BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 1476 (Padilla)
As Amended April 5, 2010
Hearing Date: April 13, 2010
Fiscal: Yes
Urgency: No
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SUBJECT
Public Utilities: Smart Meters: Privacy
DESCRIPTION
This bill would require a local publicly owned electric utility
or an electrical or gas corporation that uses smart meter
technology that allows a customer to monitor his or her electric
or gas consumption data to ensure that the customer has an
option to access that data without relinquishing personally
identifiable information, including consumption data, to a third
party.
This bill would provide that a customer's electric or gas
consumption data shall be securely kept by the local publicly
owned electric utility or electrical or gas corporation and
shall not be accessible by a third party, unless a customer
chooses to access his or her consumption data from a third party
using a smart meter, after being given the option not to
relinquish his or her data.
BACKGROUND
In 2009, the Legislature passed and the Governor signed SB 17
(Padilla, Ch. 327, Stats. 2009) which established California's
smart grid policy; smart meters are a component of a smart grid
policy. Smart meters are two-way communication devices that
measure electrical, natural gas, or water consumption. They
communicate consumption information via a network back to the
utility, eliminating the need for manual meter readings. Smart
meters can record and report energy consumption on an hourly
basis and can be linked to appliances. They also allow a
(more)
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utility to remotely disable and enable supply and to utilize
pricing systems for consumption based on the time of day and
season. New technologies, such as Google's "PowerMeter," allow
customers to access and monitor their consumption in real time,
allowing them to manage their energy use more effectively.
In California, the California Public Utilities Commission (CPUC)
has authorized the use of smart meters. Southern California
Edison has been authorized to install approximately 5.3 million
smart meters and San Diego Gas and Electric Company has received
authorization for 1.4 million electric smart meters and 900,000
natural gas meters. Pacific Gas and Electric Company has been
authorized to install approximately 9 million electric and
natural gas meters.
Although smart meters have the potential to help address some of
our most pressing energy and environmental needs, the use of
this new technology also raises privacy concerns. In fact, the
CPUC has initiated a rulemaking (R.08-12-009) to consider
policies for utilities to develop a smarter electric grid. Part
of that rulemaking will investigate the contact between the
smart grid and consumers and cyber-security issues including
policies to ensure customer privacy. In comments to the CPUC
regarding this rulemaking, several privacy groups raised
concerns that smart meter systems could reveal intimate and
sensitive personal behavior patterns such as when consumers eat,
shower, go to bed, wake up, or leave the house. The systems
could also detect whether an alarm system is engaged. Related
concerns have been raised that smart meter systems could be
subject to hacking, leaving consumers vulnerable to identity
theft. Many are also concerned that the information collected
using a smart meter could be shared with third-party marketers.
This bill is intended to address concerns that have been raised
with technologies such as Google's PowerMeter and whether that
service sufficiently protects a customer's information. This
bill would attempt to ensure that consumers have a choice when
monitoring their electric consumption data.
This bill was approved by the Senate Energy, Utilities, and
Communications Committee on April 6, 2010 by a vote of 10-0.
CHANGES TO EXISTING LAW
Existing law provides that, among other rights, all people have
an inalienable right to pursue and obtain privacy. (Cal.
Const., art. I, Sec. I.)
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Existing law requires the CPUC to determine the requirements for
a smart grid deployment plan. (Pub. Util. Code Sec. 8360 et
seq.) Current CPUC rules require California's largest
investor-owned electrical and gas corporations to replace
traditional utility meters with "smart meters."
This bill would require a local publicly owned electric utility
or an electrical or gas corporation that uses smart meter
technology that allows a customer to monitor his or her electric
or gas consumption data to ensure that the customer has an
option to access that data without relinquishing personally
identifiable information, including consumption data, to a third
party.
This bill would provide that a customer's electric or gas
consumption data shall be securely kept by the local publicly
owned electric utility or electrical or gas corporation and
shall not be accessible by a third party, unless a customer
chooses to access his or her consumption data from a third party
using a smart meter, after being given the option not to
relinquish his or her data.
COMMENT
1. Stated need for the bill
The author writes:
Sempra (San Diego Gas & Electric) is the only California
utility of which we are aware that has a meter interface
allowing the customer to access their electrical use data.
Sempra confirms that the customer cannot use this tool unless
the customer relinquishing control of the data through the
standard website "I agree" which the consumer clicks and in
doing so allows Google to use consumption data for a
commercial purpose. Sempra confirms they have no other tool
available to the customer for data interaction.
The author has indicated that it is not his intent to disrupt
the arrangement between Sempra and Google. Instead, this bill
is intended to provide a customer with an "additional means of
accessing consumption data without allowing a third party to
collect, retain, share or reuse their electric or gas
consumption information."
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2. Requirement that customers be given a choice
This bill would require a local publicly owned electric utility
or an electrical or gas corporation that uses smart meter
technology that allows a customer to monitor his or her electric
or gas consumption data to ensure that the customer has an
option to access that data without relinquishing personally
identifiable information, including consumption data, to a third
party. The author has indicated that it is his intent to ensure
that consumers are given an option to monitor their electric or
gas consumption data without having to agree to the sharing of
that data with third parties. In order to better carry out this
intent, the Committee may wish to consider amending the bill as
follows:
Suggested amendments:
1. On page 2, delete lines 7-8 and insert "being required
to agree to the sharing of his or her personally
identifiable information, including electric consumption
data, with a third party."
2. On page 3, delete lines 23-24 and insert "being required
to agree to the sharing of his or her personally
identifiable information, including electric consumption
data, with a third party."
3. Potential for discriminatory pricing based on privacy choice
This bill would require a local publicly owned electric utility
or an electrical or gas corporation that uses smart meter
technology that allows a customer to monitor his or her electric
or gas consumption data to ensure that the customer has an
option to access that data without relinquishing personally
identifiable information, including consumption data, to a third
party. There is nothing in the bill, however, which would
protect consumers against being charged more for exercising
their right to choose not to share their personally identifiable
information. In order to address these concerns that consumers
might face discriminatory pricing because they had exercised
their right to protect their privacy under this bill, the
Committee may wish to consider amending the bill to provide that
an electrical or gas corporation, or demand response provider,
may not offer incentives or discounts to solicit a particular
response by the customer regarding his or her right to control
his or her information.
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Suggested amendment:
On page 2, line 8, after the period insert "The local publicly
owned electric utility shall not partner with any third party
that facilitates access to consumption data that provides an
incentive or discount to the customer for accessing their
consumption data."
On page 3, line 24, after the period insert "The electric or
gas corporation shall not partner with any third party that
facilitates access to consumption data that provides an
incentive or discount to the customer for accessing their
consumption data."
4. Restrictions on third-party sharing and security of
consumption data
This bill would provide that a customer's electric or gas
consumption data shall be securely kept by the local publicly
owned electric utility or electrical or gas corporation and
shall not be accessible by a third party, unless a customer
chooses to access his or her consumption data from a third party
using a smart meter, after being given the option not to
relinquish his or her data.
This language is intended to be a restriction on third-party
sharing and also to ensure that a customer's consumption data is
secure. In order to more closely track existing privacy
protections and ensure that a customer's consumption data is
secure, the Committee may wish to consider amending the bill to
provide that a local publicly owned electric utility or gas or
electric corporation should use reasonable security procedures
and practices to protect a customer's consumption data from
unauthorized access, destruction, use, modification, or
disclosure.
In addition, the Committee may also wish to consider amending
the third-party sharing restriction to ensure that it
sufficiently protects consumers. Exceptions should be included
to allow for disclosure of aggregated data and disclosure for
billing purposes.
Suggested amendments:
1. On page 2, delete lines 9-14 and insert:
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(b) A local publicly owned electric utility shall not share,
sell, disclose, or otherwise make accessible to any third
party a customer's electric consumption data. A local
publicly owned electric utility may make a customer's electric
consumption data accessible to a third party, however, in
either of the following circumstances:
(1) the customer has first been given the option described
in subdivision (a), the customer has declined that option,
and the customer chooses to access his or her electric
consumption data from that third party; or
(2) the data is accessed or shared by a third party or
utility with the customer's express written prior consent
for a demand response program which manages customer
consumption of electricity in response to supply
conditions.
(c) A local publicly owned electric utility shall use
reasonable security procedures and practices to protect a
customer's electric consumption data from unauthorized access,
destruction, use, modification, or disclosure.
(d) Nothing in this section shall preclude a local publicly
owned electric utility from using customer aggregate
consumption data for analysis, reporting, or program
management if all information has been removed regarding the
individual identity of a customer.
(e) Nothing in this section shall preclude a local publicly
owned electric utility from disclosing a customer's electric
consumption data to a third party for billing purposes.
(f) For purposes of this section, "electric consumption data"
means data that is made available as part of an advanced
metering infrastructure.
2. On page 3, delete lines 25-30 and insert:
(b) An electrical or gas corporation shall not share, sell,
disclose, or otherwise make accessible to any third party a
customer's electric or gas consumption data. An electrical or
gas corporation may make a customer's electric or gas
consumption data accessible to a third party, however, in
either of the following circumstances:
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(1) the customer has first been given the option described
in subdivision (a), the customer has declined that option,
and the customer chooses to access his or her electric or
gas consumption data from that third party; or
(2) the data is accessed or shared by a third party or
utility with the customer's express prior written consent
for a demand response program which manages customer
consumption of electricity in response to supply
conditions.
(c) An electrical or gas corporation shall use reasonable
security procedures and practices to protect a customer's
electric or gas consumption data from unauthorized access,
destruction, use, modification, or disclosure.
(d) Nothing in this section shall preclude an electrical or
gas corporation from using customer aggregate consumption data
for analysis, reporting, or program management if all
information has been removed regarding the individual identity
of a customer.
(e) Nothing in this section shall preclude an electrical or
gas corporation from disclosing a customer's electric
consumption data to a third party for billing purposes.
(f) For purposes of this section, "electric or gas consumption
data" means data that is made available as part of an advanced
metering infrastructure.
Support : None Known
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : SB 837 (Florez) also contains
privacy protections related to electrical and gas corporations
and "third-party demand service providers." This bill is also
scheduled to be heard by the Committee on April 13, 2010.
Prior Legislation : None Known
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Prior Vote : Senate Energy, Utilities, and Communications
Committee (Ayes 10, Noes 0)
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