Electric companies installing smart meters that are not designed with data privacy issues as part of their core technology architecture are risking information breaches, dinged brands and even potential class action lawsuits.

It is much cheaper and safer to treat customers’ electricity use data as under the custody and control of an electricity provider rather than “owned” by the company, Ontario Information and Privacy Commissioner Dr. Ann Cavoukian told Breaking Energy.

Ontario now requires smart meter installations, and roughly five million have been installed, Cavoukian said, with half that number signing on to demand response “time of use” programs that help conserve and manage electricity use. Building security into the design of the programs and the technology from the beginning was central to earning customer trust and expanding smart meter installation and use programs, Cavoukian said.

With Canada implementing smart grid programs on a large scale ahead of many regions of the, Ontario has become a large-scale test case on privacy and the province is working with international generators, including San Diego Gas & Electric, on data privacy studies.

“Smart grid technologies have the potential to collect extremely detailed information about energy consumption in the home, which can lead to the unwelcome profiling of individuals,” Cavoukian said at an event in San Diego earlier this year. Her commission is advancing a seven-principal program called Privacy by Design that helps utilities address privacy issues.

Cavoukian is distressed by talk of monetizing data flows from people’s homes arising from smart meter installations, one of the selling points of smart grid upgrades in many competitive US markets. Customers are seeking precisely the opposite reaction and want their data protected first, Cavoukian said.

Utilities are going to be face with costs as much as five times higher if they wait to install privacy features instead of integrating them into the design right away, Cavoukian said.

US smart grid firms say privacy and data security are paramount for them. One smart meter leader, IBM, has worked on the deployment of smart meters in Canada as part of Ontario generator Hydro One’s rollout, Cavoukian said.

There is no need for a “zero sum” approach to smart meters in people’s homes, Cavoukian, who trained as a psychologist, told Breaking Energy. “People need to replace the versus with an ‘and’ – increases in privacy and in transmission function, increases in privacy and business interests.”

The key, Cavoukian says, is to keep efforts “user centric,” then smart meter installation and smart grid buildout will be easy.