CEA and a coalition of retailers and trade associations called Californians for Smart Energy still maintain the CEC's attempt to regulate TV energy efficiency is a misguided effort that will limit consumer choice, hurt retail sales and state sales tax revenues, destroy jobs, and stifle innovation.
The CEC will hold a hearing on its new draft of the rules on Oct. 13. A legislative hearing to review the potential economic harm of the rules is slated for Oct. 14th. Final adoption for the rules is slated for a CEC hearing in November.
The dispute revolves around multiple issues: Are the CEC's proposed regulations even needed to achieve the desired energy efficiency goals? What will be the real-world impact of the CEC's regulation on retail shelves when the new rules come into effect in 2011? And what is the long-term impact of a state imposing its own regulations on a product class that is manufactured and sold globally?
"It's a waste of everybody's time," said Steve Caldero, senior vice president and COO of Ken Crane's Home Entertainment, which operates 10 stores in Southern California. "With ENERGY STAR and the voluntary program that the industry is already putting into effect, these standards-as they go to ENERGY STAR 4.0 or 5.0-are as stringent or more stringent than the ones California is talking about."
On September 3rd, the U.S. Environmental Protection Agency (EPA) released its final specifications for The Versions 4.0 and 5.0 ENERGY STAR Specifications for Televisions. These requirements establish minimum On Mode power consumption levels, take steps to ensure a TV is viewed in the mode in which it qualified for ENERGY STAR, and curb energy associated with downloading program guide data. ENERGY STAR 4.0 becomes effective is May 1, 2010; ENERGY STAR 5.0 on May 1, 2012.
If approved, the CEC's first tier of TV energy efficiency mandates become effective January 1, 2011; a second, more stringent tier of regulations comes on line January 1, 2013.
"Everybody believes in the goal (of energy efficiency) here," said Douglas Johnson, CEA's senior director of technology policy. "The question really is what is the best way to get to those goals that support those objectives."
CEA believes CEC's energy savings goals could be achieved through voluntary programs like EnergyStar. CEA has also suggested, and the CEC's latest regulations have adopted, requirements that would have manufacturers implement an "auto power down" feature (to turn off TVs left on for an extended period of time) and ship TVs in lower-power consumption modes. In addition, CEA believes government could offer retailers incentives to sell Televisions that meet or exceed the ENERGY STAR specification.
While the ENERGY STAR program is a voluntary labeling program, the California regulation would prohibit manufacturers from selling TVs into the state that don't meet California's energy efficiency requirements.
If the CEC's proposed TV energy efficiency requirements were imposed today (mid-September), Caldero said, "On plasma side, it would affect just about every plasma size we carry." With LCD HDTVs, he estimated that the standards would prohibit "52- to 55-nch conventional LCD sizes from all the manufacturers, and some of 46s as well."
What would the TV energy efficiencies be in 2011, when the CEC rules come into effect, and when EnergyStar 4.0 would be in play?
"That's the big question," Caldero said. "I don't know if Panasonic or Samsung know what their goals are at this point."
TV manufacturers, however, are already sold on energy efficiency as a marketing point. "If they're not energy efficient, they're not going to survive in the marketplace," Caldero said. "Samsung's edge-lit LED, the 6000-8000 series products, are 40 percent more efficient than the conventionally lit models they sold a year ago," Caldero said.
Pam Crane, executive vice president at her family's business, was furious at the thought of losing sales to online and out-of-state suppliers because of this impending and unneeded regulation. "If somebody wants a plasma, there is no stopping them from getting that television online," she said. "California is becoming more and more business unfriendly."
Leon Soohoo, president and CEO of Paradyme in Sacramento, was relieved the CEC excluded larger screen TVs from this round of energy efficiency regulations, but is not sure what comes next. The CEC said energy efficiency rules for the larger screen TVs may be established in a second rulemaking process.
Soohoo is concerned that regulation of the big screen televisions might impact manufacturer's development of innovative, high performance products available to California's independent retail channel.
"For the majority of integrators and a/v retailers, what separates us from the Wal-Marts, Sams' Clubs and Costcos is the fact that we are doing the larger sizes," he said. "My fear is that California, with its good intentions, will exclude certain technology from being introduced in California, and I'm not going to be able to sell it legitimately."
This month, CEA is engaged in a full-court press to combat the CEC's TV regulation efforts, meeting with California media and legislators, and providing more information to the CEC.
"The important thing right now is that the Commission see that there's a better way," said CEA's Johnson. "In terms of next steps, it's really important for all impacted parties to voice their concerns with decision makers in California."
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