BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2581 - Bradford Hearing Date:
June 23, 2014 A
As Amended: June 16, 2014 FISCAL B
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DESCRIPTION
Current law requires the California Energy Commission (CEC) to
adopt regulatory standards for minimum levels of operating
efficiency for energy and water intensive appliances. The
regulations cannot result in any added total costs for consumers
over the designed life of the regulated appliances. (Public
Resources Code � 25402)
Current law authorizes the CEC to prescribe other cost-effective
measures to promote use of energy and water efficient appliances,
including energy consumption labeling not preempted by federal
labeling law. (Public Resources Code � 25402)
Current law requires any appliance manufacturer doing business in
California to submit information to the CEC so it can study the
effects of efficiency regulations on sales of appliances, and
makes this manufacturer information confidential and not a public
record. (Public Resources Code � 25402)
Current law prohibits the CEC from increasing or decreasing any
minimum efficiency appliance standard for five years after its
adoption unless another cost-effective measure for that appliance
is adopted. (Public Resources Code � 25402)
Current law requires the CEC to certify compliance options for
new products, materials, and calculation methods in order to meet
the energy efficiency standards. (Public Resources Code �
25402.1)
Current law requires the CEC to continuously carry out studies,
technical assessments, research projects, and data collection
directed to reducing wasteful, inefficient, unnecessary, or
uneconomic uses of energy, including improved appliance
efficiency. (Public Resources Code � 25401)
Current law requires the CEC to develop a public domain computer
program to estimate energy consumed by residential and
nonresidential buildings. (Public Resources Code � 25402.1)
This bill would make changes to appliance standard statutes,
including provisions that would:
Authorize the CEC to consider or recognize voluntary
agreements (VAs) establishing minimum efficiency standards
in lieu of regulation, and take VAs into account in
planning;
Require the CEC to rely on the most current data
available and, whenever feasible, to rely on data no older
than one year prior to commencing an appliance standard
rulemaking;
Authorize the CEC to repeal a standard, as specified, if
it is found to be duplicative or inconsistent with federal
or state law; and
Authorize a manufacturer to use electronic labeling to
meet any labeling requirement.
This bill would make changes to building standard statutes,
including provisions that would:
Require the CEC, before approving the public domain
computer program that estimates energy consumption, to
perform preliminary tests of the software using examples of
common residential and non-residential building, and to make
the results of the tests publicly available;
Require the CEC to ensure that its computer program to
estimate energy consumption is available at least six months
before the effective date of adopted or updated standards;
Require the CEC to adjust the software to improve
modeling accuracy for use within single-family residential
dwellings and multi-family residential dwellings with up to
four units; and
Require users of the public domain computer program to
provide consumers, along with the output of the energy
assessment tool, with a notice explaining how assumptions
used by the computer program may be different than actual
energy use.
BACKGROUND
California Leads Nation in Energy Efficiency - Energy efficiency
is the top priority in California's policies to achieve energy
savings and reduce greenhouse gas emissions. California is a
leader in energy efficiency regulations, setting Title 20
standards for various appliances years before the U.S. Department
of Energy.<1> The state's Title 24 energy efficiency building
regulations, which are updated every three years, specify
requirements relating to lighting, insulation, windows, heating,
ventilation, and air conditioning (HVAC) systems, and other
construction details designed to reduce energy consumption and
lower energy bills for consumers. In addition, numerous programs
administered by the CEC, California Public Utilities Commission
(CPUC), investor-owned utilities (IOUs), publicly-owned utilities
(POUs) and local government agencies offer consumers incentives
or rebates to purchase energy efficiency appliances and construct
or install energy efficient devices or technologies in
residential and commercial buildings. The CEC states that these
efficiency programs have helped the state to keep per capita
energy consumption at nearly the same level for more than 35
years whereas those outside the state now consume about 60% more
per capita than in the 1970s. However, since California's
population has grown, electricity use has nearly doubled.
Appliance Efficiency Standards - Since 1976, California law has
required that certain appliances or devices meet energy
efficiency standards. Manufacturers must test these products and
certify efficiency data with the CEC before the products can be
sold in the state. <2> Appliance Efficiency Regulations include
standards for both federally regulated appliances and
non-federally regulated appliances, such as air conditioners,
heaters, and fans, clothes washers and dryers, dishwashers,
lighting products, plumbing fittings and fixtures, pool and spa
equipment, refrigerators and freezers, televisions, consumer
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<1>
http://www.energy.ca.gov/appliances/documents/CAEnergyEfficiencySt
andards.pdf
<2>
http://www.energy.ca.gov/2012publications/CEC-400-2012-FS/CEC-400-
2012-FS-003-En.pdf
audio and video equipment, and water heaters. The CEC maintains
an online Appliance Efficiency Database intended to help
consumers save money and energy by providing information on
energy efficient appliances.
Set-Top Boxes Voluntary Agreement - Under a non-regulatory VA
announced in December 2013, the national electricity use of new
set-top boxes<3> will be decreased by 10 to 45 percent, depending
on the model, and energy use of these units will be made publicly
available for the first time. Once in full effect, the agreement
is expected to save consumers $1 billion annually and prevent the
emission of 5 million tons of carbon pollution each year. The
agreement was reached following a yearlong negotiation prompted,
in part, by a Natural Resources Defense Council (NRDC) report
that set-top boxes consume approximately $3 billion worth of
electricity annually - much of it when the box is turned off and
the user is neither watching nor recording a program. Signatories
to this VA include the NRDC, American Council for an
Energy-Efficient Economy and other energy efficiency advocacy
groups, the Consumer Electronics Association as well as companies
in the "Pay TV" industry, including Comcast, Time Warner Cable,
DIRECTV, AT&T, and Motorola.
CEC Appliance Standard Rulemakings - The CEC has an open
rulemaking to adopt efficiency standards, certification, and
marking requirements for large and small battery charger systems,
and to adopt self-contained lighting control standards from Title
24 (see above) to ensure that only self-contained lighting
controls that comply with applicable standards are sold or
offered for sale in California. In addition, the CEC is engaged
in the 2013 appliance efficiency pre-rulemaking, which is
currently inviting interested stakeholders to submit proposals
for standards, test procedures, and labeling requirements that
will improve the efficiency and reduce the energy or water
consumption of various appliances in the consumer electronics,
lighting, and water appliances categories, among others. Finally,
the CEC has an open rulemaking to implement SB 454 (Pavley,
Chapter 591, Statutes of 2011), which will establish an
enforcement program and allow CEC to assess civil penalties and
fines for violations of California's Appliance Efficiency
Regulations.
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<3> These units are for 'pay TV' and usually are installed in
homes by cable, satellite, or telephone companies.
COMMENTS
1. Author's Statement . "The CEC prescribes energy efficiency
regulations governing energy usage of homes, businesses,
appliances, heating and air conditioning systems, and more.
The tools approved by the CEC that are used to estimate
energy usage are not accurate enough and consistently
overestimate energy usage. This bill requires the CEC's
public domain software that estimates energy usage to be
routinely adjusted. It would also make consumers aware of
potential differences between the model and their actual
energy use patterns by providing them with a notice
explaining the caveats. Furthermore, when standards are
adopted or updated, the CEC software is not always fully
tested and ready to go. This bill would require the testing
and approval is completed six months before standards go
into effect. Finally, this bill would add voluntary
agreements to the list of actions the CEC may take to
promote water and energy efficient appliances, ensure the
CEC uses the most current data when enacting energy
efficiency standards for appliances, and authorize them to
repeal an appliance standard that is duplicative or
inconsistent."
2. What Data Should Be Used ? Studies have found that the CEC
has based analyses related to appliance standards on
"outdated" data. For example, one report stated that the
CEC's 2011 analysis of battery chargers and self-contained
lighting controls was based on "outdated" data that
overestimated product savings and underestimated the
incremental costs of compliance.<4> Another study stated
that analyses regarding consumer electronics such as TVs,
compact audio products, and DVD players utilized "outdated
power draw values to develop an energy-consumption baseline
that, in many cases, does not appear to reflect the
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<4> Wazzan and Eash. 2011. A Critique of the Regulations on
Battery Charging Systems Proposed by the California Energy
Commission.
https://www.ce.org/CorporateSite/media/Government-Media/Green/2011
-CECreportBatteryChargers.pdf
performance of typical new devices."<5>
But what does "outdated" really mean? Supporters of the
provision in this bill that requires the CEC to use the
"most current data available and, whenever feasible, data no
older than one year" state that rapid technological
innovation in the appliance and consumer electronic
industries means data from past years may exaggerate actual
energy savings. However, timeliness is not necessarily the
most important criterion for the CEC to consider because
multi-year datasets can provide insight into trends and
serve as context for current, but incomplete, datasets.
Moreover, opponents of this provision state that the data
provision as written would "open the door ? to unduly
influence the CEC's rulemaking by selectively providing
partial recent data" and would enable entities to "delay
rulemakings by challenging the use of data solely because of
its vintage." To ensure that CEC makes data-driven decisions
with flexibility to rely upon all data while still
emphasizing the importance of current data, the author and
committee may wish to amend this provision by striking "rely
on" and inserting "consider".
3. Do Voluntary Agreements 'Get To A Better Solution
Faster' ? This bill would authorize the CEC to consider or
recognize VAs in lieu of regulation, and to take VAs into
account in planning. Note that this language is permissive,
rather than directive.
As described above, last year, manufacturers, environmental
advocates, and others developed a national VA on reducing
energy consumption by set-top boxes. Even though the
agreement was universally supported by all parties,
supporters of the VA provision in this bill state that the
CEC was "unable to embrace it because the law governing its
operations does not permit the approval of non-regulatory
alternatives". Supporters opine that the VA provision will
"allow the CEC to encourage and embrace" voluntary
agreements which, they state, offer a platform for parties
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<5> TIAX. Assessment of Analyses Performed for the California
Energy Efficiency Regulations for Consumer Electronics Products.
http://www.ce.org/CorporateSite/media/Government-Media/Green/2006-
CECreportPower.pdf
to collaborate, share credit for energy savings, and 'work
out the kinks' before a standard is (potentially) adopted.
VAs can often be achieved in as few as six months, rather
than the multi-year-long regulatory process of adopting
standards at the CEC.
4. Electronic Labeling Is a Win-Win . As electronic devices
become more widespread and smaller and as energy efficiency
goals get stricter, there is growing interest in electronic
labelling. The labelling provision in this bill is a
'win-win' in that it streamlines manufacturing and saves
paper that otherwise would be included in packaging to
provide consumers with disclosures. The labeling could be
simple and easily recognizable - such as a small green dot
on a battery charger - yet indicate a lot of information,
much like the EnergyStar label on larger appliances.
5. Elimination of Regulations . Currently, the CEC cannot
increase or decrease any minimum efficiency appliance
standard for five years after its adoption unless another
cost-effective measure for that appliance is adopted,
effectively limiting repeal of an existing regulation. This
bill expressly authorizes the CEC, notwithstanding that
five-year requirement, to repeal a standard when it finds
that it is "duplicative or inconsistent" with federal or
state law. Supporters state that it affords flexibility and
is a "needed tool so that the commission does not keep
regulations on the books after they have become stale and
are creating confusion for manufacturers."
However, maintaining "duplicative" California and federal
standards is important to preserve California's ability to
enforce appliance standards when the federal government does
not, or after the federal government has repealed such a
law. As recently seen with light bulbs, due to an
appropriations rider, the U.S. Department of Energy is now
prohibited from spending money to enforce the light bulb
efficiency standards. As California's law remains on the
books, California has preserved its ability to pursue
enforcement activities if non-complying bulbs are being sold
in the state.
According to NRDC, the CEC already has authority to repeal
existing standards, and has acted on this authority by
repealing standards on digital-to-analog converters in 2007,
when industry made this request. NRDC states that the
standard for repeal in this bill would open the door for
industry efforts to repeal other existing standards, which
would undermine the CEC's rulemaking efforts and waste staff
and financial resources.
Rather than repeal a regulation, perhaps the CEC could
suspend enforcement of a regulation that is duplicative or
inconsistent with federal law. Given that the CEC has an
open rulemaking on appliance standard enforcement, the
author and committee may wish to consider amending this bill
to strike this provision, and instead direct the CEC to
consider, within its pending rulemaking on enforcement of
appliance standards, a process for the repeal, or
suspension of enforcement, of a regulation.
6. Fiscal Effect . According to the Assembly Committee on
Appropriations, the CEC is likely to experience increased
costs in the $750,000 range for contracts and staffing
associated with new requirements relating to appliance
standards, and increased in the $700,000 range for contracts
and staffing associated with new requirements relating to
building standards.
With regards to costs, the author notes that, "Some of the
costs include hiring staff to subpoena companies for
appliance energy data. The CEC currently has this authority
and has not exercised it. This bill does not change this
authority". With regard to the timely release of the CEC
compliance software for buildings, the author notes that,
"the bill does not change the timing or the CEC's authority.
This bill requires the CEC to do better planning". With
regard to building standards, the author notes that, "the
CEC claims it already reviews energy efficiency estimation
products for accuracy".
7. Related Legislation .
SB 454 (Pavley, Chapter 591, Statutes of 2011) authorizes
the CEC to establish an administrative process to enforce
appliance standards.
AB 1850 (Calderon, 2012) prohibits effectiveness of state
battery charger labeling requirements contingent on adoption
of similar federal requirements. Status: Died on the Senate
inactive file.
ASSEMBLY VOTES
Assembly Floor (79-0)
Assembly Appropriations Committee (17-0)
Assembly Utilities and Commerce Committee
(13-0)
POSITIONS
Sponsor:
Author
Support:
California Building Industry Association
California Cable & Telecommunications Association
Consumer Electronics Association
Information Technology Industry Council
TechAmerica
TechNet
Oppose:
Environment California
Global Green USA
Natural Resources Defense Council
Sierra Club California
US Green Building Council, California
Alexis Erwin
AB 2581 Analysis
Hearing Date: June 23, 2014