BILL ANALYSIS
SB 1476
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Date of Hearing: June 14, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 1476 (Padilla) - As Amended: June 10, 2010
SENATE VOTE : 30-0
SUBJECT : Customer privacy: advanced metering infrastructure.
SUMMARY : Prohibits a publicly owned utility (POU) and investor
owned utility (IOU) from sharing with a third party a customer's
electrical and gas consumption data received from an advanced
metering infrastructure (AMI) device with certain exceptions.
This bill imposes certain provisions that a utility must comply
with as it relates to the privacy of the customer's consumption
data. Specifically, this bill :
1)Repeals Public Utilities Code section 393 relating to the
California Public Utilities Commission (PUC) pilot study on
rate design and metering innovations to assist residential and
small commercial customers with better management of their
electricity use.
2)Requires a POU and IOU that utilizes an AMI device to allow a
customer to access the customer's electrical or gas
consumption data without sharing personal information,
including electrical and gas consumption data, with a third
party provider.
3)Prohibits a POU and IOU from contracting with any third party
that facilitates access to electrical or gas consumption data
that provides and incentive or discount to the customer for
accessing their consumption data with certain exceptions.
4)Prohibits a POU and IOU from sharing, disclosing, or otherwise
making accessible to any third party provider a customer's
electrical or gas consumption data with certain exceptions.
5)Prohibits a POU and IOU from selling a customer's electrical
or gas consumption data or any other personally identifiable
information for any purpose.
EXISTING LAW :
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1)Requires the PUC to conduct a pilot study on rate design and
metering innovations to assist residential and small
commercial customers with better management of their
electricity use. Consumption data obtained in the pilot study
cannot be used for any commercial purposes unless specifically
authorized by the customer.
2)Imposes limitations on the collection and disclosure of
personal information by state agencies and restricts the
distribution of personal information for commercial purposes.
Release is permitted with the consent of the individual,
pursuant to the Public Records Act or a search warrant, or to
a governmental agency when required by state or federal law.
3)Prohibits an IOU from disclosing customer usage of the
services provided by the utility without a court order or
subpoena.
4)Establishes smart grid as the policy of the state and requires
the PUC to determine the requirements for smart grid
deployment no later than July 1, 2010; subsequently, IOUs
would be required to adopt a plan for implementation of a
smart grid no later than July 1, 2011.
FISCAL EFFECT : Unknown.
COMMENTS : The author is supportive of the development of a
smart grid, of which a component is smart meters. In fact, the
author carried SB 17 (Padilla, Chapter 327, Statutes of 2009)
which required the PUC to consider developing policies for IOUs
to develop a smarter electric grid in the state. Thus, the
author notes that the users 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.
The author believes a customer's information should be kept
securely, and the customer should have the ability to withhold
data without disrupting their ability to manage their energy
consumption. The author further notes that 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
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the smart meter and utility.
What is AMI (i.e. Smart Meter) : A smart meter is a two-way
communication device which transmits data back to the utility
and negates the need for manual meter readings. Also, smart
meters enable a utility to provide customers with detailed
information about their energy usage at different times of the
day, which in turn enables customers to manage their energy use
more proactively.
Smart Meter Deployment : Smart meters are being rolled out
nationwide and internationally. According to the Edison
Foundation, more than 8 million smart meters have been deployed
by electric utilities in the U.S. and nearly 60 million should
be in place by 2020. The PUC has authorized the state's IOUs to
replace conventional customer meters with smart meters in order
to give consumers greater control over their energy use.
Southern California Edison (SCE) has been authorized to install
approximately 5.3 million new smart meters, San Diego Gas and
Electric (SDG&E) 1.4 million electric smart meters and 900,000
natural gas meters, and Pacific Gas and Electric (PG&E)
approximately 5 million electric meters and 4.2 million natural
gas meters.
Demand Response : Demand response is a resource that allows
end-use electric customers to reduce their electricity usage
(via smart meter device) in a given time period, or shift that
usage to another time period. This is usually done in response
to a price signal, a financial incentive, an environmental
condition or a reliability signal. Demand response can save
ratepayers money by lowering peak time energy usage, which is
priced higher than off-peak usage. This lowers the price of
wholesale energy, and in turn, can lower retail rates.
Customer Privacy : To date, Sempra (SDG&E) is the only California
utility that has a meter interface allowing the customer to
access their electrical usage data through a third party demand
response provider (i.e. Google Power Meter). According to
SDG&E, the customer cannot use this tool unless the customer
relinquishes control of the data through the utilities' website,
and makes the selection to agree to allow Google to utilize the
consumption data for a commercial use. Later this year, SDG&E
customers will be able to access their consumption data directly
from its website.
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This bill does not intend to disrupt SDG&E's arrangement but
rather require the utility to provide customers with an
additional means of accessing consumption data without allowing
a third party demand response provider to collect, retain, share
or reuse their electric gas consumption information.
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 by
July.
Stakeholder Comments : The Sacramento Municipal Utility District
(SMUD) believes it is unclear if this provision would prevent a
utility from using a customer's data for basic business
functions. For instance, when a customer has not paid their
bill and SMUD refers the matter to a collection agency, it is
unclear if SMUD would be violating the law if SMUD were
accessing the customer's data for this business purpose. This
bill should not preclude SMUD from referring a customer's
account to a collection agency, as there is a provision in the
bill that allows the utility to disclose a customer's electrical
or gas consumption data to a third party for system, grid, or
other operational needs .
According to the PUC, in the future, this bill may preclude the
PUC or the IOUs from exercising the option of eliminating or
outsourcing the systems involved with accessing consumption data
if circumstances indicate that it may be a prudent choice in
terms of cost, efficiency, or competitiveness. Furthermore, the
PUC believes that this prohibition may diminish the chances for
third party demand response providers to attract customers who
may be interested in demand response. Lastly, the PUC is
concerned that the provisions in this bill may potentially
impact PUC evaluation, measurement and verification (EM&V)
efforts which rely on data collection by consultants retained by
the PUC for this purpose. The author's office and the PUC are
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continuing discussions to ensure these concerns are resolved.
The PUC's Division of Ratepayer Advocates (DRA) wants to ensure
that a customer's privacy remains protected. According to DRA,
privacy concerns could have large impacts on ratepayers, and
they don't want to see those rights bypassed. Presently, DRA is
urging the PUC to address privacy issues surrounding customer
access to data prior to allowing third parties access to that
data. DRA states that some of the usage of customer consumption
data may disclose limited energy usage and thus allow third
parties, and potentially criminals, to determine which
residences are vacant. Furthermore, this consumption data could
potentially signal landlords who may be able to surmise how many
people live in a home, perhaps in violation of a leasing
arrangement.
REGISTERED SUPPORT / OPPOSITION :
Support
California Public Utilities Commission (CPUC) (if amended)
Division of Ratepayer Advocates (DRA)
Sacramento Municipal Utility District (SMUD) (if amended)
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083