by Yana A. St. Clair, Esq.
The challenge for the electric power industry lies in balancing the benefits of digital innovation with the imperative to protect data privacy.
As promised in our previous article, today we will turn our attention to Data Privacy Considerations in the Digital Transformation of the Electric Power Industry. The digital transformation of the electric power industry is reshaping how utilities generate, transmit, distribute, and manage electricity. These technologies enable improved efficiency, reliability, and responsiveness of the power grid; however, the increasing digitalization also raises serious concerns about data privacy, mainly as the volume, granularity, and accessibility of energy-related data continue to grow.
Data privacy in the electric power sector refers to the protection of personal, operational, and system-level data against unauthorized access, misuse, or disclosure. With the proliferation of smart grid technologies, massive amounts of data are collected at every level of the system-from consumer energy usage and equipment status to real-time grid conditions and asset performance. As utilities increasingly rely on digital tools for monitoring and control, ensuring the confidentiality, integrity, and appropriate use of this data becomes paramount.
Consumer Data and Privacy: Smart meters and home energy management systems are the first to come to mind regarding consumer privacy. These devices record detailed energy usage data at short intervals, enabling time-of-use billing, and more efficient energy management. However, this granular data can inadvertently reveal sensitive information about household behavior-such as occupancy patterns, appliance usage, or even lifestyle habits. If such information were accessed by unauthorized parties, it could pose privacy risks or be exploited for malicious purposes, by many parties and on many levels.
Utilities and regulators must therefore implement strict data governance policies. This includes defining who owns the data, under what conditions it can be shared or sold, and how long it should be retained. In many jurisdictions, regulators have established privacy rules that require explicit consumer consent for third-party access to personal energy usage data. Data anonymization and aggregation techniques are also employed to reduce the risk of individual identification when data is used for analytics or research.
Operational Data and Grid Security: Operational data from substations, transmission lines, distributed energy resources (DERs), and control systems is essential for grid planning and real-time decision-making. However, such information can also be a target for cyber attackers seeking to disrupt grid operations or gain competitive intelligence. To protect this data, utilities must adopt extensive cybersecurity measures aligned with data privacy principles. Encryption, secure authentication, role-based access control, and network segmentation are vital to prevent unauthorized access and ensure that data flows only to authorized entities. Furthermore, logging and monitoring mechanisms should be in place to detect and respond to suspicious activities promptly.
Third-Party Vendors and Cloud Services: As utilities outsource more digital functions to technology vendors, including cloud-based storage and analytics platforms, the complexity of managing data privacy increases. These third-party providers often have access to sensitive operational and consumer data. Without strong contractual safeguards and compliance frameworks, this could lead to inadvertent data leakage or misuse.
Data privacy considerations must therefore extend to the entire supply chain. Utilities should require vendors to comply with recognized data protection standards, such as ISO/IEC 27001, and conduct regular audits to verify compliance. Additionally, data residency laws, regulations that govern where data must be stored, must be observed, particularly when using international cloud services.
Regulatory Compliance and Standards: Various global and regional regulations influence how data privacy is addressed in the power sector. In the United States, consumer data is subject to state-level privacy laws, while utilities must also comply with NERC CIP (Critical Infrastructure Protection) standards for operational security. In the European Union, the General Data Protection Regulation (GDPR) provides a comprehensive framework for personal data protection, which includes strict requirements for data handling, breach notification, and user consent.
Standards development organizations like IEEE and IEC are also working to incorporate privacy-preserving features into technical protocols and frameworks. For instance, IEC 62351 provides guidelines for securing communication protocols used in power system automation, helping to ensure data confidentiality and integrity in digital substations.
Ultimately, the challenge for the electric power industry lies in balancing the benefits of digital innovation with the imperative to protect data privacy. And utilities must ensure that they take every precaution possible to protect privacy at all cost.
Biography
Yana is an American attorney licensed to practice in all State and Federal courts of California. Yana holds a Bachelor of Arts Degree in Political Science specializing in International Relations from UCLA, the Degree of Juris Doctor from Loyola Law School, and a Master of Business Administration Degree from Ashford University. Since the beginning of her undergraduate studies, Yana has been involved in various aspects of the field of Electrical Engineering, where she employs her business and legal knowledge to consulting and advising businesses and individuals on relevant topics of concern. Yana also serves as Editor for PAC World magazine, having been with the publication since its inception. As an attorney, Yana specializes in criminal defense, where she devotes her talents and expertise to fighting for her clients’ rights and freedom.
