UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

Bureau of Consumer Protection
Division of Enforcement
Hampton Newsome
Direct Dial; (202) 326-2889
Fax: (202) 326-2558
Email: hnewsome@fc.gov

April 15, 2013

Via Email

David Calabrese

General Counsel

Air-Conditioning, Heating, and Refrigeration Institute
2111 Wilson Boulevard, Suite 500

Arlington, VA 22201-3001

Dear Mr. Calabrese:

On April 5, 2013, the Department of Energy (DOE) announced that it will not enforce
new regional efficiency standards for furnaces pending the resolution of ongoing litigation.
Consistent with this development, the FTC staff will not recommend enforcement action against
manufacturers that do not use the new label pending resolution of the ongoing litigation.

On June 27, 2011 (76 Fed. Reg. 37408), DOE published new energy conservation.
standards for residential furnaces, central air conditioners, and heat pumps, including regional
standards for different product types. The American Public Gas Association (APGA) challenged
these standards for furnaces, and other entities intervened to challenge the standards for air
conditioners and heat pumps. On January 11, 2013, the Department of Justice and APGA filed a
joint motion asking the court to enter an agreement to settle APGA’s challenge that would,
among other things, vacate the DOE standards for non-weatherized gas furnaces. To date, the
court has not approved the settlement agreement. Currently, the DOE regulations require
compliance with the new furnace standards beginning May 1, 2013. Given the uncertainty raised.
by the proposed settlement, DOE announced on April 5, 2013 that, during the pendency of the
litigation, it will “act in a manner consistent with the terms of the settlement agreement with
regard to the enforcement of the standards.”

Earlier this year, as directed by the Energy Policy and Conservation Act (EPCA),' the
Commission issued new disclosures, including new EnergyGuide labels, to help industry
members comply with the new DOE regional efficiency standards (78 Fed. Reg. 8362 (Feb. 6,

' 42 U.S.C. §§ 6291-6309.


Page 2

2013)). Aware of the pending settlement in the DOE litigation, the Commission tied
implementation of the new disclosures to DOE’s compliance date, currently scheduled for May
1, 2013 for certain furnaces. The FTC disclosure rules will not go into effect if the DOE
standards are vacated by the settlement. However, if the settlement is not approved by May 1,
2013, the DOE standards and associated FTC labeling requirements become effective. The
dissemination of the new labels at that time could cause significant confusion for consumers and
industry members as well as wasted resources should a final settlement eventually vacate the
DOE standards.

Therefore, consistent with DOE’s April 5, 2013 enforcement statement, the FTC staff
will not recommend enforcement action against industry members that do not implement the new
FTC disclosure requirements contained in the February 6, 2013 final rule notice pending
resolution of the DOE litigation.” This approach will help coordinate implementation of the
DOE standards with the FTC disclosures, which are designed to help consumers and industry
members understand those standards.

The views expressed in this letter are those of the staff assigned to enforce the
Commission’s Energy Labeling Rule. In accordance with Section 1.3(c) of the Commission’s
Rules of Practice and Procedure, 16 C.F.R. § 1.3(c), this is a staff opinion only and has not been
reviewed or approved by the Commission or by an individual Commissioner. It is not binding
upon the Commission and is given without prejudice to the right of the Commission later to
rescind the advice and, when appropriate, to commence an enforcement proceeding. In
conformance with Section 1.4 of the Commission’s Rules of Practice, 16 C.F.R. § 1.4, this letter
is being placed on the public record. If you have any further questions, please contact me at
(202) 326-2889.

Singefdly,

Hampton Newsome
Attorney

2 The February 6, 2013 notice contained new EnergyGuide label design and content
requirements for all heating and cooling equipment, including a few product types not subject to
the DOE regional standards (e.g., boilers and oil furnaces). To promote consistency in the
timing of these broad label changes and to minimize confusion from inconsistent label designs,
this FTC staff enforcement position applies to all the new requirements in February 6, 2013
notice, whether they apply to products subject to regional standards or not. Once the DOE
litigation is resolved, the staff will provide guidance on updating labels for the various heating
and cooling products covered by the Rule.