CEA Statement on California State Senate Decision to Strike Down AB 1850

Reforms such as those outlined in AB 1850 are critical to ensuring a fair, balanced and rigorous approach on the CEC's desire to regulate computers, servers, game consoles, imaging equipment and other high tech devices.

Arlington, VA - 08/21/2012 - Today the Consumer Electronics Association (CEA)® releases the following statement, attributable to CEA Vice President of Technology Policy Doug Johnson, in response to the recent California State Senate appropriations committee decision to strike down AB 1850, legislation that would have updated and improved the regulatory framework supporting energy efficiency with respect to the California Energy Commission (CEC) and its focus on energy efficiency through appliance efficiency standards:

"California has a broken energy efficiency regulatory process, resulting in phantom energy savings in support of the state's goals for reducing greenhouse gas emissions as outlined in AB 32, California's landmark Global Warming Solutions Act of 2006.

"AB 1850 would have helped to implement common-sense measures in California's regulatory process, including checks and balances, flexibility and much-needed consideration of economic impacts for today's competitive marketplace. AB 1850 would have also helped ensure the state's energy efficiency regulations were making genuine and significant contributions to AB 32.

"Good data leads to good public policy. Unfortunately, in three separate rulemakings during the past several years, we have seen a California agency use old data to justify new regulations and claim energy savings when little or none actually existed. This is a problem not only for the California economy, which must bear the cost of unnecessary regulation, but also for the state's energy efficiency and emissions reduction policy goals.

"Reforms such as those outlined in AB 1850 are critical to ensuring a fair, balanced and rigorous approach on the CEC's desire to regulate computers, servers, game consoles, imaging equipment and other high tech devices."

Introduced by Assembly Majority Leader Charles Calderon (D- Whittier), AB 1850 originally had nine common-sense provisions:

*Protection of economic growth and innovation: AB 1850 required an Energy Commission finding that proposed regulations do not harm employment, competition, consumer choice, or product innovation and utility.

*Protection for California consumers and small businesses: AB 1850 required an Energy Commission finding that proposed standards do not significantly affect retail prices and do not burden small- and medium-sized businesses, competition, and interstate and intrastate commerce.

*Real-world economic factors: AB 1850 required that discount rates, payback calculations, and life-cycle cost estimates use interest rates that are applicable to consumer financing and the average life of the product before replacement.

*Quality of data used to justify regulations: AB 1850 required the Energy Commission to use the most current data possible and, wherever feasible, use data not older than one year prior to the commencement of a formal rulemaking.

*Policy choice flexibility: AB 1850 authorized Energy Commission standards for minimum levels of operating efficiency but only where less restrictive, non-regulatory or regulatory alternatives are not feasible.

*Reduction of compliance burdens: AB 1850 required Energy Commission policy outcomes that are designed to minimize regulatory compliance burdens.

*Elimination of regulations no longer needed: AB 1850 explicitly allowed for the elimination of Energy Commission regulations that were no longer necessary.

*Recognition of the energy-saving attributes of products: AB 1850 required Energy Commission analysis that accounts for the energy-saving attributes of electronics used for activities such as Internet commerce, online meetings, telework, and smart grid.

*Objectivity of retained consultants: AB 1850 required the Energy Commission to determine the expertise, objectivity and independence of retained consultants.

Opposition to AB 1850 was led by the CEC, National Resources Defense Council (NRDC) and Pacific Gas and Electric Company (PG&E). As the bill moved through the legislative process in California, key provisions in the original bill were struck. The remaining regulatory reform provisions in the final version of AB 1850 - requiring the state to use current data and eliminating outdated and ineffective regulations - were ultimately eliminated by State Senator Christine Kehoe (D-San Diego).

For more information, please visit www.CE.org/California.

About CEA

The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the $206 billion U.S. consumer electronics industry. More than 2,000 companies enjoy the benefits of CEA membership, including legislative advocacy, market research, technical training and education, industry promotion, standards development and the fostering of business and strategic relationships. CEA also owns and produces the International CES - The Global Stage for Innovation. All profits from CES are reinvested into CEA's industry services. Find CEA online at www.CE.org, www.DeclareInnovation.com and through social media.

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