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Michigan Bill Would Allow Customers to Opt Out of Smart Meters, Undermine Federal Program

Tenth Amendment Center: Michigan Bill Would Allow Customers to Opt Out of Smart Meters, Undermine Federal Program

LANSING, Mich. (Oct. 12, 2018) – A bill introduced in the Michigan Senate would allow customers to opt out of installing “smart meter” technology on their homes and businesses without penalty. Passage of this bill would enable Michigan residents to protect their own privacy, and it would take a step toward blocking a federal program in effect.

Sen. Patrick Colbeck (R) introduced Senate Bill 1128 (SB1128) on Sept. 26. Under the proposed law, Michigan utility customers would have the option to refuse an “advanced meter,” commonly known as a smart meter.

“A utility customer may choose between the placement or use of a traditional meter or an advanced meter regardless of the utility that provides service to that customer. A utility shall honor the direction of any customer with an advanced meter who chooses to instead be serviced by a traditional meter or to not accept new advanced meter functionality, including in situations when a customer had not previously opted out of that placement or use.”

SB1128 would prohibit utilities from imposing any fee on customers opting out of smart meter technology and would establish strict notification requirements utilities must follow before installing smart meters. The proposed laws would require utilities to encrypt smart meter data and ensure third parties cannot intercept it. It would also prohibit utilities from sharing, selling or renting smart meter data except under a court order.

Smart meters monitor home energy usage in minute detail in real time. The devices transmit data to the utility company where it gets stored in databases. Anybody with access to the data can download it for analysts. Without specific criteria limiting access to the data, these devices create significant privacy issues. Smart meters can also be used to remotely limit power usage during peak hours.

Privacy Concerns

The proliferation of smart meters creates significant privacy concerns. The data collected can tell anybody who holds it a great deal about what goes on inside a home. It can reveal when residents are at home, asleep or on vacation. It can also pinpoint “unusual” energy use, and could someday serve to help enforce “energy usage” regulations. The ACLU summarized the privacy issues surrounding smart meters in a recent report.

“The temptation to use the information that will be collected from customers for something other than managing electrical loads will be strong – as it has been for cell phone tracking data and GPS information. Police may want to know your general comings and goings or whether you’re growing marijuana in your basement under grow lights. Advertisers will want the information to sell you a new washing machine to replace the energy hog you got as a wedding present 20 years ago. Information flowing in a smart grid will become more and more ‘granular’ as the system develops.”

The privacy issues aren’t merely theoretical. According to information obtained by the California ACLU, utility companies in the state have disclosed information gathered by smart meters on thousands of customers. San Diego Gas and Electric alone disclosed data on more than 4,000 customers. The vast majority of disclosures were in response to subpoenas by government agencies “often in drug enforcement cases or efforts to find specific individuals,” according to SFGate.

“Mark Toney, executive director of the Utility Reform Network watchdog group, said the sheer number of data disclosures made by SDG&E raised the possibility that government agencies wanted to sift through large amounts of data looking for patterns, rather than conducting targeted investigations.”

No Smart Meter, No Data

Refusing to allow a smart meter on your property is the only sure-fire way to ensure your energy use data won’t fall into the hands of government agents or private marketers, or end up stored in some kind of government database. Passage of SB1128 would make opting out a legal option for Michiganders and give them control over their own privacy.

Impact on Federal Program

The federal government serves as a major source of funding for smart meters. A 2009 program through the U.S. Department of Energy distributed $4.5 billion for smart grid technology. The initial projects were expected to fund the installation of 1.8 million smart meters over three years.

The federal government lacks any constitutional authority to fund smart grid technology. The easiest way to nullify such programs is to simply not participate. SB1128 would make that possible. If enough states pass similar legislation, and enough people opt out, the program will go nowhere.

We’ve seen a similar opt-out movement undermining Common Core in New York. Opting out follows a strategy James Madison advised in Federalist #46. “Refusal to cooperate with officers of the Union” provides a powerful means to fight back against government overreach. Such actions in multiple states would likely be effective in bringing down federal smart meter programs.

WHAT’S NEXT

SB1128 was referred to the Senate Energy and Technology Committee where it must pass by a majority vote before moving forward in the legislative process.

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