[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Rules and Regulations]
[Pages 20233-20237]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8689]


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FEDERAL TRADE COMMISSION

16 CFR Part 305

RIN 3084-AB03


Appliance Labeling Rule

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Final rule.

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SUMMARY: The Commission extends the effective date for its new light 
bulb labeling requirements to January 1, 2012, to provide manufacturers 
with additional compliance time. In addition, the Commission exempts 
from the new label requirements incandescent bulbs that will not be 
produced after January 1, 2013, due to Federal efficiency standards.

DATES: The amendments published in this document will become effective 
on January 1, 2012. In addition, the July 19, 2011 effective date 
announced at 75 FR 41696 (July 19, 2010) is delayed until January 1, 
2012.

ADDRESSES: Requests for copies of this document should be sent to: 
Public Reference Branch, Room 130, Federal Trade Commission, 600 
Pennsylvania Avenue, NW., Washington, DC 20580. The complete record of 
this proceeding is also available at that address. Parts of the 
proceeding, including this document, are available at http://www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326-2889, 
Attorney, Division of Enforcement, Bureau of Consumer Protection, 
Federal Trade Commission, Room M-8102B, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background

    In response to a petition from the National Electrical 
Manufacturers Association (NEMA), on December 29,

[[Page 20234]]

2010 (75 FR 81943), the Commission published a Federal Register Notice 
proposing to extend the effective date of new labeling rules for light 
bulbs to January 1, 2012.\1\ The new labeling rules, originally 
scheduled to become effective on July 19, 2011, apply to general 
service lamps (i.e., medium screw base incandescent, compact 
fluorescent (CFL), and light-emitting diode (LED) products) and feature 
a ``Lighting Facts'' label disclosing bulb brightness, annual energy 
cost, life, color appearance, and energy use.\2\
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    \1\ This document uses the terms lamp, light bulb, and bulb 
interchangeably.
    \2\ 75 FR 41696 (Jul. 19, 2010). The Commission issued the new 
labels and established the original effective date of July 19, 2011 
pursuant to the Energy Independence and Security Act of 2007 (Pub. 
L. 110-140) (EISA). EISA also established new minimum efficiency 
standards phasing out inefficient incandescent bulbs over a three 
year period (100-watt bulbs in 2012, 75-watt bulbs in 2013, and 60- 
and 40-watt bulbs in 2014). These new standards will increase the 
prevalence of more efficient incandescent halogen bulbs, CFLs, and 
LEDs. In the July 19, 2010 Notice, the Commission exempted 100-watt 
incandescent bulbs from the new label because they will remain on 
the market for only a short time.
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    Based on concerns about the original deadline, NEMA asked the 
Commission to: (1) Extend the new label's effective date for all 
covered bulbs, except CFLs, to January 1, 2012; (2) extend the 
effective date for CFLs to January 1, 2013; and (3) exempt all 
incandescent bulbs that will be phased out by 2014 due to revised 
Federal energy efficiency standards. After considering NEMA's petition, 
as well as responses from the Natural Resources Defense Council and 
Earthjustice, the Commission proposed extending the effective date for 
all covered bulbs to January 1, 2012, and exempting bulbs phased out by 
Federal efficiency standards in place by 2013 (e.g., 75-watt bulbs). 
The proposal did not include NEMA's request for an additional extension 
for CFLs, nor did it exempt incandescent bulbs that will be phased out 
by the 2014 Federal efficiency standards (i.e., 60- and 40-watt bulbs). 
The Commission received ten comments on these proposals.\3\
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    \3\ See http://www.ftc.gov/os/comments/lightbulblabelexten/index.shtm. Unless otherwise stated, the comments discussed in this 
document refer to: Brickman (<greek-i> 00005); Earthjustice 
(<greek-i> 00009); Garcia (<greek-i> 00002); IKEA of Sweden 
(<greek-i> 00003); Leyn (<greek-i> 00007); IMERC (<greek-i> 00008); 
Natural Resources Defense Council (<greek-i> 00011); NEMA (<greek-i> 
00010); Sood (<greek-i> 00004); and VanPelt (<greek-i> 00006). 
Several comments addressed issues not germane to the proposed 
extension such as the general merits of the Lighting Facts label. 
This Notice does not address these comments.
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II. Final Rule

    The Commission extends the effective date for the new labeling 
requirements to January 1, 2012, for all covered bulbs to provide 
manufacturers additional implementation time. The Commmission is not 
providing an additional extension for CFLs because such a delay would 
deprive consumers of the new label's benefits for these widely 
available high efficiency bulbs just as new efficiency standards become 
effective. Finally, consistent with its proposal, the Commission is not 
requiring the new label for incandescent bulbs phased out by 2012 and 
2013 Federal efficiency standards (i.e., 75-watt reflector bulbs and 
bulbs subject to 2012 DOE efficiency standards) but is requiring the 
new label for 60- and 40-watt bulbs subject to 2014 standards.\4\
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    \4\ NEMA's petition also requested certain changes to the 
label's formatting requirements, particularly for smaller packages. 
The Commission did not propose any changes in its December 29, 2010 
Notice and, in response, received no comments seeking Rule changes. 
See 75 FR at 81946. Accordingly, this Notice does not address these 
issues.
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A. Extension of Effective Date for All Covered Bulbs

    As proposed in the December 29, 2010 Notice, the final rule extends 
the effective date for all covered bulbs to January 1, 2012. The 
extension is warranted by legitimate industry concerns raised after the 
effective date was originally established.
    In reaching this decision, the Commission considered several 
comments which found the proposed extension reasonable, another which 
found it too short, and others which found it too long. Specifically, 
IMERC, NRDC, IKEA of Sweden, and Universal Lighting Systems supported 
the proposed extension. Both IMERC and IKEA, for instance, argued that 
the extension is reasonable because, a wide variety of manufacturers 
need more time to re-label packages given the complexities of global 
supply chains.
    However, NEMA argued that the extension only provides minimal 
relief to manufacturers and does not solve the difficulties outlined in 
its petition. NEMA noted that manufacturers and retailers conduct 
annual ``product reviews,'' which presumably involve the development of 
new or revised packaging, during the third quarter of the calendar year 
in advance of the retail ``lighting season,'' which takes place during 
the fourth and first quarters of the calendar year. Thus, according to 
NEMA, the proposed extension is effectively much shorter than six 
months because manufacturers must implement any packaging changes as 
part of their product reviews to complete them in time for the 
``lighting season.''
    Finally, Earthjustice argued against any extension, reiterating its 
earlier concerns that NEMA's petition provided no new evidence 
justifying a delay, and asserting that the new label is necessary as 
soon as possible to help consumers make informed purchasing 
decisions.\5\ Also, Earthjustice noted that NEMA's petition 
demonstrates that manufacturers can meet the current effective date for 
LED and halogen products with no exceptions or delays, and thus no 
extension is warranted for these products.
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    \5\ Another comment (Brickman) also opposed any extension, 
arguing that the label is necessary to make consumers aware of the 
energy-saving benefits of CFLs and LEDs.
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    The Commission adopts the proposed extension to address the 
logistical challenges industry faces in implementing the new label. As 
the Commission explained in the December 2010 Notice, and as detailed 
in NEMA's petition, the large number of packaging styles involved, the 
difficulties posed by overseas manufacturing and packaging, and the 
extensive nature of the label changes required for each package weigh 
in favor of providing manufacturers with additional time to comply. In 
addition, the new January 1, 2012, effective date coincides with the 
effective date for new Federal efficiency standards that will begin to 
phase out inefficient incandescent bulbs. Thus, even with the 
extension, consumers will have the new label to help with this 
transition.
    The Commission declines to grant NEMA's request for additional 
time. As noted earlier, NEMA's comments suggest that any package 
changes must be completed several months before January 1, 2012, to 
coincide with manufacturers' ``product reviews'' in anticipation of the 
retail ``lighting season.'' However, NEMA offers no details about the 
``lighting season'' and its impact on labeling. Indeed, NEMA only 
describes the season's duration generally, stating that it covers ``the 
4th and 1st quarters of a calendar year.'' This half-year window 
appears to give manufacturers sufficient time to revise bulb packaging. 
Manufacturers could complete package revisions by the January 1, 2012, 
label deadline and still introduce their products during the remaining 
three months of the ``lighting season.'' NEMA's comment does not 
indicate otherwise. Nor did NEMA's comment propose an alternative 
effective date that would alleviate its perceived problems.
    Moreover, the Commission now has provided bulb manufacturers with 
considerable time to plan their

[[Page 20235]]

packaging changes. Specifically, the Commission provided initial notice 
of potential package changes in 2008, announced the details of those 
changes in June 2010, and recently proposed the extension it is now 
making final.
    Finally, the Commission also declines to set an earlier effective 
date for LEDs and new incandescent halogen products as suggested by 
Earthjustice because an earlier date likely would have little impact on 
labeling for those products. As noted in the December 2010 Notice, 
manufacturers are likely to use the new label for these products as 
they enter the market over the next year. Thus, an earlier effective 
date for these products is not necessary.

B. No Additional Extension for CFLs

    As proposed in the December 29, 2010 Notice, the Commmission 
declines to extend the effective date for CFLs to January 1, 2013. Such 
a delay would deprive consumers of the new label's benefits for these 
widely-available bulbs during an important transition period. With the 
exception of NEMA, the commenters supported the Commission's proposal 
not to provide additional time for CFL labeling. NEMA reiterated its 
request for a CFL extension, but without providing additional 
information or argument.
    As explained in the December 2010 Notice, further delaying the new 
CFL label would hinder consumers' ability to compare CFLs to new, 
efficient incandescent halogens and LEDs as those technologies become 
more available. Moreover, further delay for the market's most prevalent 
high efficiency bulbs may hamper ongoing efforts to help consumers 
understand the new label and use it in purchasing decisions. In 
addition, extending the effective date for all covered bulbs to January 
1, 2012, along with the exemption of certain incandescent bulbs as 
discussed below in subsection C, should ease the burden of labeling 
CFLs.

C. Incandescent Bulbs Subject to New Federal Efficiency Standards

    As proposed in the December 29, 2010 Notice, the final rule 
maintains the new Lighting Facts label for 60- and 40-watt incandescent 
bulbs but exempts from the label requirements 75-watt incandescent 
bulbs, and reflector bulbs that do not meet DOE's July 14, 2012, 
standards.\6\
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    \6\ In its petition, NEMA had sought an exemption for 60- and 
40-watt incandescent bulbs phased out by EISA efficiency standards 
effective January 1, 2014, and for 75-watt incandescent bulbs phased 
out by the EISA efficiency standards effective January 1, 2013. See 
42 U.S.C. 6295(I). It also sought to exclude certain inefficient 
incandescent reflector products that DOE efficiency regulations will 
eliminate on July 14, 2012. 10 CFR 430.32(n)(5). No comment opposed 
the exemption for these reflector bulbs.
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    Industry commenters sought exemptions for all incandescents 
affected by the EISA standards, while other comments urged fewer 
exemptions than proposed. Specifically, NEMA restated that 
manufacturers have been reducing investment in incandescent products 
phased out by EISA and that new labeling requirements will force them 
to make additional capital investments in products that will soon exit 
the market. Similarly, Universal Lighting Systems explained that the 
general public already knows these bulbs are inefficient, and thus 
requiring new labeling for the short time these products remain 
available is unnecessary and a waste of resources.
    In contrast, NRDC, Earthjustice, IMERC, and IKEA of Sweden urged 
the Commission to reconsider the proposed exemption for 75-watt bulbs. 
In particular, Earthjustice argued that the Commission has assigned 
unwarranted significance to the shorter time period the 75-watt bulb 
may be available after the new effective date.\7\ Earthjustice also 
argued that the FTC should not consider the relatively low market share 
of 75-watt bulbs because the Commission has previously stated that 75-
watt bulb labeling will benefit consumers. IMERC argued that NEMA 
failed to present sufficient information to make a compelling argument 
for the exemption.
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    \7\ The Commission originally required labeling for 75-watt 
bulbs because these products would remain on the market for ``more 
than a year'' after the effective date. However, under the extended 
deadline, they will be manufactured for no more than one year after 
the new effective date.
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    In addition, citing the recent phase-out of 100-watt incandescent 
bulbs in California and Europe, NRDC asserted that 75-watt bulbs will 
remain on store shelves well after January 1, 2013, due to manufacturer 
and retailer stockpiling. Moreover, Earthjustice stated that, with the 
phase-out of 100-watt bulbs, consumers looking for the brightest bulbs 
would gravitate to 75-watt bulbs given their tendency to equate watts 
with brightness. Earthjustice asserted that the new label on 75-watt 
bulbs would help consumers in determining that such bulbs may, in fact, 
be less bright than some higher efficiency alternatives. Similarly, 
Earthjustice asserted that, without the new label, consumers will 
confuse old 75-watt (~1,100 lumen) bulbs with new 72-watt incandescent 
halogens that have a higher lumen rating.
    Furthermore, NRDC also argued that the modest package revision cost 
associated with relabeling 75-watt bulbs would be offset by the 
economic and environmental benefits resulting from consumers using the 
new label to select more efficient bulbs, particularly given 75-watt 
bulbs' higher energy costs. Finally, NRDC and IKEA of Sweden noted that 
requiring the new label on inefficient incandescents may provide 
incentives to speed the phase out of incandescent bulbs prior to the 
effective date of the new efficiency standards.
    After considering these comments, the Commission now exempts 75-
watt and certain reflector bulbs as proposed in the December 2010 
Notice. The new label is necessary for 60- and 40-watt bulbs because 
these bulbs may remain in production for two years after the new 
label's introduction and occupy a much greater market share than other 
inefficient incandescents such as 75-watt bulbs.\8\ Moreover, the 
commenters offered no information to refute that the benefits to 
consumers of requiring the new label for 60- and 40-watt bulbs outweigh 
``reinvestment'' concerns raised by NEMA.
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    \8\ According to past estimates, 75-watt bulbs account for only 
about 19% of the incandescent market compared to 58% for 60- and 40-
watt bulbs. See http://neep.org/uploads/Summit/2010%20Presentations/NEEP%20Lighting_Swope.pdf. (DOE presentation using 2006 
incandescent estimates). As comments suggest, some consumers may 
gravitate to 75-watt bulbs as the highest wattage bulb remaining on 
the market, confusing their wattage with light output. However, even 
if such confusion does arise, it should be minimal given the 
relatively small market share of these bulbs and the limited time 
period they will be available.
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    Despite concerns raised by commenters, the Commission, as detailed 
below, does not believe the new label is warranted for 75-watt bulbs 
because they will remain available for a relatively short time and 
manufacturers can redirect resources to label other bulbs. When it 
issued the new labeling rule in July 2010, the Commission chose to 
require the new label for traditional incandescent bulbs remaining in 
production for more than a year after the Rule's effective date, 
including 75-watt bulbs, which would have stayed in production for a 
year and half after the original effective date. However, the new six-
month extension shortens the period that 75-watt bulbs will remain in 
production after the effective date, reducing the benefits of re-
labeling these soon-to-be obsolete products. As NRDC notes, 75-watt 
bulbs may continue to appear on store shelves even after the end of 
production. However, it is reasonable to assume that these bulbs will 
not be prevalent on shelves for an extended period given their limited 
market share, manufacturer

[[Page 20236]]

disinvestment in traditional incandescent technologies as indicated in 
NEMA's petition, and the increasing availability of more efficient 
incandescent halogen bulbs that have similar performance 
characteristics. Finally, the exemption will allow manufacturers to 
focus their labeling resources on products that will remain in the 
market well into the future, such as CFLs.

III. Paperwork Reduction Act

    The current Rule contains recordkeeping, disclosure, testing, and 
reporting requirements that constitute ``information collection 
requirements'' as defined by 5 CFR 1320.7(c), the regulation that 
implements the Paperwork Reduction Act (PRA).\9\ OMB has approved the 
Rule's existing information collection requirements through May 31, 
2011 (OMB Control No. 3084-0069). The amendments in this document will 
not increase and, in fact, likely will reduce somewhat the previously 
estimated burden for the lamp labeling amendments.
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    \9\ 44 U.S.C. 3501-3521.
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IV. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires 
that the Commission provide an Initial Regulatory Flexibility Analysis 
(IRFA) with a Proposed Rule, and a Final Regulatory Flexibility 
Analysis (FRFA) with the final rule, unless the Commission certifies 
that the Rule will not have a significant economic impact on a 
substantial number of small entities.\10\
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    \10\ 5 U.S.C. 603-605.
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    The Commission does not anticipate that these amendments will have 
a significant economic impact on a substantial number of small 
entities. The Commission recognizes that some of the affected 
manufacturers may qualify as small businesses under the relevant 
thresholds. However, the Commission does not expect that the economic 
impact of the proposed amendments will be significant. If anything, the 
changes will reduce the Rule's burden on affected entities.
    In its July 19, 2010 Notice (75 FR at 41711), the Commission 
estimated that the new labeling requirements will apply to about 50 
product manufacturers and an additional 150 online and paper catalog 
sellers of covered products. The Commission expects that approximately 
150 qualify as small businesses.
    Although the Commission certified under the RFA that the amendments 
would not, if promulgated, have a significant impact on a substantial 
number of small entities, the Commission has determined, nonetheless, 
that it is appropriate to publish an FRFA in order to explain the 
impact of the amendments on small entities as follows:

A. Statement of the Need for, and Objectives of, the Amendments

    Section 321(b) of the Energy Independence and Security Act of 2007 
(Pub. L. 110-140) requires the Commission to conduct a rulemaking to 
consider the effectiveness of lamp labeling and to consider alternative 
labeling approaches. The Commission has issued an extension to the 
Rule's effective date to provide industry members with additional 
compliance time.

B. Issues Raised by Comments in Response to the IRFA

    The Commission did not receive any comments specifically related to 
the impact of the final amendments on small businesses.

C. Estimate of Number of Small Entities to Which the Amendments Will 
Apply

    Under the Small Business Size Standards issued by the Small 
Business Administration, lamp manufacturers qualify as small businesses 
if they have fewer than 1,000 employees (for other household appliances 
the figure is 500 employees). Lamp catalog sellers qualify as small 
businesses if their sales are less than $8.0 million annually. The 
Commission estimates that there are approximately 150 entities subject 
to the final rule's requirements that qualify as small businesses.\11\
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    \11\ See 75 FR at 41712.
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D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    The final amendments will not increase any reporting, 
recordkeeping, or other compliance requirements associated with the 
Commission's labeling rules (75 FR 41696). The amendments will only 
extend the effective date for complying with the new lamp's labeling 
requirements previously issued at 75 FR 41696. The final amendments 
will also exempt from those requirements incandescent bulbs that fail 
to meet Federal energy efficiency standards by 2013 (e.g., 75-watt 
bulbs).

E. Duplicative, Overlapping, or Conflicting Federal Rules

    The Commission has not identified any other Federal statutes, 
rules, or policies that would duplicate, overlap, or conflict with the 
final amendments.

F. Alternatives

    The Commission sought comment and information on the need, if any, 
for alternative compliance methods that, consistent with the statutory 
requirements, would reduce the economic impact of the rule on small 
entities. In extending the effective date for the new labeling 
requirements and exempting certain bulbs from those requirements, the 
Commission is currently unaware of the need for special provisions to 
enable small entities to take advantage of the proposed extension or 
exemption. The Commission expects that the proposed amendments will 
reduce or defer, rather than increase, the economic impact of the 
rule's requirements for all entities, including small entities.

V. Final Rule

List of Subjects in 16 CFR part 305

    Advertising, Energy conservation, Household appliances, Labeling, 
Reporting and recordkeeping requirements.
    For the reasons discussed above, the Commission amends part 305 of 
title 16, Code of Federal Regulations, as follows:

PART 305--RULE CONCERNING DISCLOSURES REGARDING ENERGY CONSUMPTION 
AND WATER USE OF CERTAIN HOME APPLIANCES AND OTHER PRODUCTS 
REQUIRED UNDER THE ENERGY POLICY AND CONSERVATION ACT (``APPLIANCE 
LABELING RULE'')

0
1. The authority citation for part 305 continues to read as follows:


    Authority: 42 U.S.C. 6294.

0
2. In Sec.  305.15, paragraph (c)(1) is revised to read as follows:


Sec.  305.15  Labeling for lighting products.

* * * * *
    (c)(1) Any covered incandescent lamp that is subject to and does 
not comply with the January 1, 2012 or January 1, 2013 efficiency 
standards specified in 42 U.S.C. 6295 or the DOE standards at 10 CFR 
430.32(n)(5) effective July 14, 2012 shall be labeled clearly and 
conspicuously on the principal display panel of the product package 
with the following information in lieu of the labeling requirements 
specified in paragraph (b):
* * * * *


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    By direction of the Commission.

Donald S. Clark,
Secretary.
[FR Doc. 2011-8689 Filed 4-11-11; 8:45 am]
BILLING CODE 6750-01-P