The Fourth Amendment and Smart Grids

If we are not careful, smart grids are in direct collision with the bill of rights. Some smart grid activities define or enable business practices for balancing energy supply and demand. There is a direct link between commonly accepted business practices and some definitions of our constitutional rights. With the best of intentions, we may be casually removing significant barriers to some of our most cherished freedoms.

The Fourth Amendment to the United States Constitution is the part of the Bill of Rights which guards against unreasonable searches and seizures. During the American Revolution, British forces made extensive use of writs of assistance, a sort of general search warrant that could be extended and used without ongoing review. In response, the Fourth Amendment created a standard whereby government searches must be issues only on a discovery of probable cause, and specifically limited in location and as to the matters being searched for, based on specific information supplied to a court.

The Fourth Amendment is the most explicit source of any support for privacy that I can find in the Constitution.

Dr Orin Kerr is one of the most respected legal voices on Fourth Amendment issues. Dr Kerr blogged this week on the relationship between technology, common practices, and developing standards for reasonable search (see reference below). Specifically, Dr Kerr was exploring the ten year old Supreme Court ruling in Kyllo vs. United States that defines the limits of police use of high technology in warrantless searches.

In cartoon form (IANAL), police scanned houses with some sort of IR scanning system and noted a hot spot in the attic. From the hot spot, they deduced that the defendant was growing marijuana under grow lights in his attic. Kyllo asserted that this was a prohibited search under the 4^th amendment. The question was, in effect, is a non-intrusive search using high tech an unreasonable search. Clearly, if Kyllo had been growing the marijuana in his front yard, there would have been no dispute when police noticed this when on routine patrol. Previous rulings had stated that police fly-overs are legal searches because non-police could fly over the property and spot the plants; the property owner has no reasonable expectation of privacy applied to aerial views of his property.

In this case, the search was ruled unconstitutional; Kyllo won. The Supreme Court adopted a test designed to let the result change with social practice: “when . . . the Government uses a device that is not in general public use, to explore details of the home that would previously have been unknowable without physical intrusion, the surveillance is a “search” and is presumptively unreasonable without a warrant.” Because infrared temperature sensing was not in “general public use,” the thermal imaging was a “search” that required a warrant.

Dr. Kerr was blogging on whether under this standard, the search in Kyllo was still prohibited. Remote infrared temperature-sensing has become quite common in a wide range of applications. I heard an ad on the radio yesterday for a remote home thermometer enabling mom to take a sleeping child’s temperature from the door without waking the child. Thermal images of houses to reveal gaps in insulation have become common; many utilities will pay for them as part of energy efficiency efforts. The question was, then, is this high tech device now considered to be in in “general public use,” and if so, can the police use it without a warrant without violating the Fourth amendment.

And so, at last, I loop back to smart grids.

Some business practices we are defining, particularly in what we are calling Managed Energy, can routinely monitor the activity of every device in a home. If we establish these practices as general practice, have we eliminated any Fourth Amendment shield against the use of the same techniques by police?

Analysis of electrical power consumption reveals more than you might guess. Research a decade ago explored what engineers could learn from these signals. One anomaly occurred almost every day in a home somewhere between a half hour and two hours after the owners left each day. Further research determined that the family dog waited each day until it was sure that its owners were really gone for the day—and then climbed onto the warm waterbed. They were detecting the change in the pattern of water heater use. Further research demonstrated an ability to distinguish how much activity was on that waterbed…

When we define business practices for the smart grid, we are doing more than solving a a difficult engineering problem. We may be creating practices that re-define our precious constitutional rights. Privacy is more than a best business practice for smart grids.

Distributed Energy Grids can use Diverse Energy Storage

But there’s no way to store energy, he said. What he should have said is that there are few ways to store energy at grid scale. Grids, and microgrids, have two approaches to storing energy. They can store it in something that produces electricity, or they can store it in any format that provides a service to its customers. The closer we get to the end users of energy, the more options we have to store energy. The most critical short term goal of smart grids might be to transfer as many incentives for energy storage to the end nodes of the grid as possible as soon as possible.

Very few of us want electricity—we want instead to have a modern life-style. This means we want ready access to sanitary services, whether clean water or working waste disposal. We want light, and heat (or cooling). We want our appliances to provide whatever services we bought them for. Digital electronics provide us with the most direct conversion of electricity to desirable service, but even there we may be able to store services.

Behind every meter there is a microgrid, which exists to supply the wants of its customers. The customers of transmission and distribution grids only want electricity, and they want a lot, so these grids are limited in how they can store energy. Any storage that these grids do use, must be big enough to support the transmission or distribution scale of operations. For example, pump storage, wherein water is pumped up in the air, and used for hydro-generation later, is a very efficient way to store the energy in electricity for later use. Transmission-scale pump storage, though, must be as big as a small lake. There are a limited number of locations to place a lake with a down-hill water supply where filling and draining the lake is an acceptable option. We may have used all of them in North America already.

There are not many more options for distribution scale storage in traditional local microgrids. Non-traditional microgrids, however, distribute more than electrical energy. District energy grids distribute thermal energy, whether in the form of heat (steam) or of cooling (chilled water). These systems can pre-cool (or pre-heat, although this is less common) water for distribution. Thermal storage lets district energy microgrids shift energy use to off-peak hours. In a modern transactive grid, such shifting can be part of demand response. Microgrids with significant thermal storage may be able to run entirely on site-based alternative energy during peak hours. They may be able to store off-peak generation converted to thermal energy.

Non-energy utilities have their own grids supported by the distribution grid. A significant service in cities is the supply of water, and water pressure. This is done by pumping water high into the air, using energy-intensive pumps. Water towers can easily become locations for energy storage, off-loading electrical use until when energy is cheap, and the pumps can run inexpensively. This local pump storage is not used to generate electricity, but within its limits is an effective way to shift energy use to times when energy is cheaper and more plentiful.

When the microgrid gets down to the size of a single commercial building or home, all sorts of energy storage options become available, if only we do not confine ourselves to electrical storage. High rise buildings pump water to so toilets will flush. Thermal storage can be in basements or rooftops. Some data center strategies could even be considered to be storing up business process for use later.

Risky Business – Removing barriers to Free Energy

It is no secret to readers that I think we can best balance energy supply and demand using pure economic transactions. Whatever you feel about flash trading, those markets with millions of 14 millisecond transactions prove that we know how to run markets fast enough to manage even the most demanding decision making on smart grids. Free energy, that is energy markets unencumbered price and reliability arbitrage, is certainly the fastest path to the technologies we need to balance supply with the increasingly volatile supple we foresee. But today’s utilities serve a social justice purpose that I have been unable to reconcile in my mind with free energy until now.

We need free energy because we need to unbundle two of the most significant services provided alongside today’s energy delivery; availability risk arbitrage and price risk arbitrage. These services create a moral hazard we can no longer afford. Availability risk arbitrage removes performance incentives for end nodes to install systems for energy storage and generation. Price risk arbitrage reserves all economic incentives for energy storage and generation to the grid, where it is too expensive and innovation adoption is, of necessity, to slow to support the type of venture creation we have seen in high tech.

The basic problem is that our electric grid operates with lower margins for error than it ever has before, and current policy is to reduce them further. No community is clamoring for more power lines in its back yard even as our houses are filled with ever more energy consuming equipment for computing, telecommunications, and entertainment. It is becoming too expensive, in generation costs, infrastructure capacity, and social will to maintain constant oversupply of traditional energy. We wish to use new energy sources that are unpredictable and episodic. Attempts to smooth out supply volatility at the grid re too expensive or too few. (Ask me some time why natural gas sales went up when gas generation was replaced by wind in Colorado.) The ability of the grid to supply availability arbitrage is failing.

With fixed prices, the economic incentives for end nodes to participate in energy generation and storage are non-existent. The most basic market rule is buy low and sell high. Without dynamic pricing, the rule for homes and commercial buildings is sell low (wholesale) and buy high (retail). Efforts by local regulators to repeal that rule are as artificial as efforts to repeal gravity.

Dynamic pricing changes all that. With the volatility of energy supply fully exposed, end nodes will buy technologies to manage their risk. With the volatility of energy prices fully exposed, end nodes will find the business case to manage their power purchases. Bottlenecks in the power grid will result in local congestion pricing, letting the true costs neighborhood infrastructure decisions to be seen by the public.

Utilities today must play not to lose rather than to win. They cannot adapt new technologies quickly because they must always be reliable. Market actors that cannot accept risk, cannot afford to innovate. End nodes can voluntarily accept risk, and so can afford to adopt new technology. If Denver, where we met this month to form the Smart Grid Interoperability Panel (SGIP), is plunged into darkness for a week, it is a dire outcome; if my home fails for a week, is provides entertainment to my neighbors. The difference between grid-level innovation and end-node innovation is the difference between tragedy and comedy.

Smart grids will transfer risk to their end nodes. Economic agents which assume risk will expect to be paid for it. These payments will be the fertilizer for an untold number of new technologies. The best way to transfer risk and payments together is self-balancing, self organizing free markets in energy. Systems that can participate in these markets for us as well as systems that can store or generate energy on-site, will be the reward.

Energy Privacy

Energy Privacy was the hottest topic of Grid-Interop in Denver. Perhaps it was the Google Energy demos, which show people discussing each little recurring burst of energy use, whether refrigerator or Jacuzzi, that alerted the public to the issues. Perhaps it was when people read the UCAIug plan for OpenADE, which lists a "Law Enforcement Interface" for energy use as a higher priority than sharing information with the building occupants. Perhaps it was a late-night comedian commenting slyly that at least battery-operated devices could not be tracked, yet. Perhaps it was heightened awareness flowing over from health care debate. However it happened, privacy issues and privacy concerns became front and center at the Grid-Interop and the SGIP.

Without clear standards, and with little sense of architectural boundaries, utilities have been slowly extending control directly into the home. ZigBee Smart Energy, OpenHAN, and SEP all are premised on treating the home as an extension of the substation, another asset to serve the operational needs of the central utility. This model does more than infer energy use, as does the Google Energy model; it includes direct registration and recording of the use of each system in the home.

The NIST Smart Grid Interoperability Report reported that "distributed energy resources and smart meters will reveal information about residential consumers and activities within the house." The panel went on to cite "a lack of formal privacy policies, standards or procedures about information gathered and collected by entities involved in the smart grid." Today, there are no consistent definitions of personally identifiable information in the utility industry. In the week before Grid-Interop, there were numerous privacy meetings, expanding the conversation to include the large internet privacy advocates and public policy think tanks.

During the same week, some of the bloom went off the rose of AMI (Automated Metering Infrastructure). AMI infrastructure, or automated meter reading plus, has been touted as critical to smart grid efforts. In an effort to justify the expense of AMI deployment plans to regulators, utilities have packed more and more functions into AMI, including those described above. This has, in turn, increased the expense of the systems and opened the door to potential security holes.

The message that the public heard about AMI was that “smart meters will reduce your bill”. The message they should have heard was “smart meters will reduce your bill if you take advantage of their information and respond to dynamic prices.” Pacific Gas & Electric meters came under fire by customers whose bills went up dramatically. As far as I know, the meters were accurate, but the public is now paying closer attention—and asking questions. Some of those questions are about direct management of home systems using AMI.

The controversy went mainstream on Tuesday when a report jointly released by the Ontario Information and Privacy Commissioner and the Future of Privacy Forum (FPF). According to the report, “information may be gleaned from ongoing monitoring of electricity consumption such as the approximate number of occupants, when they are present, as well as when they are awake or asleep.”

My daughter summed it up; "if they can see all that stuff, it is time to tell them to take the equipment out." At Grid-Interop, several expressed a contrary view, that they needed to know more. PGE representatives believe that sharing information with the occupants is a privacy issue. If the utilities don’t understand privacy soon in a way that makes sense to their customers, they will find that instead of more control, they will get less.

And drop me a line if you want to get involved in privacy standards for new energy.