BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 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  
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          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  







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             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:







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          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  







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          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  







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          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

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