BILL ANALYSIS SB 1198 Page 1 Date of Hearing: August 4, 2010 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 1198 (Huff) - As Amended: June 30, 2010 Policy Committee: UtilitiesVote:12-1 Natural Resources 7-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill: 1)Delays implementation of the California Energy Commission's (CEC's) television energy efficiency labeling regulations until July 1, 2011. 2)Makes the CEC regulations effective July 1, 2011 if a Federal Trade Commission (FTC) labeling rule for televisions is not effective by that date, and continues the CEC regulations in effect until FTC final labeling rule is effective. FISCAL EFFECT Minor absorbable cost for the CEC to conduct an abbreviated rulemaking to modify its existing regulations and to respond to public inquiries regarding the modification. COMMENTS 1)Background . On November 18, 2009, the CEC adopted television energy efficiency standards for new televisions offered for sale in California beginning in 2011. According to the commission, televisions represent approximately 10% of a home's electricity use, and the first phase of regulations would reduce the energy consumption of new televisions by approximately one-third. A second phase of regulations, for products sold beginning in 2013, would reduce energy use by approximately one-half. In addition, the CEC is requiring labeling for televisions sold in California in accordance with SB 1198 Page 2 their efficiencyy regulations. The labels must clearly identify a product's "on" mode power consumption in watts-the rate at which the product consumes energy. The FTC's Appliance Labeling Rules require energy disclosures for a variety of covered products, including home appliances, lighting, and plumbing products. Prior to the CEC proposing its own approach to energy-use labeling, the FTC proposed earlier this year to extend the labeling rule to televisions. The FTC proposal would require each television to have specific information, including annual energy costs based on a uniform electricity rate and on-mode usage rate and 19 hours per day in standby mode. There is no statutory deadline for a final rulemaking, but upon final issuance, the labeling requirements will become effective in six months to allow for state implementation. 2)Purpose . The sponsors of SB 1198 (Consumer Electronics Association [CEA]) are concerned that the CEC's requirements for energy labeling on televisions disregarded the federal rulemaking already underway. Moreover, CEA notes the CEC's labeling requirements have presented several interpretation problems for both manufacturers and retailers, and that the requirements were not based on a careful approach to consumer product labeling and thus, for example, included font size requirements that are impractical in the marketplace. 3)Opposition . The CEC believes that the FTC labels could be misleading. By conveying operating costs in dollars, compared with the CEC labels that convey power consumption, the commission argues that Californians could be misled into believing a television is cheaper to operate than it really is due to different energy rate structures across the country. The CEC states this bill dilutes CEC's standards because the federal standards are almost always less stringent that California's. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081