The California Public Utilities Commission (CPUC) recently adopted new incentives to promote and prioritize energy efficiency, furthering a utility culture focused on energy savings, rather than energy generation.
We applaud and share the CPUC’s belief that a comprehensive set of policy tools is necessary to achieve complex and critical energy goals. However, we hope this shift in focus will not result in more unnecessary regulations in a state where agencies often rely too heavily on a regulatory approach, despite evidence that more market-based, less costly and less harmful options exist.
For example, three recent and flawed energy efficiency rulemakings for consumer electronics from the CPUC’s counterparts at the California Energy Commission (CEC) have resulted in new layers of costly regulations – all perpetuated under the guise of energy savings for California.
In all three cases, independent analyses discovered shortcomings, including the use of old data, math errors and exaggerated energy savings, all of which tipped the scales in favor of regulation. Despite repeated meetings, testimony and public comments on these concerns, the CEC has refused to acknowledge these flaws or correct the public record.
With support from California electric utilities (overseen by the CPUC), the CEC is currently pursuing a new round of regulations targeting high-tech products including computers, displays, game consoles and network equipment.
Our industry has supported energy efficiency initiatives for nearly two decades. We’ve found that voluntary and market-oriented policies, like the U.S. Environmental Protection Agency’s (EPA’s) ENERGY STAR program, are superior to regulatory mandates in protecting innovation, consumer choice and competition.
For example, televisions that meet today’s ENERGY STAR requirements are, on average, 40 percent more energy efficient than conventional models, saving Americans a total of $3.5 billion per year on their energy bills. Computer energy efficiency has doubled every 1.57 years, and is expected to continue at this pace for the foreseeable future. And since 2006, video game console makers have reduced the power required for HD gaming by more than 50 percent. All of these energy saving milestones have been achieved without government mandates and burdensome regulation.
What’s more, CEA, the National Cable & Telecommunications Association (NCTA) and 15 industry-leading video providers and device manufacturers launched an unprecedented Set-Top Box Energy Conservation Agreement last year that will result in annual residential electricity savings of $1.5 billion or more.
And let’s not forget that consumer electronics are already among the most energy efficient products in the home. It costs $12.87 a year to power a Blu-ray player and $15.49 to power a video game console – compared to $329.01 for central heating and air.
Sound policy requires product definitions that last long enough to track measurable results. Product convergence, new model introductions, changing usage patterns and product definitions all make the CE industry a challenging sector for a regulatory approach. The voluntary ENERGY STAR specifications for energy efficiency, which have been revised 29 times for AV equipment, computers, imaging equipment, monitors/displays, set-top boxes and televisions, have the necessary agility and flexibility to keep pace with the rapidly evolving CE market.
Unnecessary regulations and related compliance burdens ultimately hurt consumers and local businesses, waste taxpayer money, and shift manufacturers’ attention and resources away from creating more innovative products.
The public should expect the business community to demonstrate good environmental stewardship, but it should also expect government to demonstrate a sound and reasonable regulatory approach. We encourage all California regulators to recognize and encourage industry initiatives that are less costly and more innovative in order to meet California’s energy challenges without harming consumers or business in the state.