BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
837 (Florez)
Hearing Date: 05/27/2010 Amended: 05/12/2010
Consultant: Brendan McCarthy Policy Vote: Judic. 3-1, EU&C
8-2
SB 837 (Florez), Page 2
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BILL SUMMARY: SB 837 prohibits electric and gas utilities and
third party demand response service providers from sharing
specified information about a customer, without the customer's
consent. The bill prohibits these entities from offering
incentives to customers to obtain consent to release protected
information. The bill requires the Public Utilities Commission
to ensure that any smart grid deployment plan authorized by the
Commission meets specified testing and technology standards. The
bill requires the Commission to evaluate the impact of smart
grid technology on service disconnections.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
PUC oversight of smart Absorbable within existing
resourcesSpecial *
meter standards
* Public Utilities Commission Utilities Reimbursement Account.
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STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Under current regulation, the Public Utilities Commission
requires investor owned utilities that provide natural gas and
electricity service to upgrade their metering systems to make
use of advanced metering infrastructure - often referred to as
"smart meters". These smart meters allow real time monitoring of
consumption levels by individual customers and the utilities. In
addition, smart meters allow utilities to charge customers
variable rates, depending on the price of electricity at
different times of the day or days of the week.
San Diego Gas & Electric currently allows customers with smart
meters to access information about their consumption through
Google's Powermeter software. While the use of Powermeter is
free to the customer, Google requires customers to consent to
relinquish their consumption data to Google.
SB 837 defines "third party demand response service provider" as
an entity that collects energy usage data and provides
SB 837 (Florez), Page 2
equipment, software, or services that enable customers to reduce
their energy use. The bill prohibits third party demand response
service providers from sharing any personal information on
utility customers without permission from the customer. The bill
prohibits third party demand response service providers from
offering incentives or discounts to consumers in return for
permission to share personal information. The bill requires
third party demand response service providers to adopt privacy
policies, which both the service provider and any related
vendors or contractors employed by the service provider must
abide by.
SB 837 defines customer information collected by public
utilities and investor owned utilities as personal information.
The bill requires investor owned electric and natural gas
utilities to report annually to the Office of Privacy Protection
on the number of warrants and subpoenas the utility received and
the actions taken pursuant to those warrants and subpoenas.
The bill requires the Commission to evaluate the impact of smart
meters on the frequency of service disconnections and to adopt
policies to minimize adverse impacts.
The bill prohibits investor owned electric and natural gas
utilities from disclosing any personally identifiable
information about a customer without first getting the
customer's express written consent. Upon request, utilities must
provide information about how the utility shared or disclosed
customer information with outside parties
The bill prohibits utilities from offering incentives or
inducements to customers in order to get permission to disclose
personal information. The bill requires utilities to adopt a
mechanism for members of the public to anonymously report system
vulnerabilities related to smart meters. The bill requires
utilities to adopt a statement of privacy and security
principles and to make the statement available to customers.
Utilities must ensure that any entity that has access to
customer information (such as vendors or contractors) must agree
to act in a manner that conforms to the statement of privacy and
security principles.
The bill requires the Commission to ensure that any smart grid
deployment plan authorized after January 1, 2012 meet specified
testing and technology standards.
SB 837 (Florez), Page 2
The Commission indicates that it will need two additional
positions to monitor the utilities' and third party compliance
with the privacy protection requirements in the bill. In order
to ensure that future smart grid deployment plans meet required
testing standards, the Commission will need to hire an outside
contractor at an estimated cost of $2 million. Because the
utilities are currently deploying new smart meters, it is
unlikely they will propose another smart grid deployment plan
for several years. Thus, the cost for outside evaluation of new
smart meters will occur in some future year.
SB 1476 (Padilla) 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. That bill is in the Assembly.
As proposed to be amended by the author, the scope of the bill
would be limited to testing and technology standards for smart
meters. In addition, utilities would be responsible to ensure
that future smart meters are field tested, rather than the
Commission.