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(Reuters) – California regulators on Wednesday adopted the nation’s first mandatory energy efficiency rules for computers and monitors – devices that account for 3 percent of home electric bills and 7 percent of commercial power costs in the state.

The state Energy Commission said that when fully implemented the industry-backed plan will save consumers $373 million a year and conserve at least as much electricity annually as it takes to power all of San Francisco’s households.

Final approval at a meeting of the five-member commission in Sacramento capped several years spent developing the rules in collaboration with computer makers, consumer activists, the Natural Resources Defense Council (NRDC) and other environmental groups.

The new rules will cut greenhouse gas emissions from fossil fuel combustion to generate power by 700,000 tons a year, the NRDC said.

The standards work by setting benchmarks for machines’ overall energy use – focusing on when they are turned on but left inactive – and leave manufacturers flexibility to choose which efficiency measures are employed to meet the standards, an approach aimed at fostering innovation.

The rules drew support from nearly 40 companies represented by the Information Technology Industry Council, including such Silicon Valley giants as HP and Intel.

HP environmental compliance manager Paul Ford called the standards “groundbreaking,” describing them as “ambitious but achievable.”

“This is a big deal,” said Mark Cooper, a policy analyst for the Consumer Federation of America, adding that computer ownership per capita in California ranks second in the world behind Sweden.

In California, computers and monitors draw an estimated 5,610 gigawatt-hours of energy per year – representing roughly 3 percent of residential electric bills and 7 percent of power costs for commercial users – much of that while the devices sit idle.

The NRDC has said the amount of power consumed by computers and monitors will be reduced by a third once there is a complete turnover in existing stocks of those devices.

The first phase of the rules takes effect in January 2019 for desktop, laptop and notebook computers. The standards kick in for workstations and small-scale servers in January 2018 and for computer monitors in July 2019.

Video-game consoles, industrial computers, large-scale servers, tablets and other handheld devices are exempt.

The standards will add about $14 to average retail costs of desktops, which are far less energy efficient than laptops, but will save consumers more than $40 in electric bills over five years, according to commission estimates.

Over half of desktops typically in use in California now meet the first tier of the standards, which grow more stringent in 2021. Seventy-three percent of laptops already comply.

Computer monitors have farther to go, with a compliance rate of just 14 percent among the 25 million units now installed in homes and businesses statewide.

The latest rules could set a new standard for manufacturers everywhere by virtue of the size of the consumer market in California, which often leads the way in U.S. environmental initiatives.

If the same standards are adopted nationwide, they could save U.S. consumers about $2.2 billion annually in electric bills while reducing energy generation by the equivalent output of seven coal-fired power plants, the NRDC said.

(Reporting by Steve Gorman; Editing by Daniel Wallis and Jonathan Oatis)

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