Source: https://www.federalregister.gov/documents/2012/03/15/2012-4865/rule-concerning-disclosures-regarding-energy-consumption-and-water-use-of-certain-home-appliances
Timestamp: 2018-06-22 05:51:14
Document Index: 430528071

Matched Legal Cases: ['§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', 'art 430', '§\u2009430', '§\u2009430', '§\u2009430', '§\u2009430', 'art 51', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305', '§\u2009305']

A Proposed Rule by the Federal Trade Commission on 03/15/2012
15298-15310 (13 pages)
https://www.federalregister.gov/d/2012-4865 https://www.federalregister.gov/d/2012-4865
The Commission's Appliance Labeling Rule, issued pursuant to the Energy Policy and Conservation Act (EPCA),[1] requires energy labeling for major household appliances and other consumer products to help consumers compare competing models.[2] When first published in 1979,[3] 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 categories such as central air conditioners, heat pumps, plumbing products, lighting products, ceiling fans, and televisions.[4]
The Rule requires manufacturers to attach yellow EnergyGuide labels to certain covered products.[5] It prohibits retailers from removing these labels or rendering them illegible.[6] In addition, the Rule directs sellers, including retailers, to post label information on Web sites and in paper catalogs from which consumers can order covered products.[7]
Finally, the Rule contains reporting requirements for most products. Under these requirements, manufacturers must submit data to the FTC both when they begin manufacturing new models and annually.[8] These reports must contain, among other things, estimated annual energy consumption or energy efficiency ratings.
The Commission seeks comment on several proposed changes to reduce the Rule's reporting burdens, increase the availability of energy labels to consumers, and generally to improve existing requirements. Specifically, the proposed changes would: (1) Eliminate duplicative requirements by harmonizing FTC and DOE reporting and testing rules; (2) prohibit hang tag labels for all covered clothes washers, dishwashers, and refrigerators and instead require adhesive labels; (3) require placement of room air conditioner labels on display boxes instead of on the product; (4) improve retailer Web site and paper catalog disclosures; (5) include estimated operating cost information on ceiling fan labels; (6) include specific capacity numbers on clothes washer EnergyGuide labels; (7) require a QR (“Quick Response”) code on EnergyGuide labels to link mobile phone users to FTC and DOE information; (8) update product definitions for refrigerators and freezers; (9) clarify the Rule's enforcement provisions; and (10) shorten the Rule's title.[9] The following addresses each of these proposals in detail.
By harmonizing existing FTC and DOE regulations, the proposed amendments would streamline existing reporting requirements. Currently, the FTC requires manufacturers to submit annual reports containing energy-related information about their covered products.[10] Similarly, DOE requires manufacturers to submit reports certifying that their new products meet federal efficiency standards.[11] The proposed amendments would streamline the Rule's reporting burden in three ways.[12]
First, under current rules, manufacturers of each covered product must submit one report to DOE and another, largely duplicative report to the FTC. The proposed amendments would allow manufacturers to meet FTC reporting requirements by using DOE's new web-based tool for energy reporting (the “Compliance and Certification Management System” (CCMS)).[13] Once manufacturers upload their data, the FTC would be able to obtain the information from DOE and place it on the public record.[14] This change would ease reporting for manufacturers and eliminate confusion caused by two separate government data collection requirements for identical products.[15]
Third, the Commission proposes to clarify the DOE testing requirements manufacturers must use to determine energy information for FTC labels. The current FTC Rule requires adherence to applicable DOE test procedures, but does not mention several DOE requirements related to testing, including sampling rules, testing accreditation (for light bulbs), and DOE testing waiver procedures. The amendments would specify that manufacturers must test their products in accordance with these applicable DOE requirements.[16] This amendment should eliminate any confusion among manufacturers and, therefore, ensure that the content of energy disclosures on the FTC labels is based on all DOE-required testing provisions.[17]
To improve the availability of EnergyGuide labels for clothes washers, dishwashers, and refrigerators, the Commission proposes to prohibit hang tags on these products and, instead, require adhesive labels.[18] Under the current Rule, these products must display EnergyGuide labels in a location visible to consumers either in the form of a hang tag attached inside the product or an adhesive labels affixed outside or inside the product. The proposal to eliminate hang tags and require adhesive labels is designed to decrease the number of missing labels in showrooms because hang tags appear to detach easily.[19]
Evidence gathered by the FTC and the Government Accountability Office (GAO) demonstrates that many showroom products do not have EnergyGuide labels attached. Specifically, GAO visits to 30 stores in 2007 found that 26 percent of products examined had no EnergyGuide label and another 24 percent had labels that were “no longer affixed in a prominent and easily accessible location.” [20] Following the GAO report, FTC staff conducted its own examination of more than 8,500 appliances in 89 retail locations.[21] The FTC found labels either detached or missing altogether on approximately 38 percent of appliances examined.[22]
Comments received in the television rulemaking indicated that hang tags often become twisted or dislodged in stores.[23] In addition, FTC staff found that products frequently labeled with hang tags (i.e., clothes washers, dishwashers, and refrigerator-freezers) are more likely to have detached or missing labels compared to water heaters, which are generally labeled with adhesive labels.[24] The Commission, therefore, is concerned that hang tags may be more prone to detachment than adhesive labels and offer a less secure means to affix labels.
Accordingly, the Commission seeks comment on whether requiring adhesive labels (and prohibiting hang tags) for clothes washers, dishwashers, and refrigerators would improve label availability in showrooms.[25] If a comment indicates such a change would improve the label's effectiveness, please explain why. If not, please explain why not. Comments should identify the time required by industry members to switch to adhesive labels without undue burden, whether there are alternative approaches to reduce the burden of such changes, and whether the proposal accomplishes the Commission's goal of providing disclosures to consumers. Also, because dishwashers and clothes washers may have limited interior surface area for adhesive labels, the Commission asks whether the EnergyGuide label for these products should be smaller. Should the Commission adopt a smaller label size, comments should also address whether the text size, graphics, and wording for the current label should, if possible, remain the same as the current label. The Commission developed the current content and format of the label after conducting extensive consumer research, and therefore, is concerned that content changes to accommodate a smaller label would reduce the label's effectiveness for consumers.[26] Comments should address whether a smaller label would decrease the label's utility in helping consumers make purchasing decisions and, if so, how.
The Commission proposes requiring manufacturers to print or affix EnergyGuide labels on room air conditioner boxes instead of adhering them to the units themselves. Under the current Rule, manufacturers must place an adhesive EnergyGuide label on the exterior of room air conditioners. However, FTC staff has observed that retailers often display these products in boxes stacked on shelves or the showroom floor. Therefore, consumers cannot examine the label before purchase. The proposed box label would address this concern.[27] The Commission proposes to provide manufacturers with at least two years to implement this change to minimize the burdens associated with package changes.
The Commission proposes several amendments to enhance the energy information available to consumers in “catalogs” (i.e., print catalogs and Web sites selling covered products).[28] First, the amendments would require retail Web sites to post the full EnergyGuide or Lighting Facts label online.[29] The Rule would require these Web sites to post the full label or to use an FTC-provided icon to link consumers to the full version of the EnergyGuide or Lighting Facts label. Second, to ensure that retail Web sites have access to the label, the amendments would require that manufacturers make the EnergyGuide and Lighting Facts labels easily available online. Third, the proposed amendments provide specifications that retail Web sites must follow for the format and placement of the required information (e.g., label or icon). Finally, for paper catalogs, the proposed amendments would continue to allow retailers to use an abbreviated text disclosure in lieu of the full label, due to space and cost constraints.
Under the proposed amendments, Web sites selling EnergyGuide- or Lighting Facts-labeled products would be required to display the full label (either on the product page or through a link). The current Rule does not require Web sites (or paper catalogs) to include the full label, and instead allows an abbreviated, text-only disclosure. The Commission allowed these abbreviated disclosures due to space constraints and the costs of printing the full label would impose on marketers.[30] However, in reaching this decision, the Commission did not examine the differences between Web sites and paper catalogs and their relative capacities to display information. Subsequently, during the television labeling rulemaking, the Commission determined that while paper catalogs continue to have space constraints and associated costs justifying the abbreviated disclosures, this rationale does not apply to Web sites. Accordingly, the Commission required Web sites selling televisions to include the full label or a special icon linking to the label.[31] For the same reasons, the Commission now proposes to require Web sites to include the full label for all EnergyGuide and Lighting Facts-labeled products they sell.
Recently, a group of petitioners raised concerns that consumers may view the icon as an endorsement or general claim about a product's environmental quality, rather than as an energy cost disclosure.[32] The petitioners also noted that some Web sites already voluntarily display an EnergyGuide icon, but create confusion by adding text (e.g., “EnergyGuide rated”) which might imply to consumers that the icon constitutes an endorsement or a general environmental claim.[33] In light of these concerns, the Commission proposes an icon which integrates the text “Click for this product's energy information” into the icon design. This additional text is designed to help consumers understand that the icon is a link to label information, and not a product endorsement or environmental claim.[34] The Commission seeks comment on this proposal.
Second, to facilitate retailer compliance with the Rule, the proposed amendments require that manufacturers make images of their labels available on a Web site for linking and downloading by both paper catalogs and Web sites. Under the proposal, the labels must remain available online for two years after the manufacturer ceases to make the model. This proposed requirement is based on EPCA's mandate that manufacturers “provide” a label and is consistent with the recent television label rules.[35]
Third, the proposed amendments provide specifications about the format and placement of the required information on Web sites. In the recent television labeling proceeding, the Natural Resources Defense Council (NRDC) raised concerns that consumers must navigate several layers of information to obtain EnergyGuide information on some Web sites.[36] NRDC argued consumers should not have to scroll down or switch to another tab or page to see the icon.[37] To address these concerns, the Commission proposes to require that the label or icon be displayed “clearly and conspicuously and in close proximity to the covered product's price.” This proposal, which is consistent with the new television label requirements, should help ensure that consumers can easily view the label or icon while shopping online without excessive scrolling or clicking, and still providing flexibility to Web site designers. To minimize burden, the label or icon would only need to appear on “each Web page that contains a detailed description of the covered product and its price,” rather than alongside every image of a covered product on the site. This would reduce the burden for Web sites that include abbreviated summary pages listing several different models with links to a more detailed individual product page.[38]
Finally, for paper catalogs, the amendments would continue to allow an abbreviated text disclosure in lieu of the full label. Due to the space and cost constraints involved with paper catalogs, inclusion of the entire label may be impractical.[39]
The Commission proposes to enhance the existing ceiling fan label by requiring estimated annual energy cost information as the primary disclosure on ceiling fan labels. The current label, which appears on product boxes, provides information on airflow (cubic feet per minute), energy use in watts, and energy efficiency (cubic feet per minute per watt). Consistent with most other EnergyGuide labels, the Commission proposes to change this current label to focus on energy cost information while presenting existing label information in a less prominent manner. As the Commission has indicated in the past, consumer research suggests energy cost “provides a clear, understandable tool to allow consumers to compare the energy performance of different models.” [40] As with the EnergyGuide label for appliances, the new ceiling fan label would state that ``Your cost will depend on your utility rates and use.'' The proposed yellow label features the familiar ``EnergyGuide'' title used for appliances and televisions. The proposed usage and rate assumptions for this energy cost are six hours use per day (at high speed) and eleven cents per kWh/hour.[41] To minimize the burden caused by this change, the Rule would provide manufacturers two years to change their packaging.
The Commission seeks comment on this proposal, including whether six hours per day is an appropriate usage assumption for determining estimated annual energy cost. Additionally, in recent consumer research on light bulb labels, efficiency ratings performed poorly in helping study participants choose efficient products.[42] Comments should address whether ceiling fan labels raise similar issues and, if so, whether efficiency ratings should continue to appear on the labels. Finally, comments should address whether two years is sufficient lead time for manufacturers to come into compliance with a requirement to label packages without undue burden, or whether the changes can be made in less, or more, time.
The Commission proposes to require EnergyGuide labels for clothes washers to disclose specific capacity information (i.e., cubic feet). Current EnergyGuide labels indicate whether the model is a “standard” or “compact” but do not provide a specific volume (e.g., 3.5 cubic feet). The vast majority of models are “standard” size, but capacity among standard models varies significantly. Therefore, the general capacity disclosure provides little assistance to consumers. A specific capacity disclosure should help consumers make important product comparisons. It would also complement recent DOE and industry efforts to ensure consistency in clothes washer capacity disclosures which would provide consumers with consistent information whether they are looking at FTC labels, manufacturer advertising, or DOE certification data.[43] Under the proposed amendment, manufacturers would continue to measure capacity using DOE procedures. The Commission seeks comments on this proposal, including the time needed to make the proposed changes.
The Commission also seeks comments on whether to require manufacturers to place QR (“Quick Response”) codes on the EnergyGuide labels. QR codes are two dimensional black and white matrix barcodes that provide access to a Web site by scanning the code with a mobile phone equipped with scanning software. If implemented, consumers could connect instantly to government Web sites or other sources providing detailed product information, such as the broad energy impacts and greenhouse gas emissions associated with a product's use.[44]
The Commission seeks comment on whether it should pursue such provisions.[45] In particular, comments should address whether the codes would be helpful to consumers in purchasing or using products, and whether they should link to any particular information about covered products. Comments should also address whether these codes raise particular technical challenges or pose any significant burdens for manufacturers. Finally, comments should address the time needed to make any proposed changes.
On December 16, 2010,[46] DOE, as part of amendments to refrigerator test procedures, issued revised definitions for the terms “electric refrigerator” and “electric refrigerator-freezer.” The Commission proposes to conform its own definitions for these terms to ensure consistency between FTC and DOE requirements.
The proposed rule would clarify penalty assessments for several non-labeling violations listed in § 305.4(b). These violations include the refusal to allow access to records, refusal to submit required data reports, refusal to permit FTC officials to observe testing, refusal to supply units for testing, and failure to disclose required energy information in catalogs (i.e., Web sites and paper catalogs).[47] The current Rule does not specify the method (e.g., per day) for assessing penalties for these non-labeling violations.[48]
The proposed amendments would clarify that these violations are subject to civil penalties calculated on a per model per day basis.[49] For example, a manufacturer's refusal to submit required reports accrues a fine of up to $110 per day for each model subject to the reporting requirements. In addition, a Web site seller's failure to post required label information accrues a fine of up to $110 per day for each model on the Web site lacking the disclosure.
Prohibited Acts (305.4): The proposed amendments would clarify that civil penalties assessed per day under § 305.4(b) accrue on a per model basis.
Submission of Data (305.8): The proposed amendments would require manufacturers to make a copy of the EnergyGuide label publicly available. They also would allow manufacturers to submit data required by § 305.8 to the DOE in lieu of submitting it to the Commission.
Television Labels (305.17): The proposed amendments would clarify the television labeling provisions by indicating that manufacturers of televisions with screen sizes of nine inches or fewer (measured diagonally) may print or affix the EnergyGuide label on the product package.[50]
The Commission conducts scheduled reviews of its rules and guides in an effort to seek information about their costs and benefits as well as their regulatory and economic impact.[51] In addition to the specific issues discussed above, the Commission solicits general comments on, among other things, the economic impact of, and the continuing need for, the Rule; possible conflicts between the Rule and state, local, or other federal laws; and the effect on the Rule of any technological, economic, or other industry changes. If comments identify additional amendments that would improve the existing Rule, the Commission will consider issuing a supplemental notice seeking comments on such changes.
(13) Is there any information not submitted in earlier proceedings that the Commission should consider about possible consumer electronics labeling? [52]
Because comments will be made public, they should not include any sensitive personal information, such as any individual's Social Security Number; date of birth; driver's license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. Comments also should not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, comments should not include “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential” as provided in Section 6(f) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing matter for which confidential treatment is requested must be filed in paper form, must be clearly labeled “Confidential,” and must comply with FTC Rule 4.9(c).[53]
The current Rule contains recordkeeping, disclosure, testing, and reporting requirements that constitute “information collection requirements” as defined by 5 CFR 1320.3(c), the regulation that implements the Paperwork Reduction Act (PRA).[54] OMB has approved the Rule's existing information collection requirements through Jan. 31, 2014 (OMB Control No. 3084-0069). As described below, the proposed amendments modify (to a minor degree) the current Rule's existing labeling and reporting requirements.[55] Accordingly, the Commission is submitting this proposed Rule and an associated PRA Supporting Statement to OMB for review.
Manufacturer EnergyGuide Images Online: The proposed Rule requires manufacturers to post images of their EnergyGuide and Lighting Facts labels on their Web sites. Given approximately 15,000 total models [56] at an estimated five minutes per model,[57] this requirement will entail a burden of 1,250 hours.[58] Assuming that the additional disclosure requirement will be implemented by graphic designers at a mean hourly wage of $23.42 per hour,[59] the associated labor cost would approximate $29,300 per year.
Catalog Disclosures: The Commission's past 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, e.g., 71 FR 78057, 78062 (Dec. 28, 2006)).[60] The proposed amendments do not alter that assumption as they would require just a one-time change of all products in affected catalogs. This one-time adjustment is consistent with, and accounted for by this prior assumption and the associated burden estimates for catalog sellers. Accordingly, the Commission believes no modification to existing burden estimates for catalog sellers is necessary.
2. In § 305.3, revise paragraph (a)(1) and (2) to read as follows:
3. In § 305.4, revise paragraph (b) to read as follows:
(a) Unless otherwise stated in paragraphs (b), (c), (d), or (e) of this section, the content of any disclosures required by this part must be determined in accordance with the procedures required by the Department of Energy as set forth in 10 CFR part 430, including test procedures in § 430.23, sampling procedures in § 430.24, laboratory accreditation in § 430.25 for information required to be submitted to the Department, and testing procedure waivers granted pursuant to § 430.27.
(d) Determinations of estimated annual energy consumption and estimated annual operating (energy) costs of televisions must be based on the procedures contained in the ENERGY STAR Version 4.2 test, which is comprised of the ENERGY STAR Program Requirements, Product Specification for Televisions, Eligibility Criteria Version 4.2 (Adopted April 30, 2010); the Test Method (Revised Aug-2010); and the CEA Procedure for DAM Testing: For TVs, Revision 0.3 (Sept. 8, 2010). Annual energy consumption and cost estimates must be derived assuming 5 hours in on mode and 19 hours in sleep (standby) mode per day. These ENERGY STAR requirements are incorporated by reference into this section. The Director of the Federal Register has approved these incorporations by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies of the test procedure may be inspected or obtained at the United States Environmental Protection Agency, ENERGY STAR Hotline (6202J), 1200 Pennsylvania Avenue NW., Washington, DC 20460, or at http://www.energystar.gov/ia/partners/product_specs/program_reqs/Televisions_Program_Requirements.pdf [Telephone: ENERGY STAR Hotline: 1-888-782-7937]; at the Federal Trade Commission, Consumer Response Center, Room 130, 600 Pennsylvania Avenue NW., Washington, DC 20580 [Telephone: 1-202-326-2830]; and at the National Archives and Records Administration, at http://www.archives.gov/federal-register/cfr/ibr-locations.html [Telephone: 1-202-741-6030].
Manufacturer duty to provide labels.
6. In § 305.7, revise paragraph (g) to read as follows:
7. In § 305.8, paragraph (a)(1) is revised to read as follows:
8. In § 305.11, paragraphs (d) and (e) are revised to read as follows:
10. In § 305.13 paragraph (a) is revised to read as follows:
(iv) The product's electricity usage at high speed expressed in watts and determined pursuant to § 305.5 of this part as indicated in Ceiling Fan Label Illustration of appendix L of this part;
(vii) The ENERGY STAR logo as illustrated on the ceiling fan label illustration in Appendix L for qualified products, if desired by the manufacturer. Only manufacturers that have signed a Memorandum of Understanding with the Department of Energy or the Environmental Protection Agency 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 products that are covered by the Memorandum of Understanding;
(A) Refrigerator, refrigerator-freezer, and freezer. The capacity of the model determined in accordance with § 305.7, the estimated annual operating cost determined in accordance with § 305.5 and appendix K of this Part, and a disclosure stating “Your energy cost depends on your utility rates and use. The estimated cost is based on 11 cents per kWh and TK hours of use per day. For more information, visit www.ftc.gov/energy.”
(B) Room air conditioners and water heaters. The capacity of the model determined in accordance with § 305.7, the estimated annual operating cost determined in accordance with § 305.5 and appendix K of this Part, and a disclosure stating “Your operating costs will depend on your utility rates and use. The estimated operating cost is based on a national average [electricity, natural gas, propane, or oil] cost of [$ __ per kWh, therm, or gallon]. For more information, visit www.ftc.gov/energy.”
(C) Clothes washers and dishwashers. The capacity of the model determined in accordance with § 305.7 and the estimated annual operating cost determined in accordance with § 305.5 and appendix K, and a disclosure stating “Your energy cost depends on your utility rates and use. The estimated cost is based on [4 washloads a week for dishwashers, or 8 washloads a week for clothes washers] and 11 cents per kWh for electricity and $__ per therm for natural gas. For more information, visit www.ftc.gov/energy.”
(F) Televisions. The estimated annual operating cost determined in accordance with § 305.5 and a disclosure stating “Your energy cost depends on your utility rates and use. The estimated cost is based on 11 cents per kWh and 5 hours of use per day. For more information, visit www.ftc.gov/energy.”
(ii) Products not required to bear EnergyGuide or Lighting Facts labels. All Web sites advertising covered products not required by this Part to bear labels with specific design characteristics illustrated in Appendix L (showerheads, faucets, water closets, urinals, fluorescent lamp ballasts, and metal halide lamp fixtures) must make a text disclosure for each covered product identical to those required for Internet disclosures under § 305.20(a)(1)(iii).
47. See 16 CFR 305.4(b); see also 42 U.S.C. 6296(b)(2)&(4) and 6303(a)(3) (data reports and records access), 6296(b)(5) (testing access), 6296(b)(3) (units for testing), and 6296(a) (catalog sales).
48. In contrast, the current Rule does provide the basis for labeling violations. Specifically, consistent with EPCA (42 U.S.C. 6303(a)), § 305.4(a) states that labeling violations are assessed on a per unit basis.
49. The per day per model basis is consistent with EPCA's enforcement provisions . See 42 U.S.C. 6302, 6303 and 16 CFR 305.4(a). It is also consistent with recent DOE enforcement guidance for the same and similar provisions. See, e.g., DOE “Guidance on the Imposition of Civil Penalties for Violations of EPCA Conservation Standards and Certification Obligations,” http://www.doe.gov/sites/prod/files/gcprod/documents/Penalty_Guidance_5_7_2010__final_%282%29.pdf.