BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1476| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 1476 Author: Padilla (D) Amended: 8/20/10 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 SENATE FLOOR : 30-0, 5/10/10 (Consent) AYES: Aanestad, Alquist, Ashburn, Calderon, Cedillo, Cogdill, Correa, Cox, DeSaulnier, Ducheny, Florez, Hancock, Hollingsworth, Huff, Kehoe, Leno, Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Romero, Runner, Simitian, Steinberg, Walters, Wolk, Wright, Wyland, Yee NO VOTE RECORDED: Corbett, Denham, Dutton, Harman, Liu, Oropeza, Strickland, Wiggins, Vacancy, Vacancy ASSEMBLY FLOOR : 77-0, 8/25/10 - See last page for vote SUBJECT : Public utilities: smart meters: privacy CONTINUED SB 1476 Page 2 SOURCE : Author DIGEST : This bill requires an investor-owned utility (IOU) or publicly owned utility (POU) using advanced metering (smart meters) to protect consumers energy usage data from an unauthorized access or disclosure, and prohibits IOUs and POUs from certain activities. It also deletes a pilot project relating to the relative value to ratepayers of information, rate design, and metering innovations. Assembly Amendments make clarifying changes. ANALYSIS : Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations and gas corporations, as defined. Existing law requires the commission to conduct a pilot study of certain customers of each electrical corporation to determine the relative value to ratepayers of information, rate design, and metering innovations using specified approaches, but prohibits this data from being used for any commercial purpose, unless authorized by the customer. This bill repeals the provisions relating to the pilot study. This bill prohibits an electrical corporation or gas corporation from sharing, disclosing, or otherwise making accessible to any third party a customer's electrical or gas consumption data, as defined, except as specified, and requires those utilities to use reasonable security procedures and practices to protect a customer's unencrypted electrical and gas consumption data from unauthorized access, destruction, use, modification, or disclosure. This bill prohibits an electrical corporation or gas corporation from selling a customer's electrical or gas consumption data or any other personally identifiable information for any purpose. CONTINUED SB 1476 Page 3 This bill prohibits an electrical corporation or gas corporation from providing an incentive or discount to a customer for accessing the customer's electrical or gas consumption data without the prior consent of the customers. This bill requires that an electrical or gas corporation that utilizes an advanced metering infrastructure that allows a customer to access the customer's electrical and 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 with a third party. This bill provides that, if the electrical corporation or gas corporation contracts with a third party for a service that allows a customer to monitor his/her electricity or gas usage, and the third party uses the data for a secondary commercial purpose, the contract between the electrical or gas corporation and the third party shall provide that the third party prominently discloses that secondary commercial purpose to the customer. This bill adopts nearly identical requirements applicable to a local publicly owned electric utility with respect to electrical consumption data, as defined. Background In December 2008, the PUC initiated a proceeding (R.08-12-009) to consider policies for IOUs to develop a smarter electric grid in the state. Within its smart grid proceeding, the PUC will consider setting policies, standards and protocols to guide the development of a smart grid system, and facilitate integration of new technologies, such as, demand-side technologies, distributed generation, storage and electric vehicles. The rulemaking will also investigate the contact between the smart grid and consumers (residential, commercial, industrial, agricultural) and cyber-security issues which include policies to ensure customer privacy. On May 21, 2010, the PUC rendered a proposed decision and a final decision should be released later this summer. Comments CONTINUED SB 1476 Page 4 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." 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 Ongoing special fund costs of about $100,000 to the PUC for one position to monitor IOU compliance with the bill's requirements. [Public Utilities Reimbursement Account.] SUPPORT : (Verified 8/24/10) CONTINUED SB 1476 Page 5 Public Utilities Commission ASSEMBLY FLOOR : AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill Berryhill, Tom Berryhill, Block, Blumenfield, Bradford, Brownley, Buchanan, Caballero, Charles Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore, Eng, Evans, Feuer, Fletcher, Fong, Fuller, Furutani, Gaines, Galgiani, Garrick, Gatto, Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello, Nielsen, Norby, V. Manuel Perez, Portantino, Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra Strickland, Swanson, Torlakson, Torres, Torrico, Tran, Villines, Yamada, John A. Perez NO VOTE RECORDED: Fuentes, Vacancy, Vacancy RJG:mw 8/25/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED