May 9, 2011 - The California Public Utilities Commission (CPUC) came out with a long-awaited proposed ruling on the subject that would impose privacy rules on home devices that use smart meter data and are “locked” into one company’s platform or technology (think how cell phones are locked into a carrier), but leave customer-owned data sources outside of its authority.

Simply put, CPUC’s proposed ruling would require the state’s big three utilities — Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric — to impose tariffs on third parties that want to get at utility customer energy data. It would also require the utilities to add conditions to those tariffs that impose CPUC’s privacy guidelines on the third parties that sign up for them.

That authority, however, would apply specifically to so-called “locked devices” — any system that’s limited to a single provider’s network or technology. The ruling also singles out systems that keep collecting and using data without any active role on the customers’ part, once the customer has given permission to access it.

Companies that run services that fit this bill will have to enroll in the utilities’ tariff programs, CPUC’s ruling states, and the CPUC has given the state’s three big utilities six months to come up with their tariff plans. I’m curious to hear how the smart grid companies that have argued against the commission having authority to tell them what to do will react to that.

Home energy devices that aren’t “locked” and don’t automatically transfer information to a third party fall under a different category. CPUC puts the onus on utilities in that case, saying they’ll have to provide customers with such systems “information concerning the potential uses and abuses of usage data should the customer forward or otherwise provide the data to another entity” — for example, if they switch from one services provider to another.

CPUC’s proposed ruling comes after years of discussion and argument about just how smart meter data should be managed. Because of California’s position as a market trend-setter and early-adopter of smart meters, it could help set guides for how other state commissions and federal regulators approach the subject.

Some of the ruling’s new suggestions are likely to displease telcos and Itproviders who want to use the data to provide in-home energy services, particularly the idea that tariffs can give the CPUC the right to tell third parties what to do.