Seventh Circuit Hears Privacy Case Over Smart Meters

CHICAGO (CN) – With privacy concerns under the national spotlight, the Seventh Circuit wrestled Tuesday with a claim that a Chicago suburb’s smart electricity meters collect too much information about residents in violation of the Fourth Amendment.

“This is the internet of things that’s starting to give some people the creeps,” U.S. Circuit Judge Diane Wood said at the hearing. “Soon your oven is going to be telling you how to lose weight.”

Naperville Smart Meter Awareness, a nonprofit, sued Naperville in 2012, claiming the city rushed to install smart meters that wirelessly broadcast information about consumers’ electricity every 15 minutes.

The old analog meters were checked by an employee of the city’s utility service just once a month.

In addition to collecting kilowatt per hour data used to bill customers, the smart meters also collect “reactive power data.”

“This data can be used to identify unique signatures of appliances used in the home,” which is far more invasive than the data collected by analog meters, the nonprofit’s attorney, David Lee Gulbransen, told the Seventh Circuit panel Tuesday morning.

For example, the data would allow the city to determine when a resident is using their oven or electric water kettle.

Naperville claims that its interest in this data will allow it to keep electricity prices as low as possible for its customers, as the city purchases all its electricity from outside sources.

It also says the information will help it to implement a demand-response program to reward customers for using less electricity during peak hours and promote environmental conservation.

A federal judge found for the city in 2013, finding that city residents consented to the data collection by signing up for electricity service.

But on Tuesday, the Seventh Circuit was not certain that customers “voluntarily” gave up their personal information in order to receive electricity service, or whether they were forced to simply to live in the modern world – especially when there is no alternative utility service offered in Naperville.

“Why doesn’t Naperville have a business interest in this data?” Judge Wood asked Gulbransen. “It’s not just to be snoopy and figure out who’s baking a lot of apple pies.”

She also inquired whether the city could legally use the collected data to send a targeted mailer to people using old appliances to inform them about city programs to encourage a switch to more energy-efficient appliances.

Gulbransen responded, “Business interest does not protect you from violations of the Fourth Amendment.”

The judges queried Naperville attorney Kristen Foley extensively about the city’s privacy practices regarding the data it collects.

“We will not release any information without a warrant or a court order,” Foley told the court. “We hold ourselves to a very high standard.”

U.S. Circuit Judge William Bauer asked whether the city might use this information to hunt down people growing marijuana in their homes, but Foley denied that Naperville had any such intention.
Wood laughed and said, “It’ll all be legal soon, don’t worry about it.”

Foley told the panel that even the Naperville Police Department needed a warrant to access the data, and that none of it is sent out to a third party for analysis.

“What we are doing is reasonable,” Foley said, even if it is not the least restrictive means of achieving the city’s goals.

Naperville allows residents to shut off their smart meter’s wireless component for a fee of $68.35, but the nonprofit says this is not a true opt-out alternative, because the meter will still collect the customer’s information on its memory card.

Unlike private utility company Comcast, which also has pushed for the installation of smart meters, Naperville’s utility service does not permit residents to keep their analog meter, even for a fee.

U.S. Circuit Judge Michael Kanne rounded out the three-judge panel.

The Seventh Circuit is expected to issue a ruling in this case within three months.

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