[Federal Register Volume 72, Number 29 (Tuesday, February 13, 2007)]
[Proposed Rules]
[Pages 6836-6879]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-613]



[[Page 6835]]

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Part III





Federal Trade Commission





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16 CFR Part 305



Appliance Labeling Rule; Proposed Rule

Federal Register / Vol. 72, No. 29 / Tuesday, February 13, 2007 / 
Proposed Rules

[[Page 6836]]


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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: Notice of proposed rulemaking; request for public comment.

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SUMMARY: Section 137 of the Energy Policy Act of 2005 (Pub. L. 109-58) 
requires the Commission to conduct a rulemaking to examine the 
effectiveness of current energy efficiency labeling requirements for 
consumer products issued pursuant to the Energy Policy and Conservation 
Act. The Commission is seeking comments on proposed amendments to the 
existing labeling requirements.

DATES: Written comments must be received on or before April 16, 2007.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Appliance Labeling Rule Amendments, 
R511994'' to facilitate the organization of comments. A comment filed 
in paper form should include this reference both in the text and on the 
envelope, and should be mailed or delivered, with two complete copies, 
to the following address: Federal Trade Commission/Office of the 
Secretary, Room H-135 (Annex A), 600 Pennsylvania Avenue, NW., 
Washington, DC 20580. Comments containing confidential material must be 
filed in paper form, and the first page of the document must be clearly 
labeled ``Confidential'' and must comply with Commission Rule 
4.9(c).\1\ The FTC is requesting that any comment filed in paper form 
be sent by courier or overnight service, if possible, because postal 
mail in the Washington area and at the Commission is subject to delay 
due to heightened security precautions.
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    \1\ Any request for confidential treatment, including the 
factual and legal basis for the request, must accompany the comment 
and must identify the specific portions of the comment to be 
withheld from the public record. The request will be granted or 
denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See Commission Rule 4.9(c), 
16 CFR 4.9(c).
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    Comments filed in electronic form should be submitted by following 
the instructions on the web-based form at http://secure.commentworks.com/energyguide. To ensure 
that the Commission considers an electronic comment, you must file it 
on that web-based form. You also may visit http://www.regulations.gov 
to read this proposed Rule, and may file an electronic comment through 
that Web site. The Commission will consider all comments that 
regulations.gov forwards to it.
    Comments on any proposed filing, recordkeeping, or disclosure 
requirements that are subject to paperwork burden review under the 
Paperwork Reduction Act should be submitted to: Office of Information 
and Regulatory Affairs, Office of Management and Budget, Attention: 
Desk Officer for Federal Trade Commission. Comments should be submitted 
via facsimile to (202) 395-6974 because U.S. postal mail at the Office 
of Management and Budget (``OMB'') is subject to lengthy delays due to 
heightened security precautions.
    The FTC Act and other laws that the Commission administers permit 
the collection of public comments to consider and use in this 
proceeding as appropriate. The Commission will consider all timely and 
responsive public comments that it receives, whether filed in paper or 
electronic form. Comments received will be available to the public on 
the FTC Web site, to the extent practicable, at http://www.ftc.gov. As 
a matter of discretion, the FTC makes every effort to remove home 
contact information for individuals from the public comments it 
receives before placing those comments on the FTC Web site. More 
information, including routine uses permitted by the Privacy Act, may 
be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326-2889, 
Attorney, Division of Enforcement, Bureau of Consumer Protection, 
Federal Trade Commission, Room NJ-2122, 600 Pennsylvania Avenue, NW., 
Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Energy Policy and Conservation Act Labeling Requirements
III. FTC's Appliance Labeling Rule
IV. Procedural History
V. FTC Consumer Research
VI. Section-by-Section Description of Proposed Amendments
VII. Discussion of Comments and Proposed Amendments
    A. Effectiveness and Benefits of the Current Label
    B. Alternative Label Designs
    C. Requirements for Heating and Cooling Equipment
    D. Refrigerator Categories
    E. Revisions to Ranges of Comparability and Energy Price 
Information
    F. Energy Descriptors
    G. Placement of the EnergyGuide Label on Covered Products
    H. Catalog Requirements
    I. Fuel Cycle Energy Consumption
    J. Clothes Washer Labels
    K. Plumbing Issues
    L. Television Labeling
    M. Miscellaneous Amendments and Issues
VIII. Paperwork Reduction Act
IX. Regulatory Flexibility Act
X. Additional Questions for Comment
XI. Proposed Rule Language

I. Introduction

    Section 137 of the Energy Policy Act of 2005 (``EPACT 2005'') (Pub. 
L 109-58) amends the Energy Policy and Conservation Act of 1975 
(EPCA)\2\ to require the Commission to initiate a rulemaking to 
consider ``the effectiveness of the consumer products labeling program 
in assisting consumers in making purchasing decisions and improving 
energy efficiency.'' As part of this effort, the Act directs the 
Commission to consider ``changes to the labeling rules (including 
categorical labeling) that would improve the effectiveness of consumer 
product labels.'' The Act provides the Commission 90 days to initiate, 
and two years to complete, this rulemaking. Following the Act's passage 
in August 2005, the Commission published an Advance Notice of Proposed 
Rulemaking (ANPR), held a workshop, and conducted consumer research for 
this proceeding. The Commission is now publishing proposed amendments 
to the Appliance Labeling Rule (16 CFR Part 305) for public comment. 
The amendments would implement a new design for EnergyGuide labels, 
replace labeling requirements for heating and cooling equipment with 
marking requirements, and make several other changes to update and 
improve the Rule.
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    \2\ 42 U.S.C. 6291 et seq.
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II. Energy Policy and Conservation Act Labeling Requirements

    Section 324 of EPCA requires the FTC to prescribe labeling rules 
for the disclosure of estimated annual energy cost or alternative 
energy consumption information for a variety of products covered by the 
statute, including home appliances (e.g., refrigerators, dishwashers, 
air conditioners, and furnaces), and lighting products, and for the 
disclosure of water use information for certain plumbing products.\3\ 
Labels

[[Page 6837]]

for appliances covered under EPCA must disclose the estimated annual 
operating cost of such products, as determined by the Department of 
Energy (DOE) test procedures (42 U.S.C. 6294(c)).\4\ The Commission, 
however, may require a different measure of energy consumption if DOE 
determines that the cost disclosure is not technologically feasible, or 
the Commission determines the cost disclosure is not likely to assist 
consumers in making purchasing decisions or is not economically 
feasible. Section 324(c) also requires that the label for appliances 
contain information about the range of estimated annual operating costs 
(or energy consumption) for covered products. The Commission may 
require the disclosure of energy information found on the label in any 
printed material displayed or distributed at the point of sale. In 
addition, the Commission may direct manufacturers to provide additional 
energy-related disclosures on the label (or information shipped with 
the product) including instructions for the maintenance, use, or repair 
of the covered product.
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    \3\ 42 U.S.C. 6294. For most appliance products, the Commission 
must prescribe labeling rules unless it determines that labeling is 
not technologically or economically feasible (42 U.S.C. 6294(a)(1)). 
The statute requires labels for central air conditioners, heat 
pumps, furnaces, and clothes washers unless the Commission finds 
that labeling is not technologically or economically feasible or is 
not likely to assist consumers in making purchasing decisions (42 
U.S.C. 6294(a)(2)(A)). Pursuant to Sec.  6294(a)(1), the Commission 
previously determined not to require labeling for television sets, 
kitchen ranges, ovens, clothes dryers, humidifiers, dehumidifiers, 
and certain home heating equipment other than furnaces. See 44 FR 
66466, 66468-66469 (Nov. 19, 1979).
    \4\ Section 323 of EPCA (42 U.S.C. 6293) directs DOE to develop 
test procedures for major household appliances. Manufacturers must 
follow these test procedures to determine their products' compliance 
with DOE's energy conservation standards (required by 42 U.S.C. 
6295) and to derive the energy consumption or efficiency values to 
disclose on required labels.
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III. FTC's Appliance Labeling Rule

    The Commission's Appliance Labeling Rule implements the 
requirements of EPCA by directing manufacturers to disclose energy 
information about major household appliances. This information enables 
consumers to compare the energy use or efficiency of competing 
models.\5\ When initially published in 1979,\6\ the Rule applied to 
eight appliance categories: Refrigerators, refrigerator-freezers, 
freezers, dishwashers, water heaters, clothes washers, room air 
conditioners, and furnaces. Subsequently, the Commission expanded the 
Rule's coverage to include central air conditioners, heat pumps, 
fluorescent lamp ballasts, plumbing products, lighting products, and 
pool heaters as well as some other types of water heaters.\7\
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    \5\ More information about the Rule can be found at http://www.ftc.gov/appliances.
    \6\ 44 FR 66466 (Nov. 19, 1979).
    \7\ See 52 FR 46888 (Dec. 10, 1987) (central air conditioners); 
59 FR 49556 (Sept. 28, 1994) (pool heaters); 54 FR 28031 (July 5, 
1989) (fluorescent lamp ballasts); 58 FR 54955 (Oct. 25, 1993) 
(certain plumbing products); and 59 FR 25176 (May 13, 1994) 
(lighting products).
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    Under the Rule, manufacturers must disclose specific energy 
consumption or efficiency information about their appliances at the 
point of sale in the form of a yellow EnergyGuide label affixed to each 
unit. The information on the EnergyGuide label also must appear in 
catalogs from which covered products can be ordered. The Rule directs 
manufacturers to derive the information from standard DOE tests.
    Required labels for appliances must also include a ``range of 
comparability'' (published by the Commission) that shows the highest 
and lowest energy consumption or efficiencies for all similar appliance 
models. These ranges of comparability are intended to help consumers 
determine how a specific model compares to others available in the 
market. Labels for most appliances also must provide the product's 
estimated annual operating cost. Manufacturers calculate these costs 
using national average energy cost figures published by DOE. In 
addition to the required EnergyGuide labels, manufacturers of furnaces, 
central air conditioners, and heat pumps must provide energy 
information for their products in either fact sheets or an industry 
directory.
    The Rule contains very specific requirements for the content and 
format of the EnergyGuide labels. Manufacturers must use the FTC yellow 
label with the EnergyGuide headline and must provide information in the 
format and type prescribed. Additionally, manufacturers cannot place 
any information on the label other than that specifically allowed by 
the Rule. In 2000, the Commission issued an exemption allowing 
manufacturers to include the ``ENERGY STAR'' logo on the EnergyGuide 
label for covered appliances (65 FR 17554 (Apr. 3, 2000)). ENERGY STAR, 
which is administered by the Environmental Protection Agency (EPA) and 
DOE, is a voluntary U.S. Government labeling program to identify and 
promote energy-efficient products.\8\
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    \8\ See http://www.energystar.gov.
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    The Commission's Rule also contains certain reporting requirements 
which direct manufacturers for most covered products to file reports 
with the FTC both annually and when they begin manufacturing new 
models. These reports must contain the estimated annual energy 
consumption or energy efficiency ratings for the appliances derived 
from tests conducted pursuant to the DOE procedures (16 CFR 305.8(b)). 
Under section 305.10, the Commission publishes new ranges of 
comparability if an analysis of the new information indicates that the 
upper or lower limits of the ranges have changed by more than 15%. 
Otherwise, the Commission publishes a statement each year that the 
prior ranges remain in effect. Energy information submitted pursuant to 
these requirements is available on the Commission's Web site at http://www.ftc.gov/appliances.
    Finally, the Rule has different labeling requirements for non-
appliance consumer products (16 CFR 305.11(d),(e), and (f)). For 
example, manufacturers of fluorescent lamp ballasts and certain tube-
type fluorescent bulbs must disclose an encircled ``E'' on ballasts and 
on luminaires containing ballasts, as well as on packaging. The ``E'' 
signifies compliance with DOE minimum efficiency standards. 
Manufacturers of showerheads, faucets, toilets, and urinals must 
disclose water usage information on their products, packaging, and 
labeling. Manufacturers of certain incandescent bulbs, spot and flood 
bulbs, and screw-base compact fluorescent bulbs must disclose on their 
packaging light output in lumens, energy used in watts, voltage, 
average life, and number of bulbs. They also must explain how 
purchasers can select the most energy efficient bulb for their needs.

IV. Procedural History

    The Commission initiated this proceeding on November 2, 2005 with 
the publication of an ANPR that sought comments on the effectiveness of 
the FTC's energy labeling regulations for consumer products. (70 FR 
66307 (Nov. 2, 2005)). The ANPR also announced the Commission would 
conduct its periodic regulatory review as part of this rulemaking. The 
Commission received 28 comments in response to the ANPR.\9\ Based on 
these comments, the Commission conducted a Public Workshop 
(``Workshop'') on May 3, 2006 to discuss a variety of issues associated 
with the labeling program, including: (1) Overall label design issues, 
(2) refrigerator comparability ranges, (3) labels for heating and 
cooling equipment, and (4) television labeling. After conducting the 
Workshop, the Commission received ten additional written comments.\10\
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    \9\ Comments on the ANPR are available online at: http://www.ftc.gov/os/comments/energylabeling/index.htm.
    \10\ The Commission announced the Workshop in an April 10, 2006 
Federal Register notice (71 FR 18023). Written comments related to 
the Workshop are available online at: http://www.ftc.gov/os/comments/energylabeling-workshop/index.htm. A copy of the Workshop 
transcript is available online at: http://www.ftc.gov/os/comments/energylabeling-workshop/060503wrkshoptrnscript.pdf.

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    On March 15, 2006, the Commission announced its plans to conduct 
consumer research on various label designs to examine the effectiveness 
of the current energy labeling requirements and to obtain information 
about alternatives (71 FR 13398). After the Workshop, the Commission 
published an additional notice containing details about its planned 
consumer research project, including drafts of the appliance labels 
that would be used in the project. (71 FR 36088). The Commission 
received eight comments in response to that June 23, 2006 notice.\11\
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    \11\ Comments submitted in response to the June notice are 
available online at: http://www.ftc.gov/os/comments/appliancelabelingresearch/index.htm.
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    Based on all the comments, the Workshop, and consumer research 
conducted by the FTC staff (see below), we now propose various 
amendments to the Appliance Labeling Rule. We invite comments on these 
proposed changes.

V. FTC Consumer Research

    The FTC staff conducted its consumer research in October 2006. The 
detailed results of the study and associated documents can be found at 
http://www.ftc.gov/appliances. The study results are also discussed in 
sections VII.A., VII.B., and VII.D. of this Notice. The FTC staff 
designed the research to provide information regarding consumer 
comprehension of various label designs and the perceived usefulness of 
various types of information related to energy use, energy efficiency, 
and operating costs. In drafting the changes proposed in this Notice, 
the FTC considered its consumer research results, the facts submitted 
in comments, and the broad range of policy and legal issues raised by 
commenters during the rulemaking proceeding.
    In designing the consumer research, the FTC staff began with the 
findings and strategies of prior research and the comments received 
during the rulemaking proceeding. In 2002, the American Council for an 
Energy Efficient Environment (``ACEEE'') examined the efficacy of the 
EnergyGuide label as well as alternative formats and graphical 
elements.\12\ In addition, in response to the Commission's 2005 ANPR, 
the Association of Home Appliance Manufacturers (``AHAM'') conducted 
research that also examined the current label and alternatives.\13\ 
Similar to ACEEE's project, the FTC's research included questions 
designed to understand how well consumers comprehend information 
presented in different labeling formats. Like the research conducted by 
AHAM, the FTC's study involved an Internet panel. Although the FTC 
considered this prior work in developing its own research, the study 
addressed several issues not raised in the previous studies and tested 
a label design not addressed in detail by ACEEE or AHAM.
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    \12\ Thorne, Jennifer and Egan, Christine, ``An Evaluation of 
the Federal Trade Commission's EnergyGuide Label: Final Report and 
Recommendations,'' ACEEE, August 2002. The report is available 
online at http://aceee.org/pubs/a021full.pdf.
    \13\ AHAM submitted its research results as part of its comments 
on the ANPR. See AHAM (<greek-i>519870-00016) (available at http://www.ftc.gov/os/comments/energylabeling/519870-00016.htm).
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    The FTC contracted with Harris Interactive, a consumer research 
firm that has substantial experience assessing consumer communications 
using the Internet and other alternative protocols. The study's sample 
universe was made up of members of the contractor's Internet panel. The 
panel consists of more than four million individuals recruited through 
a variety of convenience sampling procedures, rather than true 
probability sampling techniques. The sample for this research is 
therefore not nationally representative in the classic sense. However, 
the contractor has studied the relationship between samples from its 
Internet panel and samples collected using more traditional probability 
sampling techniques. Based on these studies, the contractor has 
developed procedures, including demographic weighting based on 
proprietary propensity scoring techniques, to minimize differences 
between the results of their Internet panel studies, and studies based 
on true probability samples of the nation. Although an Internet panel 
may not be not suitable for some types of research, the FTC staff 
expects the population of Internet users and the members of the Harris 
panel fairly well represent the population of major appliance 
purchasers.
    The study yielded a sample of approximately 4,000 individuals who 
were at least 18 years old and likely or recent major appliance 
purchasers. In conducting this research, the contractor identified 
respondents using relevant, pre-existing data in its Internet panel 
database and necessary additional screening questions. FTC staff, in 
consultation with Harris, designed the screener questions to ensure 
that the demographic composition of the sample reasonably matched that 
of the target population. The study randomly assigned all respondents 
to one of ten label treatments. The online questionnaire then asked 
each respondent a set of questions. The study randomly assigned 
respondents to different label design groups. Each group viewed a 
single label design (and were not shown other designs). Under this 
approach, the responses yielded data about the relative effectiveness 
of each design in conveying energy information regardless of which 
design consumers would have preferred if shown multiple label designs.
    Each of the ten treatment groups (i.e., cells) contained 
approximately 400 respondents. The four primary label designs consisted 
of the current EnergyGuide label (the control label), a revised version 
of the current design using a continuous bar graph to convey the 
comparability range, a categorical ``five-star'' label based on the 
model's energy performance compared to DOE minimum standards,\14\ and a 
label prominently featuring operating costs (see Figure 1). Respondents 
in four cells viewed labels bearing the ENERGY STAR logo while 
respondents in four other cells viewed the same label without the 
ENERGY STAR logo. The study also included a control no-label (pure 
information) condition. For this condition, respondents viewed 
information about appliances in a table and text format. This no-label 
condition and the cells involving categorical labels were the only 
study conditions to include the five-star rating system and the term 
``energy efficient.'' The research study also included a refrigerator 
condition that combined all similar capacity, full-size refrigerators 
into one category (i.e., eliminated separate ranges of comparability 
for configurations such as side-by-side doors and bottom-mounted 
freezers).\15\
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    \14\ The thresholds used to assign stars under the categorical 
system used in the study were published for comment at 71 FR 36088, 
36091 (June 23, 2006).
    \15\ The overall comparability range on the labels for this 
condition was, therefore, much greater than the other conditions, 
although the energy efficiency and cost range among the four 
products remained constant.

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           Table 1.--Label Conditions Appliance Label Research
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            Cell                       Condition (label design)
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Cell 1......................  Current EnergyGuide Label.
Cell 2......................  Current EnergyGuide Label with ENERGY STAR
                               logo.
Cell 3......................  Modified Version of Current Label.
Cell 4......................  Modified Version of Current Label with
                               ENERGY STAR logo.
Cell 5......................  Categorical Label.
Cell 6......................  Categorical Label with ENERGY STAR logo.
Cell 7......................  Operating Cost Label.
Cell 8......................  Operating Cost Label with ENERGY STAR
                               logo.
Cell 9......................  Pure Information (no recognizable label
                               format, information formatted with equal
                               font size).
Cell 10.....................  Current EnergyGuide Label with Collapsed
                               Refrigerator Categories for the
                               refrigerator rotation and the Current
                               Label for the dishwasher rotation.
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    The study employed four different hypothetical refrigerator models 
and four different hypothetical dishwasher models.\16\ For example, one 
group of respondents viewed the current EnergyGuide label for four 
refrigerators and four dishwashers with different energy 
characteristics, whereas, a different group viewed a categorical 
version of the label for the same models. The order of the dishwasher 
sequence and the refrigerator sequence rotated, so that half of the 
respondents saw the dishwasher sequence first, while the other half saw 
the refrigerator sequence first.
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    \16\ The FTC published for comment the detailed attributes of 
all eight models, including their operating costs, electricity uses, 
and star rankings in a June 23, 2006 Notice (71 FR 36088). All of 
the treatments contained information about operating costs and 
energy use for the appliance. However, the prominence of this 
information differed across treatments.
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    Respondents answered a series of objective questions about the 
characteristics of the products described in the labels. The 
questionnaire directed respondents to rank the refrigerators in terms 
of annual operating costs, annual energy use, and energy efficiency. In 
addition, the study contained questions about cost, efficiency, and 
energy use differences, as well as questions about any differences in 
product quality communicated by the labels.
    Respondents in all cells answered questions about which model or 
models in the set qualified for ENERGY STAR and the location of the 
ENERGY STAR logo on the label. The questionnaire also asked respondents 
about their prior experience using EnergyGuide labels to assess how 
useful the current labels have been. Respondents answered general 
questions about the perceived usefulness of certain types of energy-
related information to assess whether labels emphasizing that 
information (e.g., energy usage, categorical measures of efficiency, or 
operating costs) are likely to be particularly useful in real life 
settings.
    After the study's completion, Harris Interactive provided the FTC 
staff with data summaries.\17\ Harris also provided information 
regarding the statistical significance of the final results under the 
different label treatments.\18\ Throughout this Notice, ``statistically 
significant'' differences among labels are those found to be 
significant at the 10% level (or lower) (i.e., the 90% confidence level 
or higher).
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    \17\ The data were generated in two ways: weighted and 
unweighted. The weighted data is based on the contractor's 
proprietary techniques to minimize the differences between 
questionnaire results from its Internet Panel and the questionnaire 
results from more traditional procedures. The results cited in this 
Notice are based on the weighted data. The FTC staff has compared 
the results for the weighted data with the unweighted data. Although 
there are some differences between the two approaches, the core 
findings discussed in this Notice are the same using both 
techniques.
    \18\ The null hypothesis for this test of statistical 
significance is that there is no difference between label conditions 
in the proportion of respondents correctly answering a question. A 
10% level of significance was set, using appropriate two-tail tests. 
Various T-tests were applied by Harris using Quantum software. Under 
this condition, the hypothesis of no difference between two label 
conditions is rejected if a two-tailed test indicates significance 
at the 10% level. One interpretation of this procedure is that if 
there really is no difference between two label conditions (i.e., 
the null hypothesis is true), then the odds are only one in ten of 
observing the difference produced by the data. Another 
interpretation is that the confidence level of the test is 90%. See 
Gilbert A. Churchill, Jr., Marketing Research Methodological 
Foundations (Fifth Edition), The Dryden Press, Chicago, 1991.
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VI. Section-by-Section Description of Proposed Amendments

    The following are brief descriptions of the proposed amendments set 
out in this Notice. Section 305.2: To make section 305.2 more user 
friendly, the Proposed Rule would place the definitions in alphabetical 
order. It would also amend the definition of catalog to clarify that 
the term covers both paper and Internet-based catalogs. Finally, the 
definition of ``range of energy efficiency ratings'' would be 
eliminated.
    Section 305.3 Description of covered products: The Proposed Rule 
would amend the description of refrigerators and refrigerator freezers 
to make it consistent with DOE regulations.
    Section 305.5 Determinations of estimated annual energy 
consumption, estimated annual operating cost, and energy efficiency 
rating, and of water use rate: The Proposed Rule would clarify that the 
Rule does not apply to covered appliances for which DOE has not issued 
test procedures.
    Section 305.7 Determinations of capacity: Under the Proposed Rule, 
capacities for refrigerators and refrigerator-freezers would be 
determined for total refrigerated volume and adjusted total volume as 
determined by DOE regulations.\19\
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    \19\ The Rule would continue to require only the disclosure of 
total refrigerated volume for the EnergyGuide label.
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    Section 305.8 Submission of data: The Proposed Rule would clarify 
that required reports for appliances include the brand name of the 
reported model if it is different from the name of the manufacturer.
    Section 305.9 Representative average unit energy cost: Under the 
Proposed Rule, this section would be removed and reserved.
    Section 305.10 Ranges of comparability information on required 
labels: The Proposed Rule would amend this section to direct the 
Commission to amend range of comparability and representative average 
energy cost information every five years.
    Redesignation of sections 305.13, 305.14, 305.15, 305.16, 305.17, 
305.18 and 305.19: The Proposed Rule would redesignate these sections 
as 305.19, 305.20, 305.21, 305.22, 305.23, 305.24 and 305.25, 
respectively.
    Requirements for lighting and plumbing products (newly designated 
sections 305.15 and 305.16): Under the Proposed Rule, the labeling and 
marking requirements for lighting and plumbing products currently in 
section 305.11

[[Page 6840]]

would be moved to redesignated sections 305.15 and 305.16, 
respectively. The Proposed Rule contains no substantive change to 
existing requirements for these products.
    Sec.  305.11 Labeling for refrigerators, refrigerator-freezers, 
freezers, dishwashers, clothes washers, water heaters, room air 
conditioners, and pool heaters: The Proposed Rule would amend this 
section to require operating cost as the primary disclosure on the 
EnergyGuide label. The Proposed Rule would also require new language to 
clarify the scope of the comparison ranges for refrigerator products on 
the labels. The proposal would also modify and clarify requirements 
related to the label placement on covered products.
    Sections 305.12 and 305.13 (newly designated) Marking requirements 
for heating and cooling equipment: The Proposed Rule would require 
manufacturers to mark permanently heating and cooling equipment (except 
water heaters) with energy efficiency information. The proposal would 
eliminate EnergyGuide labeling requirements for these products.
    Section 305.14 (newly designated) Energy information disclosures 
for heating and cooling equipment: The Proposed Rule would streamline 
requirements related to the disclosure and distribution of consumer 
energy information for central air conditioners and furnaces.
    Section 305.20 (newly designated) Paper catalogs and Web sites: The 
Proposed Rule would require the disclosure of annual estimated 
operating costs for these products in paper and Internet-based 
catalogs. Under the proposal, catalog sellers would no longer be 
required to provide range of comparability information.
    Section 305.24 (newly designated) Exemptions: The exemption related 
to ENERGY STAR logos on EnergyGuide labels would be incorporated into 
section 305.11. Section 305.24 would be reserved.
    Appendices: The Proposed Rule would amend the various appendices to 
include range of comparability information in the form of operating 
costs.

VII. Discussion of Comments and Proposed Amendments

A. Effectiveness and Benefits of the Current Label

    Issue and Comments: In the ANPR, the Commission asked a series of 
questions related to the effectiveness of the current EnergyGuide 
label. Many comments indicated that the current label provides consumer 
benefits. The responses reflected a consensus that the current program 
is useful. The Consortium for Energy Efficiency (CEE) (<greek-i>519870-
00018), for example, stated that ``there is a strong belief among [CEE] 
members that the EnergyGuide label is an important tool to inform 
consumers of the efficiency of home appliances.''\20\ Similarly, 
General Electric (<greek-i>519870-00027) noted that the label has 
successfully provided ``comparative energy consumption information to 
consumers.'' AHAM (<greek-i>522148-0007) stated that the label provides 
``accurate, useful and comparative information.''
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    \20\ CEE also expressed support for the data collection 
activities conducted by the FTC. In addition to comments about the 
EnergyGuide label, the Commission received a comment from the 
National Electronics Manufacturers Association (NEMA) in support of 
existing disclosure requirements for lighting products. NEMA 
(<greek-i>519870-00028).
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    ACEEE (<greek-i>519870-00021), however, reported that the current 
label has a ``low level of use'' and a ``minimal impact on consumer, 
manufacturer, and contractor comparisons and choices.'' ACEEE's 
research found that most consumers were unable to identify the label or 
correctly select the label from a group of different label designs. 
While assessments of the current label's effectiveness varied, most 
commenters agreed that there is much room for improvement in the 
label's design.
    A few commenters urged the Commission to consider changes to the 
label in light of the policy goals of the EnergyGuide program. The 
nature of those goals, however, was a point of disagreement among 
commenters. For example, Whirlpool (<greek-i>519870-00013) suggested 
that the current label be updated to improve its readability and 
effectiveness. A researcher (Payne <greek-i>519870-00024) who worked on 
ACEEE's study wrote that the ``current Energy Guide label is reasonably 
effective in providing consumers with information about the annual 
operating cost associated with a particular product, but is less 
effective in conveying the energy efficiency.'' He explained that the 
label appears to encourage customers to choose higher efficiency 
products after comparing the annual operating costs between two 
options, but that the energy efficiency information is not effective at 
conveying this information. According to the comment, consumers 
generally consider a labeled product to be energy efficient, and the 
comparison graphic on the current label is poorly understood. Overall, 
however, he concluded that ``the net benefit of the current label is 
positive because consumers do glean cost information and can make 
choices based on that information.''
    The same commenter identified two specific problems with the 
current label. First, there is an inconsistency in the 
``directionality'' of the comparison graphic. For some products such as 
refrigerators, the comparison range provides information about 
electricity use. On these labels, more efficient products fall on the 
left (lower) part of the range. Conversely, for other products, such as 
room air conditioners, the comparison range provides information about 
energy efficiency. On these labels, the more efficient products fall on 
the right (higher) part of the scale. In the commenter's view, this can 
cause consumers to misinterpret the label. Second, he asserted that the 
division of some products, such as refrigerators, into multiple 
categories causes problems because the ranges are different for similar 
products (e.g., top mount and side-by-side refrigerator-freezers). 
(Payne <greek-i>519870-00024).
    In responding to the Commission's questions about the effectiveness 
of the current label, several commenters addressed what they perceived 
to be the purpose of the FTC's energy labeling program. There was some 
disagreement about the policy goals underlying the EnergyGuide label. 
According to some industry members, the FTC's labeling program should 
provide useful information about the energy usage of home appliance 
products. (See, e.g., AHAM <greek-i>522148-00007). Some commenters 
questioned the role the label should play in promoting energy savings 
and in creating incentives for market transformation. Whirlpool 
(<greek-i>522148-00005), for example, pointed to DOE's efficiency 
standards program and the ENERGY STAR program as the appropriate 
entities for energy efficiency promotion. It urged the FTC to focus 
instead on providing ``meaningful, helpful information to consumers to 
assist them in the purchase decision'' through ``clear, fair, and 
unbiased'' disclosures.
    Other commenters believed that the effectiveness of the label also 
should be judged by its ability to encourage consumers to purchase 
high-efficiency products and its effectiveness in encouraging 
manufacturers to bring more high efficiency products to the 
marketplace. (See, e.g., ACEEE <greek-i>519870-00021 and Payne 
<greek-i>519870-00024). One such commenter explained that the 
Commission should consider whether the label ``convinces and encourages 
consumers to purchase higher energy-efficient products'' and encourages 
``manufacturers to produce

[[Page 6841]]

more energy efficient products.'' (Payne <greek-i>519870-00024). As 
ACEEE (<greek-i>519870-00021) observed, amendments to EPCA set forth in 
the Energy Policy Act of 2005 direct the FTC to initiate a rulemaking 
to consider the effectiveness of the appliance labeling program ``in 
assisting consumers in making purchasing decisions and improving energy 
efficiency.''
    Discussion: In promulgating the Appliance Labeling Rule in 1979 (44 
FR 66466 (Nov. 19, 1979)), the Commission provided the following 
statement: ``The primary purpose of the Commission's Rule is to 
encourage consumers to comparison-shop for energy-efficient household 
appliances. By mandating a uniform disclosure scheme for energy 
consumption information, the Rule will permit consumers to compare the 
energy efficiency of competing appliances and to weigh this attribute 
against other product features in making their purchasing decisions. If 
the labeling program works as expected, the availability of this new 
information should enhance consumer demand for appliances that save 
energy. In turn, competition should be generated among manufacturers to 
meet this demand by producing more energy-efficient appliances.'' The 
Commission continues to believe that this statement accurately 
describes the role of the FTC's energy labeling program. Specifically, 
the label serves two important purposes. First, the detailed operating 
cost and energy consumption information on the label allow consumers to 
compare the total cost of competing models. Second, the label aids 
consumers who are seeking to buy high-efficiency products that reduce 
energy use and thus help the environment.
    In the Commission's consumer research, several questions addressed 
the effectiveness of the label. These data suggest that consumers 
actually find the label much more useful than has been suggested by 
past research. Overall, the results indicate that the label exhibits a 
high level of recognition and usefulness as reported by the study's 
participants. Over 85% of recent appliance purchasers who visited a 
retail showroom recalled seeing a label with energy 
characteristics.\21\ Of those respondents, 58% correctly recalled that 
the label was yellow with black letters.\22\ Fifty-nine percent of 
respondents who recalled seeing a label scored the usefulness of the 
label \23\ at a seven or higher on a scale of zero to ten.\24\
---------------------------------------------------------------------------

    \21\ Question Q435 reads: ``Do you recall seeing a label 
describing energy characteristics attached to the appliance?'
    \22\ Question Q440 asked qualified respondents: ``To the best of 
your knowledge, was the color of the energy label: (1) White with 
green letters, (2) Blue with white letters, (3) Yellow with black 
letters, (4) Red with black letters, or (5) Not sure?'
    \23\ Question Q445 asked qualified respondents: ``Using a scale 
from 0 to 10, where 0 is ``not at all useful'' and 10 is ``extremely 
useful,'' how useful was the energy label in your most recent 
[insert relevant appliance] purchase decision?'
    \24\ It is possible that some respondents actually recalled 
seeing ENERGY STAR information instead of the EnergyGuide label. We 
note, however, that only 8% of respondents recalled that the label 
they saw in the showroom was blue and white (colors often used for 
the ENERGY STAR logo). Moreover, the ENERGY STAR logo does not 
display energy characteristics.
---------------------------------------------------------------------------

B. Alternative Label Designs

    Issue: The ANPR sought comments on whether the Commission should 
change the current design and format of the EnergyGuide label. During 
this proceeding, the Commission has considered several different label 
designs. In particular, we have sought comments on whether label 
information should be presented in the form of a ``continuous'' bar 
graph or a ``categorical'' design. Labels using a continuous design, 
such as the current EnergyGuide label, contain a bar graph, or similar 
item, that displays information on a continuous scale without discrete 
ranks or categories. Labels under a categorical approach employ 
discrete categories, using a step ranking system such as stars or 
letters to indicate relative energy use. The Commission has also 
considered whether to adopt a continuous-style label that displays 
operating costs as the primary energy efficiency descriptor.\25\
---------------------------------------------------------------------------

    \25\ As part of the Workshop, the FTC sought comment on an 
alternative label design that compared a model's energy efficiency 
to DOE minimum standards in the form of a percentage. See 71 FR 
18023. Several workshop participants raised concerns that percentage 
information may be confusing to consumers, inadequately distinguish 
the energy efficiency of some products (such as water heaters), and 
create complications as DOE minimum standards change over time. 
Taking these comments into account, the June 2006 notice indicated 
that the FTC would not continue to consider such a design (71 FR at 
36093).
---------------------------------------------------------------------------

    A key feature of the current continuous-style label is that the 
range or scale is based on data for models available on the market. One 
end of the scale depicts the energy use of the most efficient model on 
the market while the other identifies the least efficient. For example, 
the bar graph on a label for a typical refrigerator category may have 
539 kWh/yr (kilowatt-hours per year) on one end and 698 kWh/yr on the 
other.
    The ratings on a categorical label (e.g., stars or letters) 
generally depict the model's energy efficiency as compared to minimum 
government efficiency standards. For example, a five star dishwasher 
would have an efficiency rating that exceeded the minimum government 
standard by a certain percentage (e.g., 20%). In some countries, the 
energy label categories stem from a consistently applied algorithm 
(e.g., New Zealand and Australia). (Roke <greek-i>522148-00002). The 
framework behind the categorical label is fundamentally different from 
that used for the continuous-style label because the categorical range 
does not depict directly the energy use or efficiency of other products 
on the market. Instead, the categories (e.g., stars) correspond to 
thresholds defined by the agency administering the labeling program.
    Comments: In 2002, ACEEE released a report summarizing its research 
on the EnergyGuide label's efficacy and on alternative formats and 
graphical elements for the label.\26\ More recently, AHAM conducted 
research that also examined the current label and alternatives.\27\ The 
conclusions reached by AHAM and ACEEE are not in accord. The ACEEE 
report considered various categorical and continuous labels. Among 
other things, the report recommended the adoption of a categorical 
label based on a star system (e.g., one to five stars). According to 
ACEEE (<greek-i>519870-00021), its research demonstrated a clear 
preference for the categorical star-based label that consumers found 
the ``easiest to understand and most motivating.'' On the other hand, 
AHAM (<greek-i>519870-00016) indicated that its study found that 
consumers prefer and understand the continuous label design over the 
categorical.
---------------------------------------------------------------------------

    \26\ Thorne and Egan, supra note 12.
    \27\ AHAM, supra note 13.
---------------------------------------------------------------------------

Comments on the Categorical Design
    Many comments focused on the continuous and categorical designs. 
Commenters were clearly split on their preference for one design over 
the other. In general, advocates of the categorical label argued that 
the design is easier for consumers to understand and would be more 
effective at promoting energy efficiency. (See, e.g., Payne 
<greek-i>519870-00024 and ACEEE <greek-i>519870-00021). ACEEE's 
research indicated that a categorical label based on a star system ``is 
more easily understood than the current label, thereby enabling 
shoppers to more quickly and easily compare the energy performance of 
multiple models.'' ACEEE found in its research that consumers clearly 
preferred a categorical label, particularly one that employs a star-
based rating system. ACEEE (<greek-i>519870-00021) concluded that the 
star-based label was the easiest for

[[Page 6842]]

consumers to understand and ``most motivating.'' The categorical label 
also is useful for a wide range of consumers, including those with 
limited literacy, difficulty reading English, and discomfort with 
numerical concepts. Comments also suggested that the categorical label 
provides a greater incentive for manufacturers to produce high-
efficiency products because of market benefits associated with having 
the highest energy rating. (Payne <greek-i>519870-00024). Several 
commenters also noted that many other countries, including those in the 
European Union, employ a categorical labeling system. (Payne 
<greek-i>519870-00024 and ACEEE <greek-i>519870-00021). According to 
NRDC (<greek-i>519870-00025), these labels have ``been extremely 
effective communication tools and have successfully moved consumers to 
purchase more energy efficient and cost effective models.''
    Other comments raised a variety of concerns about the categorical 
approach. These concerns fell into five basic categories. First, some 
commenters warned that consumers would interpret the label's categories 
(e.g., a five-star system) as indicia of non-energy related factors 
such as product quality or performance.\28\ In fact, according to some 
comments, categorical labels in some other countries are intended to 
convey performance attributes of the product beyond the limited energy 
disclosures intended by the EnergyGuide label. (Alliance Laundry 
Systems <greek-i>519870-00008 and Whirlpool <greek-i>522148-00005).
---------------------------------------------------------------------------

    \28\ See Whirlpool <greek-i>522148-00005, Edison Electric 
Institute (EEI) <greek-i>522148-00010, Gas Appliance Manufacturers 
Association (GAMA) <greek-i>519870-00011, AHAM <greek-i>519870-
00016, and Air-Conditioning and Refrigeration Institute (ARI) 
<greek-i>519870-00010. ACEEE's comments stated that its research 
found that a star label did not imply quality or other requirements 
beyond energy consumption. (ACEEE <greek-i>519870-00021).
---------------------------------------------------------------------------

    Second, several commenters cautioned that the categorical label 
would cause confusion related to the ENERGY STAR program.\29\ For 
example, CEE (<greek-i>519870-00018) raised concerns ``about the 
potential friction between a categorical label (that implicitly directs 
consumers toward more stars) and the ENERGY STAR label (that directs 
consumers to look for the mark on efficient products).'' EPA 
(<greek-i>519870-00007), which runs the ENERGY STAR program along with 
DOE, wrote that a categorical label ``could undermine the natural 
synergies between the EnergyGuide education effort and the ENERGY STAR 
program and prevent these programs from working effectively together to 
provide important yet different information to consumers.''
---------------------------------------------------------------------------

    \29\ See, Whirlpool <greek-i>522148-00005, AHAM <greek-i>519870-
00016, EPA <greek-i>519870-00007, and GAMA <greek-i>519870-00011.
---------------------------------------------------------------------------

    Third, several commenters suggested that the categorical label 
would mislead consumers by inflating or understating the difference 
between appliances by using arbitrary cut-offs. (See, e.g., Whirlpool 
<greek-i>519870-00013). ARI suggested that the label ``would likely 
discourage incremental efficiency improvements unless the improvement 
is sufficient to qualify the product for the next star.'' (ARI 
<greek-i>519870-00010).
    Fourth, some commenters believed the categorical system would 
require the FTC to make subjective judgments about thresholds for the 
various categories. (Whirlpool <greek-i>522148-00005 and AHAM 
<greek-i>522148-00007). According to Whirlpool (<greek-i>522148-00005), 
such decisions are ``clearly beyond the scope of the current program 
and current expertise of the Commission.'' AHAM (<greek-i>522148-00007) 
indicated that, for some products such as dishwashers, the FTC would 
have to establish separate category ratings for models ``that are 
essentially the same in energy efficiency.'' It warned that the 
categorical label ``overemphasizes very small differences in energy use 
simply for the sake of differentiation.'' AHAM (<greek-i>519870-00016) 
also warned that a categorical approach would change ``the very nature 
of the label to one that would identify categories or groupings of 
products rather than'' providing range information that allows 
consumers to make their own judgments among different products.
    Fifth, many commenters noted that the implementation of a 
categorical system will require extensive technical analysis and 
protracted negotiations with stakeholders.\30\ ACEEE (<greek-i>519870-
00021) acknowledged that the effort would ``entail significant up front 
implementation efforts'' and suggested that the FTC convene a technical 
review group to advise the Commission on the appropriate category 
thresholds.
---------------------------------------------------------------------------

    \30\ See AHAM (<greek-i>519870-00016 and <greek-i>522148-00007), 
Payne (<greek-i>519870-00024), Whirlpool <greek-i>522148-00005, EEI 
<greek-i>522148-00010, EPA <greek-i>519870-00012, and GAMA 
<greek-i>519870-00011. Fisher and Paykel (<greek-i>522148-0002) 
provided information about the rating algorithm used in Austra lia 
and New Zealand for refrigerators.
---------------------------------------------------------------------------

    AHAM (<greek-i>522148-00007) and other industry members urged the 
FTC to retain the current continuous style format. AHAM indicated that 
its own research demonstrates that consumers prefer the continuous 
style label because it provides ``useful information that could be used 
to compare different models'' and because the graphic format is clear, 
simple, and understandable.
Possible Improvements to the Current Label
    Though there were sharp disagreements about whether to use a 
categorical label, most commenters believed that if the Commission were 
to retain a continuous format, improvements could be made to the 
current design. For example, EEI (<greek-i>522148-00010) recommended 
that the Commission use a revised version of the continuous label that 
increases the font sizes of key information. GAMA (<greek-i>519870-
00011), which voiced a strong preference for maintaining a continuous 
label design, supported the consideration of changes to reduce clutter 
on the current label. ACEEE (<greek-i>519870-00021), which supports a 
categorical style, indicated that improvements could be made to the 
existing label. It suggested that the label should ``clearly group and 
block off each informational element using the same text style and 
color; slightly reduce the level of explanatory text; and reposition 
the ENERGY STAR to the bottom right-hand corner of the label.''
Comments on Operating Cost Label
    A few comments urged the Commission to consider a continuous label 
design that prominently displays operating (i.e., energy) cost. 
Whirlpool (<greek-i>522148-00005) submitted a sample label featuring 
operating costs in large font. It suggested that such a label would be 
advantageous because it presented familiar information in a 
straightforward fashion. Similarly, Bosch explained that ``it is of 
critical importance that the main attention grabber be the dollar value 
of the operating expense.'' Bosch (<greek-i>522148-00003) stated that 
operating cost ``is what people most want to know, and is the best 
value to use when comparison shopping.'' At the Workshop, AHAM 
suggested that consumers really would like to know how much the 
appliance will ``cost them to operate.'' (Workshop Tr. at 124-125). 
While ACEEE's research (<greek-i>519870-00021) indicated that operating 
cost is considered one of the most important pieces of information on 
the label, it also found that consumers are interested in energy use. 
ACEEE's comments, however, also stated that ``[c]onsumers expressed 
little interest in replacing annual energy use with operating cost as 
the basis for the comparative graphic.''
Comments on Previous Research
    Commenters also discussed prior research. Natural Resources Canada 
(NRCAN) (<greek-i>519870-00020) provided an overview of that agency's 
past efforts to

[[Page 6843]]

consider improvements to the Canadian EnerGuide label.\31\ In general, 
NRCAN's work suggested that ``the majority of people find the 
information on the EnerGuide labels useful to some extent in helping 
select the most energy efficient model appliance.'' Its research, 
though, suggests consumers generally find labels with both kWh/yr and 
operational cost more useful than labels with kWh/yr alone. NRCAN 
considered the use of operating costs on its label, but concluded that 
``the disparity of electricity costs across Canada could not provide 
comparable information in the same manner as the kWh/yr.'' In addition 
to considering operating costs, NRCAN explored the implementation of a 
categorical system, but found a star-based categorical label ``did not 
test well with many consumers.'' According to NRCAN, consumers raised 
concerns about the significance of differences among the categories.
---------------------------------------------------------------------------

    \31\ The Canadian EnergGuide label is similar to the U.S. 
EnergyGuide label.
---------------------------------------------------------------------------

    In addition to NRCAN's comments about its own research, several 
comments addressed the strengths and weaknesses of the ACEEE and AHAM 
research. Whirlpool (<greek-i>519870-00013) raised concerns about 
ACEEE's mall intercept approach and also questioned the statistical 
significance of the results of a shopping experiment ACEEE conducted. 
AHAM (<greek-i>519870-00016) raised concerns that the ACEEE study was 
``non-scientific'' and results driven aimed at concluding that the 
``categorical-style label was the preference of consumers.'' ACEEE 
(<greek-i>522148-00008) countered AHAM's critiques in detail, 
explaining, among other things, that throughout ``the project, the 
research design was reviewed with numerous experts and found to be a 
strong and valid approach without bias towards any particular 
outcome.'' Furthermore, ACEEE voiced criticisms of AHAM's approach 
arguing that, contrary to AHAM's assertions, the study actually found 
``that the stars-based label best expresses energy efficiency and does 
not mislead consumers with regard to product quality, performance, and 
reliability.'' ACEEE also expressed concern that the AHAM study failed 
to test actual label comprehension, focusing instead on consumer 
preferences and self-reported ease of understanding.
Comments on ENERGY STAR and Alternative Label Designs
    In 1992, the EPA introduced the voluntary ENERGY STAR program to 
promote energy-efficient products and thereby reduce greenhouse gas 
emissions. ENERGY STAR first covered labeling for computers and 
monitors. In 1996, EPA partnered with the U.S. Department of Energy. 
The ENERGY STAR label is now on major appliances, office equipment, 
lighting, home electronics, and more. Recognizing the importance of 
this program for consumers, the Commission in 2000 issued an exemption 
to the Appliance Labeling Rule that allows manufacturers to include the 
ENERGY STAR logo on the EnergyGuide label for covered appliances. (65 
FR 17554 (Apr. 3, 2000); see also 16 CFR 305.19(a)). The exemption 
requires manufacturers to print an explanatory tag line next to the 
logo that states ``ENERGY STAR A symbol of energy efficiency.'' As part 
of EPACT 2005, Congress established a formal, statutory basis for the 
ENERGY STAR program. (See 42 U.S.C. 6294a).
    Commenters raised several issues about the inclusion of ENERGY STAR 
information on the FTC's EnergyGuide label. Some expressed concern 
about the impact a categorical labeling system may have on the ENERGY 
STAR program, while others took issue with the current placement of the 
ENERGY STAR logo on the FTC label. As discussed above, EPA 
(<greek-i>519870-00012) raised several concerns about the impact of the 
categorical label on its program. CEE (<greek-i>519870-00018), which 
works extensively with utility companies on energy-efficiency programs, 
cautioned the FTC to avoid a course that could damage ENERGY STAR and 
warned of the ``potential friction'' between a categorical label and 
ENERGY STAR. AHAM (<greek-i>519870-00016) was more direct. According to 
that industry group, the adoption of a categorical label, with its 
identification of super-efficient categories, would create a ``rival 
program to ENERGY STAR.'' The two programs service distinct purposes in 
AHAM's view. The FTC label assists consumers ``in understanding the 
long-term cost implications of purchasing a particular product,'' while 
the ENERGY STAR program ``has been specifically identified by the 
Congress to `identify and promote energy-efficient products' for 
consumers.''\32\
---------------------------------------------------------------------------

    \32\ Quoting section 131 of EPACT 2005.
---------------------------------------------------------------------------

    On the other hand, ACEEE's research found that consumers ``easily 
distinguished the ENERGY STAR from the categorical rating scheme.'' In 
addition, ACEEE concluded that the two programs have a mutually 
reinforcing relationship because consumers recognize ENERGY STAR as an 
endorsement that the model has met specific standards, while the 
categorical rating ``provides a comparison scale for energy use among 
different models.'' According to another commenter involved in ACEEE's 
research, no ``consumer comprehension issues were found when consumers 
were shown a categorical stars system combined with an ENERGY STAR 
logo.'' (Payne <greek-i>519870-00024). This commenter, however, 
explained at the Workshop that ``we probably need much more detailed 
research to understand the questions of how the Energy Guide label and 
the ENERGY STAR label interact.'' (Workshop Tr. at 101 (Payne)).
    In addition to concerns about the impact of a categorical system on 
ENERGY STAR, commenters suggested improving the placement of the ENERGY 
STAR logo (or symbol) on the EnergyGuide label regardless of overall 
label design. Most commenters who addressed this issue suggested that 
the logo appear on the lower, right corner of the EnergyGuide label 
instead of above the comparability range, as currently required.\33\ 
NRCAN (<greek-i>519870-00020)) explained that the bottom location 
``showcases'' the logo and that manufacturers believe the location 
provides more prominence to the symbol. EPA (<greek-i>519870-00007) 
suggested that the explanatory text required for the logo be shortened 
because the words ``ENERGY STAR'' have now been incorporated into the 
logo.
---------------------------------------------------------------------------

    \33\ EPA (<greek-i>519870-00021), and NRCAN (<greek-i>19870-
00020).
---------------------------------------------------------------------------

    Discussion: The Commission has reviewed the concerns raised by the 
comments and the results of the FTC's own research. Based on this 
review, as discussed further below, we propose replacing the existing 
label design with one that features estimated annual operating costs as 
the primary disclosure. The proposed label's comparison range would 
disclose energy cost information in dollars per year. The label would 
continue to provide consumers with information about the product's 
energy use (in kWh/year), but as a secondary disclosure. The Commission 
is also seeking comment on a variation of the cost label design that 
would provide a cost estimate over a period of years instead of 
annually.
    The results of the FTC research yielded several general conclusions 
about the performance of the four label designs under consideration 
(i.e., the current energy use label, a modified version of the current 
energy use label, the categorical label, and the operating cost label). 
First, respondents performed well in the objective tasks of identifying 
and ranking operating costs (in dollars) and energy use (in kilowatt-
hours) for

[[Page 6844]]

all label designs, suggesting that any of the designs should help 
consumers compare operating costs and energy use. The categorical 
label, however, was somewhat more effective for some objective tasks, 
particularly when compared to the modified version of the current 
energy use label. Second, the categorical label, which was the only 
label to include the term ``energy efficient,'' was generally more 
effective at aiding respondents in ranking products by energy 
efficiency than the labels more prominently featuring operating costs 
or energy use. Third, respondents viewing the categorical design were 
much more likely than respondents viewing other designs to identify 
models as ENERGY STAR-qualified when none of the models viewed 
contained ENERGY STAR logos. Fourth, the results suggest that 
respondents viewing the categorical labels were somewhat more likely to 
misidentify quality differences between models than those respondents 
viewing other label designs. Fifth, the research indicated that the 
categorical label had a substantially greater impact on respondents' 
reported willingness to pay for differences in energy performance 
between models. Finally, the study suggested that the respondents in 
all label conditions have a preference for the communication of energy 
characteristics in the form of operating costs over either electricity 
usage or a five-star categorical scale.
Identification of Operating Costs, Energy Use, and Energy Efficiency 
Ranking
    In general, the research results for all label designs indicated 
that most respondents had little trouble identifying the correct 
operating cost and electricity use of a single model.\34\ In most 
cases, at least 80% of the respondents consistently answered such 
questions correctly regardless of label design. Although no single 
label design consistently out performed all others on questions asking 
respondents to identify operating cost and energy use, some patterns 
emerged. For questions involving operating costs, the FTC staff found 
that the modified continuous label (Cell 3) performed worse than the 
other labels (Cell 1, Cell 5, and Cell 7) in seven out of twelve head-
to-head comparisons of response results involving labels without the 
ENERGY STAR logo. When the same cost questions were asked for labels 
bearing the ENERGY STAR logo, however, the results identified no 
statistically significant differences. In addition, there were no 
statistically significant differences between the operating cost labels 
and the categorical labels for this sequence of operating costs 
questions, whether or not the ENERGY STAR logo was included.
---------------------------------------------------------------------------

    \34\ These simple operating cost questions are Q520 ``Based on 
this information can you tell how much it typically costs to operate 
this model for one year?'' and Q522 ``How much would it typically 
cost to operate this model for one year?'' These energy use 
questions are Q521 ``Based on this information, can you tell how 
much energy is typically required to operate this model for one 
year?'' and Q525 ``How much energy is typically required to operate 
this model for one year?''
---------------------------------------------------------------------------

    Similar patterns emerged for the sequence of questions about energy 
use. Once again, the modified current label (Cell 3) performed worse 
than the operating cost design and the categorical design.\35\ In 
addition, there were no statistically significant differences in the 
percentage of correct responses between the categorical labels and the 
operating cost labels.
    The ranking task results suggested that a very high percentage of 
respondents could rank the models correctly by operating costs and 
electricity use.\36\ At least 69% of respondents viewing each label 
design could rank correctly the models by operating costs and at least 
65% of respondents viewing each label design could rank correctly the 
models by energy use. The categorical labels tended to outperform other 
designs on the ranking tasks, particularly the current label and the 
modified current label. The study indicated that the categorical label 
outperformed the other designs in seven out of twenty-four response 
comparisons for questions related to operating costs.\37\ Most of these 
statistically significant differences (six of out the seven) involved 
comparisons of the categorical label to the current label or the 
modified current label. Only one of these seven differences involved a 
comparison of the categorical label result to the operating cost label 
and this occurred on the ranking task for refrigerators in the non-
ENERGY STAR condition.\38\
---------------------------------------------------------------------------

    \35\ Respondents who viewed the modified current label without 
the ENERGY STAR (Cell 3) had significantly fewer correct responses 
to three out of four questions about energy use than the respondents 
who viewed the categorical label (Cell 5) or the operating cost 
label (Cell 7).
    \36\ The questionnaire included three ranking questions: Q615 
(operating costs), Q660 (energy use), and Q640 (energy efficiency). 
For example, Q615 asked: ``Please rank these refrigerators according 
to their typical yearly operating costs, starting with the most 
expensive to operate and then moving to the second most expensive to 
operate, and then the third most expensive to operate.'' The 
structure of all three ranking questions was the same. The order of 
the ranking questions was rotated to prevent order bias.
    \37\ For refrigerators and dishwashers, the FTC staff analysis 
examined differences among each of the four main labels without 
ENERGY STAR information (six comparisons for each product) and 
differences among the four main labels with ENERGY STAR information 
(six comparisons for each product).
    \38\ Results for the energy use ranking task were similar. There 
were statistically significant differences in ten out of twenty-four 
comparisons. The clearest difference was between the categorical 
label and the current label, where the categorical label did better 
in four out of four comparisons. The categorical label did better 
than the operating cost label in only one out of four comparisons.
---------------------------------------------------------------------------

    For questions involving comparative energy efficiency, the 
categorical label performed better than the other label designs. For 
example, 82% of respondents viewing the categorical label (with the 
ENERGY STAR logo) correctly ranked refrigerators by energy efficiency 
whereas 72% did so for the current label, 69% for the modified version 
of the energy use label, and 71% for the operating cost label.
The Categorical Label
    The results of the FTC research suggest that, while the categorical 
label can provide important benefits under the tested conditions, it 
presents some significant concerns. First, respondents were much more 
likely to exhibit confusion in identifying ENERGY STAR products when 
using the categorical label. Absent the ENERGY STAR logo, there was no 
way for respondents to identify correctly ENERGY STAR-qualified models 
without guesswork. Nevertheless, when shown categorical dishwasher 
labels without ENERGY STAR logos, 43% of the respondents indicated that 
they could tell whether any of the four labels were ENERGY STAR 
products.\39\ In groups viewing the other three label designs under the 
same conditions, a substantially smaller percentage of respondents 
indicated that they could determine whether products qualified for the 
ENERGY STAR program (14% for the current label (Cell 1), 16% for the 
modified energy use label (Cell 3), and 11% for the operating cost 
label (Cell 7)).\40\
---------------------------------------------------------------------------

    \39\ Respondents were asked Q629: ``Based on this information, 
can you tell if any of the dishwashers qualify for the federal 
govenment's ENERGY STAR program?''
    \40\ The difference in the percentage of respondents who 
answered correctly for the categorical labels versus each of the 
other labels is statistically significant at the 5% significance 
level (i.e., 95% confidence level).
---------------------------------------------------------------------------

    Additionally, when asked to identify ENERGY STAR-qualified models, 
a substantial number of respondents viewing the categorical design 
without the ENERGY STAR logo (Cell 5) identified the lower efficiency, 
non-ENERGY STAR models in the study as ENERGY STAR models. 
Specifically, 19% of the respondents in Cell 5 identified the ``three-
star'' dishwasher (Model J) as ENERGY STAR-qualified

[[Page 6845]]

and 16% identified the ``one-star'' dishwasher (Model M) as being 
ENERGY STAR-qualified. By contrast, for those viewing the operating 
cost label (Cell 7), only 4% of respondents identified dishwasher Model 
J as ENERGY STAR-qualified and only 3% identified dishwasher Model M as 
qualified.\41\
---------------------------------------------------------------------------

    \41\ The differences between the percentage of respondents 
viewing the categorical label who incorrectly identified ENERGY STAR 
models and the percentage of respondents viewing each of the other 
labels who incorrectly identified ENERGY STAR models is 
statistically significant at the 5% significance level (i.e., 95% 
confidence level). The results for refrigerators were similar: Cell 
5 (13% for Model M and 16% for Model J) and Cell 7 (4% for Model M 
and 5% for Model J).
---------------------------------------------------------------------------

    A substantial percentage of respondents who viewed the categorical 
label (39% for dishwashers) indicated that five stars (Model K) equated 
to an ENERGY STAR product even though there was no ENERGY STAR logo on 
the label.\42\ While this assumption was correct in the context of the 
refrigerator or dishwasher labels used in the study, we are concerned 
that this tendency to guess could lead to inaccurate conclusions for 
some labeled products, such as water heaters, that are not covered 
under the ENERGY STAR program. Moreover, respondents' guesswork in 
interpreting the categorical label suggests that such a label system 
could cause significant confusion where FTC categories fail to align 
neatly with ENERGY STAR levels. We note that EPA raised concerns about 
the feasibility of aligning categorical rankings to ENERGY STAR 
criteria for all covered products. (Workshop Tr. at 97-98).
---------------------------------------------------------------------------

    \42\ For other label designs, the respondents were less likely 
to identify Model K as ENERGY STAR where there was no ENERGY STAR 
logo on the label (9% for the current label, 13% for the modified 
label, and 9% for the cost label). The difference between the 
categorical label and each of the other labels is statistically 
significant at the 5% significance level (i.e., 95% confidence 
level).
---------------------------------------------------------------------------

    The study results also indicated that the categorical label caused 
more confusion than other designs with regard to the identification of 
the actual ENERGY STAR logo on the label itself. The questionnaire 
asked certain respondents to identify the information on the label 
signaling that the appliance qualified for the ENERGY STAR program.\43\ 
In cells containing the ENERGY STAR logo, well over 90% of the 
qualified respondents viewing the current, modified current, and 
operating cost labels correctly identified the logo on the ENERGY STAR 
models (Models K and L) whereas only about 80%\44\ of the qualified 
respondents viewing the categorical label with the ENERGY STAR logo 
correctly identified that logo on the labels. These results further 
support the conclusion that the categorical label is more likely to 
create confusion regarding ENERGY STAR than the other label designs.
---------------------------------------------------------------------------

    \43\ Qualified respondents were asked Q725: ``Please use your 
mouse's cursor to point and click on the screen on the information 
that tells you that this [refrigerator/dishwasher] qualifies for the 
federal government's ENERGY STAR program.'' This question was asked 
of respondents who said they could tell that an appliance qualified 
for the ENERGY STAR program, and who also identified at least one 
model as ENERGY STAR-qualified.
    \44\ The specific results for the categorical label were: 81% 
Model L refrigerator, 77% Model K refrigerator, 83% Model L 
dishwasher, and 79% Model K dishwasher. The difference between the 
categorical label and each of the other labels is statistically 
significant at the 5% significance level in 12 out of 12 head-to-
head comparisons.
---------------------------------------------------------------------------

    The study also examined possible confusion about the effect of the 
label designs on perceptions of overall product quality.\45\ On 
average, across all ten label conditions, a little over 70% of the 
respondents correctly understood that the label information did not 
include data on overall product quality. Respondents who viewed the 
categorical labels were less likely to answer the overall product 
quality question correctly than respondents who viewed the operating 
cost label or the modified current label.\46\ This tendency for the 
categorical label to suggest quality was greatest when the label design 
was coupled with the ENERGY STAR logo.\47\ For example, the research 
indicated that 24% of the respondents viewing the refrigerator 
categorical style labels (Cell 6) indicated quality differences among 
the models. Respondents viewing other label designs under the same 
conditions indicated lower levels of confusion on this issue: 16% for 
the current label, 15% for the modified energy use label, and 14% for 
the operating cost label.\48\ These differences, though not large, are 
statistically significant at the 5% significance level and add to the 
concerns with the categorical label.
---------------------------------------------------------------------------

    \45\ The questions involving product quality included Q675, 
Q680, and Q685. First, respondents were told: ``Now we would like to 
ask you some questions about the overall quality of the 
[refrigerators/dishwashers]. By `overall quality' we mean to include 
factors such as performance, durability, and workmanship.'' Then, 
respondents were asked: ``Can you tell, from the information 
provided, if one [refrigerators/dishwasher] has a higher overall 
quality than the other [refrigerator/dishwashers]?'' Respondents who 
answered ``Yes'' to this question were then asked ``Which 
[refrigerator/dishwasher] has the highest overall quality?''
    \46\ When responses for the ENERGY STAR and non-ENERGY STAR 
versions of each label format are combined, the categorical labels 
result in significantly fewer correct responses than each of the 
other labels for dishwashers and refrigerators.
    \47\ We note there was not a statistically significant 
difference between the percentage of respondents identifying quality 
differences in Cell 5 (categorical label without the ENERGY STAR 
logo) and Cell 7 (operating cost without the ENERGY STAR logo) (Cell 
5 Refrigerators--21%; Cell 5 Dishwashers--21%; Cell 7 
Refrigerators--19%; and Cell 7 Dishwashers--16 %).
    \48\ In addition, those respondents viewing the categorical 
label who perceived quality differences were much more likely to 
identify the highest efficiency model (Model K) as the highest 
quality model than respondents in other cells whose responses 
identifying the highest quality model were more evenly distributed 
across the four models.
---------------------------------------------------------------------------

    We also note that a significantly larger percentage of respondents 
who viewed the categorical label were willing to pay for energy 
performance differences compared to those respondents who viewed the 
other designs.\49\ Specifically, 70% of respondents viewing a pair of 
dishwasher models with the categorical label (Cell 5) indicated a 
willingness to pay more for one model over another. Only about 45% of 
the respondents viewing the other three label designs under similar 
conditions (without the ENERGY STAR logo) indicated that they were 
willing to pay more for one model over the other.\50\ The differences 
in willingness-to-pay across label designs when the ENERGY STAR logo 
was included on the label were also substantial, but not as pronounced 
(e.g., for dishwashers, 75% for the categorical design, 54% for the 
current label, 58% for the modified label, and 54% for the operating 
cost label).
---------------------------------------------------------------------------

    \49\ The willingness-to-pay series of questions began with Q700: 
``Now we would like to ask you some questions about how you would 
value the [refrigerators/dishwashers]. These two [refrigerators/
dishwashers] are the same in all respects, except that one uses more 
energy than the other. They have the same performance, durability, 
features, capacity and workmanship, are made by the same 
manufacturer, and sold in the same store.'' Then, respondents were 
asked Q705: ``Would you be willing to pay more for one of these two 
models?'' Respondents who answer ``Yes'' were then asked Q707: 
``Which model would you be willing to pay more for?'' Those who 
select a model were then asked: ``How much more would you be willing 
to pay for this [refrigerator/dishwasher]?'' Finally, respondents 
were asked Q715: ``Why do you say that? Please give as much detail 
as possible.''
    \50\ The willingness-to-pay differences were similar for 
refrigerators (70% for categorical label (Cell 5), 43% for the 
current label (Cell 1), 44% for the modified label (Cell 3), and 43% 
for the cost label (Cell 7)). The differences between the 
categorical label and each of these other labels are statistically 
significant at the 5% significance level for all of the relevant 
pair-wise comparisons.
---------------------------------------------------------------------------

    These willingness-to-pay results suggest that the categorical label 
may be more effective at motivating consumers to purchase higher 
efficiency products than the other designs. However, it is difficult to 
predict the extent to which self-reported intentions to pay more would 
translate into actual behavior in the marketplace. The results also 
suggest that a categorical EnergyGuide

[[Page 6846]]

label may serve a promotional function similar to the existing ENERGY 
STAR program. As the research suggests, however, the categorical label 
may actually have negative effects on the ENERGY STAR program, 
potentially creating substantial confusion and, in a significant number 
of cases, leading consumers to identify low-efficiency products as 
ENERGY STAR-qualified.
    We believe the EnergyGuide label should complement, not detract 
from, the ENERGY STAR program. The combination of the FTC label and 
ENERGY STAR program appears to provide a sound framework for conveying 
energy information to consumers and promoting energy efficiency. The 
FTC label displays detailed energy information about all products 
regardless of energy efficiency. ENERGY STAR provides the U.S. 
Government's imprimatur for high-efficiency products.\51\ This system, 
as a whole, provides a robust source of energy efficiency information 
to consumers.
---------------------------------------------------------------------------

    \51\ EPACT 2005 indicates that the purpose of the ENERGY STAR 
program is ``to identify and promote energy-efficient products and 
buildings.'' (42 U.S.C. 6294a(a)).
---------------------------------------------------------------------------

    In sum, we are not proposing a categorical label. The study 
suggests that there are benefits to the categorical label. It 
outperformed other labels on some objective performance tasks \52\ and 
appears to provide a good tool for allowing consumers to rank competing 
models. With the exception of the energy efficiency ranking task, 
however, differences in performance between the categorical label and 
the operating cost label were fairly modest. Overall, the potential 
costs of the categorical label are likely to outweigh its potential 
benefits. We are concerned that the label design could confuse a 
significant number of consumers with regard to the well-established 
ENERGY STAR program and may tend to convey inaccurate product quality 
messages more often than other tested designs. These concerns outweigh 
the categorical design's potential benefits.\53\ We request comment on 
the results of the FTC research with regard to the categorical label 
and the conclusions we have reached.
---------------------------------------------------------------------------

    \52\ We note that the study did not test conditions where two 
labels had the same number of stars, but different energy use and 
operating cost figures.
    \53\ We note commenters raised legitimate questions about the 
feasibility of implementing a categorical label system, including 
the alignment of FTC categories with ENERGY STAR criteria. Given our 
conclusions based on the research, we are not addressing such 
concerns in detail, but we recognize the serious issues that would 
be raised by the implementation of a categorical label.
---------------------------------------------------------------------------

Proposed Operating Cost Label
    After reviewing the results of the research and the comments 
submitted, the Commission is proposing to change the label design to 
require operating cost as the primary disclosure. Section 324 (a) of 
EPCA directs the Commission to require annual operating costs on the 
label, unless the Commission determines that such disclosures are not 
likely to assist consumers in making purchasing decisions. (42 U.S.C. 
6294(c)). The FTC's consumer research clearly indicates that cost 
information is likely to assist consumers in making purchasing 
decisions. While all the designs considered comply with Section 324(a), 
and each has strengths and weaknesses, on balance, we believe the 
adoption of a design that presents cost as the primary disclosure best 
serves consumers in the current marketplace. Under the Proposed Rule, 
the operating cost design would be required for refrigerators, 
refrigerator-freezers, freezers, clothes washers, dishwashers, room air 
conditioners, pool heaters,\54\ and water heaters.\55\ A sample of the 
proposed label is included as Figure 1.
---------------------------------------------------------------------------

    \54\ When the Commission first issued pool heater label 
requirements in 1994, the DOE test procedure did not contain a final 
procedure for measuring annual operating costs for these products. 
(See 10 CFR Part 430, Appendix P; and 59 FR 49556, 49558 (Sept. 28, 
1994)). Since then, DOE has amended the procedure to allow 
manufacturers to calculate annual energy use and operating cost for 
pool heaters. (62 FR 26140 (May 12, 1997)). Accordingly, the 
Commission proposes to require the disclosure of estimated annual 
operating costs on pool heaters.
    \55\ As discussed in section VII.C of this Notice, we are 
proposing to eliminate EnergyGuide labeling requirements for heating 
and cooling equipment (except water heaters). Therefore, the 
operating cost label would not apply to those products.
---------------------------------------------------------------------------

BILLING CODE 6750-01-P

[[Page 6847]]

[GRAPHIC] [TIFF OMITTED] TP13FE07.000

BILLING CODE 6750-01-C

[[Page 6848]]

    This proposed label marks a return to the prominence of operating 
costs on the label. When the Commission first issued EnergyGuide label 
requirements, the Rule required operating costs as the primary 
disclosure (44 FR 66466 (Nov. 19, 1979)). In 1994, the Commission 
relegated cost information to a secondary disclosure (see 59 FR 34014 
(July 1, 1994)). At the time, the Commission explained that when DOE 
changed its national average energy costs, corresponding changes in the 
label's operating costs could result in inconsistent cost information 
on labels in the showroom. (58 FR 12827 (March 5, 1993)). As explained 
in more detail below, we believe this concern can be addressed by 
changing the frequency at which required average energy cost 
information is changed.
    Our research indicated that respondents clearly identified 
operating costs as the preferred method for communicating energy 
performance in the marketplace. This preference was strong and 
consistent both in answers to open-ended questions at the beginning of 
the questionnaire and a series of closed-ended questions near the 
end.\56\ The contractor coded responses to the open-ended questions and 
grouped them into larger categories. Although the open-ended responses 
suggested a tendency for respondents to identify the information most 
prominently featured on the label they viewed as the ``most useful'' 
information,\57\ respondents tended to identify cost-related 
information as ``most useful'' more than other types of information 
regardless of which label they viewed. Across all label conditions, on 
average, 67% of respondents mentioned cost-related information when 
shown a refrigerator label, and 69% of respondents mentioned cost-
related information when shown a dishwasher label. In contrast, roughly 
40% of the respondents mentioned energy consumption, roughly 13% of 
respondents mentioned something about stars or an ENERGY STAR rating, 
and roughly 2% of respondents mentioned something about efficiency. The 
staff's separate review of a sub-sample of responses confirmed the 
contractor's finding that cost is mentioned most often as ``most 
useful.''
---------------------------------------------------------------------------

    \56\ Respondents were first advised: ``Imagine you were shopping 
for a [refrigerator/dishwasher] and this information was available. 
Please look at the information. You will be asked questions about 
[refrigerators/dishwashers] based on this information.'' Respondents 
then viewed a single energy label and asked (Q510): ``Would any of 
this information be useful to you in making your purchase 
decision?'' Those who answered ``Yes'' were then asked (Q515) 
``Which parts of this information would be most useful to you? 
Please be as specific as possible.'' When asked about the usefulness 
of information on the label early in the questionnaire, roughly 80% 
of respondents across all ten conditions, on average, thought the 
information would be useful (84% for refrigerator purchases and 80% 
for dishwasher purchases).
    \57\ For example, in the refrigerator condition, at least 40% of 
those who saw an operating cost label mentioned yearly operating 
costs, but only about 25% of those who viewed a categorical label 
mentioned operating cost. This tendency suggests that the 
information featured most prominently on the label will be important 
to consumers.
---------------------------------------------------------------------------

    The preference for operating cost information also emerged in an 
analysis of responses to a series of closed-ended questions asked 
toward the end of the questionnaire.\58\ For example, 40% of all 
respondents stated that operating cost was extremely useful (i.e., a 10 
on a 0 to 10 scale). In addition, 80% of all respondents rated the 
usefulness of cost information a seven or greater rating on a scale of 
0 to 10. By comparison, 28% of total respondents indicated that an 
energy use descriptor was extremely useful, and 67% of all respondents 
rated energy use a seven or greater on a 0 to 10 scale. Only 25% of 
total respondents found the five-star scale to be extremely useful and 
64% rated the five-star scale a seven or greater on the same scale.\59\
---------------------------------------------------------------------------

    \58\ Question series 900 stated: ``There are different ways to 
communicate the energy characteristics of an appliance. You can get 
* information on how much energy an appliance uses measured in 
kilowatt-hours, * information on the cost of operating an appliance 
for a year, measured in dollars, * energy efficiency ratings based 
on a five-star rating system. On a scale from 0 to 10, with 0 being 
not at all useful and 10 being extremely useful, please rate the 
usefulness of each type of information.'' Answers were elicited for 
Energy Use in Kilowatt-hours (Q905), Operating Costs Measured in 
Dollars (Q910), and Energy Efficiency based on a Five-Star Scale 
(Q915); the ordering of the alternative measures in the statement 
text and questions was randomized.
    \59\ The mean score for kilowatt-hours, operating costs, and 
energy efficiency were 7.4, 8.2, and 7.2 respectively.
---------------------------------------------------------------------------

    Respondents who viewed the categorical label were more likely than 
those in other cells to assign high ratings to the five-star scale, 
giving the five-star system a mean score of 8.1 in the condition 
without the ENERGY STAR logo and 8.2 in the condition with the ENERGY 
STAR logo. Even for these respondents, however, the five-star system 
did not yield higher ratings than the operating cost measure. They gave 
the operating cost measure an average score of 8.4 in the condition 
without the ENERGY STAR logo and 8.5 in the condition with the ENERGY 
STAR logo.
    In general, the operating cost design performed well on the 
objective tasks. For example, in head-to-head comparisons between the 
operating cost design and the categorical label design under the ENERGY 
STAR condition, there were no statistically significant differences in 
correct responses to questions about costs or energy use. The only 
statistically significant difference with the ENERGY STAR logo in place 
occurred in the energy efficiency ranking task. While the categorical 
label outperformed the operating cost label on some objective tasks, 
the differences in most cases were quite modest.
    The research suggests that the operating cost disclosure provides a 
clear, understandable tool to allow consumers to compare the energy 
performance of different models. We expect that consumers find 
operating cost information most useful because it is familiar to them 
and provides a clear context from which they can gauge the energy 
efficiency differences of various appliances, and allows them to assess 
trade-offs between energy efficiency expenditures and other 
expenditures. An operating cost range also provides an energy 
efficiency descriptor that is consistent across appliance types, and 
addresses the ``directionality'' problem identified by comments (i.e., 
more efficient models are always lower on the range across appliance 
types).
    We have two concerns, however, with the use of operating cost as 
the primary disclosure on a label. We seek comments on each. First, as 
discussed by the Commission in 1994, frequent changes to average energy 
cost figures used to calculate label disclosures could lead to 
inconsistent labels for models displayed in the showroom. To address 
this concern, the Proposed Rule would alter the frequency at which the 
FTC considers changing the national average energy cost information to 
once every five years.\60\ We believe that such a system would reduce 
compliance costs in addition to concerns about inconsistent label 
information. This issue is discussed further in section VII.E of this 
Notice.
---------------------------------------------------------------------------

    \60\ Should energy costs change dramatically during the interim, 
the Commission would have the discretion to update the figures 
before the end of the five-year period.
---------------------------------------------------------------------------

    Second, because the operating cost on the label is based on a 
national average, the energy cost used to calculate information on the 
label may not be the same as the energy cost paid by the consumer 
examining the product. Comments at the Workshop suggested that most 
consumers will understand average cost information means that their 
actual energy costs are likely to be different. (Workshop Tr. at 100-
101; and 211). For example, one participant stated that ``there are 
varying degrees to which an individual household relates to that annual 
operating cost and that annual kilowatt hour consumption, and

[[Page 6849]]

* * * all the research shows that consumers are quite savvy and quite 
clear at moderating themselves to the average.'' (Workshop Tr. at 211). 
We seek comments on whether the regional variability of energy costs is 
a significant issue for implementing the energy cost label. We urge 
commenters to identify their concerns with specificity and provide any 
alternative approaches to addressing this issue.
    Additionally, we seek comments on all aspects of the Commission's 
proposal to require operating cost as the primary disclosure on the 
label. To implement such a label, the Commission would also issue new 
range information in the form of costs for all affected products.\61\ 
These ranges would replace those currently found in the Appendices to 
the Rule. The Commission is not proposing specific range numbers now 
because the 2007 DOE fuel cost information is not available yet. 
Publication of range numbers in this Proposed Rule Notice, therefore, 
may cause confusion.
---------------------------------------------------------------------------

    \61\ The Proposed Rule would also eliminate the definition of 
``range of energy efficiency ratings'' in section 305.2 because the 
term would no longer be used in the Rule.
---------------------------------------------------------------------------

Alternative Proposal: Multiple-Year Operating Cost Label
    As an alternative to the annual operating cost information on the 
label, the Commission is considering a label that discloses operating 
cost over multiple years (e.g., a five-year period). Such a disclosure 
could provide consumers with a better understanding of the ``lifetime'' 
costs associated with operating the appliance. Thus, such a disclosure 
may also provide consumers with an easier way to gauge the money they 
will save by purchasing more efficient products. Additionally, a multi-
year disclosure may make it easier for consumers to perceive the 
magnitude of energy efficiency differences among competing products. We 
recognize, however, that expected ownership durations may differ 
substantially across consumers and products, and consumers may be 
better able to perform their own calculations using a one-year estimate 
rather than a five-year estimate.
    The Commission seeks comment on whether a ``five-year'' operating 
cost disclosure should be adopted. We have drafted such a label as 
Figure 2 (Alternative Proposal).\62\ In particular, we ask commenters 
to address whether the label would suggest to consumers that the 
product would last only five years, whether the label should use a 
different time period (e.g., 10 years), whether the cost information 
should be discounted to reflect the time-value of money, and if so, 
what assumptions should be used to institute a discounting 
procedure.\63\
---------------------------------------------------------------------------

    \62\ The label would also contain an annual cost disclosure in 
the explanatory language at the bottom of the label.
    \63\ The fact that respondents report ``willingness-to-pay'' 
figures greater than yearly operating costs across all treatments 
suggests that people may estimate cost savings over several years. 
Respondents who were willing to pay more for one appliance were 
asked (Q715) ``Why do you say that. Please give as much detail as 
possible.'' Preliminary analysis of these responses suggests that 
people often evaluate future savings based on their expected period 
of appliance use.
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BILLING CODE 6750-01-P

[[Page 6850]]

[GRAPHIC] [TIFF OMITTED] TP13FE07.001

BILLING CODE 6750-01-C

[[Page 6851]]

Proposed ENERGY STAR Placement
    In response to comments, and consistent with the new designs tested 
in the research, the proposed amendments allow manufacturers to place 
the ENERGY STAR logo in the lower right-hand corner of the label for 
qualified products. Under this proposal, the logo may be up to one inch 
by one inch in size. Requirements related to the placement of the 
ENERGY STAR logo on the label are found in section 305.11(f)(12) of the 
Proposed Rule.

C. Requirements for Heating and Cooling Equipment

    Issue: Currently, the Rule requires EnergyGuide labels on central 
air conditioners, heat pumps, furnaces, boilers, and water heaters. (16 
CFR 305.11). Section 305.11 also requires manufacturers to provide 
energy information about most of these products in the form of fact 
sheets or industry directories. Additionally, retailers, including 
assemblers, who sell furnaces or central air conditioners to consumers 
must make available to consumers this energy information for the 
heating and cooling products they sell.\64\
---------------------------------------------------------------------------

    \64\ Retailers, including assemblers, who negotiate or make 
sales at a place other than their regular places of business must 
show the information to their customers and let them read the 
information before they agree to purchase the product. (See Sec.  
305.11(b)(1)(ii)).
---------------------------------------------------------------------------

    These products generally do not appear in showrooms where consumers 
can compare labels on competing models.\65\ In its ANPR, the 
Commission, therefore, sought comment on whether the Rule should 
continue to require labeling for heating and cooling equipment. The 
Commission also asked whether there were alternatives to labeling that 
would more effectively communicate energy efficiency information to 
consumers with respect to these products.
---------------------------------------------------------------------------

    \65\ See, e.g., 44 FR at 66470 (Nov. 19, 1979) (``The majority 
of furnaces are purchased either in the consumer's home or as part 
of the consumer's purchase of a home. As a result, few consumers 
have an opportunity to see a display model before the furnace is 
installed.'').
---------------------------------------------------------------------------

    To address these questions, it is important to begin with a 
consideration of the statutory requirements related to labeling these 
products. Under section 324(a)(2) of EPCA, the Commission may exclude 
central air conditioners, heat pumps, and furnaces from labeling 
requirements if it determines that labeling is not technically or 
economically feasible or, alternatively, that labels are not likely to 
assist consumers in making purchasing decisions. (42 U.S.C. 
6294(a)(2)). For water heaters, the statute directs the FTC to require 
labels unless the Commission determines that labeling is not 
technologically or economically feasible. (42 U.S.C. 6294(a)(1)). 
Section 6294(c) gives the Commission authority to require disclosures 
of energy information in printed material displayed or distributed at 
the point of sale. In addition, the Commission may direct manufacturers 
to provide additional energy-related disclosures in information shipped 
with or attached to the product, including instructions for the 
maintenance, use, or repair of the covered product. (42 U.S.C. 
6294(c)(5)).
    Comments: In response to the ANPR, several commenters expressed the 
belief that the Commission should discontinue labeling requirements for 
heating and cooling equipment. Both the Gas Appliance Manufacturers 
Association (GAMA) and the Air Conditioning and Refrigeration Institute 
(ARI) suggested that labels for heating and cooling equipment do not 
aid consumers because these products are not sold through showrooms or 
by other means that allow consumers to examine the label before 
purchase.\66\ Industry representatives at the Workshop indicated that 
these purchases are usually made through in-person contractor visits or 
over the telephone. Contractors often conduct an on-site analysis to 
determine the appropriate equipment for the dwelling. (Workshop Tr. at 
164). In addition, a GAMA representative noted that manufacturers 
currently provide directories to the dealers who have them available 
for their customers. (Workshop Tr. at 178). GAMA, therefore, urged the 
FTC to eliminate the labeling requirement for furnaces, boilers, and 
water heaters.\67\ ARI made the same suggestion for central air 
conditioners and heat pumps. Finally, NRCAN, in its written comments, 
described its voluntary program for heating and cooling products, which 
does not use labeling, but instead urges manufacturers to print 
efficiency ratings for their products in brochures.\68\
---------------------------------------------------------------------------

    \66\ GAMA <greek-i>519870-00011, and ARI <greek-i>519870-00010.
    \67\ GAMA explained that consumers sometimes purchase 
replacement residential water heaters from retail outlets, but, as 
often as not, they obtain them through contractors.
    GAMA also argued that the recent DOE standards have 
significantly reduced the differences in energy use of storage water 
heaters on the market therefore reducing the need for labeling of 
these products. (GAMA <greek-i>519870-00011).
    \68\ NRCAN <greek-i>519870-00020.
---------------------------------------------------------------------------

    In comments submitted after the Workshop, EEI (<greek-i>522148-
00010) agreed that most consumers do not see the label on these 
products until after purchase.\69\ At the same time, it indicated that 
an ``appliance label can provide a document that verifies what the 
consumer agreed to purchase, and may help provide documentation for a 
utility rebate program, a state tax deduction or credit, or federal tax 
credit.'' ACEEE raised similar concerns about eliminating the 
EnergyGuide label from heating and cooling equipment. It suggested that 
the label information is useful even though most consumers do not see 
the EnergyGuide at the time of purchase. According to ACEEE, its 
research indicates that the label provides useful verification of the 
product's efficiency upon installation and allows auditors and 
consumers purchasing an existing home to determine the energy 
efficiency of equipment installed by previous owners. ACEEE 
(<greek-i>519870-00021), therefore, urged the FTC to consider 
additional means for providing label information to consumers.
---------------------------------------------------------------------------

    \69\ Artcraft (<greek-i>519870-00004) suggested that the energy 
label for air conditioners and heat pumps should include a note 
steering people toward expert advice and also indicated that 
manufacturers and retailers should be encouraged (and preferably 
required) to include a depiction of the energy label in leaflets, 
brochures, and advertising for each model.
---------------------------------------------------------------------------

    Many commenters provided suggestions for improving the current 
requirements to make it more likely that consumers will receive energy 
information prior to purchase. Both ARI and GAMA urged the Commission 
to require the provision of energy information for heating and cooling 
products through existing industry databases that are available over 
the Internet. (Workshop Tr. at 161-162, 163-165). GAMA stated, ``[I]f 
the FTC really wants to be relevant about this and really do an 
effective job with this, its focus ought to be on the modern, 
electronic means of communicating this information for products like 
this where the purchasing decision is made before you see the label.'' 
(Workshop Tr. at 167).
    ARI explained that consumers can now obtain an ARI certificate for 
their equipment directly from its online directory. This certificate 
provides information about a product such as the model number, the name 
of the manufacturer, the product's efficiency, and capacity. This 
information allows consumers to compare what they are buying with what 
a contractor is telling them. (Workshop Tr. at 166). ARI indicated that 
it might be possible to add operating cost information as well.
    EEI (<greek-i>522148-00010) suggested that the FTC work with home 
builders and

[[Page 6852]]

HVAC contractors to create ``certified fact sheets'' that provide 
efficiency information to consumers when they are deciding to install a 
new system. EEI indicated that the certified fact sheet could be based 
on information downloaded from the ARI or GAMA Web sites, and be 
available for use by all home builders and HVAC contractors. It could 
incorporate information shown on the current appliance labels as well.
    In addition to issues related to central air conditioners and 
furnaces, commenters raised a number of issues involving water 
heaters.\70\ Bosch (<greek-i>522148-00003) urged the Commission to use 
the same scales of comparability for instantaneous water heaters and 
tank water heaters. Bosch commented that a ``water heater is a water 
heater in terms of meeting the needs of the consumer, and yet having 
different scales for storage tanks than for tankless muddles the 
message of efficiency. If the goal is to steer consumers toward energy 
efficient appliances, then I would recommend that the Federal Trade 
Commission use the same scale for all water heaters.'' When this issue 
was discussed at the Workshop, a GAMA representative suggested that 
several issues would need to be explored before addressing this issue 
because, for example, tank and tankless water heaters use different 
capacity measurements. Until such capacity issues can be resolved, he 
suggested that the FTC should not combine the two products in the same 
range. (Workshop Tr. at 193). Other participants also suggested that 
the ranges should not be combined at this time. (Workshop Tr. at 193 
and 195). Finally, one commenter (Flanders Precisionnaire 
<greek-i>519870-00003) suggested that EnergyGuide labels on heating and 
cooling equipment include a footnote indicating that conditions 
restricting airflow will immediately and perhaps significantly reduce 
energy efficiency below the levels stated on the label.
---------------------------------------------------------------------------

    \70\ GAMA, in written comments, and at the Workshop, indicated 
that water heaters now appear in some retail stores. (Workshop Tr. 
at 185).
---------------------------------------------------------------------------

    Discussion: The Commission has reviewed the comments and proposes 
to amend the current Rule to discontinue the EnergyGuide labeling 
requirements for furnaces, boilers, central air conditioners, and heat 
pumps. In lieu of a labeling requirement, the Proposed Rule would 
require manufacturers to mark their units permanently with certain 
energy information. In addition, the Commission proposes to amend the 
fact sheet and directory requirements in the Rule to streamline and 
improve existing requirements and provide manufacturers and contractors 
with different options, such as online sources, for providing energy 
information. The Rule would continue to require EnergyGuide labeling 
for water heaters.
    As the comments indicate, there is very little evidence that the 
EnergyGuide labels currently affixed to heating and cooling equipment 
generally assist consumers in their purchasing decisions. The comments 
suggest that, in most cases, consumers buy these products through 
contractors. There is no evidence that these products are widely sold 
in a showroom or similar setting, where a comparative energy label 
would provide significant benefits. Instead, it appears that fact 
sheets and directories provide better vehicles for providing consumers 
with energy information before purchase. Unlike labels affixed to the 
products themselves, consumers can obtain fact sheets and directory 
information through retailers (including installers) and review the 
energy performance of competing products as they are making their 
decisions.
    As several commenters observed, however, the information on labels 
appears to provide a benefit to consumers in both their use of existing 
heating and cooling equipment and their purchase of replacement 
products. For example, labels that remain on installed equipment may be 
useful to consumers when they are gauging their household energy use 
and considering new equipment purchases. It may also provide 
information to allow the consumer to confirm that the model they 
ordered is the model that has been installed by the contractor. Labels 
also can help energy auditors seeking to determine the energy 
characteristics of installed equipment.
    Labeling does not appear to be the best vehicle for yielding these 
benefits because the stickers can easily be removed. Instead, a 
permanent nameplate appears to be a more effective tool to provide such 
information, and possibly less costly to industry members. EPCA 
authorizes the Commission to require manufacturers to attach to the 
product additional information related to energy consumption if that 
information would ``assist consumers in making purchasing decisions or 
in using the product and such requirements would not be unduly 
burdensome to manufacturers.'' (42 U.S.C. 6294(c)(5)). Accordingly, the 
Commission proposes requiring that manufacturers permanently mark their 
heating and cooling equipment with the product's model number and 
energy efficiency rating in lieu of labeling the products. This 
information could be placed on the product's nameplate or other 
convenient location.\71\
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    \71\ The proposed marking requirements are in section 305.12 and 
305.13 of the Proposed Rule. Under the Proposed Rule, the marking 
``must be permanent, legible, and placed on the outside surface of 
the product.'' To be ``legible,'' the information must be easily 
viewed by a person examining the surface of the product.
---------------------------------------------------------------------------

    We expect that such a marking requirement would involve minimal 
burden to industry. The California Energy Commission already requires 
that these products be marked with model number and efficiency 
information. (See, 20 C.C.R. Sec.  1607). As a result, it is likely 
that the FTC marking requirement would not create any additional burden 
for most manufacturers. In addition, the nameplates for these types of 
products provide an existing location to place such information. We 
expect that the addition of energy rating information would involve a 
small incremental burden. We seek comments on this marking proposal. In 
particular, we request that commenters address whether additional 
information should be required and the burdens such a proposal would 
impose.
    Finally, because we are proposing to eliminate the label, we are 
not proposing to require information about restricted airflow on labels 
as suggested by one comment. Manufacturers may provide such information 
in their marketing material and instruction manuals as long as such 
information is substantiated. We seek comment on whether such 
disclosures should be mandatory.
    The Commission is also proposing to amend the fact sheet 
requirements for these products to provide more flexibility to sellers, 
ensuring consumers have access to energy information. Under section 
305.14 of the Proposed Rule, therefore, manufacturers would have the 
flexibility to provide this energy information about their products to 
distributors and retailers through fact sheets, directories, or product 
brochures. In addition, manufacturers could choose to make the 
information available electronically. In turn, the Rule would continue 
to require retailers (including assemblers) to make this information 
available to customers. They could make the information available in 
any manner, as long as customers are likely to notice the information. 
For example, the information could be provided in a display, where 
customers can take copies. It could be kept in a binder or made 
available electronically at a

[[Page 6853]]

counter or service desk, with a sign telling customers where the 
information can be found. Retailers, including assemblers, who 
negotiate or make sales at a place other than their regular places of 
business would have to show the required information to their 
customers, just as required under the current Rule. If the information 
is Internet-based, retailers (and assemblers) would have the option to 
provide customers with instructions to access the information online.
    Under the Proposed Rule, the fact sheet-related information 
provided would be a simplified version of that currently required by 
the Rule. The manufacturer information would include: (1) The name of 
manufacturer or private labeler; (2) the trade (brand) name; (3) model 
number(s); (4) capacity determined in accordance with section 305.7; 
(5) energy efficiency rating as determined in accordance with section 
305.5; (6) a statement that the energy efficiency ratings are based on 
U.S. Government standard tests; and (7) for central air conditioners, 
the information about efficiency ratings for specific condenser/coil 
combinations or, alternatively, for the ``most common'' condenser-
evaporator coil combinations, as currently required by the Rule. We 
seek comments on all aspects of this proposal, including whether these 
disclosures are appropriate, and whether manufacturers and retailers 
should have the option to provide this information to customers through 
the Internet in lieu of showing them paper fact sheets or directories.
    The Commission is not proposing to require information about 
operating costs for these products. Operating costs for heating and 
cooling equipment are highly dependent on regional conditions.\72\ 
Although the current DOE test procedures provide instructions for 
calculating operating costs in several different regions, the 
calculations can be difficult to perform for the average consumer. In 
addition, we are not proposing to require range information for these 
disclosures. Range information is likely to be of reduced value to 
consumers in the context of industry directories and online databases 
where data for comparative models is readily available. It addition, it 
is unclear how separate range information can be incorporated into 
catalogs in a way that is beneficial to the average consumer. We seek 
comments on this proposal.
---------------------------------------------------------------------------

    \72\ The current Rule does not require cost information on 
EnergyGuide labels for heating and cooling equipment.
---------------------------------------------------------------------------

    We note that using a uniform national average energy cost may be 
more useful to consumers than the multi-region cost information 
currently required in the Rule. As an alternative to the proposed 
elimination of cost information for these products, the Rule could 
require manufacturers to provide a single estimated operating cost for 
their models based on national average figures for cooling/heating 
loads and for energy costs (e.g., heating/cooling loads based on Region 
IV as delineated in 10 CFR Part 430, Subpt. B, Appendix M). This 
information could be accompanied by an explanation that the cost 
information represents a national average and that individual costs 
will vary based on usage and location. We ask for comments on such an 
annual cost disclosure. Comments should address whether such a change 
would be feasible for manufacturers, technically appropriate, and 
useful for consumers.
    Finally, the comments indicated that some water heaters are sold in 
retail stores where consumers can examine and compare the product 
labels. Accordingly, we do not propose to eliminate EnergyGuide 
labeling requirements for these products nor do we propose to require 
permanent marking. In addition, we do not propose to change the ranges 
of comparability for these products to combine information for tank and 
tankless water heaters. Comments provided to the Commission suggest the 
merger of this range information is not currently feasible because 
storage and instantaneous models are rated using different capacity 
descriptors. We note that the proposed operating cost label will allow 
consumers to compare energy cost across different water heater types.

D. Refrigerator Categories

    Issue: During this proceeding, the Commission has explored whether 
the range categories for refrigerators should be combined to include 
models with different door configurations and features. The current 
labeling requirements designate separate comparability ranges for 
various refrigerator sub-categories (or styles) such as side-by-side 
door configurations or models with top-mounted freezers. This allows 
consumers easily to compare the energy use of similarly configured 
refrigerators, but not the energy use of models across subcategories. 
Consumers, however, can employ the energy use and operating cost 
information to compare the product's energy performance to other 
refrigerators in the showroom regardless of configuration.
    Some refrigerator configurations are generally less efficient than 
others. For example, top-mounted freezer models generally use less 
electricity than comparably sized side-by-side models. As a result, the 
range information on a particular side-by-side refrigerator label may 
compare favorably to other side-by-sides, but fail to show that the 
model uses significantly more energy than an average refrigerator with 
a top-mounted freezer. To address this concern, the FTC sought comments 
on whether the refrigerator labels should present comparability 
information for all refrigerators regardless of configurations.
    Comments: Consumers Union (<greek-i>519870-00017) indicated that 
the current system for labeling refrigerators is deeply flawed. It 
stated that ``consumers trying to select a refrigerator based on energy 
efficiency must be able to compare across categories, instead of within 
the current very narrowly defined subclasses.'' In particular Consumers 
Union suggested that ``the EnergyGuide label show the energy use of the 
appliance in kWh/yr, as currently done, but that the label also compare 
the energy used by the appliance to the most energy consumption allowed 
by law for any refrigerator of comparable internal volumes--independent 
of style.'' In its view, this approach would inform consumers that 
certain product configurations use less energy than others. At the 
Workshop, a participant from Consumers Union described that 
organization's approach, which focuses on the volume of the product and 
not the configuration. The Consumers Union representative raised 
concerns about the fact that ENERGY STAR levels are different for 
various product configurations stating: ``You do not want to have an 
ENERGY STAR model that uses more energy than a similarly sized and 
split refrigerator that does not get an ENERGY STAR.'' (Workshop Tr. at 
134).
    Other commenters raised similar concerns, urging the Commission to 
consider using the same classification category for most refrigerator 
models. ACEEE (<greek-i>519870-00021) wrote that products ``offering 
the same service should be compared on the same label regardless of 
differences in technology or design to avoid consumer confusion and 
diminished credibility of the label.'' ACEEE comments noted that the 
FTC amended the Appliance Rule in the past to include comparison of 
top-loading and front-loading washers on the same label. At the 
Workshop, an ACEEE representative explained: ``for those consumers who 
are interested in looking for the most efficient product in their size 
category or that want to do a

[[Page 6854]]

comparison across class, combining them will allow them to do that 
cross-class comparison, which is otherwise very difficult to do.'' 
(Workshop Tr. at 139). Another commenter at the Workshop suggested that 
the use of multiple categories for refrigerators may confuse consumers, 
particularly where ENERGY STAR models in one class use more electricity 
than non-ENERGY STAR models in another class. (Workshop Tr. at 146).
    Other commenters cautioned against changes to the current ranges 
for refrigerators. AHAM (<greek-i>522148-00007) indicated that its 
``research shows when consumers enter a retail establishment to 
purchase a refrigerator product, their first criteria is product 
configuration.'' In its view, ``consumers have already decided on the 
desired configuration prior to stepping into a retail outlet.'' 
According to AHAM, an amendment that merged the different categories of 
products ``would run counter to marketplace and consumer purchase 
drivers'' and would diminish the efficacy of the label. At the 
Workshop, an AHAM representative indicated that information currently 
on the label, such as operating costs, already permits consumers to 
make comparisons across different refrigerator configurations. 
(Workshop Tr. at 142-143). EEI (<greek-i>522148-00010) agreed, stating 
that the current system allows for an ``apples to apples'' comparison 
of products, such as side-by-side refrigerators. EEI suggested that 
consumers may be confused by comparisons of models that have different 
energy efficiency requirements or sizes.
    Whirlpool (<greek-i>522148-0005) indicated that refrigerator labels 
should continue to be unique by configuration: ``Configuration (top 
freezer vs. bottom freezer vs. side-by-side) is a primary determinant 
in the purchase decision along with physical size of the unit. Before 
the consumer even begins the shopping process, they will identify any 
size constraints and consider which configuration unit they want.'' 
Whirlpool also stated that its proprietary market research over the 
past five years repeatedly indicates that size, internal configuration, 
and features are major considerations when shopping.
    Whirlpool noted that the current label classification is consistent 
with those used under DOE's energy efficiency standards that reflect 
the inherent differences in efficiency resulting from the physical 
design of the product. Whirlpool believes it would be confusing for 
consumers to combine all configurations of refrigerators within a cubic 
foot range.
    Discussion: The Commission is not proposing to change the current 
range categories for refrigerators. We recognize that requiring more 
inclusive ranges may help consumers to compare energy use across model 
configurations. Such an approach, however, runs counter to the system 
used by DOE and by the ENERGY STAR rating system. In some cases, the 
combination of refrigerator ranges could place ENERGY STAR designated 
models lower on the label range than non-ENERGY STAR models. This could 
cause consumer confusion in the showroom and may cause confusion about 
the ENERGY STAR designation. Accordingly, the Commission does not 
believe that a change in the current range system would provide 
significant benefits for consumers and may create confusion.
    Although we do not plan to change the range categories for these 
products, it may be useful to provide consumers with additional 
information to help them understand that different door and ice service 
configurations can affect energy consumption. Accordingly, section 
305.11 of the Proposed Rule would require the following explanatory 
statement on refrigerator labels: ``Size, door attributes, and ice 
features affect energy use--so other refrigerators may have lower or 
higher operating costs.'' We request comments on the need for and 
wording of this statement.
    The FTC research also suggested that consumers may not understand 
that the comparability range on refrigerators applies to a specific 
category of refrigerator-freezers (e.g., freezer on top). One question 
in the study asked consumers whether the label allowed them to 
determine how a model compared to ``all'' similarly sized refrigerator-
freezers on the market. Over 70% of the respondents indicated they 
could make such a determination based on the information from the 
label. The range information on the label in question, however, only 
applied to models with side-by-side doors and through-the-door ice 
service.\73\
---------------------------------------------------------------------------

    \73\ We believe this percentage of respondents may be overstated 
because the question simply asked whether respondents could compare 
the model to all similarly-sized models on the market, instead of 
asking respondents to choose from two possible answers (e.g., 
comparison to all similarly-sized models vs. comparison to 
similarly-sized and configured models). Many of the respondents may 
have assumed the question related to the range on the label without 
focusing on the subtleties of the question's wording. Nevertheless, 
the responses raise some concerns about whether consumers understand 
that the range of comparability applies to specific classes of 
appliances as opposed to all models available on the market.
---------------------------------------------------------------------------

    The label currently states that the range compares ``similar'' 
models. To reduce the consumer confusion, section 305.11 of the 
Proposed Rule would require more explicit language on the refrigerator-
freezer label to clarify that the range only applies to the specific 
subcategories of products. For instance, the range for a side-by-side 
through-the-door ice label would state: ``Range for models of similar 
capacity with automatic defrost, side-mounted freezer, and through-the-
door ice.'' We seek comment on whether such language is needed for the 
label.
    Finally, we note that some manufacturers recently have introduced 
refrigerator-freezers with a bottom-mounted freezer and through-the-
door ice service. This configuration does not match any of the existing 
FTC or DOE categories for refrigerator-freezers. At this time, we are 
not aware that there are a significant number of these models on the 
market. Accordingly, we are not proposing to amend the categories to 
take these models into account. However, we are seeking comment on 
whether the number of such models is likely to increase significantly. 
If so, we ask how the categories in the Rule should take these models 
into account, if at all (e.g., should an existing category be 
expanded).

E. Revisions to Ranges of Comparability and Energy Price Information

    Issue: The EnergyGuide label must contain a range of comparability 
that shows the highest and lowest energy consumption or efficiencies 
for all similar appliance models.\74\ EPCA does not specify when the 
Commission must change the ranges, but states it cannot do so ``more 
often than annually.'' (42 U.S.C. 6296(c)). The Commission's 
regulations indicate that the FTC will revise ranges annually, if the 
upper or lower limit on the range for a product changes by 15% or more. 
(16 CFR 305.10). For some products, the Commission has changed the 
applicable ranges several times over the last few years, for others 
less frequently. When the Commission makes these changes, manufacturers 
must amend their labels to reflect the new ranges and update the fuel 
costs on the labels using new national average fuel costs, published 
annually by DOE. Accordingly, the average fuel costs used on the label 
are tied to the year in which the ranges were last amended.
---------------------------------------------------------------------------

    \74\ 42 U.S.C. 6294(c)(1)(B).
---------------------------------------------------------------------------

    Range changes can cause the labels on different models in the same 
showroom to display inconsistent information because the models on 
display may have been manufactured at different times. This potential 
confusion is exacerbated by frequent range changes.

[[Page 6855]]

Frequent range revisions also impose burdens on manufacturers who must 
expend resources to change their product labels. The ANPR contained a 
series of questions about these issues, including whether the FTC 
should change the frequency at which it examines the ranges.
    Comments: Several commenters suggested that the Commission consider 
uniform changes to range and fuel price information on a consistent 
schedule. AHAM (AHAM <greek-i>519870-00021) indicated that the current 
Rule requirements result in inconsistent energy rates used to calculate 
information across appliance types (e.g., dishwashers compared to 
refrigerators). Under the current system this can happen where the 
ranges for particular appliances do not change over a long period of 
time. In such a case, the Rule directs manufacturers to continue to 
base their operating costs estimates on energy prices that may have 
been published by DOE five or even ten years previously. AHAM, 
therefore, recommended that ``the same average fuel rates be used on 
all appliances, and that they be uniformly changed every two to three 
years.'' In its view, this would ``avoid the use of rates that are too 
old, keep all appliances using the same rates, and allow sufficient 
time for manufacturers to plan inventory of labels accordingly.'' 
(Workshop Tr. at 133). Alliance Laundry Systems (<greek-i>519870-00008) 
concurred with AHAM's recommendation, but suggested that the Commission 
continue to consider changes to the comparability ranges annually. 
Artcraft (<greek-i>519870-00004) recommended that the Commission make 
revisions more often than annually because significant changes are 
occurring in the market all the time.
    Discussion: Over the past decade, the frequency of range amendments 
has varied by appliance type. Ranges for some products, such as 
dishwashers, have changed several times while ranges for other 
products, like room air conditioners and water heaters, have changed 
less frequently. Frequent changes to the range and cost information can 
exacerbate the problem of inconsistent information on comparable models 
sitting side-by-side in a showroom. We are concerned that the consumer 
benefit from frequent updates to range and cost information may be 
outweighed by the detriment caused by this inconsistent information in 
the showroom.
    There also may be confusion caused by the use of inconsistent 
energy price information across appliance categories. For example, at 
this time, the operating cost on dishwasher labels is based on the 2004 
average electricity cost of 8.60[cent] per kilowatt-hour, whereas the 
cost on refrigerator labels is based on the 2005 figures of 9.06[cent] 
per kilowatt-hour.
    Given these concerns, the Commission proposes to amend section 
305.10 to change the frequency with which it alters range and national 
average energy price information to once every five years. Under the 
amendment, the Commission would change automatically both the range 
information and the underlying cost information to reflect the most 
recent data once every five years. This approach will minimize problems 
associated with inconsistent cost and range information on showroom 
models, and make energy cost information uniform across appliance 
categories. If energy costs or range information change substantially 
within the five-year period, the Commission can consider amendments in 
the interim through rulemaking. We seek comments on this five-year 
schedule for updating cost and range information. Among other things, 
we ask that commenters address whether a five-year cycle is 
appropriate, whether there are other ways to minimize confusion caused 
by updates to the energy cost information on labels, and whether there 
is a typical length of time that individual display models remain on 
showroom floors.\75\
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    \75\ As noted in VII.B, the Commission is not proposing specific 
range numbers in the Proposed Rule because the 2007 DOE fuel cost 
information is not available at this time and publication of range 
numbers in this Notice may cause confusion. Therefore, the proposed 
range tables are blank. In addition, the proposed amendments would 
move the energy cost chart from section 305.9 to Appendix H. We also 
note that the FTC staff has completed its review of the 2006 data 
for central air conditioners, refrigerators, and clothes washers. 
Although ranges for some of these products have changed by more than 
15%, the Commission plans to delay any amendments to existing ranges 
and cost information until the completion of the present proceeding 
so that all ranges can be changed at the same time. We seek comments 
on this approach.
---------------------------------------------------------------------------

F. Energy Descriptors

    Issue: The ANPR sought comment on whether the Commission should 
change any of the EnergyGuide's current energy descriptors. For 
example, the notice sought comment on whether the clothes washer label 
should disclose the model's efficiency rating using the measure 
currently required by DOE (the ``Modified Energy Factor'' or ``MEF'') 
instead of the product's annual energy consumption.
    Comments: Several commenters responded that the Commission should 
not change current descriptors.\76\ Whirlpool (<greek-i>519870-00013) 
explained that the use of Energy Factor information would cause 
consumer confusion. AHAM (<greek-i>522148-00007) added that energy 
consumption information (in KWh/yr) is meaningful across product 
categories.
---------------------------------------------------------------------------

    \76\ Alliance Laundry Systems (<greek-i>519870-00008), Whirlpool 
(<greek-i>519870-00013), AHAM (<greek-i>519870-00016), NRCAN 
(<greek-i>519870-00020), and GE (<greek-i>519870-00027).
---------------------------------------------------------------------------

    Discussion: The Commission received no comments in support of 
adopting efficiency ratings beyond those currently in use. We note that 
a recent news report questions the consistency between the MEF 
information used for ENERGY STAR ratings and the washer electricity use 
information on the EnergyGuide label.\77\ Accordingly, we seek further 
comment on this issue. In particular, comments should address whether 
MEF information should be provided on the label and whether, under 
current test procedures, manufacturers can derive annual operating cost 
information from MEF ratings.
---------------------------------------------------------------------------

    \77\ See, ``Washers & Dryers, Cycles of Change,'' Consumer 
Reports, Vol. 72, No. 1, Jan. 2007, at 39.
---------------------------------------------------------------------------

G. Placement of the EnergyGuide Label on Covered Products

    Issue and Comments: Whirlpool's comments noted that some dishwasher 
manufacturers are placing the EnergyGuide label in a plastic bag along 
with the use and care guide warranty. Whirlpool (<greek-i>522148-00005) 
requested that the Commission become more diligent in ensuring that 
manufacturers display the label properly.
    Discussion: In the Proposed Rule, the Commission has modified and 
clarified the requirements for posting labels. Labels must be posted on 
products in one of two ways: an adhesive label or a hang tag. In either 
case, the label must be attached to the product so that the label ``is 
prominent to a consumer examining the product.'' Manufacturers would be 
allowed to place the label on the exterior or interior of the product 
if it is prominent to consumers examining the appliance and as long as 
it will not become dislodged during normal handling throughout the 
chain of distribution to the retailer and consumer. This directive sets 
a clear performance-based standard that allows manufacturers to adjust 
the location of the label depending on the product type and 
configuration. Such an approach appears preferable to highly detailed, 
prescriptive requirements that may not account for all existing 
situations or for product changes in the future. The proposal would 
also eliminate the Rule's prescriptive requirements related to the 
location of adhesive strips on the

[[Page 6856]]

back of the label. We are seeking comments on this proposal, 
particularly whether hang tags should be allowed on the exterior 
surface of products.
    We note that the insertion of the label in a plastic bag along with 
other instructions or marketing material does not meet the current or 
proposed requirements because it is neither an adhesive label nor a 
hang tag. In addition, this practice could obscure the label from view 
particularly if it is layered under other material such as manuals or 
warranties.

H. Catalog Requirements

    Issue and Comments: Section 305.14 of the Rule currently requires 
that any manufacturer, distributor, retailer, or private labeler who 
advertises a covered product in a catalog, including a Web site that 
qualifies as a catalog, disclose the product's capacity, energy use (or 
efficiency) and range of comparability information. No comments 
addressed the current requirements.
    Discussion: The Proposed Rule would redesignate section 305.14 as 
305.20 and amend the section to require disclosures of estimated annual 
operating costs for refrigerators, refrigerator-freezers, freezers, 
clothes washers, dishwashers, room air conditioners, and water heaters. 
This change would make the catalog requirements consistent with the 
changes proposed for the EnergyGuide label. The Proposed Rule would 
continue to require the disclosure of energy efficiency rating 
information for central air conditioners and furnaces.
    The Proposed Rule also would eliminate the requirement for catalog 
sellers to include range information along with their disclosures in 
the catalogs.\78\ Consumers viewing catalogs are likely to see 
information for a much larger number of models than consumers in a 
showroom. Thus, catalog shoppers do not have the same need for market 
ranges. In addition, because the range information in the catalogs 
cannot always be presented in the same form as they appear on the 
label, it may cause confusion or fail to provide significant benefit to 
consumers. While the benefits may be small, the burdens of providing 
this information may be significant. The burdens often fall on 
retailers who are not producing and labeling the products themselves. 
For these reasons, we propose to eliminate the range information from 
the catalog requirements. We seek comments on this proposal.
---------------------------------------------------------------------------

    \78\ EPCA indicates that catalogs must ``contain all information 
required to be displayed on the label, except as otherwise provided 
by the rule of the Commission.'' (42 U.S.C. 6296(a)).
---------------------------------------------------------------------------

    Finally, the Proposed Rule also contains several changes to the 
catalog disclosure requirements in section 305.2(m) and newly 
designated section 305.20 to clarify that Internet-based catalogs must 
also provide these disclosures.\79\ The Commission promulgated these 
provisions before the advent of the Internet. The proposed amendments 
will ensure that Web-based catalog sellers understand that they must 
meet the Rule's disclosure requirements. The Commission seeks comments 
on these changes to the catalog requirements.
---------------------------------------------------------------------------

    \79\ We note that the required information should appear on each 
page that lists the covered product. (See Sec.  305.21(a)).
---------------------------------------------------------------------------

I. Fuel Cycle Energy Consumption

    Issue and Comments: The American Gas Association (AGA) 
(<greek-i>519870-00014) urged the Commission to include information on 
the label about ``energy consumption over the full fuel cycle (i.e., 
total energy efficiency) and externalities such as emissions of 
criteria air pollutants and carbon dioxide over the full fuel cycle'' 
in addition to information currently provided. AGA indicated that 
without this information, the label does not allow consumers to ``make 
truly informed choices'' and provides information that is incomplete 
and misleading.
    Discussion: AGA raised similar comments in an earlier Commission 
proceeding on the EnergyGuide label. (65 FR 17554, 17559 (Apr. 3, 
2000)). The statute, however, contains a relevant restriction on the 
type of information the Commission can require. Under section 
324(c)(1)(A) of EPCA (42 U.S.C. 6294(c)(1)(A)), the Commission must 
derive the energy consumption information required on the label from 
DOE's test procedures. These procedures measure end-use energy only and 
not the type of energy consumption described in AGA's comment. 
Accordingly, the Commission is not proposing to add the type of 
information suggested by AGA.

J. Clothes Washer Labels

    Issue and Discussion: In 2003, the Commission published amendments 
requiring a special headline on clothes washer labels indicating that 
the product had been tested under the 2004 DOE test procedure (68 FR 
35458 (June 18, 2003)). The FTC added this headline at the request of 
industry members because the results of the 2004 DOE test differed 
significantly from the previous test. Although the explanatory language 
served a good purpose at the time, we believe that its continued 
presence on the label will lose its value over time and could even 
confuse consumers as the years pass. As the 2004 date becomes more 
distant, the headline may suggest that the label or the product itself 
is old, or even obsolete. Given the proposed changes to the overall 
label design, we believe the current proceeding provides a convenient 
opportunity to eliminate this language. Accordingly, the Commission 
proposes amending 305.11 by discontinuing this explanatory language on 
the clothes washer label.\80\
---------------------------------------------------------------------------

    \80\ EPA (<greek-i>519870-00012) recommended that the Commission 
include water-use information on the EnergyGuide label. Under EPCA, 
however, the information required on clothes washers and other 
covered appliances is limited to information related to energy 
consumption. See 42 U.S.C. 6294.
---------------------------------------------------------------------------

K. Plumbing Issues

    Issue and Comment: The Appliance Labeling Rule contains marking and 
package disclosure requirements for certain plumbing products such as 
toilets, showerheads, and faucets (see 16 CFR 305.11(f)). EPA's 
Municipal Support Division (<greek-i>519870-00012) suggested several 
changes to the labeling requirements for these products. EPA staff 
indicated that its own informal survey of retail packaging ``revealed 
that on many plumbing products it [the required disclosure] is obscured 
either through extremely small type fonts or lost amongst other 
information.'' To address these concerns, EPA suggested that the rule 
require the prominent placement of the information on the package, a 
minimum font size (e.g., 16 point or greater), and the identification 
of a range of water use for similar products.
    Discussion: As with all required disclosures, the labeling for 
plumbing products must be clear and conspicuous so that consumers can 
easily find and read the relevant information. Accessible placement of 
the information not only allows building code officials and other 
professionals to determine a product's water use rate, but also 
facilitates consumers' ability to comparison shop for efficient 
products. EPA's comments appear to identify compliance problems, not 
defects with existing requirements. We are reluctant to impose 
additional requirements on all manufacturers to address the failure of 
a few manufacturers to comply with the Rule. If problems persist and 
can be traced to defects in the current requirements, the Commission 
may consider revisiting this issue and

[[Page 6857]]

promulgating more prescriptive disclosure requirements.
    Additionally, the Commission is not proposing to require the 
inclusion of water use range information on packaging. The statute does 
provide a mechanism for the Commission to establish a format for 
manufacturers to use in making claims involving costs or the range of 
costs of plumbing products. The Commission discussed this issue in 
detail in issuing its initial labeling rules for plumbing products and 
decided to defer prescribing requirements on this issue. (58 FR 54955, 
54961 (Oct. 25, 1993)). At this time, the Commission has no evidence 
that the inclusion of a water use range on packaging would provide a 
significant benefit to consumers. In addition, such changes would 
likely require manufacturers to change existing packaging and update 
packaging in the future. We see no compelling need to issue new 
requirements at this time but seek comments on this issue.\81\
---------------------------------------------------------------------------

    \81\ Under EPCA, however, manufacturers may elect to include 
such information on their products. 42 U.S.C. 6294(c)(8).
---------------------------------------------------------------------------

    One commenter, the California Urban Water Conservation Council 
(<greek-i>19870-00015), suggested that labels for toilets indicate 
whether the product is a High Efficiency Toiler (HET). According to the 
commenter, a HET functions at a maximum flush volume of 20 percent less 
than the current national standard of 1.6 gallons per flush (equal to a 
maximum of 1.28 gallons per flush). EPCA, however, directs that the 
Commission issue labeling rules for water closets that are consistent 
with the marking and labeling requirements of ASME A112.19.2M. While 
the inclusion of HET information is not inconsistent with ASME 
requirements, we see no need to direct manufacturers to provide this 
information when companies appear to have a clear incentive to provide 
this high-efficiency information on their own. Manufacturers may 
advertise the efficiency of their plumbing products through marking, 
separate labeling, or otherwise as long as the product has been tested 
under the applicable DOE procedures and the representations fairly 
disclose the results of such testing (see 42 U.S.C. 6293(c)). 
Accordingly, the Commission is not proposing any amendments.

L. Television Labeling

    Issue: Section 324(a) of EPCA requires labels for televisions 
unless the Commission determines that labeling is not technologically 
or economically feasible. (42 U.S.C. 6294(a)). In 1979, the Commission 
determined that labeling for televisions was not economically feasible; 
there was little variation in the annual energy costs of competing 
television models and such costs were a small fraction of the purchase 
price. The Commission, therefore, believed it was unlikely that labels 
for televisions would promote industry efforts to increase energy 
efficiency, or provide benefits to consumers. (44 FR 66466, 66468 (Nov. 
19, 1979)). As part of the May Workshop, the FTC sought comment on 
whether the Rule now should require television labeling.
    Comments: Several commenters urged that the Commission revisit its 
1979 decision. According to the Natural Resources Defense Council 
(NRDC),\82\ there are now many ``large-screen'' digital televisions on 
the market that use 500 or more kilowatt-hours per year, as much energy 
as many new refrigerators.\83\ NRDC asserted that, in some cases, 
consumers will pay several hundred dollars in electricity costs for 
their televisions over the lifetime of the product. NRDC's comments 
also indicated that there is now a large variation in active mode power 
use among similarly-sized televisions. In its view, there is no 
reliable, model-specific, source of energy-use information for new 
televisions. CEE also urged the Commission to consider labeling for 
televisions stating that ``new technologies and larger sizes of 
televisions that are currently offered on the market argue for their 
inclusion within the scope of the Appliance Labeling Rule.'' \84\ CEE 
noted that according to 2001 DOE estimates ``99 percent of all homes 
have at least one television, with 35 percent having two, 22 percent 
having three, and 10 percent having four televisions.'' The DOE data 
also indicate that over a third of households had ``large-screen'' 
televisions. CEE believes that televisions warrant EnergyGuide labels 
because they are ``large energy users and their energy use has 
increased over recent years.'' CEE recommended a label that would allow 
comparisons across model types and technologies (e.g., plasma, LCD, and 
CRT).
---------------------------------------------------------------------------

    \82\ NRDC (<greek-i>519870-00025).
    \83\ At the Workshop, one participant suggested that the average 
42-inch plasma televisions draws 334 watts, with a minimum draw of 
201 watts and a maximum draw of 520 watts. Workshop Tr. at 198.
    \84\ CEE (<greek-i>519870-00018).
---------------------------------------------------------------------------

    Other commenters questioned the need and feasibility of television 
labeling. The Consumer Electronics Association (CEA) noted that 
televisions are much more energy efficient than they were several 
decades ago. According to CEA, the energy consumption of a typical 20-
inch color television has decreased dramatically in the last several 
decades (from 450 watts in the 1960s to less than 100 watts in 1995). 
CEA also argued that technological innovation, not government programs, 
have driven these energy efficiency improvements. One Workshop 
participant, Christopher Payne, however, suggested that the overall 
improvement in energy performance of consumer electronics, though 
admirable, is not really relevant to the question of labeling if there 
is a broad range of energy usage among various models.\85\
---------------------------------------------------------------------------

    \85\ Mr. Payne also indicated that it is not necessary to have a 
minimum efficiency standard to require labeling for these products. 
(Workshop Tr. at 208-209).
---------------------------------------------------------------------------

    Several commenters also expressed concerns about the usage 
estimates that would be employed to determine annual energy use or 
operating costs. CEA (<greek-i>522148-00009) stated that ``consumer use 
varies significantly with high tech products, which typically contain 
multiple features and functions that are used in many ways. 
Consequently, determining an average usage pattern is very 
challenging.'' EEI (<greek-i>522148-00010) noted that the ``energy 
usage pattern of televisions is directly related to the number of sets 
and occupants per household'' and that the test procedure should take 
into account the diversity factor of usage. One Workshop participant, 
David Kline of JVC, cautioned against using a ``one size fits all'' 
approach for consumer usage estimates. (Workshop Tr. at 206).
    In contrast, another commenter suggested that the precise usage 
estimate is not as important as ensuring consumers receive comparative 
information about energy use over a given time period. (Workshop Tr. at 
210). At the Workshop, a representative of the Collaborative Labeling 
and Appliance Standards Program indicated that research demonstrates 
that consumers are capable of understanding and gauging information 
about average use on labels. (Workshop Tr. at 211-212).
    To label products consistently, manufacturers must have a reliable 
test procedure to generate energy consumption information about their 
products. According to CEA (<greek-i>522148-00009), current DOE test 
procedures were intended for black-and-white analog televisions and 
``are entirely inappropriate for measuring the energy use of digital 
televisions.'' NRDC's comments (<greek-i>519870-00025) also indicated 
that the DOE ``test method is

[[Page 6858]]

grossly outdated'' because it was designed for black and white, tube-
based televisions. CEE (<greek-i>522148-00006), which supports the 
development of an energy label for televisions, also acknowledged that 
the current federal test procedure for television is not applicable to 
today's technology, but noted that there is an ongoing industry effort 
to establish a new procedure. According to CEA, the consumer 
electronics industry is developing a standard test method as part of an 
initiative hosted by the International Electrotechnical Commission 
(IEC). EEI (<greek-i>522148-00010) stated that the FTC would need to 
wait for a new DOE test procedure before adding a label for 
televisions. EEI suggested, however, that DOE ``may not be able to 
revise the test procedure for television sets in the near future, due 
to their current workload.''
    CEE urged that ``the test procedure development should be finalized 
in advance of this rulemaking, a timeline that enables the FTC's active 
consideration of this issue.'' Until the development of such a standard 
method, CEA questioned whether the need for televison labeling could be 
adequately assessed. At the Workshop, Douglas Johnson of CEA suggested 
that energy consumption estimates offered during the meeting were 
``relatively useless'' without a standard means of measurement. 
(Workshop Tr. at 199). In addition, CEA's comment concluded that the 
FTC should not pursue a labeling program for digital televisions given 
the lack of an acceptable test procedure for digital televisions and 
the success of voluntary initiatives.
    Some comments suggested that the Commission leave the issue of 
television energy use labeling to the ENERGY STAR program. CEA 
(<greek-i>522148-00009) argued that the ENERGY STAR ``program creates a 
competitive incentive for energy savings without compromising industry 
innovation or consumer choice.'' It noted that widespread use of the 
voluntary program ``promotes energy efficiency and has resulted in 
significant energy savings and reduced greenhouse gas emissions.'' EEI 
(<greek-i>522148-00010) suggested that the FTC consider working with 
EPA and DOE to revise the use of the ENERGY STAR labeling for 
television sets. At the Workshop, an NRDC representative recognized the 
importance of ENERGY STAR, but suggested ``it is not enough here'' 
because ENERGY STAR only identifies the top 25% of the market and, in 
the absence of an EnergyGuide label, consumers would not be able to 
determine the energy consumption of models within the balance of the 
market. (Workshop Tr. at 229-231).
    Discussion: The information provided by commenters suggests that 
energy labeling for televisions may assist consumers in making 
purchasing decisions. This information also indicates that many 
televisions on the market use as much, or more, electricity than 
products currently labeled under the Rule. In addition, several 
commenters indicated that there is a significant range of energy use 
among similar products on the market. The energy consumption 
characteristics of televisions, therefore, appear to be significantly 
different than when the Commission decided to forgo labeling in the 
1970s. Based on these comments, we believe this issue deserves serious 
consideration.
    At the same time, the record indicates that current DOE test 
procedures are inadequate to test most televisions currently on the 
market. Because the energy information for a FTC television label must 
stem from test procedures prescribed by DOE (see 42 U.S.C. 6294(c)), 
the Commission cannot proceed until the DOE test is revised. At such 
time, the Commission can consider whether the attributes of televisions 
on the market warrant energy labeling. We invite further comments on 
this issue.

M. Miscellaneous Amendments and Issues

    The Commission is proposing several minor substantive and 
formatting amendments to improve the current Rule. These include the 
reorganization of some sections, a new requirement related to 
refrigerator reporting, and the elimination of obsolete or incorrect 
references in the Rule. Commenters raised several additional issues 
that are also discussed in this section.
    Alphabetize Definitions and Update Definition of Refrigerators and 
Refrigerator Freezers: To make the Rule more user-friendly, the 
Commission is proposing to alphabetize the list of definitions in Sec.  
305.3 and the descriptions of covered products in Sec.  305.4. We also 
are proposing to amend the definition of ``refrigerators and 
refrigerator freezers'' at Sec.  305.3(a) so that it is consistent with 
DOE's current definition (10 CFR 430.2).
    Adjusted Volume Information for Refrigerators: The Rule currently 
does not require refrigerator and freezer manufacturers to submit the 
adjusted volume of their models to the FTC. Adjusted volume data is 
essential for determining whether a refrigerator or freezer model meets 
DOE minimum efficiency standards, and thus whether it should be 
considered in updating range information for refrigerator labels. 
Absent adjusted volume data, the FTC staff has had difficulty 
determining whether submitted models are compliant with DOE standards. 
The staff must make such compliance determinations to exclude obsolete 
models from its range calculations.
    The Proposed Rule therefore would require refrigerator, 
refrigerator-freezer, and freezer manufacturers to report the adjusted 
volume of their models along with the information currently required by 
the Rule. The Commission proposes to require this information in data 
submissions by amending Sec.  305.7(a)&(b) and Sec.  305.8. We do not 
expect that this will be a significant burden because this information 
should be readily available to manufacturers as it is already necessary 
for determining compliance with DOE conservation standards.
    Brand Name Reporting: The Commission is proposing to amend Sec.  
305.8 to clarify that manufacturers must report both the manufacturer 
name and the brand name (if different from the manufacturer) of their 
models. This information helps the FTC staff and the public identify 
appliances in the data submitted by manufacturers.
    Reorganization of Section 305.11: The Commission proposes to break 
section 305.11 into several sections organized by product category to 
make it easier for manufacturers to identify the requirements 
applicable to their products. The new proposed sections are: Sec.  
305.11 Labeling for refrigerators, refrigerator-freezers, freezers, 
dishwashers, clothes washers, water heaters, room air conditioners, and 
pool heaters; Sec.  305.12 Marking Requirements for Central Air 
Conditioners and Heat Pumps; Sec.  305.13 Marking Requirements for 
Furnaces; Sec.  305.14 Energy Information Disclosures for Heating and 
Cooling Equipment; Sec.  305.15 Labeling Requirements for Lighting 
Products; and Sec.  305.16 Labeling and Marking Requirements for 
Plumbing Products.
    Applicability of DOE Test Procedures: The Commission proposes to 
amend section 305.5 to clarify that the Rule does not apply to covered 
appliance products for which DOE does not have a test procedure. The 
Rule already contains such information in the descriptions of certain 
covered products in section 305.3 (e.g., water heaters and pool 
heaters). This proposed amendment explicitly would apply the same 
sentence to all applicable appliance products listed in section 
303.5(a).
    Elimination of Appendix K: The Commission proposes to eliminate the 
suggested reporting format in Appendix K. Most manufacturers submit 
data via

[[Page 6859]]

e-mail using spreadsheet templates provided on the FTC Web site. In 
addition, the reporting format in Appendix K does not apply to products 
that have been added since the Rule was first promulgated in 1979. 
Accordingly, we believe that Appendix K is no longer needed.
    Review of Technological Changes: CEE (<greek-i>519870-00018) 
recommended that the Commission consider instituting a semi-annual 
process to review technological advancements and modify the scope of 
labeling accordingly. The Commission conducts periodic reviews of all 
its regulations on a rotating schedule, as it is conducting now for the 
Appliance Labeling Rule. During these reviews, the Commission seeks 
comments on the effectiveness of the rule in question, the burden it 
imposes, and possible improvements. Between such reviews, individuals 
and organizations may contact the Commission about problems or possible 
amendments to rules that may be needed. Therefore, we have no plans to 
institute formal semi-annual reviews.
    Third-Party Testing: One commenter (Schau <greek-i>519870-00002) 
urged the Commission to require third-party testing for covered 
products. Under current DOE and FTC requirements, manufacturers may 
conduct testing themselves as long as they follow DOE test procedures. 
The Commission is not aware of any evidence of widespread energy 
disclosure problems stemming from the fact that third-party testing is 
not required by DOE and FTC regulations. Accordingly, we have no plans 
to propose such a requirement.

VIII. Paperwork Reduction Act

    The Rule contains disclosure 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).\86\ OMB has approved the Rule's information collection 
requirements through August 31, 2009 (OMB Control No. 3084-0069). The 
proposed amendments make minor changes in the current Rule's existing 
recordkeeping, labeling, and reporting requirements. Accordingly, the 
Commission has submitted this proposed Rule and a Supporting Statement 
to OMB for review under the PRA.
---------------------------------------------------------------------------

    \86\ 44 U.S.C. 3501-3520.
---------------------------------------------------------------------------

    The Commission's burden estimates for the proposed Rule are based 
on data submitted by manufacturers to the FTC under current 
requirements and the staff's general knowledge of manufacturing 
practices.
    The proposed amendments would require manufacturers of products 
with the EnergyGuide label to change their labels to the new design. 
Under the current Rule, manufacturers routinely change labels to 
reflect new range and cost data. The new label design will require a 
one-time drafting change for the manufacturers. The Commission 
estimates that this one time change will take 40 hours per 
manufacturer. The Commission further estimates that there are 
approximately 300 manufacturers of affected covered products. 
Therefore, the proposed label design change would result in a one-time 
burden of 12,000 hours (300 manufacturers x 40 hours). In calculating 
the associated labor cost estimate, the Commission assumes that the 
label design change will be implemented by clerical workers at an 
hourly wage rate of $14.59 per hour based on Bureau of Labor Statistics 
information. Thus, the Commission estimates that the proposed label 
design change would result in a one-time labor cost of approximately 
$175,080 (12,000 hours x $14.59 per hour)
    The proposal to eliminate labels for heating and cooling equipment 
will significantly reduce the burden for manufacturers of those 
products. While there will be additional burden in marking their 
products with efficiency rating information, this burden is likely to 
be offset by the elimination of the labeling requirements.
    As discussed above, the Commission anticipates that the provision 
of adjusted volume information for refrigerator manufacturers will not 
result in a significant burden increase because this information should 
be readily available to manufacturers as it is necessary to determine 
compliance with DOE conservation standards. Accordingly, the Commission 
has not made an adjustment to its previous burden estimate due to this 
de minimis increase in reporting of the data already required by the 
Rule.
    The Proposed Rule would also require retailers who sell through 
catalogs to disclose information about annual operating cost 
information instead of the annual energy consumption information for 
certain products and provide an explanatory statement in the catalog 
similar to that which appears on the label. It would also eliminate the 
requirement for catalog sellers to list the range of comparability 
information. The Commission's previous estimate of the Rule's burden on 
catalog sellers (including Internet sellers) has assumed conservatively 
that catalog sellers must enter their data for each product into the 
catalog each year (see 69 FR 64289, 64293 (Nov. 4, 2004)). The proposed 
Rule changes would not alter that assumption because the amendments 
would require a one-time change of all products in affected catalogs. 
This one-time change is consistent with previous burden estimates. 
Accordingly, the Commission does not believe any change is required to 
the existing burden estimates for catalog sellers.
    The Commission invites comments that will enable it to: (1) 
Evaluate whether the proposed collections of information are necessary 
for the proper performance of the functions of the Commission, 
including whether the information will have practical utility; (2) 
evaluate the accuracy of the Commission's estimate of the burden of the 
proposed collections of information, including the validity of the 
methodology and assumptions used; (3) enhance the quality, utility, and 
clarity of the information to be collected; and (4) minimize the burden 
of the collections of information on those who must comply, including 
through the use of appropriate automated, electronic, mechanical, or 
other technological techniques or other forms of information 
technology.
    Comments on any proposed filing, recordkeeping, or disclosure 
requirements that are subject to paperwork burden review under the 
Paperwork Reduction Act should additionally be submitted to: Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Attention: Desk Officer for Federal Trade Commission. Comments should 
be submitted via facsimile to (202) 395-6974 because U.S. postal mail 
at the OMB is subject to lengthy delays due to heightened security 
precautions.

IX. 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''), if any, 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. See 5 U.S.C. 
603-605.
    The Commission does not anticipate that the proposed Rule 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. We do not expect that the economic impact of implementing 
the design change will be significant. The Commission plans to

[[Page 6860]]

provide manufacturers with ample time to implement this new design. The 
Commission estimates that these new requirements will apply to about 
300 product manufacturers and an additional 150 online and paper 
catalog sellers of covered products. Out of these companies, the 
Commission expects that approximately 300 qualify as small businesses. 
In addition, the Commission does not expect that the requirements 
specified in the Proposed Rule will have a significant impact on these 
entities.
    Accordingly, this document serves as notice to the Small Business 
Administration of the FTC's certification of no effect. To ensure the 
accuracy of this certification, however, the Commission requests 
comment on whether the proposed Rule will have a significant impact on 
a substantial number of small entities, including specific information 
on the number of entities that would be covered by the proposed Rule, 
the number of these companies that are ``small entities,'' and the 
average annual burden for each entity. Although the Commission 
certifies under the RFA that the Rule proposed in this notice 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 IRFA in order to inquire into the impact 
of the proposed Rule on small entities. Therefore, the Commission has 
prepared the following analysis:

A. Description of the Reasons That Action by the Agency Is Being Taken

    Section 137 of the Energy Policy Act of 2005 (``EPACT 2005'') (Pub. 
L 109-58) requires the Commission to conduct a rulemaking to consider 
the effectiveness of the consumer products labeling program.

B. Statement of the Objectives of, and Legal Basis for, the Proposed 
Rule

    The objective of the proposed Rule is to improve the effectiveness 
of the current appliance labeling program. Section 137 of EPACT 2005 
amends section 324 of EPCA to require the Commission to examine ``the 
effectiveness of the consumer products labeling program in assisting 
consumers in making purchasing decisions and improving energy 
efficiency.''

C. Small Entities to Which the Proposed Rule Will Apply

    Under the Small Business Size Standards issued by the Small 
Business Administration, refrigerator and laundry equipment 
manufacturers qualify as small businesses if they have fewer than 1,000 
employees (for other household appliances the figure is 500 employees). 
Appliance retailers qualify as small businesses if their sales are less 
than $8.0 million annually. The Commission estimates that fewer than 
300 entities subject to the Proposed Rule's requirements qualify as 
small businesses. The Commission seeks comment and information with 
regard to the estimated number or nature of small business entities for 
which the proposed Rule would have a significant economic impact

D. Projected Reporting, Recordkeeping and Other Compliance Requirements

    The Commission recognizes that the proposed labeling rule will 
involve some increased drafting costs and reporting requirements for 
appliance manufacturers. As discussed in this notice, the increase 
reporting burden should be de minimis. The transition to the use of a 
new label design should represent a one-time cost that will not be 
substantial. The Commission does not expect that the labeling 
requirements will impose significant additional costs on catalog 
sellers. All of these burdens are discussed in section VIII. of this 
notice and there should be no difference in that burden as applied to 
small businesses. The Commission invites comment and information on 
these issues.

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 
proposed Rule. The Commission invites comment and information on this 
issue.

F. Significant Alternatives to the Proposed Rule

    The Commission seeks 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 such 
small entities. As one alternative to reduce burden, the Commission 
could delay the Rule's effective date to provide additional time for 
small business compliance. The Commission could also consider further 
reductions in the amount of information catalog sellers must provide. 
If the comments filed in response to this notice identify small 
entities that are affected by the Rule, as well as alternative methods 
of compliance that would reduce the economic impact of the Rule on such 
entities, the Commission will consider the feasibility of such 
alternatives and determine whether they should be incorporated into the 
final rule.

X. Additional Questions for Comment

    All comments should be filed as prescribed in the ADDRESSES section 
above, and must be received on or before April 16, 2007. In addition to 
the questions and requests for comment found throughout this Notice, we 
also ask that commenters address the following questions: What costs or 
burdens, and any other impacts, would the proposed requirements impose, 
and on whom? What regulatory alternatives to the proposed requirements 
are available that would reduce the burdens of the proposed 
requirements? How would such alternatives affect the benefits provided 
by the proposed Rule?

XI. Proposed Rule Language

List of Subjects in 16 CFR Part 305

    Advertising, Energy conservation, Household appliances, Labeling, 
Reporting and recordkeeping requirements.

    For the reasons set out above, the Commission proposes the 
following amendments to 16 CFR Part 305:

PART 305--[AMENDED]

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

    Authority: 42 U.S.C. 6294.

    2. Section 305.2 is revised to read as follows:


Sec.  305.2  Definitions.

    (a) Act means the Energy Policy and Conservation Act (Pub. L. 94-
163), and amendments thereto.
    (b) ANSI means the American National Standards Institute and, as 
used herein, is the prefix for national standards and codes adopted by 
ANSI.
    (c) ASME means the American Society of Mechanical Engineers and, as 
used herein, is the prefix for national standards and codes adopted by 
ASME.
    (d) Average lamp efficacy means the lamp efficacy readings taken 
over a statistically significant period of manufacture with the 
readings averaged over that period.
    (e) Ballast efficacy factor means the relative light output divided 
by the power input of a fluorescent lamp ballast, as measured under 
test conditions specified in American National Standards Institute 
(``ANSI'') standard C82.2-1984, or as may be prescribed by the 
Secretary of Energy. Copies of ANSI standard C82.2-1984 may be obtained 
from the American National Standards Institute, 11 West 42nd St., New 
York, NY 10036.

[[Page 6861]]

    (f) Base for lamps means the portion of the lamp which screws into 
the socket.
    (g) Bulb shape means the shape of the lamp, especially the glass 
portion.
    (h) Catalog means printed material, including material disseminated 
over the Internet, which contains the terms of sale, retail price, and 
instructions for ordering, from which a retail consumer can order a 
covered product.
    (i) Color rendering index or CRI for lamps means the measure of the 
degree of color shift objects undergo when illuminated by a light 
source as compared with the color of those same objects when 
illuminated by a reference source of comparable color temperature.
    (j) Commission means the Federal Trade Commission.
    (k) Consumer product means any article (other than an automobile, 
as ``automobile'' is defined in 15 U.S.C. 2001(1) [sec. 501(1) of the 
Motor Vehicle Information and Cost Savings Act]) of a type--
    (1) Which in operation consumes, or is designed to consume, energy 
or, with respect to showerheads, faucets, water closets, and urinals, 
water; and
    (2) Which, to any significant extent, is distributed in commerce 
for personal use or consumption by individuals;
    Without regard to whether such article or such type is in fact 
distributed in commerce for personal use or consumption by an 
individual, except that such term includes fluorescent lamp ballasts, 
general service fluorescent lamps, medium base compact fluorescent 
lamps, general service incandescent lamps (including incandescent 
reflector lamps), showerheads, faucets, water closets, and urinals 
distributed in commerce for personal or commercial use or consumption.
    (l) Consumer appliance product means any of the following consumer 
products, excluding those products designed solely for use in 
recreational vehicles and other mobile equipment:
    (1) Refrigerators, refrigerator-freezers, and freezers that can be 
operated by alternating current electricity, excluding--
    (i) Any type designed to be used without doors; and
    (ii) Any type which does not include a compressor and condenser 
unit as an integral part of the cabinet assembly.
    (2) Dishwashers.
    (3) Water heaters.
    (4) Room air conditioners.
    (5) Clothes washers.
    (6) Clothes dryers.
    (7) Central air conditioners and central air conditioning heat 
pumps.
    (8) Furnaces.
    (9) Direct heating equipment.
    (10) Pool heaters.
    (11) Kitchen ranges and ovens.
    (12) Television sets.
    (13) Fluorescent lamp ballasts.
    (14) General service fluorescent lamps.
    (15) Medium base compact fluorescent lamps.
    (16) General service incandescent lamps, including incandescent 
reflector lamps.
    (17) Showerheads.
    (18) Faucets.
    (19) Water closets.
    (20) Urinals.
    (21) Any other type of consumer product that the Department of 
Energy classifies as a covered product under section 322(b) of the Act 
(42 U.S.C. 6292).
    (m) Correlated color temperature for lamps means the absolute 
temperature of a blackbody whose chromaticity most nearly resembles 
that of the light source.
    (n) Covered product means any consumer product or consumer 
appliance product described in Sec.  305.3 of this part.
    (o) Distributor means a person (other than a manufacturer or 
retailer) to whom a consumer appliance product is delivered or sold for 
purposes of distribution in commerce.
    (p) Energy efficiency rating means the following product-specific 
energy usage descriptors: annual fuel utilization efficiency (AFUE) for 
furnaces; energy efficiency ratio (EER) for room air conditioners; 
seasonal energy efficiency ratio (SEER) for the cooling function of 
central air conditioners and heat pumps; heating seasonal performance 
factor (HSPF) for the heating function of heat pumps; and, thermal 
efficiency (TE) for pool heaters, as these descriptors are determined 
in accordance with tests prescribed under section 323 of the Act (42 
U.S.C. 6293). These product-specific energy usage descriptors shall be 
used in satisfying all the requirements of this part.
    (q) Estimated annual energy consumption and estimated annual 
operating cost--(1) Estimated annual energy consumption means the 
energy or (for products described in sections 305.3(n)-(q)) water that 
is likely to be consumed annually in representative use of a consumer 
product, as determined in accordance with tests prescribed under 
section 323 of the Act (42 U.S.C. 6293).
    (i) Kilowatt-hour use per year, or kWh/yr., means estimated annual 
energy consumption expressed in kilowatt-hours of electricity.
    (ii) Therm use per year, or therms/yr., means estimated annual 
energy consumption expressed in therms of natural gas.
    (iii) Gallon use per year, or gallons/yr., means estimated annual 
energy consumption expressed in gallons of propane or No. 2 heating 
oil.
    (2) Estimated annual operating cost means the aggregate retail cost 
of the energy that is likely to be consumed annually in representative 
use of a consumer product, as determined in accordance with tests 
prescribed under section 323 of the Act (42 U.S.C. 6293).
    (r) Flow restricting or controlling spout end device means an 
aerator used in a faucet.
    (s) Flushometer valve means a valve attached to a pressured water 
supply pipe and so designed that, when actuated, it opens the line for 
direct flow into the fixture at a rate and quantity to operate properly 
the fixture, and then gradually closes to provide trap reseal in the 
fixture in order to avoid water hammer. The pipe to which this device 
is connected is in itself of sufficient size that, when opened, will 
allow the device to deliver water at a sufficient rate of flow for 
flushing purposes.
    (t) IES means the Illuminating Engineering Society of North America 
and, as used herein, is the prefix for test procedures adopted by IES.
    (u) Lamp efficacy means the light output of a lamp divided by its 
wattage, expressed in lumens per watt (LPW).
    (v) Lamp type means all lamps designated as having the same 
electrical and lighting characteristics and made by one manufacturer.
    (w) Life and lifetime for lamps mean length of operating time of a 
statistically large group of lamps between first use and failure of 50 
percent of the group.
    (x) Light output for lamps means the total luminous flux (power) of 
a lamp in lumens.
    (y) Luminaire means a complete lighting unit consisting of a 
fluorescent lamp or lamps, together with parts designed to distribute 
the light, to position and protect such lamps, and to connect such 
lamps to the power supply through the ballast.
    (z) Manufacturer means any person who manufactures, produces, 
assembles, or imports a consumer appliance product. Assembly operations 
which are solely decorative are not included.
    (aa) New covered product, as used in Sec.  305.4, means a covered 
product the title of which has not passed to a purchaser who buys the 
product for purposes other than resale or leasing for a period in 
excess of one year.
    (bb) Private labeler means an owner of a brand or trademark on the 
label of a

[[Page 6862]]

consumer appliance product which bears a private label.
    (cc) Range of comparability means a group of models within a class 
of covered products, each model of which satisfies approximately the 
same consumer needs.
    (dd) Range of estimated annual energy cost means the range of 
estimated annual energy cost per year of all models within a designated 
range of comparability.
    (ee) Retailer means a person to whom a consumer appliance product 
is delivered or sold, if such delivery or sale is for purposes of sale 
or distribution in commerce to purchasers who buy such product for 
purposes other than resale. The term retailer includes purchasers of 
appliances who install such appliances in newly constructed or newly 
rehabilitated housing, or mobile homes, with the intent to sell the 
covered appliances as part of the sale of such housing or mobile homes.
    (ff) Water use means the quantity of water flowing through a 
showerhead, faucet, water closet, or urinal at point of use, determined 
in accordance with test procedures under section 323 of the Act, 42 
U.S.C. 6293.
    (gg) Wattage for lamps means the total electrical power consumed by 
a lamp in watts, after an initial seasoning period and including, for 
fluorescent lamps, arc watts plus cathode watts.
    3. In Sec.  305.3, paragraphs (a)(1), (d), and (r) are revised to 
read as follows:


Sec.  305.3  Description of covered products.

    (a) * * * (1) Electric refrigerator means a cabinet designed for 
the refrigerated storage of food at temperatures above 32 [deg] F and 
below 39 [deg] F, configured for general refrigerated food storage, and 
having a source of refrigeration requiring single phase, alternating 
current electric energy input only. An electric refrigerator may 
include a compartment for the freezing and storage of food at 
temperatures below 32 [deg] F, but does not provide a separate low 
temperature compartment designed for the freezing and storage of food 
at temperatures below 8 [deg]F.
* * * * *
    (d) Water heater means a product which utilizes oil, gas, or 
electricity to heat potable water for use outside the heater upon 
demand, including--
    (1) Storage type units which heat and store water at a 
thermostatically controlled temperature, including gas storage water 
heaters with an input of 75,000 Btu per hour or less, oil storage water 
heaters with an input of 105,000 Btu per hour or less, and electric 
storage water heaters with an input of 12 kilowatts or less;
    (2) Instantaneous type units which heat water but contain no more 
than one gallon of water per 4,000 Btu per hour of input, including gas 
instantaneous water heaters with an input of 200,000 Btu per hour or 
less, oil instantaneous water heaters with an input of 210,000 Btu per 
hour or less, and electric instantaneous water heaters with an input of 
12 kilowatts or less; and
    (3) Heat pump type units, with a maximum current rating of 24 
amperes at a voltage no greater than 250 volts, which are products 
designed to transfer thermal energy from one temperature level to a 
higher temperature level for the purpose of heating water, including 
all ancillary equipment such as fans, storage tanks, pumps, or controls 
necessary for the device to perform its function.
* * * * *
    (r) Pool heater means an appliance designed for heating nonpotable 
water contained at atmospheric pressure, including heating water in 
swimming pools, spas, hot tubs and similar applications.
    4. In Sec.  305.5, paragraph (a) is revised to read as follows:


Sec.  305.5  Determinations of estimated annual energy consumption, 
estimated annual operating cost, and energy efficiency rating, and of 
water use rate.

    (a) Procedures for determining the estimated annual energy 
consumption, the estimated annual operating costs, the energy 
efficiency ratings, and the efficacy factors of the following covered 
products are those located in 10 CFR part 430, subpart B. For the 
following list of covered products, the requirements of this part apply 
only to products for which the Department of Energy has adopted and 
published test procedures for measuring energy usage.
    (1) Refrigerators and refrigerator-freezers Sec.  430.23(a).
    (2) Freezers--Sec.  430.23(b).
    (3) Dishwashers--Sec.  430.23(c).
    (4) Water heaters--Sec.  430.23(e).
    (5) Room air conditioners--Sec.  430.23(f).
    (6) Clothes washers--Sec.  430.23(j).
    (7) Central air conditioners and heat pumps--Sec.  430.23(m).
    (8) Furnaces--Sec.  430.23(n).
    (9) Pool Heaters--Sec.  430.23(p)
    (10) Fluorescent lamp ballasts--Sec.  430.23(q).
* * * * *
    5. Section 305.7 (a) and (b) are revised to read as follows:


Sec.  305.7  Determinations of capacity.

* * * * *
    (a) Refrigerators and refrigerator-freezers. The capacity shall be 
the total refrigerated volume (VT) and the adjusted total volume (AV) 
in cubic feet, rounded to the nearest one-tenth of a cubic foot, as 
determined according to appendix A1 to 10 CFR part 430, subpart B.
    (b) Freezers. The capacity shall be the total refrigerated volume 
(VT) and the adjusted total volume (AV) in cubic feet, rounded to the 
nearest one-tenth of a cubic foot, as determined according to appendix 
B1 to 10 CFR part 430, subpart B.
* * * * *
    6. In Sec.  305.8, paragraph (a)(1) is revised to read as follows:


Sec.  305.8  Submission of data.

    (a)(1) Each manufacturer of a covered product (except manufacturers 
of fluorescent lamp ballasts, showerheads, faucets, water closets, 
urinals, general service fluorescent lamps, medium base compact 
fluorescent lamps, or general service incandescent lamps including 
incandescent reflector lamps) shall submit annually to the Commission a 
report listing the estimated annual energy consumption (for 
refrigerators, refrigerator-freezers, freezers, clothes washers, 
dishwashers and water heaters) or the energy efficiency rating (for 
room air conditioners, central air conditioners, heat pumps, furnaces, 
and pool heaters) for each basic model in current production, 
determined according to Sec.  305.5 and statistically verified 
according to Sec.  305.6. The report must also list, for each basic 
model in current production: the manufacturer name, the brand name (if 
different from the manufacturer's name), the model numbers for each 
basic model; the total energy consumption, determined in accordance 
with Sec.  305.5, used to calculate the estimated annual energy 
consumption or energy efficiency rating; the number of tests performed; 
and its capacity, determined in accordance with Sec.  305.7. For those 
models that use more than one energy source or more than one cycle, 
each separate amount of energy consumption, measured in accordance with 
Sec.  305.5, shall be listed in the report. Starting serial numbers or 
other numbers identifying the date of manufacture of covered products 
shall be submitted whenever a new basic model is introduced on the 
market.
* * * * *


Sec.  305.9  [Removed and Reserved]

    7. Section 305.9 is removed and reserved.
    8. Section 305.10 is revised to read as follows:

[[Page 6863]]

Sec.  305.10  Ranges of Comparability Information on the Required 
Labels.

    (a) Range of Estimated Annual Operating Cost. The range of 
estimated annual estimated operating costs for each covered product 
(except fluorescent lamp ballasts, lamps, central air conditioners, 
heat pumps, furnaces, showerheads, faucets, water closets or urinals) 
shall be taken from the appropriate appendix to this rule in effect at 
the time the labels are affixed to the product. The Commission shall 
publish revised ranges every five years beginning in 2012 in the 
Federal Register. When the ranges are revised, all information 
disseminated after 90 days following the publication of the revision 
shall conform to the revised ranges. Products that have been labeled 
prior to the effective date of a modification under this section need 
not be relabeled.
    (b) Representative average unit energy cost. The National Average 
Representative Unit Cost to be used on labels as required by Sec.  
305.11 of this Part are listed in Appendix H to this Part. The 
Commission shall publish revised National Average Representative Unit 
Cost figures every five years beginning in 2012 in the Federal 
Register. When the cost figures are revised, all information 
disseminated after 90 days following the publication of the revision 
shall conform to the new cost figure.
    (c) Operating Costs Outside Current Range. When the estimated 
annual operating cost of a given model of a covered product falls 
outside the limits of the current range for that product, which could 
result from the introduction of a new or changed model, the 
manufacturer shall:
    (1) Omit placement of such product on the scale, and
    (2) Add the sentence below, as appropriate, in the space just below 
the scale, as follows:

    The estimated annual operating cost of this model was not 
available at the time the range was published.


Sec. Sec.  305.13, 305.14, 305.15, 305.16, 305.17, 305.18, and 
305.19  [Redesignated as 305.19, 305.20, 305.21, 305.22, 305.23, 305.24 
and 305.25]

    9. Sections 305.13, 305.14, 305.15, 305.16, 305.17, 305.18 and 
305.19 are redesignated as 305.19, 305.20, 305.21, 305.22, 305.23, 
305.24 and 305.25 respectively.
    10. Section 305.15 is added to read as follows:


Sec.  305.15  Labeling Requirements for Lighting Products.

    (a) Fluorescent Lamp Ballasts and Luminaires--(1) Contents. 
Fluorescent lamp ballasts that are ``covered products,'' as defined in 
Sec.  305.2(n), and to which standards are applicable under section 325 
of the Act, shall be marked conspicuously, in color-contrasting ink, 
with a capital letter ``E'' printed within a circle. Packaging for such 
fluorescent lamp ballasts, as well as packaging for luminaires into 
which they are incorporated, shall also be marked conspicuously with a 
capital letter ``E'' printed within a circle. For purposes of this 
section, the encircled capital letter ``E'' will be deemed 
``conspicuous,'' in terms of size, if it is as large as either the 
manufacturer's name or another logo, such as the ``UL,'' ``CBM'' or 
``ETL'' logos, whichever is larger, that appears on the fluorescent 
lamp ballast, the packaging for such ballast or the packaging for the 
luminaire into which the covered ballast is incorporated, whichever is 
applicable for purpose of labeling.
    (2) Product Labeling. The encircled capital letter ``E'' on 
fluorescent lamp ballasts must appear conspicuously, in color-
contrasting ink, (i.e., in a color that contrasts with the background 
on which the encircled capital letter ``E'' is placed) on the surface 
that is normally labeled. It may be printed on the label that normally 
appears on the fluorescent lamp ballast, printed on a separate label, 
or stamped indelibly on the surface of the fluorescent lamp ballast.
    (3) Package Labeling. For purposes of labeling under this section, 
packaging for such fluorescent lamp ballasts and the luminaires into 
which they are incorporated consists of the plastic sheeting, or 
``shrink-wrap,'' covering pallet loads of fluorescent lamp ballasts or 
luminaires as well as any containers in which such fluorescent lamp 
ballasts or the luminaires into which they are incorporated are 
marketed individually or in small numbers. The encircled capital letter 
``E'' on packages containing fluorescent lamp ballasts or the 
luminaires into which they are incorporated must appear conspicuously, 
in color-contrasting ink, on the surface of the package on which 
printing or a label normally appears. If the package contains printing 
on more than one surface, the label must appear on the surface on which 
the product inside the package is described. The encircled capital 
letter ``E'' may be printed on the surface of the package, printed on a 
label containing other information, printed on a separate label, or 
indelibly stamped on the surface of the package. In the case of pallet 
loads containing fluorescent lamp ballasts or the luminaires into which 
they are incorporated, the encircled capital letter ``E'' must appear 
conspicuously, in color-contrasting ink, on the plastic sheeting, 
unless clear plastic sheeting is used and the encircled capital letter 
``E'' is legible underneath this packaging. The encircled capital 
letter ``E'' must also appear conspicuously on any documentation that 
would normally accompany such a pallet load. The encircled capital 
letter ``E'' may appear on a label affixed to the sheeting or may be 
indelibly stamped on the sheeting. It may be printed on the 
documentation, printed on a separate label that is affixed to the 
documentation or indelibly stamped on the documentation.
    (b) Lamps--(1)(i) Any covered product that is a compact fluorescent 
lamp or general service incandescent lamp (including an incandescent 
reflector lamp) shall be labeled clearly and conspicuously on the 
product's principal display panel with the following information:
    (A) The number of lamps included in the package, if more than one;
    (B) The design voltage of each lamp included in the package, if 
other than 120 volts;
    (C) The light output of each lamp included in the package, 
expressed in average initial lumens;
    (D) The electrical power consumed (energy used) by each lamp 
included in the package, expressed in average initial wattage;
    (E) The life of each lamp included in the package, expressed in 
hours.
    (ii) The light output, energy usage and life ratings of any covered 
product that is a medium base compact fluorescent lamp or general 
service incandescent lamp (including an incandescent reflector lamp), 
shall appear in that order and with equal clarity and conspicuousness 
on the product's principal display panel. The light output, energy 
usage and life ratings shall be disclosed in terms of ``lumens,'' 
``watts'' and ``hours'' respectively, with the lumens, watts and hours 
rating numbers each appearing in the same type style and size and with 
the words ``lumens,'' ``watts'' and ``hours'' each appearing in the 
same type style and size. The words ``light output,'' ``energy used'' 
and ``life'' shall precede and have the same conspicuousness as both 
the rating numbers and the words ``lumens,'' ``watts'' and ``hours,'' 
except that the letters of the words ``lumens,'' ``watts'' and 
``hours'' shall be approximately 50% of the sizes of those used for the 
words ``light output,'' ``energy used'' and ``life'' respectively.
    (iii) The light output, energy usage and life ratings of any 
covered product that is a medium base compact fluorescent lamp or 
general service

[[Page 6864]]

incandescent lamp (including an incandescent reflector lamp), shall be 
measured at 120 volts, regardless of the lamp's design voltage. If a 
lamp's design voltage is 125 volts or 130 volts, the disclosures of the 
wattage, light output and life ratings shall in each instance be:
    (A) At 120 volts and followed by the phrase ``at 120 volts.'' In 
such case, the labels for such lamps also may disclose the lamp's 
wattage, light output and life at the design voltage (e.g., ``Light 
Output 1710 Lumens at 125 volts''); or
    (B) At the design voltage and followed by the phrase ``at (125 
volts/130 volts)'' if the ratings at 120 volts are disclosed clearly 
and conspicuously on another panel of the package, and if all panels of 
the package that contain a claimed light output, wattage or life 
clearly and conspicuously identify the lamp as ``(125 volt/130 volt),'' 
and if the principal display panel clearly and conspicuously discloses 
the following statement:

    This product is designed for (125/130) volts. When used on the 
normal line voltage of 120 volts, the light output and energy 
efficiency are noticeably reduced. See (side/back) panel for 120 
volt ratings.

    (iv) For any covered product that is an incandescent reflector 
lamp, the required disclosure of light output shall be given for the 
lamp's total forward lumens.
    (v) For any covered product that is a compact fluorescent lamp, the 
required light output disclosure shall be measured at a base-up 
position; but, if the manufacturer or private labeler has reason to 
believe that the light output at a base-down position would be more 
than 5% different, the label also shall disclose the light output at 
the base-down position or, if no test data for the base-down position 
exist, the fact that at a base-down position the light output might be 
more than 5% less.
    (vi) For any covered product that is a compact fluorescent lamp or 
a general service incandescent lamp (including an incandescent 
reflector lamp), there shall be clearly and conspicuously disclosed on 
the principal display panel the following statement:

    To save energy costs, find the bulbs with the (beam spread and) 
light output you need, then choose the one with the lowest watts.''

    (vii) For any covered product that is a general service 
incandescent lamp and operates with multiple filaments, the principal 
display panel shall disclose clearly and conspicuously, in the manner 
required by paragraph (b)(1)(i)-(iii) and (vi) of this section, the 
lamp's wattage and light output at each of the lamp's levels of light 
output and the lamp's life measured on the basis of the filament that 
fails first.
    (2) Any covered product that is a general service fluorescent lamp 
or an incandescent reflector lamp shall be labeled clearly and 
conspicuously with a capital letter ``E'' printed within a circle and 
followed by an asterisk. The label shall also clearly and conspicuously 
disclose, either in close proximity to that asterisk or elsewhere on 
the label, the following statement:

    *[The encircled ``E''] means this bulb meets Federal minimum 
efficiency standards.

    (i) If the statement is not disclosed on the principal display 
panel, the asterisk shall be followed by the following statement:

    See [Back, Top, Side] panel for details.


    (ii) For purposes of this paragraph (b), the encircled capital 
letter ``E'' shall be clearly and conspicuously disclosed in color-
contrasting ink on the label of any covered product that is a general 
service fluorescent lamp and will be deemed ``conspicuous,'' in terms 
of size, if it appears in typeface at least as large as either the 
manufacturer's name or logo or another logo disclosed on the label, 
such as the ``UL'' or ``ETL'' logos, whichever is larger.
    (3)(i) A manufacturer or private labeler who distributes general 
service fluorescent lamps, compact fluorescent lamps, or general 
service incandescent lamps (including incandescent reflector lamps) 
without labels attached to the lamps or without labels on individual 
retail-sale packaging for one or more lamps may meet the disclosure 
requirements of paragraphs (b)(1) and (b)(2) of this section by making 
the required disclosures, in the manner and form required by those 
paragraphs, on the bulk shipping cartons that are to be used to display 
the lamps for retail sale.
    (ii) Instead of labeling any covered product that is a general 
service fluorescent lamp with the encircled ``E'' and with the 
statement described in paragraph (b)(2) of this section, a manufacturer 
or private labeler who would not otherwise put a label on such a lamp 
may meet the disclosure requirements of that paragraph by permanently 
marking the lamp clearly and conspicuously with the encircled ``E''.
    (4) Any manufacturer or private labeler who makes any 
representation on a label of any covered product that is a general 
service fluorescent lamp, medium base compact fluorescent lamp, or 
general service incandescent lamp (including an incandescent reflector 
lamp), regarding the cost of operation of such lamp shall clearly and 
conspicuously disclose in close proximity to such representation the 
assumptions upon which it is based, including, e.g., purchase price, 
unit cost of electricity, hours of use, patterns of use.
    (5) Any cartons in which any covered products that are general 
service fluorescent lamps, medium base compact fluorescent lamps, or 
general service incandescent lamps (including incandescent reflector 
lamps), are shipped within the United States or imported into the 
United States shall disclose clearly and conspicuously the following 
statement:

    These lamps comply with Federal energy efficiency labeling 
requirements.
    11. Section 305.16 is added to read as follows:


Sec.  305.16  Labeling and Marking Requirements for Plumbing Products.

    (a) Showerheads and Faucets. Showerheads and faucets shall be 
marked and labeled as follows:
    (1) Each showerhead and flow restricting or controlling spout end 
device shall bear a permanent legible marking indicating the flow rate, 
expressed in gallons per minute (gpm) or gallons per cycle (gpc), and 
the flow rate value shall be the actual flow rate or the maximum flow 
rate specified by the standards established in subsection (j) of 
section 325 of the Act, 42 U.S.C. 6295(j). Except where impractical due 
to the size of the fitting, each flow rate disclosure shall also be 
given in liters per minute (L/min) or liters per cycle (L/cycle). For 
purposes of this section, the marking indicating the flow rate will be 
deemed ``legible,'' in terms of placement, if it is located in close 
proximity to the manufacturer's identification marking.
    (2) Each showerhead and faucet shall bear a permanent legible 
marking to identify the manufacturer. This marking shall be the trade 
name, trademark, or other mark known to identify the manufacturer. Such 
marking shall be located where it can be seen after installation.
    (3) Each showerhead and faucet shall be marked ``A112.18.1M'' to 
demonstrate compliance with the applicable ASME standard. The marking 
shall be by means of either a permanent mark on the product, a label on 
the product, or a tag attached to the product.
    (4) The package for each showerhead and faucet shall disclose the 
manufacturer's name and the model number.
    (5) The package or any label attached to the package for each 
showerhead or faucet shall contain at least the

[[Page 6865]]

following: ``A112.18.1M'' and the flow rate expressed in gallons per 
minute (gpm) or gallons per cycle (gpc), and the flow rate value shall 
be the actual flow rate or the maximum flow rate specified by the 
standards established in subsection (j) of section 325 of the Act, 42 
U.S.C. 6295(j). Each flow rate disclosure shall also be given in liters 
per minute (L/min) or liters per cycle (L/cycle).
    (b) Water Closets and Urinals. Water closets and urinals shall be 
marked and labeled as follows:
    (1) Each such fixture (and flushometer valve associated with such 
fixture) shall bear a permanent legible marking indicating the flow 
rate, expressed in gallons per flush (gpf), and the water use value 
shall be the actual water use or the maximum water use specified by the 
standards established in subsection (k) of section 325 of the Act, 42 
U.S.C. 6295(k). Except where impractical due to the size of the 
fixture, each flow rate disclosure shall also be given in liters per 
flush (Lpf). For purposes of this section, the marking indicating the 
flow rate will be deemed ``legible,'' in terms of placement, if it is 
located in close proximity to the manufacturer's identification 
marking.
    (2) Each water closet (and each component of the water closet if 
the fixture is comprised of two or more components) and urinal shall be 
marked with the manufacturer's name or trademark or, in the case of 
private labeling, the name or registered trademark of the customer for 
whom the unit was manufactured. This mark shall be legible, readily 
identified, and applied so as to be permanent. The mark shall be 
located so as to be visible after the fixture is installed, except for 
fixtures built into or for a counter or cabinet.
    (3) Each water closet (and each component of the water closet if 
the fixture is comprised of two or more components) and urinal shall be 
marked at a location determined by the manufacturer with the 
designation ``ASME A112.19.2M'' to signify compliance with the 
applicable standard. This mark need not be permanent, but shall be 
visible after installation.
    (4) The package, and any labeling attached to the package, for each 
water closet and urinal shall disclose the flow rate, expressed in 
gallons per flush (gpf), and the water use value shall be the actual 
water use or the maximum water use specified by the standards 
established in subsection (k) of section 325 of the Act, 42 U.S.C. 
6295(k). Each flow rate disclosure shall also be given in liters per 
flush (Lpf).
    (5) With respect to any gravity tank-type white 2-piece toilet 
offered for sale or sold before January 1, 1997, which has a water use 
greater than 1.6 gallons per flush (gpf), any printed matter 
distributed or displayed in connection with such product (including 
packaging and point-of-sale material, catalog material, and print 
advertising) shall include, in a conspicuous manner, the words ``For 
Commercial Use Only.''
    (c) Annual Operating Cost Claims for Covered Plumbing Products. 
Until such time as the Commission has prescribed a format and manner of 
display for labels conveying estimated annual operating costs of 
covered showerheads, faucets, water closets, and urinals or ranges of 
estimated annual operating costs for the types or classes of such 
plumbing products, the Act prohibits manufacturers from making such 
representations on the labels of such covered products. 42 U.S.C. 
6294(c)(8). If, before the Commission has prescribed such a format and 
manner of display for labels of such products, a manufacturer elects to 
provide for any such product a label conveying such a claim, it shall 
submit the proposed claim to the Commission so that a format and manner 
of display for a label may be prescribed.
    12. Section 305.11 is revised to read as follows:


Sec.  305.11  Labeling for refrigerators, refrigerator-freezers, 
freezers, dishwashers, clothes washers, water heaters, room air 
conditioners, and pool heaters.

    (a) Layout. All energy labels for refrigerators, refrigerator-
freezers, freezers, dishwashers, clothes washers, water heaters, pool 
heaters, and room air conditioners shall use one size, similar colors 
and typefaces with consistent positioning of headline, copy and charts 
to maintain uniformity for immediate consumer recognition and 
readability. Trim size dimensions for all labels shall be as follows: 
width must be between 5\1/4\ inches and 5\1/2\ inches (13.34 cm. and 
13.97 cm.); length must be between 7\3/8\ inches (18.78 cm.) and 7\5/8\ 
(19.34 cm.). Copy is to be set between 27 picas and 29 picas and copy 
page should be centered (right to left and top to bottom). Depth is 
variable but should follow closely the prototype labels appearing at 
the end of this part illustrating the basis layout. All positioning, 
spacing, type sizes and line widths should be similar to and consistent 
with the prototype and sample labels in Appendix I.
    (b) Type style and setting. The Arial series typeface or equivalent 
shall be used exclusively on the label. Specific sizes and faces to be 
used are indicated on the prototype labels. No hyphenation should be 
used in setting headline or copy text. Positioning and spacing should 
follow the prototypes closely. Generally, text must be set flush left 
with two points leading except where otherwise indicated. See the 
prototype labels for specific directions.
    (c) Colors. The basic colors of all labels covered by this section 
shall be process yellow or equivalent and process black. The label 
shall be printed full bleed process yellow. All type and graphics shall 
be print process black.
    (d) Label Types-- The labels must be affixed to the product in the 
form of an adhesive label or a hang tag.
    (1) Adhesive labels. All adhesive labels should be applied so they 
can be easily removed without the use of tools or liquids, other than 
water, but should be applied with an adhesive with an adhesion capacity 
sufficient to prevent their dislodgment during normal handling 
throughout the chain of distribution to the retailer or consumer. The 
paper stock for pressure-sensitive or other adhesive labels shall have 
a basic weight of not less than 58 pounds per 500 sheets (25'' x 38'') 
or equivalent, exclusive of the release liner and adhesive. A minimum 
peel adhesion capacity for the adhesive of 12 ounces per square inch is 
suggested, but not required if the adhesive can otherwise meet the 
above standard.
    (2) Hang tags. Labels may be affixed to the product in the form of 
a hang tag using string or similar material. The paper stock for hang 
tags shall have a basic weight of not less than 110 pounds per 500 
sheets (25\1/2\'' x 30\1/2\'' index). When materials are used to attach 
the hang tags to appliance products, the materials shall be of 
sufficient strength to insure that if gradual pressure is applied to 
the hang tag by pulling it away from where it is affixed to the 
product, the hang tag will tear before the material used to affix the 
hang tag to the product breaks.
    (e) Placement--(1) Adhesive labels: Manufacturers shall affix 
adhesive labels to the covered products in such a position that it is 
easily read by a consumer examining the product. The label should be 
generally located on the upper-right-front corner of the product's 
front exterior. However, some other prominent location may be used as 
long as the label will not become dislodged during normal handling 
throughout the chain of distribution to the retailer or consumer. The 
top of the label should not exceed 74 inches from the base of taller 
products. The label can be displayed in the form of a flap tag adhered 
to the top of the appliance and bent (folded at 90[deg]) to hang over 
the

[[Page 6866]]

front, as long as this can be done with assurance that it will be 
readily visible.
    (2) Hang tags. A hang tag shall be affixed in such a position that 
it can be easily read by a consumer examining the product. A hang tag 
can be affixed in any position that meets this requirement as long as 
the label will not become dislodged during normal handling throughout 
the chain of distribution to the retailer or consumer.
    (f) Label Content for refrigerators, refrigerator-freezers, 
freezers, dishwashers, clothes washers, water heaters, room air 
conditioners, and pool heaters--(1) Headlines and texts, as illustrated 
in the Prototype Labels in Appendix I to this Part.
    (2) Name of manufacturer or private labeler shall, in the case of a 
corporation, be deemed to be satisfied only by the actual corporate 
name, which may be preceded or followed by the name of the particular 
division of the corporation. In the case of an individual, partnership, 
or association, the name under which the business is conducted shall be 
used. Inclusion of the name of the manufacturer or private labeler is 
optional at the discretion of the manufacturer or private labeler.
    (3) Model number(s) will be the designation given by the 
manufacturer or private labeler.
    (4) Capacity or size is that determined in accordance with Sec.  
305.7. For refrigerators, refrigerator-freezers, and freezers, the 
capacity provided on the label shall be the model's total refrigerated 
volume (VT) as determined in accordance Sec.  305.7.
    (5) Estimated annual operating costs for refrigerators, 
refrigerator-freezers, freezers, clothes washers, dishwashers, room air 
conditioners, pool heaters, and water heaters are as determined in 
accordance with Sec.  305.5 and Appendix H to this Part.
    (6) Ranges of comparability for estimated annual operating costs, 
as applicable, are found in the appropriate appendices accompanying 
this part.
    (7) For refrigerators, refrigerator-freezers, and freezers, the 
range of comparability, the following statements shall be placed 
immediately below the range as illustrated in the sample labels in 
Appendix I:
    (i) For models covered under Appendix A1, the statement shall read: 
Range for models of similar capacity with Automatic Defrost.
    (ii) For models covered under Appendix A2, the statement shall 
read: Range for models of similar capacity with Manual Defrost.
    (iii) For models covered under Appendix A3, the statement shall 
read: Range for models of similar capacity with Partial Automatic 
Defrost.
    (iv) For models covered under Appendix A4, the statement shall 
read: Range for models of similar capacity with Automatic Defrost, Top-
Mounted Freezer, and without Through-the-door Ice.
    (v) For models covered under Appendix A5, the statement shall read: 
Range for models of similar capacity with Automatic Defrost, Side-
Mounted Freezer, and without Through-the-door Ice.
    (vi) For models covered under Appendix A6, the statement shall 
read: Range for models of similar capacity with Automatic Defrost, 
Bottom-Mounted Freezer, and without Through-the-door Ice.
    (vii) For models covered under Appendix A7, the statement shall 
read: Range for models of similar capacity with Automatic Defrost, 
Bottom-Mounted Freezer, and with Through-the-door Ice.
    (viii) For models covered under Appendix A8, the statement shall 
read: Range for models of similar capacity with Automatic Defrost, 
Side-Mounted Freezer, and with Through-the-door Ice.
    (ix) For models covered under Appendix B1, the statement shall 
read: Range for upright freezer models of similar capacity with Manual 
Defrost.
    (x) For models covered under Appendix B3, the statement shall read: 
Range for upright freezer models of similar capacity with Automatic 
Defrost.
    (xi) For models covered under Appendix B3, the statement shall 
read: Range for chest and other freezer models of similar capacity.
    (8) Placement of the labeled product on the scale shall be 
proportionate to the lowest and highest estimated annual operating 
costs.
    (9) Labels must contain the model's estimated annual energy 
consumption or energy efficiency rating as determined in accordance 
with Sec.  305.5.
    (10) Labels must contain a statement explaining information on the 
label as illustrated in the prototype labels in Appendix I.
    (i) For refrigerators, refrigerator-freezers, and freezers, the 
statement will read as follows (fill in the blanks with the appropriate 
appliance name, the operating cost, the year, and the energy cost 
figures):
    Size, door attributes, and ice features affect energy use--so other 
[refrigerators/freezers] may have lower or higher operating costs. Your 
actual operating costs will depend on your local utility rates and how 
you use this product. The estimated operating cost is based on a [Year] 
national average cost of [$ ---- per kWh, therm, or gallon] for 
electricity.
    For more information, visit www.ftc.gov/appliances.
    (ii) For room air conditioners and water heaters, the statement 
will read as follows (fill in the blanks with the appropriate appliance 
name, the operating cost, the year, and the energy cost figures):
    Your actual operating costs will depend on your local utility rates 
and how you use this product. The estimated operating cost is based on 
a [Year] national average cost of [$ ---- per kWh, therm, or gallon] 
for [electricity, natural gas, propane, or oil].
    For more information, visit www.ftc.gov/appliances.
    (iii) For clothes washers and dishwashers, the statement will read 
as follows (fill in the blanks with the appropriate appliance name, the 
operating cost, the number of loads per week, the year, and the energy 
cost figures):
    Based on [4 washloads a week for dishwashers, or 8 washloads a week 
for clothes washers] a week. Your actual operating costs will depend on 
your local utility rates and how you use this product. The estimated 
operating cost is based on a [Year] national average cost of $ ---- per 
kWh for electricity and $ ---- per therm for natural gas.
    For more information, visit www.ftc.gov/appliances.
    (iv) For pool heaters, the statement will read as follows (fill in 
the blanks with the appropriate appliance name, the operating cost, the 
year, and the energy cost figures):
    The Thermal Efficiency (as expressed by a percent) is the measure 
of energy efficiency for pool heaters. Only pool heaters fueled by 
[natural gas/oil] 305.yare used in this scale. Your actual operating 
costs will depend on your local utility rates and how you use this 
product. The estimated operating cost is based on a [Year] national 
average cost of [$ ---- per kWh, therm, or gallon] for [natural gas or 
oil].
    For more information, visit www.ftc.gov/appliances.
    (11) The following statement shall appear at the bottom of the 
label: Federal law prohibits removal of this label before consumer 
purchase.
    (12) No marks or information other than that specified in this part 
shall appear on or directly adjoining this label except that:
    (i) A part or publication number identification may be included on 
this label, as desired by the manufacturer. If a manufacturer elects to 
use a part or publication number, it must appear in

[[Page 6867]]

the lower right-hand corner of the label and be set in 6-point type or 
smaller.
    (ii) The energy use disclosure labels required by the governments 
of Canada or Mexico may appear directly adjoining this label, as 
desired by the manufacturer.
    (iii) The manufacturer may include the ENERGY STAR logo on the 
bottom right corner of the label for qualified products. The logo must 
be no larger than 1 inch by 1 inch. Only manufacturers that have signed 
a Memorandum of Understanding with DOE or EPA may add the ENERGY STAR 
logo to labels on qualifying covered products; such manufacturers may 
add the ENERGY STAR logo to labels only on those covered products that 
are contemplated by the Memorandum of Understanding.
    13. Section 305.12 is revised to read as follows:


Sec.  305.12  Marking Requirements for Central Air Conditioners and 
Heat Pumps.

    (a) Central air conditioners and heat pumps covered by this part 
must be marked permanently with the model number, the Seasonal Energy 
Efficiency Ratio for the model's cooling function, if applicable, and 
the Heating Seasonal Performance Factor (HSPF) for the model's heating 
function, if applicable. The marking must be permanent, legible, and 
placed on the outside surface of the product.
    (b) For the model's cooling function, the seasonal energy 
efficiency ratio shall be determined in accordance with Sec.  305.5. 
For the heating function, the heating seasonal performance factor shall 
be calculated for heating Region IV for the standardized design heating 
requirement nearest the capacity measured in the High Temperature Test 
in accordance with Sec.  305.5. In addition, the energy efficiency 
rating(s) for split system condenser-evaporator coil combinations shall 
be either:
    (1) The energy efficiency rating of the condenser-evaporator coil 
combination that is the particular manufacturer's most commonly sold 
combination for that condenser model; or
    (2) The energy efficiency rating of the actual condenser-evaporator 
coil combination comprising the system to which the label is to be 
attached.
    14. Section 305.13 is added to read as follows:


Sec.  305.13  Marking Requirements for Furnaces.

    (a) Furnaces (including boilers) covered by this part must be 
marked permanently with the model number, and the model's Annual Fuel 
Utilization Efficiency (AFUE) determined in accordance with Sec.  
305.5. The marking must be permanent, legible, and placed on the 
outside surface of the product.
    (b) Manufacturers of boilers shipped with more than one input 
nozzle to be installed in the field must mark such boilers with the 
AFUE of the system when it is set up with the nozzle that results in 
the lowest annual fuel utilization efficiency rating.
    (c) Manufacturers that ship out boilers that may be set up as 
either steam or hot water units must mark the boilers with the AFUE 
rating derived by conducting the required test on the boiler as a hot 
water unit.
    15. Section 30.14 is added to read as follows:


Sec.  305.14  Energy Information Disclosures for Heating and Cooling 
Equipment

    (a) Required Information: Manufacturers of central air 
conditioners, heat pumps, and furnaces (including boilers) must provide 
energy information about the equipment they sell to distributors and 
retailers, including contractors. This information can be provided 
through means such as fact sheets, product brochures, and directories. 
All required information must be disclosed clearly and conspicuously. 
The information must include:
    (1) Name of manufacturer or private labeler [in the case of a 
corporation, the name shall be deemed to be satisfied only by the 
actual corporate name, which may be preceded or followed by the name of 
the particular division of the corporation. In the case of an 
individual, partnership, or association, the name under which the 
business is conducted shall be used.]
    (2) Trade name (if different from manufacturer);
    (3) Model number(s) (given by the manufacturer or private labeler);
    (4) Capacity or size as determined in accordance with Sec.  305.7;
    (5) Energy efficiency rating as determined in accordance with Sec.  
305.5.
    (6) A statement that the energy efficiency ratings are based on 
U.S. Government standard tests.
    (7) For central air conditioners and heat pumps, the required 
information must disclose efficiency ratings for the ``most common'' 
condenser-evaporator coil combinations. The statement should be made in 
one of the following three ways:
    (i) For information disclosing the seasonal energy efficiency ratio 
for cooling, the statement should read:
    This energy rating is based on U.S. Government standard tests of 
this condenser model combined with the most common coil. The rating may 
vary slightly with different coils.
    (ii) For information disclosing both the seasonal energy efficiency 
ratio for cooling and the heating seasonal performance factor for 
heating, the statement should read:
    This energy rating is based on U.S. Government standard tests of 
this condenser model combined with the most common coil. The rating 
will vary slightly with different coils and in different geographic 
regions.
    (iii) For information disclosing the heating seasonal performance 
factor for heating, the statement should read:
    This energy rating is based on U.S. Government standard tests of 
this condenser model combined with the most common coil. The rating 
will vary slightly with different coils and in different geographic 
regions.
    (8) Information for central air conditioners disclosing the 
efficiency ratings for specific condenser/coil combinations does not 
have to contain any of the above three statements. Instead, it must 
contain a general disclosure that the energy costs and efficiency 
ratings are based on U.S. Government tests.
    (b) Distribution. (A) Manufacturers and private labelers must give 
distributors and retailers, including assemblers, the information 
covered under section 305.14(a) for the central air conditioners, heat 
pumps, and furnaces (including boilers) they sell to them. This 
information may be provided in paper or electronic form (including 
Internet-based access). Distributors must give this information to 
retailers, including assemblers, they supply.
    (B) Retailers, including assemblers, who sell furnaces (including 
boilers), central air conditioners, or heat pumps to consumers must 
have the required information for the furnaces and central air 
conditioners they sell. They must make the information available to 
their customers. The required information may be made available to 
customers in any manner, as long as customers are likely to notice 
them. For example, it can be available in a display, where customers 
can take copies of them. It can be kept in a binder or made available 
electronically at a counter or service desk, with a sign telling 
customers where the required information is.
    (C) Retailers, including assemblers, who negotiate or make sales at 
a place other than their regular places of business must show the 
required information to their customers and let them read the fact 
information before they agree to purchase the product. If the 
information is Internet-based, retailers, including assemblers, who 
negotiate or make sales at a place other

[[Page 6868]]

than their regular places of business, may choose to provide customers 
with instructions to access such information in lieu of showing them a 
paper version of the information. Retailers who choose to use the 
Internet for the required information, must let customers read such 
information before the customers agree to purchase the product.
    16. In newly designated Sec.  305.20, the heading and paragraph (a) 
are revised to read as follows:


Sec.  305.20  Paper Catalogs and Web sites.

    (a) Any manufacturer, distributor, retailer, or private labeler who 
advertises in a catalog, a covered product (except fluorescent lamp 
ballasts, general service fluorescent lamps, medium base compact 
fluorescent lamps, general service incandescent lamps including 
incandescent reflector lamps, showerheads, faucets, water closets or 
urinals) shall include in such catalog the following information 
required to be disclosed on the label:
    (1) The capacity of the model on each page that lists the covered 
product.
    (2) The estimated annual operating costs for refrigerators, 
refrigerator-freezers, freezers, clothes washers, dishwashers, room air 
conditioners, pool heaters, and water heaters as determined in 
accordance with Sec.  305.5 on each page that lists the covered 
product.
    (3) A statement conspicuously placed in the catalog explaining the 
information as follows:
    (i) For refrigerators, refrigerator-freezers, and freezers, the 
statement will read as follows (fill in the blanks with the appropriate 
appliance name, the operating cost, the year, and the energy cost 
figures):
    Your actual operating costs will depend on your local utility rates 
and how you use this product. The estimated operating cost is based on 
a [Year] national average cost of [$---- per kWh, therm, or gallon] for 
electricity.
    For more information, visit www.ftc.gov/appliances.
    (ii) For room air conditioners and water heaters, the statement 
will read as follows (fill in the blanks with the appropriate appliance 
name, the operating cost, the year, and the energy cost figures):
    Your actual operating costs will depend on your local utility rates 
and how you use this product. The estimated operating cost is based on 
a [Year] national average cost of [$---- per kWh, therm, or gallon] for 
[electricity, natural gas, propane, or oil].
    For more information, visit www.ftc.gov/appliances.
    (iii) For clothes washers and dishwashers, the statement will read 
as follows (fill in the blanks with the appropriate appliance name, the 
operating cost, the number of loads per week, the year, and the energy 
cost figures):
    Based on [4 washloads a week for dishwashers, or 8 washloads a week 
for clothes washers] a week. Your actual operating costs will depend on 
your local utility rates and how you use this product. The estimated 
operating cost is based on a [Year] national average cost of $---- per 
kWh for electricity and $---- per therm for natural gas.
    For more information, visit www.ftc.gov/appliances.
    (iv) For pool heaters, the statement will read as follows (fill in 
the blanks with the appropriate appliance name, the operating cost, the 
year, and the energy cost figures):
    The Thermal Efficiency (as expressed by a percent) is the measure 
of energy efficiency for pool heaters. Only pool heaters fueled by 
[natural gas/oil] are used in this scale. Your actual operating costs 
will depend on your local utility rates and how you use this product. 
The estimated operating cost is based on a [Year] national average cost 
of [$---- per kWh, therm, or gallon] for [natural gas or oil].
    For more information, visit www.ftc.gov/appliances.
    (4) The energy efficiency ratings for central air conditioners and 
furnaces on each page that lists the covered product.
* * * * *


Sec.  305.25 Exemptions.  [Removed and Reserved]

    17. The text of newly designated Sec.  305.25 is removed and 
reserved.
    18. Appendix A1 to part 305 is revised to read as follows:

Appendix A1 to Part 305--Refrigerators With Automatic Defrost

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 2.5.....................
2.5 to 4.4........................
4.5 to 6.4........................
6.5 to 8.4........................
8.5 to 10.4.......................
10.5 to 12.4......................
12.5 to 14.4......................
14.5 to 16.4......................
16.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    19. Appendix A2 to part 305 is revised to read as follows:

Appendix A2 to Part 305--Refrigerators and Refrigerator-Freezers With 
Manual Defrost

[[Page 6869]]



                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs  (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 2.5.....................
2.5 to 4.4........................
4.5 to 6.4........................
6.5 to 8.4........................
8.5 to 10.4.......................
10.5 to 12.4......................
12.5 to 14.4......................
14.5 to 16.4......................
16.5 to 18.4......................
18.5 to 20.4......................
20.5 to 22.4......................
22.5 to 24.4......................
24.5 to 26.4......................
26.5 to 28.4......................
28.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    20. Appendix A3 to part 305 is revised to read as follows:

Appendix A3 to Part 305--Refrigerator-Freezers With Partial Automatic 
Defrost

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs  (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 10.5....................
10.5 to 12.4......................
12.5 to 14.4......................
14.5 to 16.4......................
16.5 to 18.4......................
18.5 to 20.4......................
20.5 to 22.4......................
22.5 to 24.4......................
24.5 to 26.4......................
26.5 to 28.4......................
28.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    21. Appendix A4 to part 305 is revised to read as follows:

Appendix A4 to Part 305--Refrigerator-Freezers With Automatic Defrost 
With Top-Mounted Freezer Without Through-the-Door Ice Service

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 10.5....................
10.5 to 12.4......................
12.5 to 14.4......................
14.5 to 16.4......................
16.5 to 18.4......................
18.5 to 20.4......................
20.5 to 22.4......................
22.5 to 24.4......................
24.5 to 26.4......................
26.5 to 28.4......................

[[Page 6870]]

 
28.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    22. Appendix A5 to Part 305 is revised to read as follows:

Appendix A5 to Part 305--Refrigerator-Freezers With Automatic Defrost 
With Side-Mounted Freezer Without Through-the-Door Ice Service

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs  (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 10.5....................
10.5 to 12.4......................
12.5 to 14.4......................
14.5 to 16.4......................
16.5 to 18.4......................
18.5 to 20.4......................
20.5 to 22.4......................
22.5 to 24.4......................
24.5 to 26.4......................
26.5 to 28.4......................
28.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    23. Appendix A6 to Part 305 is revised to read as follows:

Appendix A6 to Part 305--Refrigerator-Freezers With Automatic Defrost 
With Bottom-Mounted Freezer Without Through-The-Door Ice Service

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs  (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 10.5....................
10.5 to 12.4......................
12.5 to 14.4......................
14.5 to 16.4......................
16.5 to 18.4......................
18.5 to 20.4......................
20.5 to 22.4......................
22.5 to 24.4......................
24.5 to 26.4......................
26.5 to 28.4......................
28.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    24. Appendix A7 to Part 305 is revised to read as follows:

Appendix A7 to Part 305--Refrigerator-Freezers With Automatic Defrost 
With Top-Mounted Freezer With Through-The-Door Ice Service Range 
Information

[[Page 6871]]



                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs  (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 10.5....................
10.5 to 12.4......................
12.5 to 14.4......................
14.5 to 16.4......................
16.5 to 18.4......................
18.5 to 20.4......................
20.5 to 22.4......................
22.5 to 24.4......................
24.5 to 26.4......................
26.5 to 28.4......................
28.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    25. Appendix A8 to Part 305 is revised to read as follows:

Appendix A8 to Part 305--Refrigerator-Freezers With Automatic Defrost 
With Side-Mounted Freezer With Through-the-Door Ice Service

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs  (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 10.5....................
10.5 to 12.4......................
12.5 to 14.4......................
14.5 to 16.4......................
16.5 to 18.4......................
18.5 to 20.4......................
20.5 to 22.4......................
22.5 to 24.4......................
24.5 to 26.4......................
26.5 to 28.4......................
28.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    26. Appendix B1 to Part 305 is revised to read as follows:

Appendix B1 to Part 305--Upright Freezers With Manual Defrost

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs  (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 5.5.....................
5.5 to 7.4........................
7.5 to 9.4........................
9.5 to 11.4.......................
11.5 to 13.4......................
13.5 to 15.4......................
15.5 to 17.4......................
17.5 to 19.4......................
19.5 to 21.4......................
21.5 to 23.4......................
23.5 to 25.4......................
25.5 to 27.4......................
27.5 to 29.4......................

[[Page 6872]]

 
29.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    27. Appendix B2 to Part 305 is revised to read as follows:

Appendix B2 to Part 305--Upright Freezers With Automatic Defrost

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs  (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 5.5.....................
5.5 to 7.4........................
7.5 to 9.4........................
9.5 to 11.4.......................
11.5 to 13.4......................
13.5 to 15.4......................
15.5 to 17.4......................
17.5 to 19.4......................
19.5 to 21.4......................
21.5 to 23.4......................
23.5 to 25.4......................
25.5 to 27.4......................
27.5 to 29.4......................
29.5 and over.....................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    28. Appendix B3 to Part 305 is revised to read as follows:

Appendix B3 to Part 305--Chest Freezers and All Other Freezers

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
    Manufacturer's rated total              costs (dollars/year)
 refrigerated volume in cubic feet -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Less than 5.5.....................
5.5 to 7.4........................
7.5 to 9.4........................  .................  .................
9.5 to 11.4.......................  .................  .................
11.5 to 13.4......................  .................  .................
13.5 to 15.4......................  .................  .................
15.5 to 17.4......................  .................  .................
17.5 to 19.4......................  .................  .................
19.5 to 21.4......................  .................  .................
21.5 to 23.4......................  .................  .................
23.5 to 25.4......................  .................  .................
25.5 to 27.4......................  .................  .................
27.5 to 29.4......................  .................  .................
29.5 and over.....................  .................  .................
------------------------------------------------------------------------
(*) No data submitted for units meeting the Department of Energy's
  Energy Conservation Standards effective July 1, 2001.

    29. Appendix C1 to Part 305 is revised to read as follows:

Appendix C1 to Part 305--Compact Dishwashers

[[Page 6873]]



                            Range Information
  [``Compact'' includes countertop dishwasher models with a capacity of
     fewer than eight (8) place settings. Place settings shall be in
 accordance with appendix C to 10 CFR part 430, subpart B. Load patterns
   shall conform to the operating normal for the model being tested.]
------------------------------------------------------------------------
                                     Range of estimated annual operating
                                            costs (dollars/year)
             Capacity              -------------------------------------
                                           Low                High
------------------------------------------------------------------------
              Compact
------------------------------------------------------------------------

    30. Appendix C2 to Part 305 is revised to read as follows:

Appendix C2 to Part 305--Standard Dishwashers

                            Range Information
[``Standard'' includes dishwasher models with a capacity of eight (8) or
more place settings. Place settings shall be in accordance with appendix
   C to 10 CFR part 430, subpart B. Load patterns shall conform to the
              operating normal for the model being tested.]
------------------------------------------------------------------------
                                     Range of estimated annual operating
                                            costs (dollars/year)
             Capacity              -------------------------------------
                                           Low                High
------------------------------------------------------------------------
              Compact
------------------------------------------------------------------------

    31. Appendices D1 through D5 to Part 305 are revised to read as 
follows:

Appendix D1 to Part 305--Water Heaters--Gas

                                                Range Information
----------------------------------------------------------------------------------------------------------------
                    Capacity                         Range of estimated annual operating costs (dollars/year)
----------------------------------------------------------------------------------------------------------------
                                                       Natural gas ($/year)              Propane ($/year)
                First hour rating                ---------------------------------------------------------------
                                                        Low            High             Low            High
----------------------------------------------------------------------------------------------------------------
Less than 21....................................  ..............  ..............  ..............
21 to 24........................................  ..............  ..............  ..............
25 to 29........................................  ..............  ..............  ..............
30 to 34........................................  ..............  ..............  ..............
35 to 40........................................  ..............  ..............  ..............
41 to 47........................................  ..............  ..............  ..............
48 to 55........................................  ..............  ..............  ..............
56 to 64........................................  ..............  ..............  ..............
65 to 74........................................  ..............  ..............  ..............
75 to 86........................................  ..............  ..............  ..............
87 to 99........................................  ..............  ..............  ..............
100 to 114......................................  ..............  ..............  ..............
115 to 131......................................  ..............  ..............  ..............
Over 131........................................  ..............  ..............  ..............
----------------------------------------------------------------------------------------------------------------
*No data submitted.

Appendix D2 to Part 305--Water Heaters--Electric

                            Range Information
------------------------------------------------------------------------
             Capacity                Range of estimated annual operating
-----------------------------------         costs  (dollars/year)
                                   -------------------------------------
         First hour rating                 Low                High
------------------------------------------------------------------------
Less than 21......................
21 to 24..........................
25 to 29..........................
30 to 34..........................
35 to 40..........................

[[Page 6874]]

 
41 to 47..........................
48 to 55..........................
56 to 64..........................
65 to 74..........................
75 to 86..........................
87 to 99..........................
100 to 114........................
115 to 131........................
Over 131..........................
------------------------------------------------------------------------
*No data submitted.

Appendix D3 to Part 305--Water Heaters--Oil

                            Range Information
------------------------------------------------------------------------
             Capacity                Range of estimated annual operating
-----------------------------------         costs  (dollars/year)
                                   -------------------------------------
         First hour rating                 Low                High
------------------------------------------------------------------------
Less than 65......................
65 to 74..........................
75 to 86..........................
87 to 99..........................
100 to 114........................
115 to 131........................
Over 131..........................
------------------------------------------------------------------------
*No data submitted.

Appendix D4 to Part 305--Water Heaters--Instantaneous--Gas

                                                Range Information
----------------------------------------------------------------------------------------------------------------
                    Capacity                         Range of estimated annual operating costs  (dollars/year)
----------------------------------------------------------------------------------------------------------------
                                                       Natural gas ($/year)              Propane ($/year)
                First hour rating                ---------------------------------------------------------------
                                                        Low            High             Low            High
----------------------------------------------------------------------------------------------------------------
 Under 1.00.....................................
1.00 to 2.00....................................
2.01 to 3.00....................................
Over 3.00.......................................
----------------------------------------------------------------------------------------------------------------
*No data submitted.

Appendix D5 to Part 305--Water Heaters--Heat Pump

                            Range Information
------------------------------------------------------------------------
             Capacity                Range of estimated annual operating
-----------------------------------         costs  (dollars/year)
                                   -------------------------------------
         First hour rating                 Low                High
------------------------------------------------------------------------
Less than 21......................
21 to 24..........................
25 to 29..........................
30 to 34..........................

[[Page 6875]]

 
35 to 40..........................
41 to 47..........................
48 to 55..........................
56 to 64..........................
65 to 74..........................
75 to 86..........................
87 to 99..........................
100 to 114........................
115 to 131........................
Over 131..........................
------------------------------------------------------------------------
*No data submitted.

    32. Appendix E to Part 305 is revised to read as follows:

Appendix E to Part 305--Room Air Conditioners

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
   Manufacturer's rated cooling             costs  (dollars/year)
       capacity in Btu's/yr        -------------------------------------
                                           Low                High
------------------------------------------------------------------------
Without Reverse Cycle and with
 Louvered Sides:
    Less than 6,000 Btu...........
    6,000 to 7,999 Btu............
    8,000 to 13,999 Btu...........
    14,000 to 19,999 Btu..........
    20,000 and more Btu...........
Without Reverse Cycle and without
 Louvered Sides:
    Less than 6,000 Btu...........
    6,000 to 7,999................
    8,000 to 13,999 Btu...........
    14,000 to 19,999 Btu..........
    20,000 and more Btu...........
With Reverse Cycle and with
 Louvered Sides...................
With Reverse Cycle, without
 Louvered Sides...................
------------------------------------------------------------------------
*No data submitted for units meeting Federal Minimum Efficiency
  Standards effective October 1, 2000.

    33. Appendix F1 to Part 305 is revised to read as follows:

Appendix F1 to Part 305--Standard Clothes Washers

                            Range Information
[``Standard'' includes all household clothes washers with a tub capacity
                        of 1.6 cu. ft. or more.]
------------------------------------------------------------------------
                                     Range of estimated annual operating
                                            costs  (dollars/year)
             Capacity              -------------------------------------
                                           Low                High
------------------------------------------------------------------------
             Standard
------------------------------------------------------------------------

    34. Appendix F2 to Part 305 is revised to read as follows:

Appendix F2 to Part 305--Compact Clothes Washers

[[Page 6876]]



                            Range Information
 [``Compact'' includes all household clothes washers with a tub capacity
                        of less than 1.6 cu. ft.]
------------------------------------------------------------------------
                                     Range of estimated annual operating
                                            costs  (dollars/year)
             Capacity              -------------------------------------
                                           Low                High
------------------------------------------------------------------------
              Compact
------------------------------------------------------------------------

Appendices G1 through G8, H, and I to Part 305 [Removed]

    35. Appendices G1 through G8, H, and I to Part 305 are removed.

Appendices J1 and J2 to Part 305 [Redesignated as G1 and G2]

    36. Appendices J1 and J2 to Part 305 are redesignated as Appendices 
G1 and G2 and revised to read as follows:

Appendix G1 to Part 305--Pool Heaters--Gas

                                                Range Information
----------------------------------------------------------------------------------------------------------------
                                                     Range of estimated annual operating costs  (dollars/year)
                                                 ---------------------------------------------------------------
    Manufacturer's rated  heating capacities                Natural gas                       Propane
                                                 ---------------------------------------------------------------
                                                        Low             High            Low            High
----------------------------------------------------------------------------------------------------------------
                 All capacities
----------------------------------------------------------------------------------------------------------------

Appendix G2 to Part 305--Pool Heaters--Oil

                            Range Information
------------------------------------------------------------------------
                                     Range of estimated annual operating
   Manufacturer's rated heating             costs (dollars/year)
            capacities             -------------------------------------
                                            Low               High
------------------------------------------------------------------------
          All capacities
------------------------------------------------------------------------

    37. Appendix H to Part 305 is revised to read as follows:

Appendix H to Part 305--Representative Average Unit Energy Costs

    This Table contains the representative unit energy costs that 
must be utilized to calculate operating cost disclosures required 
under sections 305.11, 305.14, and 305.20. This Table is based on 
information published by the U.S. Department of Energy in 2007.

----------------------------------------------------------------------------------------------------------------
                 Representative average unit costs of energy for five residential energy sources
-----------------------------------------------------------------------------------------------------------------
                                                               As required by DOE      Dollars per  million Btu
           Type of energy            In commonly used terms      test  procedure                 \1\
----------------------------------------------------------------------------------------------------------------
Electricity........................  --------[cent]/kWh 2 3  $--.----/kWh..........  $----.----
Natural Gas........................  $--.----/therm \4\....  $--.--------/Btu......  $----.----
                                     $--.----/MCF \5\ \6\..
No. 2 heating oil..................  $--.----/gallon \7\...  $--.------------/Btu..  $----.----
Propane............................  $--.----/gallon \8\...  $--.------------/Btu..  $----.----
Kerosene...........................  $--.----/gallon \9\...  $--.------------/Btu..  $----.----
----------------------------------------------------------------------------------------------------------------
\1\ Btu stands for British thermal unit.
\2\ kWh stands for kiloWatt hour.
\3\ 1 kWh = 3,412 Btu.
\4\ 1 therm = 100,000 Btu. Natural gas prices include taxes.
\5\ MCF stands for 1,000 cubic feet.
\6\ For the purposes of this table, 1 cubic foot of natural gas has an energy equivalence of 1,031 Btu.
\7\ For the purposes of this table, 1 gallon of No. 2 heating oil has an energy equivalence of 138,690 Btu.
\8\ For the purposes of this table, 1 gallon of liquid propane has an energy equivalence of 91,333 Btu.
\9\ For the purposes of this table, 1 gallon of kerosene has an energy equivalence of 135,000 Btu.


[[Page 6877]]

Appendix L [Redesignated as Appendix I]

    38. Appendix L is redesignated as Appendix I.
    39. Prototype label 1 and Sample labels 1 and 2 are revised and 
Prototype labels 2 through 5 and Sample labels 3 through 11 in newly 
designated Appendix I are removed to read as follows:

Appendix I to Part 305--Sample Labels

BILLING CODE 6750-01-P
[GRAPHIC] [TIFF OMITTED] TP13FE07.002


[[Page 6878]]


[GRAPHIC] [TIFF OMITTED] TP13FE07.003


[[Page 6879]]


[GRAPHIC] [TIFF OMITTED] TP13FE07.004

* * * * *

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 07-613 Filed 2-12-07; 8:45 am]
BILLING CODE 6750-01-C