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CEC takes aim on digital signage

The California Energy Commission’s (CEC) latest foray into proposed regulations to reduce power consumption of consumer electronics devices is targeting computers (both desktop and laptop/notebooks) as well as monitors and signage displays. Although in the relatively early step of pre-rulemaking, those unfamiliar with the CEC process should be forewarned that the path ahead is one that should be of great concern to the affected industries, and bears keeping a close eye on with active engagement from impacted stakeholders. This certainly holds true for those in the digital signage industry.

For those who want to get to how this may impact digital signage, you can jump ahead five or six paragraphs, but for the broader context, maybe some history on the CEC is appropriate.

What is the CEC?

In a nutshell, the CEC is an independent regulatory agency in California that governs a whole host of issues and bills as the state’s primary energy policy and planning agency. Their broad portfolio includes forecasting energy needs, siting and certifying larger power plants, developing renewable energy resources, and most importantly for this purpose, regulating energy efficiency standards for appliances and buildings. Their original charge from 1974 was to promote energy efficiencies in large household appliances such as refrigerators over concern about energy reliability and cost.

Right off the bat, anyone in the digital signage industry may wonder how this applies to them. Well, good question. You might be surprised to learn that the CEC has designated a whole host of consumer electronics and high tech products – including monitors and digital displays – as “appliances” for purposes of their regulatory ambitions. They base this claim on the landmark Greenhouse Gas (GHG) reduction act in California, AB 32, which seeks to reduce California’s GHG emissions to 1990 levels by 2020. In their part of a broad California effort to reduce GHG emissions, the CEC has for several years now been mandating energy efficiency standards on new categories of products, including televisions, battery chargers (for devices like tablets and smart phones), and now, computers, monitors and signage displays.

It’s important to note that no one we know in the consumer electronics industry is opposed to greater energy efficiencies, reductions in GHGs, or addressing climate change. In fact, the broader consumer electronics industry has done much – on its own and through voluntary standards and responding to consumer demands for greater efficiencies – to reduce power consumption of our devices. Over the past 20 years, our industry has partnered with the federal government to broadly promote the successful ENERGY STAR standards which give consumers information to make smart choices about energy efficient devices.

Certainly the digital signage industry agrees. In fact, the whole industry was born in part out of a desire of electronic display advertisers and signage users to have more efficient and environmentally responsible choices. Switching from printed displays and signage to digital saves paper, as well as allows more efficient use of resources and more rapid ability to change information. As the industry has transitioned from LCD to LED signage, greater energy efficiencies have been obtained. All of this happened without any government mandates, and it mirrors increasing efficiencies across the consumer electronics space ahead of regulators.

So while the CEC’s intentions are no doubt good, it’s important to know that for several reasons, the Commission has repeatedly shown a lack of understanding on how to effectively regulate energy efficiencies in rapidly-changing high-tech devices.  Their model, built around slower-changing technologies and longer product life cycles in appliances such as refrigerators and air conditioners, has struggled to keep up with today’s high-tech world. They tend to use old data, which puts them in the position of regulating “last year’s devices.” They tend to overestimate the savings of their proposed standards, underestimating the costs to manufacturers (and ultimately, consumers) to comply. And they ignore the simple fact that as a single state agency, albeit in a big and important state, they lack the scope to address issues that really should be handled on a national basis.

The CEC’s impact on the Digital Signage sector

With this background in mind, what is the CEC currently proposing for the signage display and computer monitors industries and what does it mean? We’re happy to provide more detailed information to any who would like a deep dive, and we suggest reading from selected industry responses (here and here) for a deep review.

In a nutshell, the CEC proposes significant mandates on the reduction of power consumption of monitors and signage displays. These mandates impact displays and monitors in all modes, the “On”, “Stand By” and “Off” mode. For digital signage and displays, which are more often in the “On” mode due to their use in displaying information throughout the day, and sometimes 24 hours per day, these mandates are very strict and some believe may be unachievable without significant disruption and/or cost. The proposals also may be detrimental to innovation and future product development.

The Consumer Electronics Association (CEA) and many of our industry colleagues, including TechNet and the Information Technology Industry Council, have reviewed the proposals in detail and find several concerns:

1. The CEC is not sharing the data on which they have made their findings of cost or ability to comply.

2. They appear not to be aligned with current national standards from ENERGY STAR, or even pending increases in efficiency proposed by future ENERGY STAR requirements.

3. They appear to make several, possibly incorrect assumptions about displays that tend to overstate the energy savings and understate the cost of compliance with the regulations. Again, it is hard to tell because the CEC has not shared all the assumptions behind their proposals.

At a recent meeting with CEC regulators, several industry groups and member company representatives presented detailed concerns and analysis of the problems with the CEC’S proposed regulations. It remains to be seen how the CEC responds to these concerns, although they are required to respond at the conclusion of their rulemaking process.

Digital signage is an important, growing segment of our information sharing world, and these regulations could pose a significant threat to the industry and future innovation. Please stay engaged in following these proposed regulations at the CEC website, through your industry news, or with an allied partner. We all share a goal of greater energy efficiency and lower GHG emissions, but regulations, if they are needed at all to achieve these goals, must make sense.

Doug Johnson

Doug Johnson

Doug serves as an advocate for the CE industry before regulators and legislators at the local, national and international levels on issues such as energy efficiency, regulatory reform, policy alignment, CE devices on aircraft, and policy concerning the operation of small unmanned aerial vehicles (UAVs).

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