Groundhog daze

An electronics retailer hopes the state’s energy commission will finally see its shadow

It’s Groundhog Day all over again for business owner Leon SooHoo.

It’s Groundhog Day all over again for business owner Leon SooHoo.

Leon SooHoo is president and CEO of Paradyme Sound + Vision

In the classic comedy Groundhog Day, Bill Murray is forced to live the same day over and over. In a similar fashion, the California Energy Commission is once again looking to regulate consumer electronics in an attempt to reduce power consumption in California without first understanding the electronics market. While repeating the same mistakes time and again makes for good entertainment, the consumer, business and state casualties make it an expensive approach to creating policy. The commission’s most recent proposal on televisions is no exception.

Over the past four years, the CEC has tried three times to regulate electronics products without first understanding the market. In 2005, an attempt to regulate external power supplies caused chaos in the electronics market and had to be significantly amended; in 2006, it attempted to regulate a product that didn’t exist and ultimately withdrew the regulation; and again in 2006, it enacted regulations for consumer audio and video products based on old data, leading to false conclusions and statements about energy savings.

In this round, the CEC is attempting to regulate television power usage by setting an artificial limit designed to take up to 25 percent of TVs off the market. Unfortunately, this move will have drastic financial implications for small and independently owned California retailers, distributors and installers of these electronics—not to mention consumers. Severely impacted would be many of the larger-screen and fully featured models that comprise the majority of what independent retailers sell. We rely on the sale and customer service of these high-performance TVs to compete against big-box and online retailers that can compete on other factors. The CEC’s approach will simply drive consumers out of local mom-and-pop stores to online retailers.

In fact, research suggests that banning just 10 percent of televisions from the market would mean a loss of 5,000 jobs that are tied to sales of TVs, and a loss to California of more than $44 million in tax revenue.

Retailers share in the goal of increased energy efficiency, but the CEC’s proposal shows a clear misunderstanding of the consumer electronics industry and the achievements of consumer-focused programs already in place. Energy Star, a market-based program recognized by a majority of consumers and supported by a wide range of industry and nonindustry stakeholders, encourages manufacturers to focus on efficiency as they compete to develop the next generation of televisions. This program saved more than 23 billion kilowatt-hours of electricity and prevented 4.4 million metric tons of carbon emissions from entering the atmosphere in 2007 alone.

Ultimately, the CEC’s costly and unnecessary proposal for regulation reaches into stores and removes product from shelves, decimating an entire business segment. Like the CEC’s earlier attempts, this proposal misses the mark. In Groundhog Day, Bill Murray was able to correct his mistakes over time, and let’s hope the CEC can do the same.