Big Data = Big Challenge?
Utilities compete for analytics talent
Having read the latest general interest article on Big Data and its exploitation for business intelligence—The New York Times' Feb. 12 piece "The Age of Big Data"—I'll share a few thoughts to see whether readers can provide additional insights, counterpoints or a reality check.
The fact is, Big Data has been happening in many if not most verticals for some time. And many endeavors beyond vertical industries seek data analytics expertise. Electric utilities are relatively late to the game. The demand for expertise in this realm probably outstrips supply, leading to intense competition for data analytics practitioners.
One upshot is that utilities with regulated rates of return may well find it difficult to attract the data analytics people they need, based on their business model, their cautious approach to their mission, their compensation levels and the entire industry's perceived lack of cachet.
As the Times' article makes clear, Big Data will only get bigger.
"It's a revolution," said Gary King, director of Harvard's Institute for Quantitative Social Science. "We're really just getting under way. But the march of quantification, made possible by enormous new sources of data, will sweep through academia, business and government. There is no area that is going to be untouched."
The poster child for connecting Big Data and advertising—where the cash meets the road, if you will—is, of course, Google. The new "masters of the universe," to borrow a phrase from author Tom Wolfe that he applied to Wall Streeters in the 1980s, may well be those who can extract insights from masses of data that can be spun into gold.
That's why the Times article cited the recent World Economic Forum's focus on Big Data and its report, "Big Data, Big Impact," that "declared data a new class of economic asset, like currency or gold."
And the Times rightly cited the corollary of Big Data—the concern about data privacy and the exploitation and possible leakage of personally identifiable information. That's already the stuff of headlines about careless stewardship, lackluster security, lost laptops and thumb drives and vulnerability to hackers.
"Privacy advocates take a dim view [of the exploitation of Big Data], warning that Big Data is Big Brother, in corporate clothing," the Times piece said.
The utility industry cannot afford to ignore operational and customer-related data, it's just too valuable. It can lead to operational efficiencies, better capital planning and balancing supply and demand for environmental and cost reasons. Analytics also will provide the customer behavior insights that will inform new rate plans and how to generate uptake.
Though I've heard various parties in the power industry reference their iron-clad policies on data privacy, I can't say that details have pierced my consciousness. The term "encryption" is bandied about, but your average electricity customer hasn't heard much more than assurances. Just as utilities have struggled to communicate the value of interval meters, they may have their work cut out for them as they explain the use of the resulting data.
Like it or not, believe in the dire consequences once painted by George Orwell or not, an emerging strategy for the privacy-minded individual in this potentially jarring, suddenly naked world will be to take data privacy into one's own hands. Certainly businesses will thrive that cater to personal encryption for one's every keystroke or card swipe.
Meanwhile, electric utilities and regulators are articulating rules regarding the use of personally identifiable data and generic, aggregate data. Most policies I've seen regard individual data as the property of that individual, with utilities permitted to use it for billing only. Aggregate data that aids in system planning, operations or maintenance may be accessed by the utility. Customers must opt-in to allow third party access to that data.
The utility industry, with exceptions, has an added challenge. In the marketplace, if a consumer likes one company's data practices and policies better than another company's, that consumer is free to choose with whom to do business. But when there is no choice, no competition—such as Google or one's local utility—that lack of choice tends to breed resentment.
If I can read the Sunday paper one day and knock out a few semi-coherent thoughts the next day, shouldn't utilities and regulators be well along in the task of informing us just exactly how our private usage data will be kept private and secure and scrubbed of personally identifiable connections?
We know that some states and industry associations have crafted policies. But despite our previous work in detailing privacy concerns, listed here, I haven't heard enough from utilities to convince me that they understand the challenges and concerns and have met them.
"Colorado Mulls Data Privacy Rule"
"Data Privacy: Ohio Ponders"
"Data Privacy Efforts Underway"
"Smart Grid 'Privacy by Design'"
Stay tuned later this week for coverage of Energy Central's Utility Analytics Institute Summit 2012 in Orlando, being held Feb. 15-16.
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