The Information Commissioner's Office (ICO) said Ofgem proposals for "mandatory half-hourly settlement" under the new system of smart metering, which is being introduced in the UK, run contrary to the terms of a data access privacy framework (DAPF) that Ofgem established to govern how smart meter data can be used.
Ofgem held a consultation (42-page / 569KB PDF) between 11 November and 6 January on moving to a system of mandatory half-hourly settlement. At the time it said the move would "expose the true cost of supplying that customer in any given half-hour, putting incentives on suppliers to help customers move their consumption to periods when electricity is cheaper (or export in periods when it is beneficial to the system)".
Ofgem said that the move would "make the settlement process more accurate and timely, and to deliver positive outcomes for consumers by facilitating lower bills, reduced environmental impacts, enhanced security of supply and a better quality of service", and that it said it expects to need to "mandate all suppliers to settle their customers on a half-hourly basis to realise the full benefits".
However, in a response to that consultation, the ICO said (4-page / 246KB PDF) the proposed move to mandatory half-hourly settlement "is in conflict with" the DAPF.
"The DAPF states that access to half-hourly data is restricted to instances where the individual has actively opted in to the collection and processing of such data by their supplier," the ICO said.
"Mandating half-hourly data be used for settlement directly contradicts that framework, and it is that framework that will have governed the access to consumption data when a large number of consumers will have made the choice to have a smart meter installed. Therefore changing the framework to allow for mandatory half-hourly settlement should not be taken lightly, and any change made must be drafted narrowly so as to only allow half-hourly data to be used for settlement unless the consumer has opted in to further processing of that data," it said.
The ICO said that DAPF would need to be amended to enable mandatory half-hourly settlement. It urged the changes to be "kept to the minimum necessary to achieve the aims of mandating half-hourly settlement".
"If half-hourly settlement is to be mandated then any ability of suppliers to use this half-hourly data without the consent of the customer should be drafted as narrowly as possible to ensure that the data is used only for settlement," the ICO said. "Any changes must also be communicated to customers to ensure that they are aware of how their data are being handled. Consideration must be given to what happens if a customer objects to their half-hourly consumption data being used for settlement purposes."
The ICO said that concerns over smart meter customer profiling must also be addressed.
"A large number of people have already had smart meters installed under the current consent model whereby half-hourly data can only be collected and processed by energy suppliers where the customer has opted in to that processing," the ICO said.
"One of the main privacy concerns that the commissioner raised [previously] … was that half-hourly consumption data gives energy suppliers the ability to profile individuals and to use those profiles to make decisions about that person. It is therefore important that the opt-in model for half-hourly data remains in place where the profiling of individual MPANs takes place for reasons beyond settlement, including using the data to target individual consumers in an attempt to change their energy usage or tariff," it said.
MPANs are 'meter point administration numbers' when are associated with each smart meter. The ICO said that where consumption data from smart meters is linked with the MPAN for that meter, the information will be considered to be personal data, and therefore subject to UK data protection laws.