BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
SB 674 (Padilla)
As Introduced
Hearing Date: April 26, 2011
Fiscal: Yes
Urgency: No
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SUBJECT
Utilities: Privacy
DESCRIPTION
Existing law provides that if a utility contracts with a third
party for a service that permits a customer to monitor his or
her electricity or gas usage and the third party uses that
information for a secondary commercial purpose, the contract
between the utility and third party shall provide that the third
party prominently disclose that secondary commercial purpose to
the customer.
Existing law also permits a utility to disclose a customer's
electrical or gas consumption data to a third party for system,
grid, or operational needs, or the implementation of demand
response, energy management, or energy efficiency programs
provided that the contract between the utility and the third
party prohibits the use of the data for a secondary commercial
purpose without the customer's consent.
This bill would clarify that the contracts between the utility
and third party described above must secure the customer's
consent to that purpose prior to use of the data.
This bill also contains provisions relating to master-meter
service and proceeding s of
the Federal Communications Commission.
BACKGROUND
Last year, the Legislature passed and the Governor signed SB
1476 (Padilla, Ch. 497, Stats. 2010) which, among other things,
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prohibited a utility from sharing, disclosing, or otherwise
making a consumer's electrical or gas consumption data
accessible to third parties, except in specified instances. The
bill also required that in cases where a utility contracts with
a third party for a service that allows a customer to monitor
his or her electricity or gas usage and the third party uses
that information for a secondary commercial purpose, the
contract between the utility and the third party must
prominently disclose that purpose to the customer. SB 1476 also
permitted a utility to disclose a customer's electrical or gas
consumption data to a third party for system, grid, or
operational needs, or the implementation of demand response,
energy management, or energy efficiency programs provided that
the contract between the utility and that third party prohibits
the use of the data for a secondary commercial purpose without
the customer's consent.
When SB 1476 was pending in the Legislature, the author agreed
to amend the bill to make clear that a customer's prior consent
is required for the use and release of the customer's data for a
secondary purpose in both of the instances described above. The
author was unfortunately precluded from amending the bill in
this manner because of legislative deadlines. As a result, the
author agreed last year to introduce a follow-up measure in this
legislative session to make the agreed-upon changes. This bill
implements that commitment.
This bill also contains provisions relating to master-meter
service and proceeding s of
the Federal Communications Commission. This bill has been heard
by the Senate Energy, Utilities, and Communications Committee
for consideration of these provisions, which are not within this
Committee's jurisdiction. The measure was approved by that
committee on April 5, 2011 by a vote of 11-0.
(This analysis reflects author's amendments to be adopted in
Committee.)
CHANGES TO EXISTING LAW
1.Existing law provides that if an electrical or gas corporation
or local publicly owned electric utility contracts with a
third party for a service that permits a customer to monitor
his or her electricity or gas usage and the third party uses
that information for a secondary commercial purpose, the
contract between the utility and third party shall provide
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that the third party prominently disclose that secondary
commercial purpose to the customer. (Pub. Util. Code Secs.
8380(c), 8381(c).)
This bill would require that the contract secure the customer's
consent to the use of his or her data for that secondary
commercial purpose prior to use of the data.
2.Existing law permits an electrical or gas corporation or local
publicly owned electric utility to disclose a customer's
electrical or gas consumption data to a third party for
system, grid, or operational needs, or the implementation of
demand response, energy management, or energy efficiency
programs provided that the utility has required by contract
that the third party implement and maintain reasonable
security procedures and practices. (Pub. Util. Code Secs.
8380(e)(2), 8381(e)(2).) Existing law requires, in the case
of electrical or gas corporations, that the contract between
the utility and third party prohibit the use of a customer's
electrical or gas consumption data for a secondary commercial
purpose without the customer's consent. (Pub. Util. Code Sec.
8380(e)(2).)
This bill would require that the contract between the utility
and third party prohibit the use of a customer's electrical or
gas consumption data for a secondary commercial purpose
without the customer's prior consent to that use.
3.Existing law requires a mobilehome park owner who provides
master-meter service to residents and who receives a rebate
from a gas or electrical corporation to distribute a portion
of that rebate to each customer. (Pub. Util. Code Sec. 739.5.)
This bill would exclude from the definition of "rebate" the
award of a monetary incentive under the California Solar
Initiative for a solar energy system that provides electrical
generation for the common area of the park.
4.Existing law requires the California Public Utilities
Commission to monitor and participate in a 1999 proceeding of
the Federal Communications Commission. (Pub. Util. Code Sec.
709.7.)
This bill would repeal this obsolete provision.
COMMENT
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1.Stated need for the bill
The author writes that this bill would make "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."
2.Clarifying that a customer must consent prior to use
Under existing law, if a utility contracts with a third party to
provide a service that permits a customer to monitor his or her
electricity or gas usage and the third party uses that
information for a secondary commercial purpose, the contract
between the utility and the third party must provide that the
third party prominently disclose that secondary commercial
purpose to the customer. This bill would also require that the
contract secure the customer's consent to the use of his or her
data for that secondary commercial purpose prior to use of the
data.
This clarifying change makes clear that the contract between a
utility and a third party must secure a customer's consent to
that secondary commercial purpose before his or her data is used
for that purpose. This opt-in requirement-combined with
existing law's requirement that the secondary use be prominently
disclosed-ensures that a consumer is aware of the use of his or
her data for a secondary commercial purpose and consents to that
use before it occurs.
Existing law also permits an electrical or gas corporation or
local publicly owned electric utility to disclose a customer's
electrical or gas consumption data to a third party for system,
grid, or operational needs, or the implementation of demand
response, energy management, or energy efficiency programs
provided that the contract between the utility and the third
party prohibits the use of the data for a secondary commercial
purpose without the customer's consent. This bill would clarify
that a customer's prior consent is required in these instances
as well. This change, similar to the one described above, makes
clear that the use of a customer's data for a secondary
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commercial purpose is permitted only if a customer has given his
or her prior consent (opt-in) to that use.
3. Author's amendments
The author would like to make the following amendments to the
bill:
1.On page 6, line 36, after "consent" insert "to the use of his
or her data for that secondary commercial purpose"
2.On page 7, line 6, strike "this" and insert "This"
3.On page 7, line 18, after "consent" insert "to that use"
4.Amend Section 8381(c) of the Public Utilities Code to read:
If a local publicly owned electric utility 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 local publicly owned electric utility and the third party
shall provide that the third party prominently discloses that
secondary commercial purpose to the customer and secures the
customer's consent to the use of his or her data for that
secondary commercial purpose prior to the use of the data.
5.Amend Section 8381(e)(2) of the Public Utilities Code to read:
Nothing in this section shall preclude a local publicly owned
electric utility from disclosing a customer's electrical
consumption data to a third party for system, grid, or
operational needs, or the implementation of demand response,
energy management, or energy efficiency programs, provided,
for contracts entered into after January 1, 2011, that the
utility has required by contract that the third party
implement and maintain reasonable security procedures and
practices appropriate to the nature of the information, to
protect the personal information from unauthorized access,
destruction, use, modification, or disclosure, and prohibits
the use of the data for a secondary commercial purpose not
related to the primary purpose of the contract without the
customer's prior consent to that use.
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Support : None Known
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation : See Background.
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