California Bill Would Put Off TV-Energy Labeling, Change Standards Criteria

The CE industry is backing a measure in the California Senate that would put on hold a requirement for TVs to carry energy use labels and calls for regulators to use consumer credit financing rates as a basis for evaluating cost effectiveness in setting energy standards. The Natural Resources Defense Council opposed the measure, accusing CEA of “sponsoring” the bill in an attempt to weaken the TV energy standards adopted last November by the California Energy Commission (CED Nov 19 p1).

The labeling requirement was part of the TV energy standards. The CEC has yet to send the TV regulations to the Office of Administrative Law for approval (CED April 21 p7). The Senate Energy Utilities and Communications Committee held a hearing Tuesday on SB-1198 that would, among other things, “prohibit the implementation” of the TV labeling rule “unless the … Federal Trade Commission fails to issue a final labeling rule for that product as of July 1, 2011."

CEA told the committee that the CEC based its TV regulations on “demonstrably false assumptions, admittedly stale and outmoded data, basic mathematical errors, and conceptual mistakes that both exaggerated the ‘problem’ to be solved and overestimated the potential energy savings.” Douglas Johnson, CEA vice president of technology policy, said his group supports “a uniform national labeling program that sensibly provides consumers with product information, without imposing unrealistic costs” on device makers and retailers. The FTC has started a rulemaking on TV labeling, he said. But the CEC adopted its own labeling requirement, “which did not consider consumer preferences, labeling logistics, or the costs to the manufacturers or retailers."

A “fundamental concern” about the CEC’s rulemaking procedures is the “economic factors” that it relies on to determine whether a proposed regulation is cost effective for the consumer, Johnson said. For its TV regulations, the CEC assumed a “unrealistically low” rate of 3 percent at which a consumer could get credit, and thereby “artificially inflated” the regulations’ energy savings estimates, he said. “SB-1198 would address this fundamental problem in the Commission’s approach to cost-benefit analysis by requiring the Commission to use economic factors appropriate to the consumers’ real-world experience and applicable to consumer financing in particular,” Johnson said.

Requiring the CEC to use consumer financing rates to set standards would make it “much harder for California to set standards as the incremental costs would be greatly inflated,” said NRDC Senior Scientist Noah Horowitz. “This is one more attempt by the CEA to roll back the California standard for TVs.” But the way the bill is written, it would cover every product that the CEC sets standard for, “which is even more dangerous,” he said. The NRDC has no position on the TV labeling provision in the bill because the group has been “very active” in the FTC rulemaking,” he said. “We're hopeful they get things right there.”