BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1476| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 1476 Author: Padilla (D) Amended: 4/20/10 Vote: 21 SENATE ENERGY, U.&C. COMMITTEE : 10-0, 4/6/10 AYES: Padilla, Dutton, Corbett, Cox, Kehoe, Lowenthal, Oropeza, Simitian, Strickland, Wright NO VOTE RECORDED: Florez SENATE JUDICIARY COMMITTEE : 4-0, 4/13/10 AYES: Corbett, Hancock, Leno, Walters NO VOTE RECORDED: Harman SENATE APPROPRIATIONS COMMITTEE : 10-0, 5/3/10 AYES: Kehoe, Cox, Corbett, Denham, Leno, Price, Walters, Wolk, Wyland, Yee NO VOTE RECORDED: Alquist SUBJECT : Public utilities: smart meters: privacy SOURCE : Author DIGEST : This bill requires investor owned utilities and publicly owned utilities that use smart meters to allow customers to access their consumption data without requiring the disclosure of personally identifiable information or consumption data to a third party. ANALYSIS : Existing law provides that, among other CONTINUED SB 1476 Page 2 rights, all people have an inalienable right to pursue and obtain privacy. (Section 1, Article I, California Constitution) Existing law requires the Public Utilities Commission (PUC) to determine the requirements for a smart grid deployment plan. (Section 8360 et seq. of the Public Utilities Code.) Current PUC rules require California's largest investor-owned electrical and gas corporations to replace traditional utility meters with "smart meters." This bill requires a local publicly owned electric utility or an electrical or gas corporation that uses smart meter technology that allows a customer to access his/her electrical or gas consumption data to ensure that the customer has an option to access that data without being required to agree to the sharing of his/her personally identifiable information, including electrical consumption data, with a third party. This bill provides that the local publicly owned electric utility shall not partner with any third party that facilitates access to electrical consumption data that provides an incentive or discount to the customer for accessing their electrical consumption data. This bill provides that a local publicly owned electric utility shall not share, sell, disclose, or otherwise make accessible to any third party a customer's electrical consumption data, except as provided in paragraph (2). This bill provides that a local publicly owned electric utility may make a customer's electrical consumption data accessible to a third party in either of the following circumstances: 1. The customer was given the option, pursuant to subdivision (b), to access electrical consumption data without being required to share personally identifiable information with a third party, the customer has declined that option, and the customer has instead chosen, without revoking that choice, to access his or her electrical consumption data from that third party. 2. The electrical consumption data is accessed or shared by SB 1476 Page 3 a third party or local publicly owned electric utility with the customer's prior express written consent for a demand response program that manages the customer's consumption of electricity in response to electrical supply or pricing conditions. This bill provides that a local publicly owned electric utility shall use reasonable security procedures and practices to protect a customer's electrical consumption data from unauthorized access, destruction, use, modification, or disclosure. This bill provides that nothing in this bill shall preclude a local publicly owned electric utility from using customer aggregate electrical consumption data for analysis, reporting, or program management if all information has been removed regarding the individual identity of a customer. This bill provides that nothing in this bill shall preclude a local publicly owned electric utility from disclosing a customer's electrical consumption data to a third party for billing purposes. This bill provides that "electrical or gas consumption data" means data about a customer's electrical or natural gas usage that is made available as part of an advanced metering infrastructure. This bill specifies that the electrical corporation or gas corporation shall not partner with any third party that facilitates access to electrical or gas consumption data that provides an incentive or discount to the customer for accessing their electrical or gas consumption data. This bill provides that an electrical corporation or gas corporation shall not share, sell, disclose, or otherwise make accessible to any third party a customer's electrical or gas consumption data, with specified exceptions. This bill provides that an electrical corporation or gas corporation may make a customer's electrical or gas consumption data accessible to a third party in either of the following circumstances: SB 1476 Page 4 1. The customer was given the option to access electrical or gas consumption data without being required to share personally identifiable information with a third party, the customer has declined that option, and the customer has instead chosen, without revoking that choice, to access his/her electrical or gas consumption data from that third party. 2. The electrical or gas consumption data is accessed or shared by a third party, electrical corporation, or gas corporation with the customer's prior express written consent for a demand response program that manages the customer's consumption of energy in response to supply or pricing conditions. This bill provides that an electrical corporation or gas corporation shall use reasonable security procedures and practices to protect a customer's electrical or gas consumption data from unauthorized access, destruction, use, modification, or disclosure. This bill provides that nothing in this bill shall preclude an electrical corporation or gas corporation from using customer aggregate electrical or gas consumption data for analysis, reporting, or program management if all information has been removed regarding the individual identity of a customer. This bill provides that nothing in this bill shall preclude an electrical corporation or gas corporation from disclosing a customer's electrical or gas consumption data to a third party for billing purposes. Comments 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 SB 1476 Page 5 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." Purpose of the bill . The author has been a strong advocate of the development of a smart grid, a component of which is smart meters. However, the author notes that the use of new technology in conjunction with the state's energy supply infrastructure requires added diligence over the protection of a customer's personally identifiable information including electrical and gas consumption data. Information should be kept securely and customers should have the ability to withhold data without disrupting their ability to manage their energy consumption. Consumption data can reveal sensitive personal information about a customer's schedule and intimate details about their lives such as their medical needs and personal habits. The disclosure becomes more acute with time as appliances become "smarter" and interact with the smart meter and utility. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Appropriations Committee: Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund PUC enforcement $115 Special* * Public Utilities Commission Utilities Reimbursement Account The PUC indicates that it will require one additional staff SB 1476 Page 6 position to implement the bill. According to the PUC, an additional position is needed to review utility marketing materials, review utility contracts with any third parties that provide consumption data to customers, and review utility practices to ensure customer information is protected. RJG:mw 5/5/10 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END ****