The Maine Supreme Court recently upheld a state agency’s dismissal of a privacy challenge to the installation of smart meter technology in Maine homes and businesses.  Smart meters use wireless technology to collect and transmit data to utility companies about how and when customers use electricity. While smart grid advocates argue that the use of smart meters will promote energy efficiency and customer savings, privacy advocates have raised concerns about the nature of the data that is collected. In Friedman v. Public Utilities Commission et al., Maine consumers argued, inter alia, that a utility company’s collection of information via smart meters represented a violation of the Fourth Amendment, that the Maine Public Utilities Commission had not adequately considered their privacy concerns, and that utilities could not impose extra fees on customers who opt out of using a smart meter.

The Commission issued two orders in mid-2011 requiring that the Central Maine Power Company (CMP) provide customers with an option to opt out of smart meter installation.  However, under the Commission’s order, consumers who opted out would be subject to extra fees, including an initial charge and recurring monthly charges. The plaintiffs in Friedman filed a complaint with the Commission, expressing privacy and Fourth Amendment concerns, and challenging the charges on consumers who opted out of using smart meters as a “discriminatory action against those with legitimate privacy and trespass concerns.”  The Commission dismissed these claims without a hearing, finding that it had already investigated and addressed the consumers’ concerns in response to prior complaints.  Plaintiffs appealed to the state supreme court.

While the Maine Supreme Court affirmed the Commission’s dismissal of plaintiffs’ privacy claims, it did not directly address the merits of those claims because the privacy question on appeal was whether the Commission had adequately addressed the plaintiffs’ privacy concerns. The court applied an “abuse of discretion” standard and upheld the dismissal because the Commission had already considered the privacy implications of smart meters in response to prior complaints.  The court also dismissed the Fourth Amendment claim and the challenges to the additional fees imposed on customers who opt out of smart meter use, but the court’s decision also avoided addressing the substance of these issues.  Instead, the court focused on the fact that the plaintiffs brought their constitutional claims against the Commission itself (instead of CMP) under a statute that only permitted claims against public utilities. As a result, the court’s decision may not serve as a useful precedent for privacy advocates or public utilities in future legal disputes over privacy issues associated with smart grid technology.  However, Friedman does suggest that public utility commissions and companies advocating for smart grid expansion may enjoy significant advantages in future cases before appellate courts if those courts examine similarly narrow legal questions and apply deferential standards of review when examining prior agency decisions. 

The court ruled for the plaintiffs on a non-privacy claim, holding that the Commission had not adequately considered the health and safety risks of smart meters and remanding to the Commission for further proceedings.