Can Smart Utility Meters Give The Government a Look Inside Your House?

by Matthew Tokson

Information about how much energy a household consumes has historically been pretty unrevealing. It might be mildly embarrassing to run up a high energy bill, but beyond that it’s difficult to think of a less sensitive form of personal data. With the rise of “smart meter” technology, however, energy utilities and government agencies can increasingly use energy data to infer what happens inside of a home. Patterns of living, the use of individual appliances--virtually anything that uses electricity can be detected. Granular energy use data can reveal what the inhabitants of a home do and exactly when they do it. This is especially true when smart meters interface with smart home devices like Amazon’s Alexa. And police have already begun to use such data in criminal prosecutions.

At the same time, smart utility meters can provide enormous benefits. They promote efficient energy grid management, helping to mitigate climate change and increase consumer welfare. They allow utilities to constantly adjust energy flows, generate just the right amount of electricity to meet demand, adapt to pre-set consumer preferences, and give customers detailed feedback on their energy consumption. They also help utilities detect and rapidly respond to service outages and switch power on and off for individual households during natural disasters. Finally, smart meters enable the increased use of renewable energy sources and large-scale batteries on the grid. 

Smart meters present a conundrum for Fourth Amendment and privacy law. Public utilities have compelling reasons to collect granular data regarding household energy use. But allowing government agents to obtain detailed data about the home without a warrant seems unacceptable under the Fourth Amendment. And permitting sales of such data to commercial parties seems undesirable as well. How should we regulate smart utility meters in the era of big data surveillance--and the era of climate change?

The way forward on smart meters is likely the development of robust use restrictions on collected data. That is, when government agencies collect personal data for valid purposes, substantial restrictions on data use and dissemination are necessary to comply with the Fourth Amendment and (ideally) with statutory privacy requirements. Developing effective use restrictions may be difficult, given the ease of data transfers between government entities or officers. But as data collection and analysis becomes increasingly essential to modern infrastructure and technology, such restrictions will often be the only viable means of protecting privacy. 

Use restrictions may be imposed by statute or local ordinance. Such laws already exist in some towns and others have been proposed by scholars. Statutes can be detailed and nuanced in ways that court-imposed restrictions typically are not. And statutes can prevent commercial exploitation of smart meter data in addition to government abuses. 

But in the absence of privacy-protective statutes, Fourth Amendment law can also provide a basis for use restrictions on data collected by non-law-enforcement agencies. In the leading case Naperville Smart Meter v. City of Naperville, the Seventh Circuit upheld a town’s use of mandatory smart meters on the ground that their data collection was “unrelated to law enforcement” and was otherwise reasonable. Importantly, the court noted that its holding depended on the particular circumstances of the case, and that “our conclusion might change if the data was more easily accessible to law enforcement or other city officials outside the utility.” The court functionally imposed a Fourth Amendment use restriction on the data. Going forward, in the Seventh Circuit, smart meter data collection is only reasonable under the Fourth Amendment so long as it's walled off from law enforcement uses. 

Likewise, in United States v. Hasbajrami, the Second Circuit ruled that the Fourth Amendment applies to law enforcement uses of data collected and stored for national security purposes. FBI agents had queried a database of emails and other communications with foreign nationals collected by the NSA under the Foreign Intelligence Surveillance Act of 1978. The Second Circuit remanded to the district court to determine whether this additional use was reasonable under the Fourth Amendment. It noted that the enormity of the communications database and the sensitive nature of the data compelled constitutional restrictions on use, lest the program turn into a limitless source of domestic surveillance. If law enforcement could query such a vast database without any constitutional check, it would be akin to a general warrant allowing the government to search wherever and whomever it pleases. 

In short, smart meters are the quintessential technology that compels use restrictions on gathered data. The brief history of smart meter implementation suggests that courts and lawmakers can successfully impose such restrictions. More broadly, government entities are already collecting personal information about citizens for a variety of legitimate, non-law enforcement purposes. Limiting access to such data will often be the best practical means to ensure citizen privacy in the era of big data.