Under the proposed energy standards, a TV set's maximum power consumption is determined by the size of the screen. The bigger the TV, the higher the permitted power consumption.
The proposed standard is:
By 2011, 0.156 x sq inch screen + 80 watts
By 2013, 0.120 x sq inch screen + 25 watts
So, a 2011 set with a 42" screen would have a 199 watt limit. Most LCD TVs and rear-projection TVs already meet that standard, or are close enough that it will be easy. LED TVs will also meet that standard. Plasma TVs burn the most power, current 42" plasma TVs can burn nearly 300 watts.
There are many different ways to lower a TV's power consumption. Most of the power supplies and other parts of a TV or other appliance do not use the latest, most efficient components, because manufacturers have no incentive to do the redesign work. More interesting, the screen backlight can be designed to emit less or no light in parts of the screen where the image is supposed to be dark. (In most current LCD screens, the backlight lamps are on full all the time, even if the image is all black.) This not only reduces power consumption, it also gives a better picture since blacks can be blacker. This can be done with LCDs using CCFL backlights (long tubes), but more easily with LCDs using LED backlights (a grid of 30 to 60).
The proposed California 2011 standard is not too different from the latest "Energy Star" standard (v3.0) that most appliance buyers are familiar with, except that Energy Star is a voluntary standard.
More info on TV power consumption
http://reviews.cnet.com/4520-6475_7-6400401-2.html
The reason for this sort of standard, for all sorts of appliances, is to reduce the load on California's electricity grid, to reduce the amount of additional capacity that will have to be added in the future. Every couple billion dollars counts.
Personally, I think there should be energy consumption standards for TVs, you should be able to buy a TV that doesn't meet the standard, but that TV would have a "gas-guzzler" surcharge.