BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1476|
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                              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
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                                                               SB 1476
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           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.


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          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  

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          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)

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          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

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