California has become the first state to adopt rules for ensuring the privacy and security of sensitive information generated by Smart Meters, interactive meters that are an element of the emerging Smart Grid electric distribution system.

The rules adopted in July by the California Public Utilities Commission are intended to protect customer data while ensuring access by customers and utilities for energy management and conservation services. The rules are consistent with Homeland Security Department principles and were created in cooperation with national efforts to develop Smart Grid standards.

“California is one of the states that is leading in the development and deployment of the Smart Grid, so it is not surprising that they would be one of the first to issue rules,” said George Arnold, coordinator for Smart Grid interoperability at the National Institute of Standards and Technology.

California regulators said the rules bring the state’s practices into conformity with the best national privacy and security practices.

The covered companies must provide regulators with plans for implementing the rules, which call for providing access to customers of information on electric usage and cost on at least a daily basis, broken into hourly or 15-minute segments. Within six months the covered companies must establish a pilot Smart Meter program for providing this information. They also must provide to as many as 5,000 households home area network technology that would allow customers to receive Smart Meter information in their homes.

The companies must ensure that the data is reasonably accurate and complete, and that it is secured. Breaches involving information of at least 1,000 customers must be reported to the commission, but there is no provision in the rules for notifying customers of breaches.

Security requirements do not specify technology to be used, requiring only “reasonable administrative, technical and physical safeguards.” That is a strength, Arnold said.

The Smart Grid Interoperability Panel is a creating a Catalog of Standards for the emerging Smart Grid architecture. The panel has approved the first six interoperability standards addressing formats for the exchange of information on the grid, standards for charging electric vehicles and requirements for upgrading smart electric meters.

“What we’re doing is coming up with a framework” of standards to be applied as appropriate, Arnold said. The utilities will select the technologies and policies appropriate for them. They also are directed under the new rules to develop common formats for accessing and sharing data. “That points them directly to the work we are doing.”

Texas is another leader in Smart Grid deployment with rule-making for the new technology “well under way,” Arnold said.