The New York Public Service Commission (New York PSC) has approved the transfer of customer utility data to a third-party vendor without prior customer consent for the purpose of conducting energy efficiency programs. The New York PSC's order last month reversed an earlier ruling in which it approved the use of energy efficiency behavior modification programs administered by OPower for Central Hudson Gas & Electric Corporation (Central Hudson), but required that Central Hudson receive prior individual customer consent to the use of their customer usage data in the programs.

OPower's energy efficiency programs aim to incentivize utility customers by sending them personalized reports comparing their energy usage to those of similarly situated customers. OPower argued that the design requires access to personally identifiable customer information including names, addresses, and individual customer usage data and does not provide customers an opportunity to grant informed consent prior to the transfer of their personal information from the utility to OPower. After receiving the information and notifying those program participants who will receive the reports, the participants will have the opportunity to “opt-out” from receiving the reports. However, their data will already have been transferred to OPower and will continue to be used in the energy efficiency program.

Many jurisdictions require that customer data not be shared with third parties unless the customer has consented in advance. The New York PSC nevertheless approved the data sharing with OPower, concluding 1) that the contractual privacy obligations between the utilities and OPower were sufficient to protect customer privacy interests; 2) that providing customer data to OPower did not constitute a "sale" of customer data under New York law; 3) that OPower will be using the customer data solely for the use of administering the energy efficiency programs, which the New York PSC viewed and a rate-payer-funded utility function; and 4) that the customer data was necessary to successfully implement the energy efficiency programs.

The issue of third-party access to customer utility data is hotly debated, particularly in light of the evolution of the smart grid and smart meter programs. It remains to be seen whether other jurisdictions will adopt the position of the New York PSC on this issue.