BILL ANALYSIS
SB 1198
Page 1
Date of Hearing: June 21, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 1198 (Huff) - As Amended: April, 27, 2010
SENATE VOTE : 24-9
SUBJECT : California Energy Commission: regulations.
SUMMARY : This bill delays implementation of the California
Energy Commission's (CEC) television energy use labeling
requirement until July 1, 2011, to allow the Federal Trade
Commission (FTC) time to develop and adopt its own national
energy efficiency labeling rule for televisions. Specifically,
this bill :
1)Provides that the television product labeling regulations
adopted by the CEC would not be effective until July 1, 2011,
if the FTC fails to issue a final labeling rule for those
products as of July 1, 2011.
2)Provides that those regulations would remain in effect only
until the FTC issues a final labeling rule for television
products.
EXISTING LAW :
1)Requires the CEC to adopt regulatory standards for minimum
levels of operating efficiency for appliances the use of which
requires a significant amount of energy or water on a
statewide basis. These regulations cannot result in any added
total of costs for consumers over the designed life of the
regulated appliances.
2)Federal law authorizes the FTC to require energy disclosures
for certain consumer electronics, including televisions,
personal computers, cable or satellite set-top boxes,
stand-alone digital video recorder boxes, and personal
monitors and preempts state labeling regulations once a rule
is adopted for a specific appliance.
FISCAL EFFECT : Unknown.
COMMENTS : California has pursued its energy demand reduction
SB 1198
Page 2
goals through two primary avenues: (1) utility-sponsored
programs to reduce end-user consumption, and (2) codes and
standards designed to lower the energy use of buildings and
appliances.
According to the CEC, by 2004, these efforts had cumulatively
saved more than 40,000 gigawatt hours (GWh) of electricity and
12,000 megawatts (MW) of peak electricity, equivalent to 24
500-MW power plants. More than half of the statewide savings
has come from the building and appliance standards, with the
balance resulting from programs implemented by the state's
investor owned utilities and local publicly owned utilities. As
a result of these efforts, California's energy use per-capita
has remained stable for more than 30 years while the national
per-capita average has steadily increased and is nearly double
that of California.
CEC Appliance Standards : California's Appliance Efficiency
Regulations were established in 1976 in response to a
legislative mandate to reduce California's energy consumption.
The regulations are updated periodically to allow consideration
and possible incorporation of new energy efficiency technologies
and methods.
The current Appliance Efficiency Regulations, (California Code
of Regulations, Title 20,
Sections 1601 through 1608), dated August 2009, contain
amendments that were adopted by the California Energy Commission
on December 3, 2008, and replaced all previous versions.
The official version of these regulations is published by the
Office of Administrative Law.
The Appliance Efficiency Regulations include standards for both
federally-regulated appliances and non-federally-regulated
appliances. Twenty-three categories of appliances are included
in the scope of these regulations which include commercial and
residential products including water heaters, clothes washers,
dishwashers, traffic signals and lighting, and heat and air
conditioning systems. The standards within these regulations
apply to appliances that are sold or offered for sale in
California, except those sold wholesale in California for final
retail sale outside the state and those designed and sold
exclusively for use in recreational vehicles or other mobile
equipment.
SB 1198
Page 3
As part of the Appliance Efficiency Regulations, in November
2009, the CEC adopted energy efficiency standards (Docket
#09-AAER-1C) for new televisions offered for sale in California
beginning in 2011 and 2013. Currently, statewide TV energy
consumption is estimated to be 6,360 million kilowatt hours
(kWh) per year, or roughly two percent of California's gross
system electricity usage. This percentage is expected to
increase as the current stock (mostly analog cathode ray tubes)
is replaced by the newer and larger TV types. There are many
"large-screen" digital televisions on the market that use 500 or
more kWh per year, as much energy as many new refrigerators.
There are two tiers of efficiency standards in the adopted
regulations: one for televisions manufactured on or after
January 1, 2011, and other for televisions manufactured on or
after 2013. The Tier 2 efficiency standards are more stringent
than Tier 1 standards. However, the labeling requirement
applies uniformly to both Tiers of televisions. The first
television standard (Tier 1) could potentially reduce energy
consumption by average of 33 percent. The second television
standard (Tier 2), in conjunction with Tier 1, could potentially
reduce energy consumption by an average of 49 percent.
The standards have no effect on existing televisions.
Televisions sold in California, beginning January 1, 2011, will
be required to be permanently marked with the on-mode power
consumption in watts and list the same data in any publication
website, document or retail display that is used for selling the
product. The regulation package specifies July 1, 2010, but the
CEC reports that this was a typographical error that will be
changed to January 1, 2011 at the Office of Administrative Law
(OAL).
The CEC estimates that the proposed regulations will generate an
estimated 6,515 GWh in energy savings annually after all
existing stock is replaced with televisions that meet the Tier 2
standard. This savings will avoid the need to build a new power
plant to supply this power that otherwise would have been used
by televisions. The net present value of the overall energy
cost savings to consumers for California, over the life of a
television, is expected to be approximately $8.1 billion. The
estimated total present value of this regulation is
approximately $8.7 billion, which is the sum of the net present
value of the energy cost savings from the proposed standards
over the expected life of a television once all televisions meet
SB 1198
Page 4
the Tier 2 standards and savings in avoided construction cost of
a $615 million natural gas power plant.
According to the CEC, this is a conservative estimate on several
grounds. This estimate does not account for any increases over
time in the price of energy, should they occur as expected.
Furthermore, it does not include any savings from the power
factor and luminance requirements of the standards. Finally,
the estimate does not include any savings from televisions that
exceed the Tier 2 standards, as some already do.
The regulation package has been adopted by the CEC and will be
submitted to OAL within the next month.
Pending FTC Television Labeling Requirement : The FTC's
Appliance Labeling Rules require energy disclosures for a
variety of covered products, including home appliances,
lighting, and plumbing products. The Rule requires most covered
products to have, at the point of sale, yellow EnergyGuide
labels containing estimated annual operating cost information
based on Department of Energy test procedures. The label
information must also appear in catalogs and on Internet sites
offering the products for sale.
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 to help consumers make better
purchasing decisions. Within the proposed rulemaking (16 CFR
Part 305), the FTC would require each television to have
specific information consistent with EnergyGuide labels for
other products including annual energy costs based on a uniform
electricity rate of 11-cents per kWh, an on-mode usage rate of
five hours per day and 19 hours per day in standby mode to
calculate annual cost and energy consumption information. The
label would also have comparative information to other
televisions grouped by screen size.
According to the FTC, public comments to the proposed rulemaking
were received in May 2010 and are still being reviewed. No
statutory deadline has been set forth by the FTC for release of
a final rulemaking. Upon final issuance of the ruling, the
labeling requirements will become effective in six months to
allow the states time to implement the rules.
Proponents Comments : According to the sponsors, the Consumer
SB 1198
Page 5
Electronics Association (CEA), the general concern with the
CEC's adopted requirements for energy labeling on televisions is
that the CEC's requirements disregarded the federal rulemaking
already underway (which began in early 2009). This concern was
raised by stakeholders numerous times during the CEC's
rulemaking. Furthermore, CEA notes the CEC's television labeling
requirements have presented several interpretation problems for
both manufacturers and retailers. CEA believes the methodology
CEC's labeling requirements were not based on a careful and
considered approach to consumer product labeling and thus
included font size requirements that are impractical for the
marketplace.
Opponents Comments : According to the CEC, the FTC labels could
be misleading. By conveying operating costs in dollars,
compared with the CEC labels which convey power consumption
information in watts, Californians could be misled into
believing that the television is cheaper to operate than it
really is due to different rate structures across the country.
The CEC has been performing energy efficiency standards for
decades, which has made California the leader in energy
efficiency policies. The CEC states that appliance labeling
plays a crucial role in efficiency and consumer choice and has
saved Californians millions of dollars over the years. The CEC
states that this bill only serves to dilute the CEC's standards
because the federal standards are almost always less stringent
that California's.
In addition, this bill seeks to reverse California's important
and pioneering work in energy efficiency. The CEC notes that it
has adopted California regulations and viable efforts should not
be thwarted.
REGISTERED SUPPORT / OPPOSITION :
Support
California Retailers Association (CRA)
Consumer Electronics Association (sponsor)
Consumer Electronics Retailers Coalition (CERC)
Custom Electronic Design & Installation Association (CEDIA)
Mitsubishi Digital Electronics America (MDEA)
Plasma Display Coalition (PDC)
SB 1198
Page 6
Sharp Electronics Corp. (Sharp)
Opposition
California Energy Commission (CEC)
Planning and Conservation League
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083