5 Buckets:

1) Labeling

2) Communication down sales chain

3) DOE collection of information (suspected violations, data)

a. Proactive investigations (e.g. DOE “auditing”)

b. Passive investigation (e.g. investigate claims to DOE)

4) DOE i nvestigation process

a. How is a violation determined

5) Consequences

Tools discussed to date:

1. FTC label

a. Increase visibility (add luminescence, increase size)

2. W histleblower (consumer, contractors, or other industry member reporting)

a. R equired of industry members?

b. 1

- 800 #

3. DOE public outreach

a. Consumer (homeowner education)

4. Periodic review of enforcement program

a. End of sell through period (July 2016)

b. May add financial burden and uncertainty in market

c. Periodic review without mandate to change program

5. “Sting” type operations by DOE

6. DOE database o f contractors/dealers/distributors that have agreed to comply with regional

standards

7. DOE finding of routine violation by a contractor/dealer/distributor

a. P ublishing of reports and findings

8. Tear off label mailed in by manufacturers/distributors/contractors

9. Tear off label mailed in by manufacturers/distributors/contractors

10. T raining to contractors/distributors on compliance with regional standards

a. P rovided by?

11. R ecords retention for specified time in specified manner

a. B y distributors

b. B y contractors

12. Records produ ction

13. U se of AHRI database and certificates

14. U se of DOE CCMS database

15. Tracking “chip” on units

a. Radio frequencies coming off labels could be problematic

b. RFID chips

16. Restrictions on manufacturers to ship some products to distributors in certain states

17. Restrict ions on distributors to ship to contractors in certain states

18. Use of warranty information

a. Restrictions on information disclosure

19. Adding burden to contractors to “fix” non

- compliant installations

20. DOE consideration of remedial actions when assessing penalti es

21. Assessing civil penaltiesLabeling

Purpose of label:

- U tilized at time of delivery to make s ure unit is installed correctly

- U tilized after installation for rebates or installation site inspection

Ideas:

1. FTC label (on packaging)

a. Increase visibility (add luminescence, increase size)

2. Tear off label mailed in by manufacturers/distributors/contractors

a. Overload of information for DOE

3. Tracking “chip” on units

a. Radio frequencies coming off labels could be problematic

b. RFID chips

4. QR code l abels

a. Voluntary only

5. Manufacturer labeling

6. Label packaging and unit

a. Manufacturers willing to put label on unit

b. FTC label on package

Communication down sales chain

1. P ublic outreach

a. DOE

i. To c onsumer s (homeowner education)

1. How to message the g race period

ii. To contractors

iii. In collaboration with NGOs

iv. In collaboration with California Energy Commission

v. Effective communication: w ebsite or DOE handout w/explanation of cause for

regional stds) , ads in regional publications (HVAC Insider) , poster for display in

distrib utor facilities, FAQ for explanation of regs (grace period), webinar

vi. DOE willing to commit to trifolds, webinars, and website (as of 9/4/2014)

1. Preamble?

vii. Information for consumers

1. Link to DOE website or webinar to educate consumers

2. How much oversight of th e content does working group want?

viii. Information disclosure for online sales  DOE to follow up with FTC

b. Manufacturers to contractors, distributors, consumers

i. Website information

ii. To include commitment in preamble

2. DOE database of contractors/dealers/distributo rs that have agreed to comply with regional

standards

a. Cons: high turnover, only “good actors” will sign up

b. Pros: education, tool for manufacturers

c. What are the barriers?d. Alternative: p oint of sale 1

- pager with rules and responsibilities for contractors that

would be signed by contactor at first sale

i. Processing and handling paper is expensive

3. Training to contractors/distributors on compliance with regional standards

a. Provided by?

b. Federal regulation requiring such education?

c. Preamble language from manufactu rers in support of mfg provided training (vote:

unanimous)

d. Agreement from distributors?

e. How much?

f. Clarification if DOE can consider training provided by manufacturers/distributors in

determining if manufacturers/distributors sold to routine violators

g. DOE develop training resource to promote uniform training program

4. Use of AHRI database and certificates /u se of DOE CCMS database

a. Should installer provide consumer with document at point of sale or installation

b. Add features to database(s) to allow units to be s earched by allowable installation

region

c. Is E nergy G uide label sufficient?

d. Improve interface with Energy Guide label and DOE database

e. No regulatory text requiring certificates, but may be used as tools for DOE

DOE collection of information (suspected violations, data)

1. Whistleblower (consumer, contractors, or other industry member reporting)

a. Required of industry members?

b. 1

- 800 #

i. Positive response

ii. Likely a voicemail

c. Email vs phone call

i. Email allows for a conversation/follow up questions

ii. Request specific fields

d. Whistleblower program decreases cheating

e. Confidentiality is important

f. Online form with follow up menu and tracking number for submitter

i. Limited information can be disclosed for tracking progress

g. How to effectively communicate email address

h. Obligatio n to report?

i. Conflict of interest for manufacturers to whistle blow?

j. DOE is committed to accepting reports of non

- compliance through a 1

- 800 #, email, and

online submission form (9/4/2014)

i. Can be included in training

2. Tear off label mailed in by manufacturers/distributors/contractors

3. Records retention for specified time in specified manner

a. By distributors

b. By contractors

c. What DOE needs:

i. From an installer

- when, what, and where was a unit installedii. From a distributor

- who was the unit sold to and wh ere it was delivered

iii. From a manufacturer

- what products were shipped where

iv. Timeline?

1. 3

- 5 years: aligns with tax record keeping

2. 8

- 10 years: b/c the unit is more likely to be serviced in this timeframe

d. Record keeping on for those who make sales in impacted regions

e. Where is record kept? What type of record? What is the burden?

f. Contractors’ records might be more searchable by customer name/info

g. If records are kept on contractor site is the absence of records a violation?

h. Annual reporting of number of installs per region?

i. Use warranty information to see if manufacturers are honoring warranties in states for

which those types units should not be installed as a means of identification.

i. Warranty filing rates could drop if filed by contractor

j. Annual industry wide review of installation trends?

k. How would regional record retention requirements be implemented?

l. DOE is inclined to mirror the IRS’s record retention requirements because of reduction

in burden

m. How can DOE trace data (e.g. model serial numbers) from very sm all

contractors/installers

n. How should internet sales be regulated? How does equipment get to an internet seller?

i. Manufacturers selling to online dealers/contractors

ii. Online dealers/contractors purchasing equipment from distributors (sometime

on sale equipm ent)

4. Use of warranty information

a. Restrictions on information disclosure

5. Tool to easily determine compliance at installation site

a. Robo

- call effort to survey locations with new installations and locations willing to have

installation inspected [cost about $5 000 plus cost per call (about $0.50 each)]

DOE investigation process

1. “Sting” type operations by DOE

2. Records production

3. What happens if less efficient equipment is labeled as 14 SEER and sold in the south?

a. Is manufacturer responsible for rectifying situati on?

b. Rerate equipment ?

c. DOE may want the ability to assess penalties based on how many units were installed in

the south or should DOE be able to penalize manufacturers for all units sold if

installation records can’t be produced

Consequences

1. DOE finding of routine violation by a contractor/dealer/distributor

a. Publishing of reports and findings

b. What’s routine, when should a notice be issued?

i. Would a threshold set by DOE defining “routine” cause manufacturers to

establish a lo wer thresholdc. Likely DOE would pu blish a notice instead of a list of routine violators

i. Should be easily accessible and readable

ii. How long does it take DOE to determine that a contractor/dealer/distributor is a

routine violator? Possibly around 6 months to a year.

d. Should manufacturers be al erted that DOE is investigating an entity before a final

finding is made?

e. Process for a contractor getting off the “list”

f. Should DOE send a letter or warning notice to installers that have been reported

2. Restrictions on manufacturers to ship some products t o distributors in certain states

a. Restriction on manufacturers to ship units rated below 14 SEER to southern states

3. Restrictions on distributors to ship to contractors in certain states

4. Adding burden to contractors to “fix” non

- compliant installations

a. Curr ently DOE only requires a manufacturer that distributes a non

- compliant product to

inform the consumer

b. Manufacturers and contractors may voluntarily replace non

- compliant products and

DOE may consider that in assessing civil penalties

c. Contractors should b e required to notify consumers that the non

- compliant product(s)

were installed

5. DOE consideration of remedial actions when assessing penalties

a. DOE currently has a policy statement requiring this

b. Consider remedial actions when determining if an entity is a routine violator

6. Assessing civil penalties

a. DOE only assess civil penalties for defined prohibited acts

b. DOE evaluates the maximum civil penalty, considers remedial actions, and determines

an appr opriate fine. DOE also offers a settlement figure which may or may not differ

from the determined fine.