The California Public Utilities Commission (CPUC) is evaluating a proposal to ban energy-inefficient television sets in the state. The proposal intends to lower electricity demand, and if implemented would be a first in the country. This would stipulate televisions sold in California to be more energy efficient from the inception of fiscal 2011.

The standards would apply to all television sets up to 58 inches. For example, all new 42-inch television sets have to use less than 183 watts by fiscal 2011 and less than 116 watts by fiscal 2013. That’s considerably more efficient than current models in the market. A 42-inch Hitachi plasma TV sold in 2007 uses 313 watts while a 42-inch Sharp Liquid-crystal display, or LCD, TV draws 232 watts, according to Energy Commission research.

However, as of now only one-quarter of the television sets on the market meet the required standard. Television sets larger than 58 inches would not be covered by the rule, as those sets account for no more than 3% of the overall market.

In California, an average residential customer’s 10% electrical consumption goes to television sets. However the regulatory apprehension is that with upgrade to larger television sets the consumption pattern for television sets will spike by as much as 8% annually. This is a worrisome trend for the power hungry state which has to import around 15% of its requirements from outside the state to meet its huge requirement.

The regulators are dreading a return to the gory days of the California electricity crisis at the beginning of the century. The crisis was aggravated as the then government kept the price of electricity artificially low, encouraging wastage.
 
An energy-efficient TV would save a household roughly $30 a year per set in lowered electricity costs. If all 35 million television sets in the state were replaced with more efficient sets, Californians would save $8.1 billion over 10 years, according to the Energy Commission report. The standard also could help California meet the goals of its 2006 global warming law, which calls for the state to cut greenhouse gases 25% by 2020.

To reduce greenhouse gas emissions, utilities operating in California are spending big money. California’s renewable portfolio standard requires utilities to generate 33% of power from renewable sources by fiscal 2020. PG&E Corporation (PCG) plans to invest around $13 billion in the period 2009 – 2011. Another utility, Edison International’s (EIX) subsidiary Southern California Edison, is projecting capital expenditures for the period 2009 – 2013 in the range of $16.8 billion – $19.8 billion.
Read the full analyst report on “PCG”
Read the full analyst report on “EIX”
Zacks Investment Research

Last 5 posts by Zacks Market Commentaries

• Noble Raises Return to Investors - Analyst Blog - February 9th, 2010
• MWIV Targets UK, Raises Guidance - Analyst Blog - February 9th, 2010
• Switched Digital Video Thriving - Analyst Blog - February 9th, 2010
• Boeing Progressing on 747-8 - Analyst Blog - February 9th, 2010
• Atmel Beats Expectations - Analyst Blog - February 9th, 2010