The Commissioner, Anne Cavoukian, issued the report along with the Future of Privacy Forum (FPF). Entitled Smart Privacy for the Smart Grid, the report warns that as electricity companies collect more information about customers' energy usage, they could put their privacy at risk.
Smart grid technology works by using two-way meters that communicate information about a customer's energy usage back to the utility.
In many cases, they also enable the utility to control the customer's power consumption throughout the day, and regulate load across the grid more efficiently.
"While this is beneficial and supports valuable efforts to curb greenhouse gas emissions and reduce consumers energy bills, it introduces the possibility of collecting detailed information on individual energy consumption use and patterns within the most private of places our homes", the report said.
Cavoukian worries that companies will be able to infer private information about the lifestyle of a household's residence such as the number of occupants, when they are at home, and when they sleep - which leads to privacy issues. "For many, these will resonate as a 'sanctity of the home' issue, where such intimate details of daily life should not be accessible", it said.
The news comes just days after Microsoft signed XCel Energy as a partner for Microsoft Hohm, a smart grid service that enables residential users in the U.S. to profile the energy usage and share it with other users in their geographical area.
The smart grid service, which takes a social networking approach to achieving energy efficiency, lets the customers of partner utilities automatically upload information about the energy usage. Customers who don't deal with utilities partnering with Hohm can enter details about their households themselves, including some of the parameters that Cavoukian worries about.
"We must take great care not to sacrifice consumer privacy amidst an atmosphere of unbridled enthusiasm for electricity reform", said the report. "Information proliferation, lax controls and insufficient oversight of this information could lead to unprecedented invasions of consumer privacy."