What are the stakes when the Pennsylvania Supreme Court tackles smart meters? Issues and impacts | Cozen O’Connor

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During its oral argument session in December 2021, the Pennsylvania Supreme Court will hear arguments in three consolidated cases regarding the installation of smart meters by electric utilities. A smart meter is part of a network that includes a meter, two-way communication, computer hardware and software, and trained support personnel. Pennsylvania Law 129 of 2008 amended the Pennsylvania Utility Code to require electric utilities with 100,000 or more customers to provide smart meter technology at a customer’s request, in the construction of new buildings and in accordance with a depreciation schedule not exceeding 15 years. .

The Supreme Court has agreed to consider several issues in these cases, but the critical questions are: (1) whether the code mandates the universal deployment of smart meters or instead allows consumers to opt out of the installation of meters intelligent; and (2) the burden of proof that a consumer must meet to prove a violation of article 1501 of the code.1 This alert briefly discusses the events that led to the Supreme Court’s consideration of these issues, and then discusses the potential impacts of the Supreme Court’s decision.

CONTEXT

Law 129 was enacted to reduce energy consumption and demand. Smart meters help achieve this by providing customers with direct access and the ability to use price and consumption information. Smart meters support time-of-use and real-time pricing schedules. Smart meters also support automatic control of electricity consumption by the customer, the electric utility or a third party (at the request of the customer). However, some customers have resisted installing smart meters in their homes and businesses, for privacy, security, and other concerns.

As early as 2013, the Pennsylvania Public Utility Commission (PUC) ruled that the General Assembly intended to require all covered electric utilities to deploy smart meters across their systems. The PUC ruled that the code does not give customers a general right to opt out of installing smart meters, but a customer could argue that installing a smart meter at their home or business would be a service. dangerous or unreasonable. Therefore, the PUC has ruled that a customer who files a complaint alleging that the installation of a smart meter would violate Section 1501 is entitled to a hearing, but has the burden of proving that the installation and the using a smart meter at home or at business will exacerbate or adversely affect their health.2

In cases to be heard by the Supreme Court, the Electricity Utility (PECO Energy Company) has sought to replace existing self-reading meters with wireless smart meters. Several residential customers have refused to allow the utility to replace their meters, claiming they are medically sensitive to radiofrequency electromagnetic (RF) energy emissions from wireless meters. The utility tariff provided customers with options, such as moving the meter to customer’s property, but customers rejected those options. The utility threatened to end customer service, and customers filed complaints with the PUC. After testing with numerous medical and expert testimonials, the PUC concluded that customers had not shown that their health would be affected by the smart meter. Therefore, the PUC concluded that these customers had failed to demonstrate that the utility had failed to provide them with a safe and reasonable service.

Upon review, a divided Commonwealth of Pennsylvania court found that the code requires utilities to offer smart meters to all customers, but does not require all consumers to accept the offer. Therefore, the majority found that the code does not prevent utilities – or the PUC – from responding to customer requests to avoid RF emissions.

With respect to the burden of proof, the Commonwealth Court placed the question in the following context (emphasis in original):

The issue here is much more obscure than simply stating the correct burden of proof. What is the procedure when RF emissions have known dangers, but research has not yet determined the extent of these dangers? Should consumers assume the risk that RF emissions will harm them more than others because of their sensitivity and underlying health conditions? Conversely, should the CEEC be required to respond to consumer concerns even if medical research has not yet definitively determined the degree of risk posed by the level of RF exposure involved?

The Commonwealth Court held that the burden of proof on customers was to show that the service of the public service was That is unsafe Where unreasonable; customers did not need to prove that the service was the two unsafe and unreasonable. In addition, the Commonwealth Court ruled that consumers must demonstrate, by a preponderance of evidence, that smart meters would cause them adverse effects on their health. It was not enough for them to prove the potential or risk of damage from smart meters; they had to demonstrate a “conclusive causal link” between RF exposure and adverse health consequences.

The Commonwealth Court concluded that the PUC’s decision was based primarily on the finding that the code mandates the universal deployment of smart meters. Finding this erroneous conclusion, the Commonwealth Court ordered a remand of the case so that the PUC could determine whether the accommodations are appropriate (even without proof of harm to the client). The Commonwealth Court encouraged the PUC, on remand, to explore ways to balance the interests of the parties, for example by allowing the use of wired smart meters or disabling the RF emission functions of a wireless smart meter. wire.

RESULTS AND POSSIBLE CONSEQUENCES OF THE SUPREME COURT DECISION

One possible outcome of this case is that the Supreme Court could agree with the PUC that the code mandates the universal deployment of smart meters. Such a decision, whether “good” or “bad” in terms of interpretation of the law or of public policy, would seem to bring little change in the electricity industry, as it would confirm the long-standing interpretation. code date by the PUC. A Supreme Court ruling adopting the PUC’s position would remove the lingering uncertainty on the issue, but would otherwise have little apparent impact on the status quo.

If, on the other hand, the Supreme Court concludes that customers can opt out of installing smart meters, the Supreme Court should consider – or should send the case back to the Commonwealth Court or the PUC for processing – the circumstances under which clients may opt out. Could clients opt out for any reason or could clients opt out only for certain specified reasons such as health impacts? Will customers be required to prove harm, or will utilities be required to make accommodations even without proof of harm? Will customers be allowed to opt out if they prove, after installing a smart meter, that they have suffered adverse health effects from this smart meter?

The practical consequences of a decision to allow clients to opt out could be significant. Electric utilities have invested hundreds of millions of dollars in smart meter systems. The Supreme Court ruling could force them to make significant additional investments. An electric utility may need to have multiple grids in place simultaneously in order to provide electrical service to customers who use wireless smart meters as well as customers who use an analog meter or wired smart meter. There could also be an increased administrative burden on utilities due to the increased number of customer withdrawal requests and the need to respond to more of those requests. The PUC could also face an increased workload if consumers file more complaints with the PUC because their withdrawal requests are denied. All of these possible outcomes would have a financial impact – on electric utilities and their tariffs and on the PUC and its assessments to fund its operations. This does not mean that the Supreme Court should affirm the position of the PUC to avoid these consequences; it is simply to recognize that the Supreme Court’s ruling on the proper interpretation of the code has real-world consequences.

Nonetheless, the Supreme Court’s ruling on the customer’s burden of proof could have an even greater impact than its ruling on whether customers can opt out of installing smart meters. Indeed, the Supreme Court’s decision on the burden of proof would apply to a wider variety of cases; it would not only apply to cases involving smart meters of electric utilities, but would apply to any case involving a utility (electricity, natural gas, pipeline, water, wastewater, telecommunications or transport service) in which the complainant alleges that the utility will violate section 1501 of the code if that utility takes (or does not take) certain specified actions in the future.

Cases before the Supreme Court were unusual in that they involved trials that lasted several days and involved expert testimony from both sides. This is unusual for PUC consumer complaint procedures, but will it become more common in the future as consumers attempt to meet a tort-like burden of proof? If so, will this create backlogs within the PUC or require the PUC to hire additional administrative law judges?

Another possible outcome of the Supreme Court ruling, regardless of the Supreme Court ruling, is that the General Assembly could amend the code in response to the ruling. Perhaps the Supreme Court ruling – in the eyes of the legislature – will misinterpret the intention of the legislature in passing Bill 129, or perhaps the legislature has changed its collective thinking over the past 13 years. years since law 129 amended the code. Of course, if the legislature amends the code to clarify its intention regarding a customer’s right to opt out of the installation of smart meters, the legislature could also take the opportunity to make further changes to the code.

CONCLUSION

The stakes are high when the Supreme Court rules on the smart meter cases listed during the December pleading session. Lawmakers, regulators, power industry executives and utility practitioners are expected to monitor the outcome of these cases in 2022.

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