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"Smart Meter" Opponents Press Privacy Challenge in Seventh Circuit

March 20, 2017 posted by Eric Christensen

Fourth Amendment Challenge Could Complicate Deployment of Advanced Metering Infrastructure

            Although it promises a range of benefits from improving the efficiency of utility operations to increasing the electric grid’s ability to accommodate distributed renewable energy resources, the deployment of Advanced Metering Infrastructure (“AMI”) has spawned controversy and litigation.  Initially, litigation focused on the supposed health effects of AMI, but these concerns were rejected as lacking a scientific foundation by both state utility commissions and by the courts.  

            Now AMI opponents are pursuing a new line of attack, arguing that, because AMI can record electricity consumption in increments a few minutes in length (as opposed to monthly or bi-monthly readings from standard meters), it presents a substantial threat to privacy.  In 2011, a group calling itself Naperville Smart Meter Awareness filed a lawsuit challenging the AMI program adopted by the City of Naperville, Illinois’s municipal utility.  Specifically, the group claimed that Naperville’s installation of smart meters amounts to a violation of the Fourth Amendment to the U.S. Constitution and the parallel provision of the Illinois constitution.  The basis for the claim is that the more granular data provided by AMI will allow governmental authorities to monitor the activities of residents by inferring what those residents are doing from how much power they are using at a particular time.  The U.S. District Court rejected these claims on summary judgment.  Naperville Smart Meter Awareness has now appealed the adverse Fourth Amendment ruling to the Seventh Circuit.

            An adverse ruling by the Seventh Circuit could create constitutional roadblocks to the continued deployment of AMI, especially for the nation's publicly-owned utilities.  Accordingly, the Seventh Circuit should join the Eighth Circuit and the Ninth Circuit, as well as other courts, in concluding that electric consumption records, by themselves, do not raise constitutional privacy concerns.  This approach will leave legislatures, utilities, and regulatory commissions with the authority to develop privacy policies for electric consumption data that balance privacy interests and the need to protect customer data with the interests of improving utility efficiency and enabling innovations based on the increasingly refined data available from smart grid technologies.  These innovations include demand response and "transactive energy" solutions that can employ advanced information technology to create markets for energy from small renewable projects and household-level demand response programs.  Similarly, smart grid technologies can allow for dynamic pricing programs that will encourage, for example, electric vehicle owners to charge during off-peak hours so that widespread adoption of electric vehicles does not create added, and expensive-to-serve, peak period demand.