments that will assist with regional/state planning which includes:

• Standardized industry metrics• Foundational investments

• Drive solutions through stakeholder engagement and education.

• Address technology challenges and limitations through robust research and analysis.

A collaborative approach that engages the ecosystem of stakeholdersA collaborative approach that engages the ecosystem of stakeholders

Phase II - Transition to the Future

Purpose: Implement recommendations #1 and #2 from the Future of the Grid initiative in partnership with GridWise Alliance.General Approach• Open, transparent, multi-stakeholder effort• Steering committee to guide effort• Marketing/outreach activities to gain support/buy-in and broad awareness• Include multiple data gathering techniques (RFI, webinars, interviews, etc.) to

collect input from stakeholders to better inform and develop workshop/discussions

• Conduct stakeholder workshops• Workshops a means to an end – not the main driver

• Conduct any needed research or modeling to make the process more efficient and results more actionable. (incorporate QER research and findings)

Phase IIOverarching Objectives

• Process used should create/sustain momentum, engage stakeholders and build understanding and support

• Recognize and accommodate differences• Develop actionable steps that can be undertaken to

accelerate the transition• Final deliverables complete by end of 2016• Stakeholder engagement and input critical• Plan will include other data gathering options such as surveys,

interviews, etc

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Stakeholders Outreach

• Utilities/DSO• TSO• ISO/RTO• Customer advocates• Regulators (State and Federal)• Legislators (State and Federal)• Vendors of measurement, sensor, analytics, comms, control,

compute, storage• Vendors of energy services and behind the meter technologies• Key associations (e.g. EEI, APPA, NRECA, EPRI, NEMA, etc)

THANK YOU!

Questions?

Contact: eric.lightner@hq.doe.gov

VCC: www.smartgrid.gov/privacy Future of the Grid: www.smartgrid.gov/future_grid