Smart meters report electricity usage of a user to the utility provider on a real-time basis, which is known to leak sensitive user information. In this talk we will discuss how a rechargeable battery with limited storage capacity at the user’s home can be used to mask this information. We will use the mutual information between the user load and the grid output as our privacy metric and assume that the rechargeable battery satisfies ideal charge conservation. We show that the problem of designing optimal charging policies is equivalent to designing a communication channel subject to certain state constraints. For the case of i.i.d. inputs we derive an explicit solution and provide an intuitive interpretation based on certain invariance properties of the system. For the case of Markov inputs we cast the problem as a Markov Decision Process (MDP) that could be solved using a dynamic program. We will also discuss a generalization when multiple batteries cascaded in series can be used by the system.