California is viewed as a leader in energy efficiency, but are all regulations created equal? In 2007, the California Energy Commission (CEC) proposed giving public utilities the ability to change the temperature in homes and businesses statewide via remote control to prevent strains on the state’s power supply. Thankfully, Californians recognized the obvious privacy implications of this regulation, not to mention the fact that it was economically counterproductive. Public outrage was swift, causing the CEC to drop the proposal.
But it seems like history is already repeating itself. The CEC is now proposing an arbitrary regulation on television electricity usage that would take 25 percent of LCD and plasma big screen televisions – and 100 percent of plasma TV’s over 60 inches – off the market entirely. According to a recent Resolution Economics, LLC study, if enacted, this proposal could destroy 4,600 jobs and cost California $50 million a year in lost tax revenues.
So tomorrow, a growing coalition of consumers, small businesses and associations, Californians for Smart Energy, will hold a news conference in Sacramento to demonstrate widespread opposition to this unnecessary and harmful regulation.
The CEC’s economic damage would be inflicted in the name of “energy efficiency.” Now I’m not opposed to conserving energy – in fact, I pride myself on California’s leadership in this area. I just prefer to throw my support behind smart energy policies; ones that promote energy efficiency without causing undue harm to California’s already suffering economy and small businesses.
As is the case with many regulations that come out of Sacramento, small business owners will be hit the hardest. I should know, because I am one.
As the owner of Paradyme Sound & Vision, which specializes in designing and installing complete Home Theater Systems, I can personally attest to the fact that we small businesses bear a lopsided share of the regulatory burden.
Employing 34 staff between two Sacramento stores, our niche in this fast and competitive industry is helping families take full advantage of their home entertainment options. With the economy in the doldrums, Californians are staying in more, and relying on their home entertainment and control systems to replace other, costlier activities. One way that we help them do this is by providing state-of-the-art Home Theater Systems at down-to-earth prices.
My company prides itself on selection and affordability, but this regulation would devastate our business. The CEC simply doesn’t understand how my customers purchase these kinds of products. My business is not largely dependent on casual foot traffic like a Starbucks. Instead, most customers learn about TVs in magazines and trade publications. They read the reviews, compare features and then visit my store to learn more, which can lead to a sale.
But if I can’t offer all the TV models in the market, customers will simply buy TVs online or – if their location permits – Oregon, Nevada and Arizona. By banning the television models that make up the bulk of our revenues, the CEC’s approach will simply drive consumers out of stores like mine, sending their dollars to online and out-of-state retailers.
Not to mention that this regulation is unnecessary in the first place. For years, manufacturers and retailers have produced energy efficient products to supply consumer demand. Programs like the feds’ ENERGY STAR encourage the industry – without regulations – to increase efficiency as they compete to develop the next generation of televisions. And consumer demand is further leading the industry in the right direction – 20 percent of flat panel TVs in 2008 had green features, and this number is expected to rise to 70 percent by 2012. This regulation illustrates again what little understanding the CEC has of the consumer electronics industry and the achievements already in place.
Regulating simply to regulate, as the CEC seems to think they must do, is simply not good California business policy. As an entrepreneur, I know that innovation and competition are always better options than unnecessary regulation and government interference.
And with the second highest unemployment rate in the country and an unemployment insurance fund that’s already operating in the red, does California really need anything that’s going to further strain our economy? As we here at Paradyme continue to connect lifestyles and families, I can only hope the CEC realizes that and drops this unnecessary and harmful regulation.