by K.T. Weaver, SkyVision Solutions
For those consumers who oppose utility smart meters, it should not be necessary to “opt-out” of a program for which there never was an “opt-in.” This is especially true when there are no clear benefits for participation in a program that exposes the consumer to significant risks and also involves the violation of personal rights.
Despite the above, I think it is important to highlight the information contained in a recently published review article (law analysis), “For privacy’s sake: Consumer ‘opt outs’ for smart meters.” Although the article assumes a false narrative that there are “significant societal benefits” to be gained from smart meter deployments, it does walk through the thought process of why consumers should be offered ‘opt out’ mechanisms in order that they can “exercise their privacy and data protection rights.”
The published paper also states “that consumers should not be charged unreasonable fees, and the reasonableness of opt out fees must be examined in light of the nature of consumers’ privacy rights under EU and U.S. laws.”
The above statements, although positive in one sense, are astonishing for how someone could think it legal or ethical to charge a consumer any fee in order to avoid having one’s rights violated. Nevertheless, the article may be of value to consumers and activists still fighting to achieve reasonable ‘opt-out’ policies within their local jurisdictions.
From the Abstract of “For privacy’s sake: Consumer ‘opt outs’ for smart meters,”
“The EU/U.S. comparative law analysis provided in this paper aims to help energy suppliers and regulators craft opt out mechanisms to protect individual privacy and data protection rights while also achieving important societal benefits from smart meters.”
What follows are selected quotations from the published law analysis and where I provide emphasis with bold font in some instances. Please note that I purchased the copyrighted published article and am providing these selected quotations in the public’s interest for non-commercial purposes. Others should not feel at liberty to liberally quote this posting without having purchased the published article. In addition, the full published article will provide more complete context than what is provided below.
“Smart metering systems enable massive collection of personal information from European and U.S. households with the potential intrusiveness increased by the ability to infer information from the data about what members of a household do within the privacy of their own homes.”
“In both Europe and the United States, concerns about consumer privacy and data protection and concerns about other potential harms, including health concerns, have caused delays in programs to roll out smart meters. In particular, questions are arising about whether consumers should be given options to keep analog meters or provided with other options that would mitigate the potential privacy-intrusiveness of smart meters.”
Smart meters, individual rights and societal interests
“Significant consumer privacy and data protection concerns are associated with implementation of smart metering systems that relate to a traditionally highly private arena, the home. These interests include the legal rights of people to be free from unreasonable surveillance and other intrusions into their homes and their personal and family lives. Once smart metering systems are installed, such surveillance could be either overt or covert, depending on whether the consumers who are under surveillance are aware of the surveillance.”
“Citing privacy and other concerns, some consumers have objected to having smart meters installed in their homes. When consumers object to smart meters and are allowed to opt out (in some cases, opt out may mean modifying or disabling the meter’s monitoring and communication capabilities, or it may mean choosing a meter that has not been equipped with AMI), they are taking action to prevent potential privacy and data protection intrusions associated with having a smart meter by excluding the device that is capable of monitoring and communicating energy use data from their homes.”
Laws regarding privacy and data protection
“[O]ne must examine many sources of U.S. law to see if any laws are applicable to privacy and data protection in smart metering systems because a comprehensive legal framework for information privacy does not exist in the U.S. Although there is generally an absence of statutory privacy or personal data protection law that could be applied to smart metering systems, U.S. laws (primarily found in state privacy tort laws and state and federal constitutional rights) have long protected individual privacy from unreasonable intrusions, including the right of people to privacy in their homes and personal communications.”
“However, given the industry-specific nature of existing privacy statutes (and apart from potential application of constitutional and tort laws), it is likely that smart meter data will receive little privacy protection under current U.S. laws as it does not fall within the scope of existing legal protections.”
“Across the U.S., consumers continue to challenge smart metering implementation programs for a variety of privacy, health, or other reasons, including demanding the right to opt out and challenging the reasonableness of opt out fees. In response, PUCs in Maine, Oregon and California require energy suppliers in their states to provide opt out programs. Several other states are considering whether to require energy suppliers to provide opt out programs. In states where the right to opt out is provided, there may be fees imposed on consumers who opt out and the amount of the fees may vary considerably depending on the state in which the consumer resides and on the business practices of the particular energy supplier that provides the electricity to the consumer.”
Recommendation on opt out mechanisms
“Having articulated and examined the privacy and data protection concerns consumers have that relate to having a smart meter installed in their homes and the relevant societal benefits to be gained from smart metering implementation programs, we come to the conclusion that opt out mechanisms should be offered to consumers that are consistent with balancing personal privacy and societal interests.”
“Because the societal benefits to be achieved from smart metering implementation programs are important, we do not believe that opt in mechanisms requiring consumer consent to installation of smart meters is appropriate, because requiring advance and explicit consumer consent to all smart meter installations would greatly burden such programs and make it unlikely that the societal benefits of the programs could be achieved.”
“However, we conclude that an opt out mechanism is necessary to give consumers the opportunity to object to smart meters in order to protect their privacy and personal data.”
“Having concluded that consumers’ privacy and data protection rights should be recognized and protected in smart metering implementation programs and that an opt out mechanism is desirable for this purpose, what type of opt out mechanism should be offered? There are two parts to answering this question.”
“First, what type of opt out mechanism should be included in a smart metering implementation program? From an information privacy perspective, choosing not to have a smart meter device installed in their homes is the ultimate opt out for consumers. This is so because such an opt out mechanism excludes the device that makes it possible for energy suppliers and others to initially collect household-level energy-use data, effectively precluding collection, use and subsequent sharing and processing of that data.”
“A less drastic option would be to allow the consumer to choose to have a smart meter installed in the home that minimizes the collection of granular energy use data, such as one that has been modified through programming of the device to collect and communicate only energy use data that are necessary to deliver energy to the consumer or that are essential to management of the energy grid.”
“This latter option is preferable because it achieves a better balance between protecting consumers’ privacy and personal data and achieving important societal interests that support participation in smart metering systems, such as promoting better management of the energy supply and improving energy conservation. Modifying the data collection and communication capabilities of smart meters also helps prevent privacy intrusive secondary uses of smart meter data by energy suppliers and third parties that are unrelated to the direct provision of energy, such as the use of granular household energy use data for behavioral advertising purposes.”
“Second, is it lawful (and equitable) for energy suppliers to charge consumers additional fees for opting out? Currently additional fees for opting out do not appear to be included in opt out mechanisms available to consumers in the European Union, but they are common in the United States. As in the Friedman v PUC case discussed earlier, energy suppliers argue that it is fair to charge additional fees to consumers who opt out because such opt outs result in additional expenses for energy suppliers and undermine potential societal benefits of smart metering systems.”
“From an information privacy perspective, we think much caution should be exercised in determining the amount of fees that energy suppliers may charge consumers who opt out. We reach this conclusion having considered that opt out fees may unfairly incentivize consumers to give up their information privacy rights at a time when exercising an opt out is viewed as increasing their energy bills without tangible benefit.”
“To the extent that the necessary purposes of smart metering systems can be achieved without charging customers for opting out, no opt out fees should be charged to customers who opt out. This is so because it is recognized that energy suppliers do not need data from all households to manage the energy supply, and many of the important societal benefits of the smart grid may be achieved without each household sharing granular energy use data.”
“However, if opt outs become prevalent among energy suppliers’ customers, there may be insufficient data collected through smart meters to facilitate management of the energy supply and otherwise to achieve the societal benefits anticipated from the smart grid. A reasonable balance of the relevant interests is to charge consumers no (or low) fees to opt out and to have energy suppliers and government regulators engage in ongoing assessment of the success or lack of success of smart meter implementation programs in terms of meeting the societal goals of the programs.”
“Finally, it may also be important to correlate the applicable fees for opting out to the income of those who opt out, such that lower-income customers pay lower fees. The adjustment of opt out fees for income level is needed to ensure that the cost of exercising one’s privacy and data protection rights is not so high that it makes privacy and data protection out of reach to customers who have limited resources.”
“If challenged by consumers on consumer privacy and data protection grounds, an opt out mechanism as described above is likely to be upheld by the courts in the United States, where consumers do not have broad information privacy rights and privacy and data protection is not generally viewed as a fundamental human right in the context of commercial uses of that data.”
“The right to be free of unnecessary and intrusive surveillance in the home and of one’s personal communications is recognized under both EU and U.S. law, and energy consumers have significant concerns related to this traditionally private arena that are implicated by installation and operation of smart meters in their homes. Accordingly, consumers in both the EU and the U.S. should be provided with opt out mechanisms that respect their rights to privacy and data protection, provided these mechanisms do not significantly frustrate achievement of important societal benefits that can be gained from smart meter implementation programs.”
“However, not all of the societal benefits to be achieved from smart meters are equally important, and it will be imperative to reach consensus about which societal benefits are essential. Some potential societal benefits, including those that are related to secondary uses of smart meter data that have commercial value but are not directly related to delivering energy to the supplier or better managing the smart grid, should be found to be subordinate to consumers’ privacy and data protection rights.”
“Use of smart meter data for direct marketing of products and services to consumers is a prime example of a use that is not essential to smart metering implementation programs.”
“Accordingly, consumers should be allowed to opt out of privacy intrusive smart metering implementation programs, which should include having the choice of smart meters that have been modified to limit collection and sharing of energy use data except for data that is necessary to deliver energy to them and to enable the energy supplier to properly manage the energy grid.”
“Further, when exercising their right to opt out, consumers should not be charged unreasonable fees and the reasonableness of opt out fees must be examined in light of the nature of consumers’ privacy rights under EU and U.S. laws. In most cases, we think that charging consumers opt out fees is inconsistent with EU citizens’ fundamental rights.”
“Finally, fees charged to individual consumers for opting out should be reasonable in light of the consumers’ relative income level, such that low-income consumers are not being asked to pay fees that make it unduly burdensome to exercise their privacy and data protection rights.”
Despite the narrative maintained by the authors of the published law analysis that there are societal benefits to smart meters, which is quite questionable as to what they might be, the analysis arrived at the clear conclusion that all consumers should have the right to be provided a reasonable ‘opt-out’ mechanism.
As was mentioned in my article entitled, ‘The Increased Risks to Privacy Created by Smart Meters Are Likely to Provoke Opposition,’ Reveals Latest Research Study:
“Unlike social media technologies or shopping cards, consumers need electricity and must purchase it under monopolistic conditions. They cannot realistically refuse to purchase electricity.”
The above reality presents an extraordinary burden for consumers desiring to preserve their privacy rights in the face of smart meter installations. In some instances, they must either move house and home or otherwise pay high fees to maintain a traditional usage meter. It is incumbent on governments and utilities to provide a reasonable ‘opt-out’ mechanism.
In some jurisdictions in the United States which currently allow no smart meter “opt-outs,’ such as for Commonwealth Edison customers in Illinois and utilities in Pennsylvania, given the analysis provided in the referenced article, there can no longer be a rational or ethical basis for a government/PUC or utility continuing to dismiss consumer privacy concerns by not providing a smart meter ‘opt out’ mechanism, one which is accompanied with little or no fee. In another example, the City of Naperville, Illinois, only provides a non-wireless alternative smart meter ‘opt out’ option which still intrusively collects granular data every 15 minutes. For other jurisdictions that charge high ‘opt-out’ fees that are considered as “penalties” for consumers attempting to preserve their privacy rights, they need to reevaluate the basis for those fees.
Source Material for this Article
“For privacy’s sake: Consumer ‘opt outs’ for smart meters,” by Nancy J. King and Pernille Wegener Jessen; Computer Law & Security Review; 30 (2014) 530-539; http://dx.doi.org/10.1016/j.clsr.2014.07.001