  As smart meters continue to be deployed around the world collecting
unprecedented levels of fine-grained data about consumers, we need to find
mechanisms that are fair to both, (1) the electric utility who needs the data
to improve their operations, and (2) the consumer who has a valuation of
privacy but at the same time benefits from sharing consumption data. In this
paper we address this problem by proposing privacy contracts between electric
utilities and consumers with the goal of maximizing the social welfare of both.
Our mathematical model designs an optimization problem between a population of
users that have different valuations on privacy and the costs of operation by
the utility. We then show how contracts can change depending on the probability
of a privacy breach. This line of research can help inform not only current but
also future smart meter collection practices.
