BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1198
                                                                  Page  1

          Date of Hearing:  June 28, 2010

                       ASSEMBLY COMMITTEE ON NATURAL RESOURCES
                                Wesley Chesbro, Chair
                     SB 1198 (Huff) - As Amended:  April 27, 2010

           SENATE VOTE  :  24-9
           
          SUBJECT  :  Energy: State Energy Resources Conservation and  
          Development Commission: regulations

           SUMMARY  :  Prohibits the California Energy Commission (CEC)  
          updated television energy efficiency labeling regulations from  
          taking effect or from being enforced until July 1, 2011.  On  
          July 1, 2011 the CEC's labeling regulations will only take  
          effect if the U.S. Federal Trade Commission (FTC) has not  
          already issued a national television labeling regulation at that  
          time.

           EXISTING STATE LAW  :

          1)Requires CEC to adopt regulations describing the standards for  
            minimum levels of energy efficiency for appliances using a  
            significant amount of energy.

          2)Establishes that CEC require the use of product labeling, not  
            preempted by federal law, in order to promote the use of  
            energy efficient appliances so long as it does not result in  
            added cost for consumers.

           EXISTING FEDERAL LAW  :

          Establishes that FTC adopt appliance labeling rules for  
            products, such as home appliances, lighting, and plumbing  
            products, that disclose energy use for each product.  These  
            FTC labels must include EnergyGuide information including the  
            estimated annual operating energy cost that has been  
            determined by the U.S. Department of Energy (DOE).  FTC does  
            not currently extend the labeling rule to televisions.   

           THIS BILL  :

          3)Delays the implementation and enforcement of CEC television  
            energy efficiency labeling regulations until July 1, 2011.









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          4)Establishes that CEC television energy efficiency labeling  
            regulations will not take effect on July 1, 2011 if the FTC  
            has issued a national television labeling regulation.

          5)Establishes that if on July 1, 2011 FTC has not issued a  
            national television labeling regulation, the CEC television  
            energy efficiency labeling regulations may be adopted and  
            enforced only until the FTC has issued a national television  
            labeling regulation.

           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, there are minor costs to the Energy Resources Program  
          Account associated with the implementation of the CEC television  
          energy efficiency labeling regulations.

           COMMENTS  :   

           1)Background.   The Warren-Alquist State Energy Resources  
            Conservation Act establishes that CEC adopt regulations  
            describing the standards for minimum levels of efficiency for  
            appliances that use a significant amount of energy or water.   
            These regulations include standards for both  
            federally-regulated appliances and non-federally-regulated  
            residential and commercial appliances including water heaters,  
            clothes washers, dishwashers, traffic signals, lighting, and  
            heat and air conditioning systems to be sold in California.   
            Regulations adopted by CEC in this manner aim to achieve  
            significant energy savings state-wide that are feasible,  
            attainable, and do not result in added costs to the consumer  
            for the estimated lifetime of the regulated appliance.  
           
            On November 18, 2009, CEC adopted television energy efficiency  
            standards for new televisions offered for sale in California  
            beginning in 2011.  According to the CEC, televisions  
            represent approximately 10% of a home's electricity use.  The  
            regulations would only apply to televisions sold in California  
            after January 1, 2011 and would not apply to existing  
            televisions.  The phase of regulations beginning in 2011 would  
            reduce television energy consumption by approximately a third,  
            followed by a second phase of regulations beginning in 2013  
            would reduce television energy use by approximately half.  The  
            new regulations involve three changes to the current  
            television standards enforced by the CEC that were adopted in  
            2006.  First, while a television is turned off, it will be  
            required to use a maximum of 1 watt compared to the previous 3  








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            watts maximum.  Second, televisions would require a power  
            usage efficiency standard while the television is turned on.   
            Third, televisions using at least 100 watts of power will have  
            the added requirement of meeting a minimum 0.9 power factor  
            standard.  These new standards will be the first time that  
            "on" mode television energy efficiency is regulated.  

            Labeling, or "marking of applicances," is proposed by the CEC  
            to accompany televisions sold in California in accordance with  
            their efficiencyy regulations.  The labels must be clearly and  
            legibly displayed and must describe the television's "on" mode  
            power consumption in watts; the rate at which they consume  
            energy.  These labels must accompany the television to be sold  
            in any venue including websites, brochures, and retail venues  
            within California.  The labels are not required on televisions  
            that are manufactured in California to be sold out of state.   
            The CEC labeling requirements were developed and adopted  
            alongside the television energy efficiency standards.  

           2)FTC television energy standards and labeling.   The Energy  
            Independence and Security Act of 2007 established that FTC had  
            the authority to require energy labeling rules for certain  
            consumer electronics, including televisions.  These FTC labels  
            must include EnergyGuide information including the estimated  
            annual operating energy cost that has been determined by DOE.   
            These labels are bright yellow and describe key aspects of an  
            appliances function as well as energy-related information  
            including an estimate of yearly electrical use in kilowatt  
            hours (kwh) and an estimated yearly operating cost in dollars.  
             This dollar amount is an approximation due to the varying  
            rates of electricity across the nation as well as an  
            assumption of the amount of use of the appliance.  The  
            estimate is based upon a flat electrical cost rate of eleven  
            cents per kwh, and a usage rate of five hours per day and 19  
            hours per day in "off" mode (Figure 1).  The EnergyGuide label  
            may contain the Energy Star logo if the appliance meets the  
            Energy Star standards.  However, the presence of an  
            EnergyGuide label does not automatically imply that the  
            appliance has the Energy Star rating.  Televisions currently  
            do not have EnergyGuide labels, however the FTC is currently  
            proposing to require them for televisions so that consumers  
            have more information regarding their energy use.  After  
            reviewing public comments on the proposal, the FTC determined  
            that EnergyGuide labels should be required for televisions.   









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            Figure 1.


            Although the EnergyGuide label provides a dollar amount, the  
            amount is an estimate and customers may adjust this value for  
            themselves based upon their electricity rates and the  
            frequency of appliance usage in order to get a more accurate  
            annual dollar energy value.  The proposed CEC television  
            energy label describes the energy use of the appliance in the  
            form of watts, which also requires the customer to calculate  
            for themselves the annual electrical cost of the appliance.  

            According to current state law, the CEC is required to  
            prescribe measures such as energy consumption labeling not  
            preempted by federal labeling law.  As described above, the  
            FTC has not yet developed and implemented its national  
            television labeling standard, so the proposed CEC label  
            regulation would not be preempted by the FTC label until the  
            FTC officially implements their standard national television  
            label.  
           
          REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Consumer Electronics Association
          Consumer Electronics Retailers Coalition
          Custom Electronic Design & Installation Association
          Mitsubishi Digital Electric America
          Plasma Display Coalition
          Sharp Electronics Corp.
           
            Opposition 
           
          California Energy Commission

           Analysis Prepared by  :  Jessica Westbrook / NAT. RES. / (916)  
          319-2092