New Equipment Efficiency Standards Expected Soon in California

Dating back to the late Governor Ronald Reagan, California has been setting pioneering minimum energy efficiency standards for appliances for almost 40 years. The first standards for refrigerators and air conditioners came in the 1970s and California has continued to lead the nation ever since. In fact, just last year California adopted new standards that will require the battery chargers used in our portable products such as power tools, cordless phones, and laptops to be more efficient. These standards help drive manufacturer innovation and have been incredibly successful in saving energy and money. In fact, according to the California Energy Commission estimates, these standards have saved Californians $39 billion to date and shaved $2.6 billion off their electricity and natural gas bills in 2010. That translates to $200 per year savings for each California household in 2010!

So what’s next?  Well plenty. Today the Commission announced the next steps in a rulemaking that could set new standards for 15 new products. These products fall into four categories – consumer electronics, lighting, water using products like faucets, and miscellaneous. Per our preliminary analysis, with new standards Californians could potentially save in excess of $1 billion a year via lower energy costs and prevent the release of millions of tons of CO2, the main heat trapping pollutant responsible for climate change.

The CEC has a very comprehensive and transparent rulemaking process and we are only in the second inning for this proceeding. As such the Commission is requesting information and data from all stakeholders and will analyze this data carefully as it decides how to proceed for each product category. 

Why do we need standards? While there are exceptions, a product’s energy efficiency is seldom a top design priority for manufacturers. If they can shave a dollar off the cost of the product many will, even if it means the consumer may pay $5 or $10 more in the form of higher electricity costs over the life of the product. But at the end of the day, manufacturers don’t pay the electric bill, we do. 

Standards help keep inefficient and wasteful products off the shelf. It’s just that simple.

The standards are also set in a thoughtful way. The standards are technology neutral and are performance based. In other words, manufacturers are given a power budget for a certain sized product and they can get there anyway they want. For example, for a 21 cubic foot fridge, the manufacturer can choose any combination of ways to meet the standard, whether it’s by a more efficient compressor, different defrost cycles or more door insulation. As such these standards lead to increased innovation and the lowest cost solution where everyone wins – the consumer, the manufacturer and the environment.

Industry opposition? While it’s too early to say, based on past history we can expect some industry stakeholders to make false claims about how the standards will cause job losses, empty shelves, and stifle innovation. A good example is the California television efficiency standard set by the CEC for flat screen TVs in 2009. With the exception of Vizio, which was one of the lone industry voices of reason during this proceeding, the TV manufacturers and its trade association the Consumer Electronics Association (CEA) proclaimed that the standard would cause:

• Many high end independent retailers to close and cost the state 5,000 jobs;
• Consumers to go out of state or online to buy their TVs and cost the state a whopping $50 million in lost revenues; and,
• Stifle innovation.

When the proceeding began, the average 42 inch TV consumed around 241 Watts, today they consume 69 Watts – a 70 percent reduction in energy use. Additionally, this good news is also coupled with the fact that not a single job was lost in California due to the standard and televisions that used to cost $2,000 can now be purchased for $600, the one difference being the new one costs a lot less to operate. New televisions also have many new features, including 3D TV and internet connectivity that allows you to stream and watch Netflix directly on your TV.

NRDC plans to actively participate in the CEC’s rulemaking and urges all stakeholders to produce the data requested by the Commission so we can have a decision making process based on the best available data rather than unsubstantiated industry speculations and warnings that the sky is falling. Fasten your seat belts and we’ll report back what happens.