BILL ANALYSIS Ó
SB 674
Page 1
Date of Hearing: June 28, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 674 (Padilla) - As Amended: May 5, 2011
PROPOSED CONSENT
SENATE VOTE : 39-0
SUBJECT : Telecommunications: Master-Metering: Data Security
KEY ISSUE : Should contracts between public utilities and third
parties that permit a customer to monitor energy consumption
data specify that the third party cannot use the customer's data
for any secondary commercial purpose without the customer's
consent?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This non-controversial bill deletes an obsolete section of the
Public Utilities Code and makes technical and clarifying
amendments to last year's SB 1476 (Ch. 497, Stats. of 2010),
which passed out of this Committee last year on consent. Last
year's bill provided that when an investor-owned utility (IOU)
or publicly owned utility (POU) contracted with a third party to
provide advanced metering ("smart meters") to its customers, the
IOU or POU was required to take certain steps to protect a
consumer's energy usage data from unauthorized access or
disclosure. This bill clarifies what was intended to be true of
last year's bill: contracts between utilities and the third
parties that provide the advanced metering programs must specify
that the third party cannot disclose data for a secondary
commercial purpose without the customer's prior consent. The
author had intended to make this clarification last session, but
could not because of legislative deadlines. This bill reflects
the author's commitment to make those changes in this session.
This bill also repeals the now-obsolete California High Speed
Internet Access Act and corrects a definition of "rebate" under
the California Solar Initiative as it relates to mobilehome
parks. This bill did not receive any "no" votes in the Senate
and recently passed out of the Assembly Utilities and Commerce
SB 674
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Committee on consent. There is no known opposition to this
bill.
SUMMARY : Clarifies that a contract between a public utility and
a third party that allows a customer to use smart meters to
monitor his or her energy consumption must specify that the
third party cannot disclose energy consumption data for a
secondary commercial purpose without the customer's prior
consent, and makes other technical changes for purposes of code
maintenance. Specifically, this bill :
1)Repeals the California High Speed Internet Access Act of 1999,
which required the Public Utilities Commission to monitor and
participate in a now-completed proceeding of the Federal
Communications Commission to determine the feasibility of
providing high bandwidth data services over telephone lines.
2)Redefines "rebate" for purposes of the California Solar
Initiative to exclude the reward of monetary incentives for a
solar energy system that provides electrical generation for
the common area of a mobilehome park.
3)Clarifies that a contract between a public utility and a third
party that allows customers to use advanced metering
technology ("smart meters") to monitor their energy
consumption patterns must specify that the third party cannot
disclose energy consumption data for a secondary commercial
purpose without the customer's prior consent.
EXISTING LAW :
1)Requires the California Public Utilities Commission to monitor
and participate in a program of the Federal Communications
Commission relating to the feasibility of requiring local
exchange carriers, as defined, to provide high bandwidth data
services over telephone lines. (Public Utilities Code Section
709.7.)
2)Requires a mobilehome park owner who provides master-meter
service to residents and who receives a solar incentive rebate
from a gas or electrical corporation to distribute a portion
of that rebate to each customer. (Public Utilities Code
Section 739.5.)
3)Prohibits an IOU or POU from sharing, disclosing, or otherwise
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making accessible to any third party a customer's electrical
consumption data, except upon consent of the customer, or
unless the IOU or POU is disclosing the customer's consumption
data to a third party for system, grid, or operational needs,
or pursuant to an energy efficiency programs. Requires the
IOU or POU to require the third party, by contract, to
implement and maintain appropriate security practices in order
to protect information from unauthorized access, destruction,
use, modification, or disclosure. (Public Utilities Code
Sections 8380 (a) and (e) and 8381(a) and (e).)
4)Provides that if the IOU or POU contracts with a third party
for a service that allows a customer to monitor his or her
electricity usage, and that third party uses the data for a
secondary commercial purpose, the contract between the utility
and the third party shall provide that the third party
prominently discloses the secondary commercial purpose to the
customer. (Public Utilities Code Sections 8380 (c) and 8381
(c).)
COMMENTS : According to the author, this non-controversial
measure is effectively a code maintenance bill. Most notably,
this bill makes clarifying amendments to last year's SB 1476
(Ch. 497, Stats. of 2010). That bill, which passed out of this
Committee last year on consent, permitted an IOU or POU to
contract with a third party to provide its customers with
advanced metering technology ("smart meters"), so long as both
the utility and the third party took certain steps to protect a
customer's consumption data from an unauthorized access or
disclosure. So-called "smart meters" transmit energy
consumption data directly to the utility company over the
Internet, which eliminates the cost of on-site reading. As
important, smart meters allow customers to monitor their
consumption patterns and, armed with this information, adopt
more efficient consumption behaviors. While this new technology
permits more intelligent and efficient energy usage, it also
raises the potential that a person's private consumption habits
could be accessed by persons for no legitimate business purpose
or sold for commercial purposes. Therefore, last year's bill
also included a number of security requirements intended to
protect a customer's consumption data and personal information
from unauthorized access, and to ensure that third party
contractors did not use the information for commercial purposes
without the customer's consent.
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According to the author, this year's bill merely clarifies what
was intended to be true of last year's bill: contracts between
utilities and third parties to provide advanced metering
programs must specify that the third party cannot disclose data
for a secondary commercial purpose without the customer's prior
consent. The author had intended to make this clarification
last session, but could not because of legislative deadlines.
This bill reflects the author's commitment to make those changes
in this session.
In addition, this bill makes two other technical "clean up"
changes. First, this bill repeals the now-obsolete California
High Speed Internet Access Act of 1999. That statute required
the California Public Utilities Commission to participate in a
federal program to determine the "feasibility" of local carriers
to provide high bandwidth data services over telephone lines.
Since the federal program has apparently terminated - and
because advances in technology have largely rendered
"feasibility" a moot point - the statute is now obsolete.
This bill also revises the definition of "rebate" as it relates
to a state Solar Incentive Program. One aspect of that program
required the owner of a mobilehome park who provided
master-meter services to residents, and who received a rebate
under the solar incentive program, to distribute a portion of
that rebate to residents based on that resident's usage. This
bill clarifies that the rebate provision does not apply to any
solar energy system that provides electrical generation to a
common area of the park.
ARGUMENTS IN SUPPORT : According to the author:
This is a code maintenance bill Ýthat repeals] an obsolete
section of the Public Utilities Code and Ýmakes]
technical, non-controversial changes to two other
sections. Of concern to the Judiciary Committee are
technical changes to SB 1476 (Padilla, 2010) which were
intended in that bill but the author was precluded from
making due to legislative deadlines. The language
clarifies the requirement in SB 1476 that parties to
contracts between utilities and third parties will follow
the principles behind the bill and include in the terms of
contracts between them that a customer's prior consent
will always be required for the use and release of a
customer's data for a secondary commercial purpose.
SB 674
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REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334