As Blunk noted, “We want to level the playing field for the contractors. It's frustrating bidding against people who are not pulling permits, who are not following code. And so this is really intended to improve code compliance.” 

Blunk said the CEC is hoping to improve accountability by tracking where equipment ends up and identifying gaps between purchases and permitted installs. If a contractor buys large volumes but pulls few permits, it raises questions about where that equipment went. As he put it, “we want to know who got it and what happened to it,” adding that the broader goal is to support legitimate contractors and reduce unfair competition from unlicensed operators. “There is nothing more frustrating as a contractor than being underbid by Chuck in a truck,” he said. 

The CEC is currently seeking industry feedback to better understand how equipment moves through the market and what data should be collected. Blunk noted that efforts to improve permitting compliance have fallen short over the past 20+ years, with HVACR permit rates below 10%. The CEC sees equipment tracking as a practical way to improve compliance, protect consumers, and support legitimate contractors. 

The concept for the rule largely stems from SB 795, a 2023 bill that would have required the CEC to create a statewide HVACR equipment sales registry and compliance tracking system to help enforcement agencies cross-check purchases against permits. However, that bill ultimately died without becoming law.  

But the idea didn’t disappear; instead, it has continued through the regulatory process. The CEC is now developing similar concepts under its “Energy Data Collection – Phase 3” rulemaking (Docket 24-OIR-03), where it has issued requests for information and held workshops to explore potential reporting requirements for distributors, wholesalers, retailers, and other sellers of HVACR and water heating equipment. 

Not surprisingly, the proposal is drawing strong opposition from HVACR OEMs, distributors, contractors, and trade groups. HARDI is firmly against the rule, noting in a blog that, “The proposal is being presented as a way to improve permit compliance and oversight. In reality, it would force the collection and reporting of sensitive business information and create red tape that is unworkable for our industry.” 

According to HARDI, “The reporting requirement will not just be serial number tracking (which most distributors don’t record), but also require distributors to log the make/brand, model number, customer name, customer billing address, and business ID or contractor CSLB license number, when applicable, for every transaction in and out of the warehouse. That means that California will be creating a supposedly ‘secure’ database with every HVAC business's customer lists and market share; information that, if leaked or accessed by competitors, could force a business to close.” 

In comments submitted to the CEC, AHRI stated that manufacturer-level or serial-number reporting requirements would “impose significant administrative and operational burdens, while failing to produce reliable or meaningful data.” The association said such a system would require new databases and staffing, while doing little to improve permit compliance or accurately track installed equipment. Instead, AHRI urged the CEC to focus on streamlined online permitting, targeted enforcement, and contractor education. 

As of now, the effort remains in the pre-rulemaking stage with no final regulation adopted. If it moves forward, it could introduce new reporting requirements across the HVACR supply chain. After outlining how the California registry would work, Blunk turned to the audience and joked, “You all love me now?”