[Federal Register Volume 65, Number 59 (Monday, March 27, 2000)]
[Rules and Regulations]
[Pages 16132-16142]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7461]


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FEDERAL TRADE COMMISSION

16 CFR Part 305


Rule Concerning Disclosures Regarding Energy Consumption and 
Water Use of Certain Home Applicances and Other Products Required Under 
the Energy Policy and Conservation Act (``Appliance Labeling Rule'')

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (the Commission) amends Appendix 
F to its Appliance Labeling Rule (the Rule) to eliminate the ``Front-
Loading'' and ``Top-Loading'' sub-categories for clothes washers. The 
purpose of this change is to provide consumers with a more accurate 
basis to compare the efficiency of clothes washers.

EFFECTIVE DATE: July 14, 2000.

FOR FURTHER INFORMATION CONTACT: James G. Mills, Attorney (202-326-
3035; [email protected]), or Janice Podoll Frankle, Attorney (202-326-
3022; [email protected]) Division of Enforcement, Federal Trade 
Commission, Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Commission's Appliance Labeling Rule

    The Commission issued the Appliance Labeling Rule on November 19, 
1979, pursuant to a directive in section 324 of Title III of the Energy 
Policy and Conservation Act of 1975, 42 U.S.C. 6294 (EPCA). The Rule 
requires manufacturers to disclose energy information about major 
household appliances to enable consumers purchasing appliances to 
compare the energy use or efficiency of competing models. When 
published, the Rule applied to eight appliance categories: 
Refrigerators, refrigerator-freezers, freezers, dishwashers, water 
heaters, clothes washers, room air conditioners, and furnaces. Since 
then, the Commission has expanded the Rule's coverage five times: In 
1987 (central air conditioners, heat pumps, and certain new types of 
furnaces, 52 FR 46888 (Dec. 10, 1987)); 1989 (fluorescent lamp ballasts 
(54 FR 28031 (July 5, 1989)); 1993 (certain plumbing products (58 FR 
54955 (Oct. 25, 1993); and twice in 1994 (certain lighting products (59 
FR 25176 (May 13, 1994)), and pool heaters and certain other types of 
water heaters (59 FR 49556 (Sept. 28, 1994)).
    Manufacturers of all covered appliances must disclose specific 
energy consumption or efficiency information at the point of sale in 
the form of an ``EnergyGuide'' label affixed to the covered product. 
The information on the EnergyGuide also must appear in catalogs from 
which covered products can be ordered. Manufacturers must derive the 
information from standardized tests that EPCA directs the Department of 
Energy (``DOE'') to promulgate. 42 U.S.C. 6293. Manufacturers of 
furnaces, central air conditioners, and heat pumps also either must 
provide fact sheets showing additional cost information or be listed in 
an industry directory that shows the cost information for their 
products. Required labels for appliances and required fact sheets for 
heating and cooling equipment must include a highlighted energy 
consumption or efficiency disclosure and a scale, or ``range of 
comparability,'' which appears as a bar on the label below the main 
energy use or efficiency figure, that shows the highest and lowest 
energy consumption or efficiencies for all similar appliance models. 
Labels for clothes washers and some other appliance products also must 
disclose estimated annual operating cost based on a specified national 
average cost for the fuel the appliances use.

B. Ranges of Comparability and the Categories in Appendix F

    The ``range of comparability'' scale on the EnergyGuide is intended 
to enable consumers to compare the energy consumption or efficiency of 
the other models (perhaps competing brands) in the marketplace that are 
similar to the labeled model they are considering. Section 305.8(b) of 
the Rule, 16 CFR 305.8(b), requires manufacturers to report annually 
(by specified dates for each product type) the estimated annual energy 
consumption or energy efficiency ratings for the appliances derived 
from the DOE test procedures. Due to modifications to product lines and 
improvements in the energy use of individual models, the base of 
reported information is constantly changing. To keep the required 
information on labels consistent with these changes, the Commission 
publishes new range figures (but not more often than annually) for 
manufacturers to use on labels if the upper or lower limits of the 
range scales have changed by more than 15%. 16 CFR 305.10. Otherwise, 
the Commission publishes a statement that the prior ranges remain in 
effect for the next year.
    Each category of the products covered by the Rule is divided to 
some extent into sub-categories for purposes of the ranges of 
comparability. These sub-categories, which are generally the same as 
those developed by DOE in connection with its efficiency standards 
program,\1\ are based on fuel type, size, and/or functional features, 
depending on the type of product.
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    \1\ Section 325 of EPCA, 42 U.S.C. 6295, directs DOE to develop 
efficiency standards for major household appliances to achieve the 
maximum improvement in energy efficiency for residential appliances 
that is technologically feasible and economically justified. As 
amended, the statute itself sets the initial national standards for 
appliances and establishes a schedule for regular DOE review of the 
standards for each product category.
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    When the Commission published the Rule in 1979, the clothes washer 
category in Appendix F was divided into the sub-categories ``Standard'' 
and ``Compact'' only.\2\ 44 FR 66466, 66486 (Nov. 19, 1979). These sub-
categories stayed in effect until 1994, when the Commission amended 
Appendix F in response to comments received in connection with a 
comprehensive review of the Rule. The amendment to Appendix F created 
the additional subdivisions of ``Top Loading'' and ``Front Loading'' 
that appear in the current Rule. In the Federal Register notice 
announcing the amendments that grew out of the review, the Commission 
discussed the comments on clothes washer sub-categories and its reasons 
for the amendment to Appendix F:
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    \2\ Appendix F defines ``Compact'' as including all household 
clothes washers with a tub capacity of less than 1.6 cubic feet or 
13 gallons of water; ``Standard'' includes all washers with a 
capacity of 1.6 cubic feet or 13 gallons of water or more.

    Horizontal axis clothes washers (which are generally front-
loading) are significantly more energy-efficient than vertical axis 
washers (generally top-loading). Because the typical door 
configurations for these products are different, consumers may shop 
for only

[[Page 16133]]

one configuration, and information respecting the energy usage of 
products having the other configuration may not be useful. For 
example, consumers wanting to stack a clothes dryer on top of their 
washer to conserve space would only be interested in a front loading 
washer. The Commission finds, therefore, that separate ranges of 
comparability for these products would benefit consumers. 
Accordingly, the Commission is * * * amending the sub-categories for 
clothes washers to reflect a further subdivision into top-loading 
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and front-loading models.

59 FR 34014, 34019 (July 1, 1994).

C. The Petition to Change the Sub-categories

    The Consortium for Energy Efficiency, Inc. (``CEE'') \3\ petitioned 
the Commission to amend the Rule by changing the clothes washer 
category in Appendix F to eliminate the ``Front-Loading'' and ``Top-
Loading'' subdivisions of the ``Standard'' and ``Compact'' sub-
categories. CEE asserted that, because of the recent introduction of 
high-efficiency products from major domestic manufacturers, it is at a 
critical point in its efforts to promote high-efficiency clothes 
washers, and that its members have committed to significant expansions 
of their consumer-targeted campaigns to promote the purchase of these 
products. CEE argued that Appendix F to the Rule confuses consumers and 
undermines CEE's and its members' efforts to promote high-efficiency 
clothes washers. In its petition, CEE contended that eliminating the 
``Front-Loading'' and ``Top-Loading'' subdivisions of the ``Standard'' 
and ``Compact'' sub-categories would remedy these concerns.
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    \3\ According to its Mission Statement, CEE is a non-profit, 
public benefit corporation that expands national markets for super-
efficient technologies, using market transformation strategies. Its 
members include more than 40 electric and gas utilities, public 
interest groups, research and development organizations, and state 
energy offices. Major support is provided to CEE by DOE and the 
Environmental Protection Agency (``EPA'').
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    CEE asserted that, since the Commission's 1994 statement in the 
Federal Register, the clothes washer market has changed, and front-
loading washers are no longer merely a niche product. According to CEE, 
consumer research in the Northwest has shown that a significant 
proportion of consumers who were shopping for top-loading machines were 
also interested in, and had looked at, front-loading models, and that 
many were ready to pay a premium for the front-loading models. The 
research showed that many consumers could be persuaded to purchase 
front-loading washers at the point of sale.\4\
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    \4\ CEE summarized the results of the intercept interviews and 
surveys in its petition, which appears on the public rulemaking 
record in binder R611004-1-1-3. The research itself, which was a 
study prepared in January, 1998 by Pacific Energy Associates, Inc. 
under contract to the Northwest Energy Efficiency Alliance, also 
appears in binder R611004-1-1-3.
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    CEE explained that, because the most highly efficient clothes 
washers are all front-loading,\5\ an EnergyGuide comparison only among 
front-loading models provides an incomplete picture of the efficiencies 
available in the clothes washer market. According to the petition, the 
least efficient of the high-efficiency front-loading clothes washers, 
will, of necessity, appear at the ``Uses Most Energy'' end of the 
comparability range on the label attached to it, even though it 
consumes only half the energy that the average top-loading model does. 
This situation, according to CEE, confuses consumers and creates the 
erroneous impression that these highly-efficient products are high 
energy users.
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    \5\ CEE noted one exception: one manufacturer makes a 
horizontal-axis, highly efficient washer that loads from the top and 
is thus classified as a top-loading model.
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    CEE also asserted that the current front-loading and top-loading 
subdivisions are particularly problematical in connection with the DOE/
EPA Energy Star Program.\6\ Under that program, all front-loading 
clothes washers produced by manufacturers participating in the program 
qualify for the Energy Star logo. This means that the label on the 
least energy efficient of these highly efficient products will indicate 
that the product ``Uses Most Energy'' while also bearing the Energy 
Star logo. CEE contended that this situation creates consumer confusion 
and undermines the credibility of both the EnergyGuide and Energy Star 
programs.
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    \6\ DOE and EPA staff are implementing statutory directives to 
promote high-efficiency household appliances in the marketplace. 
They have produced a joint effort called the ``Energy Star'' 
Program, which defines what constitutes a high-efficiency product 
and identifies products that qualify for the designation. A 
product's qualification for the Program is indicated by the Energy 
Star logo, currently either on the product or a separate Energy Star 
label. The Commission is considering a proposal to permit 
manufacturers of qualifying appliances to place the Energy Star logo 
on the Appliance Labeling Rule EnergyGuides.
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    In addition, CEE noted that the Canadian EnerGuide appliance 
labeling program (which is very similar to the EnergyGuide Program) 
does not distinguish between front-loading and top-loading clothes 
washers for range purposes. The Canadian Program divides the clothes 
washer category into only the ``Compact'' and ``Standard'' sub-
categories.
    Finally, CEE asserted that technological advances in the clothes 
washer industry have begun to eliminate the distinction between the 
front-loading and top-loading subdivisions. As examples, CEE cited the 
Maytag Neptune model, which has a basket that operates on an axis that 
is 15 degrees off of vertical and an opening mounted on a plane angled 
between the top and front of the machine (Maytag classifies this as a 
front-loading model), and the Staber Industries horizontal axis model 
that loads from the top (and is thus a top-loading model). CEE 
maintained that, perhaps in recognition of this incipient blurring of 
the distinction between the subdivisions, DOE is considering 
eliminating the separate classes from its testing and standards 
program. CEE urged that the Commission grant its petition to help 
achieve consistency on this issue at the Federal level.

D. The Notice of Proposed Rulemaking

    On November 2, 1998, the Commission published a Notice of Proposed 
Rulemaking (the NPR) proposing amendments that would eliminate the 
``Top-Loading'' and ``Front-Loading'' sub-categories of the 
``Standard'' and ``Compact'' categories. 63 FR 58671. In the NPR, the 
Commission discussed the reasons for the proposed amendments and 
solicited comment on several specific questions and issues.
    The NPR explained that the market for clothes washers has changed 
significantly since the Commission promulgated the ``Front-Loading'' 
and ``Top-loading'' subdivisions. In 1993-94, front-loading machines 
appeared to be a ``niche'' product.\7\ Since that time, the 
availability of and technology for these products have advanced 
considerably. When the NPR was published, ten of the 228 clothes washer 
models for which data were submitted in March 1998 were front-loading 
models. In comparison, in 1993-1994, five models were front-loaders. 
Front-loaders are still a small percentage of the overall number of 
models (now 7.6% as compared to 4.4% in 1998).\8\

[[Page 16134]]

But, the increase in their availability, coupled with CEE's research 
suggesting that a significant proportion of current clothes washer 
consumers are receptive to the idea of buying a front-loading machine, 
suggested that eliminating the distinction between them on labels could 
assist consumers interested in purchasing more efficient products.
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    \7\ The Commission theorized that these products may have been 
considered a niche market in part because they were so much more 
expensive than top-loading models and because they may have been 
favored by consumers with limited space looking for stackable 
models. The Commission noted that, although front-loading models are 
on average still more expensive than top-loading, the price 
differential is now much smaller, citing ``A New Spin on Clothes 
Washers,'' in the July 1998 issue of Conusmer Reports.
    \8\ The data report for clothes washers for March 1999 shows 
that there is a continuing increase in the availability of front-
loading clothes washers (there were 29 front-loading models out of a 
total of 381 models (7.6%)).
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    The NPR also cited information the Commission had received stating 
that the current sub-categories may be causing confusion among 
prospective clothes washer purchasers. Specifically, two letters to 
Commission staff, dated April 27 and May 19 of 1998, from the Office of 
Energy of the Oregon Department of Consumer and Business Services 
(``OEO'') supported CEE's petition.\9\ In both letters, OEO expressed 
concern that consumers are confused by the current subdivisions and 
that such confusion undermines consumer confidence in the EnergyGuide 
itself, which, according to OEO, has been rising steadily since the 
Rule was promulgated in 1979.
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    \9\ These two letters are on the public rulemaking record in 
Binder R611004-1-1-3.
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    The NPR explained that consumer confusion may occur because, 
although the label for clothes washers states that ``Only standard 
size, front-loading (or top-loading) clothes washers are used in this 
scale,'' not all consumers may notice the disclosure. Consumers looking 
at top-loading machines may not realize that front-loading models are 
generally much more efficient, and may not even consider purchasing a 
front-loading model simply because the energy consumption figures for 
front-loading machines are not included in the range scales appearing 
on labels for top-loading models. And, consumers shopping for front-
loading machines may get the incorrect impression that some of the most 
efficient models (front-loading) on the market are not really highly 
energy efficient, only because they are being compared unfavorably to 
other even more highly-efficient models (also front-loading), instead 
of to the generally less efficient top-loading models. Finally, the NPR 
pointed out that, because some front-loading clothes washers that have 
qualified for the Energy Star logo are shown on the EnergyGuide to be 
at or near the ``Uses Most Energy'' end of the comparability scale bar, 
this may cause consumer confusion about the Energy Star Program.\10\
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    \10\ The NPR also stated that, without the subdivisions, it may 
be more difficult for consumers to determine the range of energy use 
possibilities for each type of washer. Thus, for a consumer who, 
because of price or some other reason, wishes to purchase a top-
loading washer, eliminating the ``Top-Loading'' and ``Front-
Loading'' sub-categories would make it more difficult to determine 
which top-loading machine achieves the highest energy efficiency 
possible for a top-loader. Although a given retail outlet will 
likely have several brands and models for comparison, and such a 
consumer would be able to find the most efficient top-loader in the 
store by comparing EnergyGuides, the consumer still would not know 
whether he should seek other choices by going to another retailer. 
The Commission suggested that consumers' search costs may not be 
significantly increased, however, because consumers may not 
necessarily know the range of possibilities for other 
characteristics (such as price) of the washer, and thus already need 
to search various retailers.
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    The NPR also discussed DOE's energy conservation standards for 
clothes washers and possible future changes to the DOE test procedure, 
and their impact on the proposed amendments. DOE has announced, in 
connection with an ongoing review of its energy conservation standards 
for clothes washers, that it may eliminate any reference to front-
loading or top-loading (or horizontal-or vertical-axis) in the 
standards.\11\ Thus, when DOE completes its review of the clothes 
washer standards rule, it is reasonable to expect that DOE will no 
longer use the ``Front-loading'' and ``Top-loading'' (or ``horizontal-
axis'' and ``vertical-axis'') subdivisions to describe clothes washers. 
An August 14, 1998 letter to Commission staff from DOE's Assistant 
Secretary for Energy Efficiency and Renewable Energy asked that the 
Commission eliminate the top-loading and front-loading sub-categories 
for clothes washers because they are causing consumer confusion about 
washer efficiency and appear to be undermining the Energy Star 
Program's credibility. The Assistant Secretary also stated that, 
although the amendments to DOE's rules will not take effect for several 
years, DOE believes ``that it is in the consumer's best interest for 
FTC to adopt the new classifications for labeling purposes as soon as 
possible.'' \12\
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    \11\ In connection with its review of the energy and water 
consumption standards for clothes washers, DOE published an Advance 
Notice of Proposed Rulemaking on November 14, 1994, in which it 
indicated its intention to consider only two classes for the clothes 
washer category--``Compact'' and ``Standard.'' 59 FR 56423, at 
56425. Later in the review process, DOE issued a Draft Report on 
Design Options for Clothes Washers for use in a November 1996 DOE 
workshop in which DOE again proposed reducing the number of clothes 
washer categories to ``Compact'' and ``Standard.'' In July 1997, DOE 
published a draft Clothes Washer Rulemaking Framework, which DOE 
staff describes as a ``roadmap'' for the review process. In that 
document, DOE stated that it ``believes that there is no basis for 
maintaining separate classes for horizontal and vertical clothes 
washers.''
    \12\ DOE's letter is on the public record in binder R611004-1-1-
3.
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    The NPR also discussed the Commission's interest in harmonizing the 
Rule's labeling requirements with those of the Canadian EnerGuide 
Program in accordance with the North American Free Trade Agreement 
(``NAFTA'') goals of reducing or eliminating non-tariff barriers to 
trade (e.g., labeling requirements). Commission staff has worked with 
staff at Natural Resources Canada (``NRCan'') since 1992 to harmonize 
the two countries' appliance labeling programs as much as possible. One 
example of this cooperation is a change in the primary energy use 
descriptor on EnergyGuides for most appliances from estimated annual 
operating cost to kiloWatt-hours per year, the descriptor used in the 
Canadian Program.\13\
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    \13\ 59 FR 34014 (July 1, 1994). In addition, in 1996, the 
Commission amended the Rule to permit Canada's EnerGuide, as well as 
Mexico's energy label, to be placed ``directly adjoining'' the 
Rule's required ``EnergyGuide'' label. Previously the Rule 
prohibited the placement of non-required information ``on or 
directly adjoining'' the EnergyGuide. 61 FR 33651 (June 28, 1996).
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    The Canadian EnerGuide Program does not divide the ``Standard'' and 
``Compact'' clothes washer sub-categories further into top-loading and 
front-loading (or horizontal-axis and vertical-axis) subdivisions.\14\ 
The NPR suggested that eliminating the ``Top-loading'' and ``Front-
loading'' subdivisions would benefit consumers and have the salutary 
effect of promoting international harmonization and furthering the 
NAFTA goal of making the standards-related measures of the treaty 
signatories compatible, thereby facilitating trade among the parties.
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    \14\ According to NRCan staff, this is because the definition of 
``clothes washer'' in the Canadian regulations encompasses both top-
loading and front-loading technologies, and the rulemaking staff saw 
no reason for further differentiation.
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    Finally, the NPR solicited comment from the public on the proposed 
amendments. In particular, the NPR sought comments on the following 
questions and issues: The effect of the ``Top-Loading'' and ``Front-
Loading'' sub-categories on consumers' ability to choose the most 
energy efficient model that will fill their needs; the extent to which 
consumers shop exclusively for either a top-loading or a front-loading 
model; the economic impact on manufacturers of the proposed amendment; 
the costs and benefits of the proposed amendment, and to whom; the 
benefits and economic impact of the proposed amendment on small 
businesses; whether there should be additional descriptors added to the 
label (such as tub volume); and whether the timing of the anticipated 
change to

[[Page 16135]]

DOE's energy conservation standard rule should affect the timing of the 
amendments (if they become final), and, if so, how.

II. Discussion of the Comments and Final Amendments

A. The Proposed Amendment

    The Commission received twenty-three comments in response to the 
NPR.\15\ The comments were from five manufacturers,\16\ six non-profit 
public interest groups,\17\ five utilities,\18\ two city energy 
offices,\19\ one state energy office,\20\ one research laboratory,\21\ 
one intra-state compact,\22\ one law firm on behalf of a 
manufacturer,\23\ and one individual.\24\ Three of the commenters 
opposed the Commission's proposal to amend the Rule to eliminate the 
``Front-Loading'' and ``Top-Loading'' sub-categories.\25\ One other 
commenter supported the amendment but opposed its becoming effective in 
advance of anticipated revisions to DOE's test procedure and energy 
conservation standards for clothes washers, \26\ and another opposed 
the amendment on grounds that will likely be resolved by DOE's revised 
test and standards.\27\
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    \15\ Willett Kempton (``Kempton'') (1); Consumers Union (``CU'') 
(2); City of Portland, Oregon Energy Office (``POE'') (3); Amana 
Appliances (``Amana'') (4); Oregon Office of Energy (``OOE'') (5); 
Maytag Corporation (``Maytag'') (6); City of Austin, Water 
Conservation Division (``Austin-WCD'') (7); Boston Edison (8); 
American Council for an Energy Efficient Economy (``ACEEE'') (9); 
Whirlpool Corporation (``Whirlpool-1'') (10); Whirlpool Corporation 
(``Whirlpool-2'') (11) (Whirlpool filed its substantive comments 
twice; this second version contains a confidential attachment and is 
not on the public part of the rulemaking record); General Electric 
Appliances (``GE'') (12); Massachusetts Electric (``Mass. Elec.'') 
(13); Pacific Northwest National Laboratory (``PNNL'') (14); Natural 
Resource Defense Council (``NRDC'') (15); Consortium for Energy 
Efficiency (``CEE'') (16); Northwest Energy Efficiency Alliance 
(``NEEA'') (17); Commonwealth Electric Company (``Com. Elec.'') 
(18); Alliance Laundry Services (``Alliance'') (19); White & Case 
Limited Liability Partnership (``White & Case'') (19A); Bay State 
Gas Company (``Bay State Gas'') (20); Northwest Power Planning 
Council (``NPPC'') (21); Tacoma Public Utilities (``TPU'') (22); 
Northeast Energy Efficiency Partnerships (``NEEP'') (23). The 
comments are on the public record and are available for public 
inspection in accordance with the Freedom of Information Act, 5 
U.S.C. 552, and the Commission's Rules of Practice, 16 CFR 4.11, at 
the Consumer Response Center, Public Reference Section, Room 130, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, 
D.C. The comments are organized under the Appliance Labeling Rule, 
16 CFR part 305, Matter No. R611004, ``Clothes Washer Categories 
Rulemaking.''
    \16\ Amana (4); Maytag (6); Whirlpool-1 (10); GE (12); and 
Alliance (19).
    \17\ CU (2); ACEEE (9); NRDC (15); CEE (16); NEEA (17); and NEEP 
(23).
    \18\ Boston Edison (8); Mass. Elec. (13); Com. Elec. (18); Bay 
State Gas (20); and TPU (22).
    \19\ POE (3); and Austin-WCD (7).
    \20\ OOE (5).
    \21\ PNNL (14).
    \22\ NPPC (21).
    \23\ White & Case (19A).
    \24\ Kempton (1) (Willett Kempton is a senior policy scientist 
at the University of Delaware.)
    \25\ Amana (4); Alliance (19); White & Case (19A).
    \26\ Whirlpool-1 (10).
    \27\ GE (12).
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1. Comments in Support
    Eighteen comments expressed general support for the Commission's 
proposal to eliminate the ``front-loading'' and ``top-loading'' sub-
categories for clothes washers.\28\ They contended that the current 
``front-loading'' and ``top-loading'' sub-categories confuse 
consumers,\29\ undermine efforts to promote high-efficiency clothes 
washers,\30\ or impair a consumer's ability to distinguish highly 
efficient equipment from standard.\31\ The commenters explained that 
the confusion occurs because under the current labeling system, front-
loaders are not compared to top-loaders in any direct way. 
Consequently, some of the most energy efficient front-loading models 
have an EnergyGuide label stating ``Uses Most Energy'' because the 
front-loading models are only compared with other front-loading 
models.\32\ Two commenters pointed out that those same high-efficiency 
models labeled ``Uses Most Energy'' also bear a DOE/EPA Energy Star 
endorsement indicating that they are highly efficient.\33\ ACEEE 
stated:
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    \28\ Kempton (1) p. 1; CU (2) p. 1; POE (3) p. 1; OOE (5) p. 1; 
Maytag (6); Austin-WCD (7) p. 1; Boston Edison (8) p. 1; ACEEE (9) 
p. 1; Whirlpool-1 (10) p. 1; Mass. Elec. (13) p. 1; NRDC (15); CEE 
(16) p. 1; NEEA (17) p. 1; Com. Elec. (18) p. 1; Bay State Gas (20) 
p. 1; NPPC (21) p. 1; TPU (22) p. 1; NEEP (23) p. 1.
    \29\ OOE (5) p. 2 (Many consumers who have called OOE have asked 
for clarification regarding what seems to be contradictory 
information on the EnergyGuide labels.); Maytag (6) p. 2 (Separation 
of top-loading and front-loading washers into different subdivisions 
makes the comparison misleading.); Austin-WCD (7) (Received calls 
from consumers who were confused by the EnergyGuide label.); ACEEE 
(9) p. 1; NEEA (17) p. 2 (Top- and front-loading subdivisions may 
confuse consumers interested in purchasing a resource-efficient 
clothes washer.); Bay State Gas (20) p. 2 (Evidence that the current 
system of labeling categories is inaccurate and confusing to 
consumers is overwhelming and agreed upon by a broad cross-section 
of stakeholders, e.g., utilities, efficiency advocates, 
manufacturers, Consumer Reports magazine.); NPPC (21) p. 1 (Current 
label may cause confusion among consumers wanting to purchase a 
resource-efficient model since the ``least efficient'' front-loading 
resource-efficient models are far less costly to operate than the 
``most efficient'' top-loading models.); NEEP (23) pp. 1-2 (May 
cause confusion for those who want to buy a resource-efficient 
model.)
    \30\ CU (2) p. 1; POE (3) p. 1 (Seeing a highly efficient, 
horizontal-axis washing machine on the high end of the energy use 
spectrum is inconsistent with the message about how efficient they 
are.); Maytag (6) p. 3 (Single EnergyGuide label for all standard 
size washers could be a significant force in transforming the 
clothes washer market to high efficiency models.); NRDC (15) p. 1; 
CEE (16) p. 1; Bay State Gas (20) p. 1; TPU (22) p. 1.
    \31\ Maytag (6) p.2; CEE (16) p.1; Bay State Gas (20) p.1.
    \32\ Maytag (6) p.2 (``By placing all front loaders, which tend 
to be far more efficient, in a separate subdivision, the rating of a 
specific model front loader washer may appear to be less efficient 
than a specific model top load washer, when in reality it is much 
more efficient.''); Boston Edison (8) p.1; Mass. Elec. (13) p.1; Bay 
State Gas (20) p.1.
    \33\ CEE (16) p.1; Bay State Gas (20) p.1.

    On one hand, consumers have been told by utilities and DOE to 
look for the Energy Star and rebate-eligible models. On the other 
hand, when they look at the Energy Guide, they see that some highly-
efficient washers are labeled ``uses most energy'' while other, much 
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less efficient models, are labeled ``uses least energy.\34\

    \34\ ACEEE (9) p.1.
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Several commenters stated that combining the categories would enable 
consumers to compare the different types of machines and be better 
informed regarding energy efficiency,\35\ and that this would provide 
better quality information to consumers.\36\
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    \35\ Kempton (1) p. 1; POE (3) p.1; Austin-WCD (7) p. 1 
(``Combining the categories would . . . emphasize the savings 
derived from the more efficient washers, promoting the more 
efficient machines at the expense of the less efficient. ''); NEEA 
(17) p. 1; NPPC (21) p. 1; NEEP (23) p. 1.
    \36\ Maytag (6) p.3 (``Unfortunately, because of the separate 
classes and labels for H-axis and V-axis, the dramatic difference in 
energy use between these washer designs is not apparent to the 
consumer. By combining H-axis and V-axis into a single class and 
therefore a single, label, the energy savings would be immediately 
apparent.''); Boston Edison (8) p. 2; Com. Elec. (18) p. 2.
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    Nine commenters stated that typically customers do not choose a 
washer on the basis of top- versus front-loading.\37\ ACEEE stated that 
its understanding, based on discussions with appliance manufacturers 
and retailers, as well as discussions with manufacturers of high-
efficiency clothes washers, is that many consumers are now considering 
both top- and front-loading machines and are comparing a range of 
product attributes, including cleaning ability; wear on clothes; 
manufacturer reputation; washer capacity; energy, water and

[[Page 16136]]

detergent use; ease of use; and cycle time.\38\
---------------------------------------------------------------------------

    \37\ Kempton (1) p. 1 (Most consumers will choose a washer based 
on other features, including operating cost.); POE (3) p. 1 
(Capacity, rather than door configuration, is most consumers' first 
consideration, and cost is next.); Boston Edison (8) p. 1; Mass. 
Elec. (13); CEE (16) pp. 3-4; NEEA (17) p. 3 (When consumers were 
asked which clothes washer features were important to them, they 
ranked good cleaning first, followed by load capacity, energy/water 
efficiency, price and operating costs.); Com. Elec. (18) p. 1; NPPC 
(21) p. 2 (Other features of the clothes washer have more importance 
in the decision making process than style of loading.); NEEP (23) p. 
2 (Current FTC label is based on a now arbitrary distinction 
regarding how the washers load, a feature that is not considered by 
consumers when shopping for a new clothes washer.)
    \38\ ACEEE (9) p. 1.
---------------------------------------------------------------------------

    Maytag stated:

    When consumers shop for a washer, their natural inclination is 
to shop for what they previously owned unless there is a compelling 
reason to change. When comparing a V-axis to a H-axis, the 
substantial difference in energy use could be that compelling 
reason. Unfortunately, because of the separate classes and labels 
for H-axis and V-axis, the dramatic difference in energy use between 
these washer designs is not apparent to the consumer.\39\
---------------------------------------------------------------------------

    \39\ Maytag (6) p.3.

    Several commenters stated that a clear technological distinction 
between top-and front-loaders can no longer be easily made as a result 
of the introduction of new products,\40\ and that these new products 
make the current system of rating clothes washers in separate 
categories based on loading style obsolete.\41\ ACEEE stated ``(W)e 
applaud the FTC for recognizing that the clothes washer market is 
changing, and that a labeling approach developed several years ago may 
not be appropriate today.'' \42\ Four commenters observed that the 
growth in sales volume of front-loading high efficiency washers shows 
that they are securing a wider market acceptance and that they are no 
longer a ``niche'' product that only a subset of consumers are 
interested in purchasing.\43\ Maytag stated that the front-loading 
Maytag Neptune has proven to have consumer appeal across all 
demographic segments and is helping to transform the U.S. market by 
focusing attention on the environmental benefits of high efficiency 
appliances.\44\
---------------------------------------------------------------------------

    \40\ Maytag (6) p. 1; Boston Edison (8) p. 1; Mass. Elec. (13); 
CEE (16) pp. 1-2 (Whirlpool has a resource efficient top-loading 
vertical-axis washer with an annual kWh usage of 451 that is far 
more comparable in terms of energy efficiency and annual operating 
cost to the high efficiency horizontal-axis washers than to the 
standard efficiency vertical-axis washers; under the current system, 
the Whirlpool Resource Saver would be labeled ``Uses Least Energy,'' 
while the Maytag Neptune, a front-loading machine that uses only 333 
kWh annually would be labeled ``Uses Most Energy.''); Com. Elec. 
(18) p. 1.
    \41\ Maytag (6) p. 1 (Top-loading and front-loading subdivisions 
are becoming ``meaningless'' because of the introduction of new 
washer designs that no longer fit into those categories in the way 
they were intended; other designs are possible that will allow for 
high efficiency with the top-loading capacity or access somewhere in 
between, e.g., Maytag Neptune.); NEEA (17) p. 1; NPPC (21) p. 1; 
NEEP (23) p. 2 (Now there are many more choices in the market and 
distinctions based on how the consumers load washers are no longer 
relevant.)
    \42\ ACEEE (9) p. 3.
    \43\ Maytag (6) p. 2; Austin-WCD (7) p. 1; CEE (16) p. 1; Bay 
State gas (20) p. 1.
    \44\ Maytag (6) p. 2.
---------------------------------------------------------------------------

2. Comments in Opposition
    Three commenters stated that they opposed the proposed amendment on 
its merits.\45\ Alliance stated that the Commission must respect the 
existing product class definitions in DOE's energy conservation 
standards program, which are based largely on capacity and consumer 
utility, and that the Commission should not combine the categories just 
because a petitioner believes one class of product is no longer a niche 
product. Alliance added that consumers who are uncertain why a product 
carries an Energy Star logo while showing high energy use on the 
EnergyGuide should consult with a salesperson or look at the 
EnergyGuides on other models.\46\
---------------------------------------------------------------------------

    \45\ Amana (4) p. 1; Alliance (19) pp. 1-2; White & Case (19A) 
pp. 1-3.
    \46\ Alliance (19) p. 1 (``The current FTC label clearly 
identifies the product class being compared and it would be no more 
logical to combine the clothes washer classes than it would (be to 
combine) those used for the refrigerator-freezer product with its 
numerous classes and their ranges of comparability.'')
---------------------------------------------------------------------------

    White & Case argued that putting front-loading and top-loading 
washing machines on a single label would combine two products that are 
not similar and are not within the same product market and, therefore, 
do not compete pursuant to the Commission's Horizontal Merger 
Guidelines.\47\ Thus, consumers searching for the most efficient top-
loading clothes washer among other top-loading washers would confront 
considerable difficulties with a label that included the energy 
efficiency of non-competing products.\48\ White & Case also asserted 
that consumers shop exclusively for either a top-loader or a front-
loader. It contended that some of the reasons for this are the 
substantial price difference between the two and that front-loaders 
must use specially formulated, more expensive laundry detergents 
because regular detergents do not function well in front-loading 
machines.\49\
---------------------------------------------------------------------------

    \47\ White & Case (19A) pp. 1-3 (``The purpose of the 
Commission's test for product markets under the Horizontal Merger 
Guidelines is to determine what the practical demand-side choices 
are for the buyers of various products. Front-loading washing 
machines do not compete with top-loading machines at current pricing 
levels.'')
    \48\ Id. p.3.
    \49\ Id.
---------------------------------------------------------------------------

    Amana stated that any change in the energy standards or labeling 
requirements for clothes washers could have a significant impact on its 
business and associated employment.\50\ It contended that elimination 
of the sub-categories will remove a significant distinction and cause 
increased confusion to the consumer when trying to compare models in a 
consolidated category.\51\ Amana stated that the justification for 
separate categories is based on ergonometrics, product utility and 
technology employed, including costs and energy and water consumption, 
and that the differences in technology and energy consumption between 
V-axis and H-axis machines are clearly evident.\52\ Amana contended 
that the retail price of a high end H-axis washer is more than 50% 
above the most highly featured, stainless steel, electronically-
controlled V-axis washer currently available, and argued that this 
difference is important to a consumer's buying decision.\53\
---------------------------------------------------------------------------

    \50\ Amana (4) p. 1.
    \51\ Id. pp. 2-3.
    \52\ Id. p. 1. (``The typical H-axis machine of comparable 
washer capacity uses less than half of the water of a typical V-axis 
machine.'')
    \53\ Id. p. 2.
---------------------------------------------------------------------------

    Amana and Alliance, as well as two other commenters, took the 
position that the Commission should not make any change to the ``Top-
Loading'' and ``Front-Loading'' sub-categories until the effective date 
of DOE's proposed revisions to its energy conservation standards for 
clothes washers.\54\ Amana stated: ``While we believe there is no 
justification for, and it is inappropriate for the FTC to consider 
changing the labels, there is less justification to do it before DOE 
has established revised Energy Standards in the proposed rulemaking.'' 
\55\
---------------------------------------------------------------------------

    \54\ Amana (4) p. 2; Whirlpool-1 (10) pp. 1,7; GE (12) pp. 2-5; 
Alliance (19) p. 1.
    \55\ Amana (4) p. 2.
---------------------------------------------------------------------------

    Alliance cited DOE's recent initiation of work on a consumer 
analysis, which, ``although not necessarily determinative of the 
issues, is intended to measure and document the `consumer utility' 
associated with horizontal-axis and vertical-axis designs.'' Alliance 
maintained that it was premature to combine the categories before DOE's 
consumer analysis is completed.\56\
---------------------------------------------------------------------------

    \56\ Alliance (19) p. 1.
---------------------------------------------------------------------------

    GE said that the Commission should reject the petition, but that if 
it does not do so, it should not revise the labeling program to 
eliminate the classes contained in the current DOE standard until the 
pending DOE clothes washer energy efficiency rulemaking is concluded 
and the product class issue is resolved.\57\ GE also opposed the 
amendment because it believes that a clothes washer label with a 
combined front-loading/top-loading range scale would misrepresent the 
true energy performance of horizontal-axis

[[Page 16137]]

machines by understating their actual energy consumption.
---------------------------------------------------------------------------

    \57\ GE (12) pp. 1-2.
---------------------------------------------------------------------------

    GE's point was based on the fact that, under the current DOE test 
procedure, vertical-axis machines are tested for the average energy 
used in running the machine in the maximum fill and minimum fill cycles 
with no test load in the tub, while front-loaders are tested for the 
average energy used in running the machine with three-pound and seven-
pound loads. GE argued that thus only the test for V-axis machines 
accounts for the full range of potential clothes loads. GE contended 
that ``advocates of horizontal-axis clothes washers tout these 
machines' ability to hold far more garments than the users of 
traditional machines would perceive to be optimal,'' and that ``this 
claimed advantage'' would result in an understatement in energy label 
values for horizontal-axis washers. GE asserted that this 
understatement results from the fact that the larger loads would use 
more water, and thus energy to heat it, which would mean a higher 
energy use value than what is on the front-loading machines' labels. GE 
conceded that ``if the DOE eliminates the different product classes [in 
its revised energy conservation standards and test procedure], the 
change sought by [CEE's] petition could be reconsidered.'' \58\
---------------------------------------------------------------------------

    \58\ Id. p. 4.
---------------------------------------------------------------------------

    Whirlpool stated that consumers know the difference between top- 
and front-loading and that the vast majority of consumers have strong 
preferences for the ease of loading offered by top-loaders.\59\ 
Whirlpool also expressed concern about the cost differential between 
top- and front-loading washing machines. It stated that most consumers 
cannot afford the high cost of front-loading machines, and thus shop 
for top-loaders generally because of the perceived or actual 
convenience that top-loaders offer and because of the price difference. 
Consumers who wish to shop for the more efficient top-loaders would not 
be able to discern the ranges of comparability for these products with 
a consolidated range scale.\60\ Whirlpool concluded that the amendment 
is the best course to follow only if it is made effective in concert 
with the effective date of new DOE energy standards for clothes 
washers, when high-efficiency top-loaders have much more market 
penetration.\61\
---------------------------------------------------------------------------

    \59\ Whirlpool-1 (10) pp. 3-4.
    \60\ Id. p. 3 (``front-loading machines * * * generally run from 
$800 to $1100 plus. Most toploaders average about $400.'')
    \61\ Id. p. 1.
---------------------------------------------------------------------------

3. Comments Addressing the Benefits and Costs of the Proposed Amendment
    A majority of the commenters maintained that the amendment would 
have beneficial results.\62\ Several asserted that consumers would be 
more effectively educated \63\ and that there would be consistency with 
the categories used by the EnerGuide Program in Canada.\64\ Four 
commenters contended that one of the benefits of the proposed amendment 
would be that some purchasers would choose to buy more efficient 
washers.\65\ Commenters variously stated that the proposed amendment 
would reduce water consumption,\66\ promote energy efficiency,\67\ and 
that saving energy means saving money.\68\ Several commenters stated 
that they believed that the proposed amendment would benefit the 
environment,\69\ consumers,\70\ the economy,\71\ and retailers and 
manufacturers.\72\ Six commenters urged that the Commission not wait 
for possible changes to the DOE regulations before implementing the 
revised sub-categories because the implementation of the test and 
standards is still at least several years away.\73\ Those arguing in 
favor of immediate implementation contended generally that continuance 
of the current sub-categories: would continue consumer confusion;\74\ 
could impede DOE/EPA and utilities' efforts to increase consumer 
awareness about energy efficiency in clothes washers;\75\ would result 
in significant uncaptured energy and water savings due to lost sales of 
more efficient clothes washer models;\76\ and would perpetuate an 
artificial market barrier to adoption of a highly energy efficient 
technology.\77\
---------------------------------------------------------------------------

    \62\ Kempton (1) p. 1; CU (2) p. 1; POE (4) p. 1: OOE (5) p. 3; 
Maytag (6) pp. 2-4; Austin-WCD (7) p. 1; Boston Edison (8) pp. 1-2; 
ACEEE (9) p. 2; Mass. Elec. (13) pp. 1-2; NRDC (15) p. 1; CEE (16) 
p. 5; Com. Elec. (18) pp. 1-2; Bay State (20) pp. 1-2; NPPC (21) p. 
1; TPU (22) p. 1; NEEP (23) pp. 1-2.
    \63\ OOC (5) p. 3; Maytag (6) p. 3 (Consumers could determine at 
a glance how any washer compares with the universe of standard size 
washers of all configurations.); Boston Ed. (8) p. 1 (There would be 
an increased consumer awareness about energy efficiency.); CEE (16) 
p. 5 (Better and more accurate information to consumers.); ACEEE (9) 
p. 2 (``The prime benefits . . . stem from the fact that consumers 
would better be able to compare different products, with the result 
that some consumers will likely purchase more efficient washers than 
if the amendment were not adopted.''); Com. Elec. (18) p. 2 
(Increased consumer awareness of energy efficiency.); NPPC (21) p. 2 
(The current label may cause confusion among consumers who want to 
purchase a resource-efficient washer.)
    \64\ OEE (5) p. 3; CEE (5) p. 3.
    \65\ Kempton (1) p. 1; CU (2) p. 1; POE (3) p. 1; ACEEE (9) p. 
2.
    \66\ Maytag (6) p. 2.
    \67\ Maytag (6) p. 2; Boston Edison (8) pp. 1-2; Com. Elec. (18) 
pp. 1-2; NPPC (21) p. 1.
    \68\ Kempton (1) p. 1; POE (3) p. 1; TPU (22) p. 1 (There is a 
cost of about $300 for a rsource-efficient machine, but households 
that purchase these machines save $75 to $100 in yearly charges for 
electricity, water and wastewater; which means there is a quick pay-
back.)
    \69\ Kempton (1) p. 1; OOE (5) p. 3 (``[A]s the sales of more 
efficient clothes washers increase, there will be enormous water, 
wastewater treatment and energy savings benefits.''); Austin-WCD (7) 
p. 1 (Emphasizing water conservation.); NRDC (15) p. 1 (There are 
energy and water savings with more efficient clothes washer 
models.); CEE (16) p. 5 (``There will be significant energy savings, 
avoided air pollution and greenhouse gas emissions, substantial 
water savings, and wastewater treatment savings as sales of more 
efficient clothes washers increase.''); Bay State Gas (20) p. 1.
    \70\ Kempton (1) p. 1 (By purchasing more efficient washers, 
consumers could reduce their non-discretionary expenditures and 
money would be made available for other consumer spending.); OOE (5) 
p. 3; Maytag (6) p. 2 (Consumer could determine at a glance how any 
washer compares with the universe of standard-size washers of all 
configurations.); Boston Edison (8) p. 1; ACEEE (9) p. 2 (``The 
prime beneficiary of this change will be consumers who purchase 
these more efficient washers as the high-efficiency washers now 
being sold can reduce operating costs by 50% or more relative to 
typical units being sold.''); Mass. Elec. (13).
    \71\ Kempton (1) p. 1; CEE (16) p. 5.
    \72\ ACEEE (9) p. 2; Boston Edison (8) p. 1; Mass. Elec. (13) p. 
1.
    \73\ POE (3) p. 1; OOE (5) p. 5 (``[I]t will be at least five 
years from the time of the Commission's decision to implementation 
if the Commission wishes to coordinate with DOE's standard 
implementation. This is far too long for consumers to live with the 
disadvantages of the current labeling classifications.''); Maytag 
(6) p. 4 (``Immediate adoption by the Commission of the proposed 
amendment, regardless of the timing of the next rulemaking by the 
Department of Energy, is in the best interests of consumers.''); 
ACEEE (9) p. 3 (The earliest time that a new DOE standard can take 
effect is September 2003; that time frame is ``much too long to wait 
to correct a serious problem with the current label.''); CEE (16) p. 
6 (``[I]f the FTC waits for DOE, it could be a very long time before 
an accurate EnergyGuide label for clothes washers is 
implemented.''); (NPPC (21) p. 3 (Strongly recommended that the 
Commission not wait for DOE to make its changes since the earliest 
possible date that the new standard could take effect is the fall of 
2002.)
    \74\ Boston Edison (8) pp. 1-2; Mass. Elec. (13) p. 2; NRDC (15) 
p. 1; CEE (16) p. 6.
    \75\ Boston Edison (8) pp. 1-2; Mass. Elec. (13) p. 2.
    \76\ NRDC (15) p. 1.
    \77\ CEE (16) p. 1.
---------------------------------------------------------------------------

    Amana saw no benefits in the proposed amendment. It is believed 
that a label change would confuse consumers and adversely impact energy 
consumption and/or delay purchase decisions in favor of the repair of 
older, less efficient models.'' \78\ Two other commenters said that 
manufacturers who currently have no front-loading, efficient models 
would incur the costs of slightly lower sales and that the sales of 
more efficient washer models would

[[Page 16138]]

increase at the expense of less efficient models.\79\
---------------------------------------------------------------------------

    \78\ Amana (4) p. 2.
    \79\ Kempton (1) pp.1-2; OOE (5) p. 3.
---------------------------------------------------------------------------

    Six commenters mentioned specifically the costs associated with 
changing the EnergyGuide labels.\80\ Alliance stated that the cost of 
creating new labels and scrapping finished printed labels would be 
borne by manufacturers.\81\ Maytag stated, however, that the economic 
impact should not be detrimental to any manufacturer: ``In fact, in the 
long run it could result in a small savings for those manufacturers 
that presently have to stock two different types of labels, one for 
``front loader'' and one for `top loader.' '' \82\ Whirlpool was 
concerned that there would be some engineering, administrative and cost 
implications that would ultimately be borne by consumers:
---------------------------------------------------------------------------

    \80\ Amana (4) p. 3; OOE (5) p. 3; Maytag (6) p. 3; Whirlpool-1 
(10) p. 5; CEE (16) p. 5; Alliance (19) p. 2.
    \81\ Alliance (19) p. 2 (``Frequent label changes are disruptive 
to our business.'')
    \82\ Maytag (6) p. 3.

    With the constant turnover of personnel in sales, marketing, 
manufacturing and engineering there would be ongoing confusion 
between the newly formatted label with one product category and the 
DOE's vertical and horizontal axis categories. This considerably 
increases the likelihood of an inadvertent error in energy 
reporting/certification. At the most, a cost of $100 per unit per 
day, under Section 333 of the Energy Policy and Conservation Act, 
could be a serious burden of manufacturers. At the least, there is a 
real possibility of a lesser fine as well as substantial internal 
cost of correcting mislabeled units.\83\
---------------------------------------------------------------------------

    \83\ Whirlpool-1 (10) p. 5.

    Addressing the expense to manufacturers of changing EnergyGuide 
labels to eliminate the ``Top-loading'' and ``Front-Loading'' 
categories, some commenters explained that the cost depended on the 
timing of the change. Amana stated: ``If the label changes are made at 
some time other than a normal FTC label revision, there would be 
significant cost impact for the manufacturers.'' \84\ Whirlpool stated 
that if the washer category consolidation could be combined with other 
changes to the Energy Guide, such as a change in the ranges of 
comparability, the confusion for manufacturers and potential 
complications would be minimized.\85\ OOE, ACEEE, and CEE pointed out 
that there are fixed costs incurred any time there is a change to the 
ranges of comparability, energy prices, model descriptions, or any 
other information on the label, but that timed to coincide with such a 
change, and with enough lead time, the costs of changing labels to 
reflect the eliminated product categories would be near zero.\86\
---------------------------------------------------------------------------

    \84\ Amana (4) p. 3.
    \85\ Id.
    \86\ OOE (5) p. 3; ACEEE (9) p. 2; CEE (16) p. 5.
---------------------------------------------------------------------------

4. Final Amendments
    After careful consideration of the comments, the Commission has 
decided to amend Appendix F of the Rule, which pertains to the clothes 
washer category, by eliminating the ``front-loading'' and ``top-
loading'' subdivisions of the ``standard'' and ``compact'' sub-
categories. The Commission agrees with the comments that maintained 
that the current ``front-loading'' and ``top-loading'' subdivisions may 
be confusing to consumers, may impair efforts to promote high-
efficiency clothes washers and may hinder a consumer's ability to 
distinguish highly energy efficient clothes washers.\87\ Further, the 
Commission has determined not to add any additional information or 
descriptors, other than the current ``standard'' and ``compact'' sub-
divisions, to the EnergyGuide label at this time, as discussed in 
section II.B., below.
---------------------------------------------------------------------------

    \87\ The Commission agrees that there is potential for confusion 
when consumers see a high-efficiency front-loading washer bearing 
the Energy Star logo with an accompanying EnergyGuide label that 
shows the model is close to the ``Uses Most Energy'' end of the 
comparability scale. This would occur only because it is not as 
efficient as the even more efficient competing models.
---------------------------------------------------------------------------

    In deciding to amend Appendix F, the Commission concludes that the 
technological distinction between top-loading and front-loading clothes 
washers is becoming blurred. As several commenters noted, the present 
system of placing clothes washers in separate product categories based 
on loading orientation is becoming outmoded.\88\ The comments largely 
showed that consumers are willing to consider both types of washers and 
that the present labeling system can impair consumers' ability to make 
meaningful comparisons based on energy efficiency.
---------------------------------------------------------------------------

    \88\ In part, this may be due to the fact that the price 
differential is diminishing. For example, a July, 1999 Consumer 
Reports article on clothes washers rated four front-loading models 
priced at $700, $720, $800, and $1,000. The article rated 18 top-
loading models, of which the six most costly models were priced at 
$550 (two models), $580, $600, $640, and $800.
---------------------------------------------------------------------------

    The Commission recognizes that consumers are more familiar with 
top-loading machines, because they have been sold in the U.S. for many 
years longer than front-loaders. However, the Commission believes that 
if consumers are provided with the opportunity to compare directly the 
energy use of both top- and front-loading washers, then, when making a 
purchase decision, they will be able to consider the purchase cost 
differential between the two types of washers along with other product 
attributes, such as cleaning ability, tub capacity, ease of use, and 
water and energy consumption. Because of being able to compare energy 
use more efficiently, some consumers may choose to buy more efficient 
washers. Ultimately, the amendment will help to promote energy 
efficiency while reducing water and energy consumption, which will save 
consumers money. The Commission also gave weight to the fact that the 
proposed amendment will provide consistency with Canada's EnerGuide for 
clothes washers.
    The Commission recognizes the potential, raised by Whirlpool and 
others, for some negative impact on manufacturers and retailers 
producing and marketing only top-loading machines (especially resource-
efficient models). The Commission believes however, that the beneficial 
effects on consumers and the environment that are likely to result from 
the elimination of the top-loading and front-loading sub-categories 
will significantly outweigh whatever negative impact occurs.
    The Commission has decided that the amendment will become effective 
in July, 2000, rather than after the effective date of DOE's expected 
changes to its energy conservation standards and test procedure for 
clothes washers. There is uncertainty about the final date of DOE's 
changes, and DOE itself has advised Commission staff in its letter of 
August 14, 1998, that it would be in the consumer's best interest for 
the Commission to adopt the changes to the clothes washer sub-
categories ``as soon as possible.'' \89\ Because there are costs 
associated with changing the EnergyGuide label, as discussed in section 
II.A.3., above, the Commission is coordinating the effective date of 
the amendment with the next scheduled change to the ranges of 
comparability for clothes washers. Consequently, the relabeling costs 
of eliminating the top-loading and front-loading subdivisions will be 
minimal. And, as Maytag pointed out, there could be a long-run savings 
to manufacturers because they will no longer have to stock separate 
labels for both top-loading and front-loading clothes washers.
---------------------------------------------------------------------------

    \89\ Letter from Dan W. Reicher, Assistant Secretary, Energy 
Efficiency and Renewable Energy, DOE (Aug. 14, 1998). See note 12, 
supra.
---------------------------------------------------------------------------

    The Commission has considered GE's contention that the current 
differences in the DOE test procedures may affect the comparability of 
the energy ratings for H-axis and V-axis machines on

[[Page 16139]]

EnergyGuides that do not distinguish between the two subcategories, and 
that, in particular, H-axis machines would appear to have greater 
relative efficiency than is actually the case. GE did not provide 
evidence of consumer behavior respecting the pounds of clothes that 
consumers wash, or expect to wash, in front-loading machines. And, 
although GE implies that front-loaders have greater capacity than top-
loaders, a recent study by Consumer Reports magazine states that there 
is little variation in capacity among full-sized washers, including 
both front- and top-loading.\90\ Thus, there is no clear indication 
that the load used in the DOE test for front-loading machines is too 
small.
---------------------------------------------------------------------------

    \90\ Consumer Reports, July 1999. In the article, ``capacity'' 
is based on how well clothes can circulate in increasingly large 
loads.
---------------------------------------------------------------------------

    The seven-pound load specified as the large load (to be used with a 
three-pound load in conducting the test) in the DOE test was the result 
of a rulemaking procedure conducted by DOE with input from all sectors 
of the public. One of DOE's goals in developing this aspect of the test 
was to capture the concept of ``maximum fill'' so that the test results 
for front-loaders would be analogous to the results for top-loaders. 
Therefore, in the absence of evidence to the contrary, the Commission 
believes that the test results are comparable.
    The Commission has concluded that any inaccuracies in the relative 
efficiency of H-axis and V-axis washers that may be caused by the 
differences in the current DOE test procedures are likely to be small. 
Accordingly, the Commission has decided not to delay the effective date 
of these amendments until DOE's amended energy conservation standards 
and test procedure for clothes washers become effective and possibly 
eliminate any slight inequalities between the measured energy use of 
the two types of machines.\91\
---------------------------------------------------------------------------

    \91\ The Commission does not agree, moreover, with FE's 
contention that the Commission cannot amend the product classes set 
out in the Appendices to its Rule independent of a DOE determination 
on product class. The Commission is not constrained by any statutory 
provisions from establishing the product classes in the Appendices 
for purposes of the ranges of comparability in whatever form it 
believes to be most appropriate. For example, until 1994, the 
product classes for refrigerators, refrigerator-freezers, and 
freezers in (then) Appendices A-1, A-2, and B were significantly 
different from the more feature-specific configurations in DOE's 
energy conservation standards, and the current classes for 
dishwashers are determined differently (the Commission's Rule 
differentiates between ``Standard'' and ``Compact'' on the basis of 
place settings, and DOE uses exterior width). The Commission has 
chosen to align its product classes with those in the DOF energy 
conservation standards program whenever it has concluded that doing 
so is helpful to consumers and competition.
---------------------------------------------------------------------------

    The Commission also is not persuaded by the contention of Alliance 
that the proposed amendment would result in an EnergyGuide label that 
compares the energy efficiency of two distinct products. An EnergyGuide 
label that does not categorize washers based on loading orientation 
will enable consumers who are not looking for a washer with particular 
loading option to compare easily features and energy consumption for 
all washers within either the ``standard'' or ``compact'' sub-
categories, or both.
    Finally, the Commission does not agree with White & Case that top-
loading and front-loading washers are necessarily in separate product 
markets according to the Commission's Horizontal Merger Guidelines. 
White & Case's argument rests almost entirely on the difference in 
purchase prices between the two types of washers, but, as noted above, 
this price differential has changed considerably in recent years and is 
likely to change in the future. Furthermore, consumers often consider 
the differences in operating costs of these products, which may reduce 
the overall price differential between the two types of products.
    To implement today's decision, the Commission amends Sample Label 3 
in Appendix I of the Rule, which shows the proper format for a clothes 
washer EnergyGuide label, by deleting references on the label to the 
``Top-loading'' and ``Front-Loading'' subcategories.

B. The Need for Additional Information on the Label

1. Comments
    Fourteen commenters responded to the question in the NPR asking 
whether the Commission should add other descriptors of clothes washer 
capacity (such as tub volume) to the label if it eliminates the ``Top-
Loading'' and ``Front-Loading'' sub-categories.\92\ Six stated that 
other information or descriptors are unnecessary.\93\
---------------------------------------------------------------------------

    \92\ Kempton (1) p. 2; CU (2) p. 1; Amana (4) pp. 2 and 3; OOE 
(5) p. 4; POE (3) p. 1; OOE (5) p. 5; Maytag (6) p. 4; ACEEE (9) p. 
3; Whirlpool-1 (10) p. 6; GE (12) p. 2; PNNL (14) p. 1; NRDC (15) p. 
1; CEE (16) p. 5; Alliance (19) p. 2.
    \93\ Kempton (1) p. 2; OOE (5) p. 5; Maytag (6) p. 4; ACEEE (9) 
p. 3; NRDC (15) p. 1; CEE (16) p. 5.
---------------------------------------------------------------------------

    CU stated that it would like to see the proposed amendment taken 
one step further, noting that the FTC label looks only at total energy 
consumption, and not efficiency: ``Therefore, at first glance, small-
clothing-capacity washers may appear better than ones with much larger 
capacities. However, the larger clothing capacity may make for a much 
more efficient machine.'' \94\ To improve on this situation, CU stated 
that the annual energy cost should be for washing a specific number of 
pounds of clothing per year, based on the DOE test's assumed average 
annual use of 392 cycles per year.\95\
---------------------------------------------------------------------------

    \94\ CU (2) p. 1.
    \95\ Id. p. 1 (``We would suggest that the annual pounds-of-
clothing be calculated by multiplying 392 by about 8 pounds per 
load, or 3136 pounds-of-laundry per year. Therefore, the yellow 
sticker should list the amount of energy used to wash 3136 pounds of 
clothes, rather than the amount of energy used in 392 cycles 
regardless of how many pounds of clothes can be washed in those 392 
cycles.'')
---------------------------------------------------------------------------

    Five commenters stated that the Commission should require that the 
internal tub volume of clothes washers, in cubic feet or in gallons (or 
both), also be required on the EnergyGuide labels.\96\ PNNL pointed 
out:
---------------------------------------------------------------------------

    \96\ Amana (4) p. 3; OOE (5) p. 4; ACEE (9) p. 3; PNNL (14) p. 
1; CEE (16) pp. 5-6.

    Without some reference to tub volume the consumer may believe 
that the comparison between two machines of different tub volume is 
equal. In reality, a comparison of two machines of different tub 
volumes is not equal. Assuming that near-full loads are washed, the 
machine with the smaller tub volume will require that more loads be 
washed per year than the machine with the larger tub volume.\97\
---------------------------------------------------------------------------

    \97\ PNNL (14) p. 1.

Maytag contended that tub volume measurements in cubic feet are 
misleading because in H-axis washers the entire measured tub volume is 
usable, whereas V-axis tub volume measurement includes unusable space 
at the top of the tub.\98\ Maytag also stated that using gallons as a 
measurement of internal tub volume would likely confuse consumers 
because it could be construed as a water consumption measurement rather 
than a capacity measurement.\99\ OEE stated that using cubic feet as a 
capacity indicator is a problem because, according to manufacturers, 
this metric is not directly comparable from vertical axis to horizontal 
axis products.\100\
---------------------------------------------------------------------------

    \98\ The DOE test measures the tub volume in top-loaders without 
including the space taken up by the agitator, so the volume figure 
reflects the amount of water that can actually go into the tub. 
Maytag suggested applying a factor of 1.2 to the volume of an H-axis 
machine to correct this inconsistency for test procedure purposes; 
for example, and H-axis machine with a measured volume of 3.0 cubic 
feet would have the equivalent usable volume of a 3.6-cubic-foot V-
axis machine. Maytag (6) p. 4.
    \99\ Maytag (6) p. 4.
    \100\ OOE (5) p. 4.
---------------------------------------------------------------------------

2. The Commission's Conclusions
    The Commission has decided not to add other capacity descriptors to 
labels for clothes washers, and to keep only

[[Page 16140]]

the ``Standard'' and ``Compact'' descriptors at this time. At present, 
internal tub volume is a metric that is not directly comparable between 
vertical and horizontal axis machines. Thus, adding tub volume to the 
EnergyGuide label might be more confusing, and perhaps misleading, than 
helpful to consumers.
    The Commission also is not adopting CU's suggestion to include 
operating cost for a specific number of pounds of clothes per year. 
This information cannot be derived by means of the current DOE test 
procedure for clothes washers. The Commission is not empowered, 
therefore, to require that manufacturers include it on EnergyGuides. If 
DOE decides to provide for the quantification of this information in 
its test procedure at some future time, the Commission may revisit this 
issue. In the meantime, because the information could be helpful to 
consumers, the Commission encourages manufacturers to consider 
including it, together with a meaningful explanation of its use, in 
promotional materials relating to their products.

III. Regulatory Flexibility Act

    This notice does not contain a regulatory analysis under the 
Regulatory Flexibility Act (``RFA''), 5 U.S.C. 603-604, because the 
Commission believes that the amendment will not have ``a significant 
economic impact on a substantial number of small entities,'' 5 U.S.C. 
605.
    In the NPR, the Commission concluded tentatively that the amendment 
would not impose any new requirements on manufacturers of clothes 
washers. Instead, it would require less information than is currently 
required on labels that clothes washer manufacturers already must affix 
to their products. The Commission stated that it therefore believed 
that the impact of the proposed amendment on all entities within the 
affected industry, if any, would be de minimis.
    In light of the above, the Commission certified in the NPR, 
pursuant to section 605 of the RFA, 5 U.S.C. 605, that the proposed 
amendments would not, if granted, have a significant impact on a 
substantial number of small entities. To ensure that no substantial 
economic impact was overlooked, however, the Commission solicited 
comments concerning the effects of the proposed amendment, including 
any benefits and burdens on manufacturers or consumers and the extent 
of those benefits and burdens, beyond those imposed or conferred by the 
current Rule, that the amendment would have on manufacturers, 
retailers, or other sellers. The Commission expressed particular 
interest in comments regarding the effects of the amendment on small 
businesses. The Commission stated that, after reviewing any comments 
received, it would determine whether it would be necessary to prepare a 
final regulatory flexibility analysis if it determined to issue the 
amendment.
    Five comments responded to the Commission's solicitation.\101\ 
ACEEE stated that ``For retailers who sell high efficiency machines, we 
would expect modest benefits, as sales of high-efficiency machines 
increase sales and profits.''.\102\ OOE, Maytag, and CEC commented that 
there would be virtually no impact on small businesses.\103\ Amana said 
that label confusion and training costs could have an adverse economic 
impact on small businesses,\104\ and Whirlpool stated that ``Small 
retailers that specialize in top-loaders only could be disadvantaged.'' 
\105\
---------------------------------------------------------------------------

    \101\ Amana (4) p. 3; OOE (5) p. 4; ACEEE (9) p. 3; Whirlpool-1 
(10) p. 5; and CEE (16) p. 5.
    \102\ ACEEE (9) p. 3.
    \103\ OOE (5) p. 4; Maytag (6) p. 3; CEE (16) p. 5.
    \104\ Amana (4) p. 3.
    \105\ Whirlpool-1 (10) p. 5.
---------------------------------------------------------------------------

    The Commission acknowledges that manufacturers that do not make, 
and small businesses that do not sell, front-loading clothes washers, 
and especially those companies that do manufacture and/or sell 
efficient top-loading models, may, in the short run, be at a slight 
disadvantage as a result of today's amendment. The Commission has 
concluded, however, that such disadvantages are offset by the benefits 
to consumers. Further, continuing developments in clothes washer 
technology and ongoing changes in the marketplace (and manufacturer and 
retailer responses to such changes), could quickly overcome any slight 
disadvantages that may be incurred now.
    Therefore, although the comments on this issue seem split as to 
whether there will be any effect at all on small businesses, the 
Commission believes that the impact of the results that do accrue will 
be de minimis, because the potential costs will be small in comparison 
to the overall budgets of the businesses affected, and thus will not be 
``significant.''
    In light of the above, the Commission certifies, pursuant to 
section 605 of the RFA, 5 U.S.C. 605, that the amendment published 
today will not have a significant impact on a substantial number of 
small entities.

IV. Paperwork Reduction Act

    The Paperwork Reduction Act (``PRA''), 44 U.S.C. 3501 et seq., 
requires government agencies, before promulgating rules or other 
regulations that require ``collections of information'' (i.e., 
recordkeeping, reporting, or third-party disclosure requirements), to 
obtain approval from the Office of Management and Budget (``OMB''), 44 
U.S.C. 3502. The Commission currently has OMB clearance for the Rule's 
information collection requirements (OMB No. 3084-0069).
    In the NPR, the Commission concluded that the conditional exemption 
would not impose any new information collection requirements. To ensure 
that no additional burden was overlooked, however, the Commission 
sought public comment on what, if any, additional information 
collection burden the proposed conditional exemption would impose.
    No comments addressed this issue. The Commission again concludes, 
therefore, that the conditional exemption will not impose any new 
information collection requirements.

[[Page 16141]]

List of Subjects in 16 CFR Part 305

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

    Authority: 42 U.S.C. 6294.

V. Final Amendment

    In consideration of the foregoing, the Commission amends title 16, 
chapter I, subchapter C of the Code of Federal Regulations, as follows:

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

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

    Authority: 42 U.S.C. 6294.

    2. Appendix F to Part 305--Clothes Washers is revised to read as 
follows:

Appendix F to Part 305--Clothes Washers

Range Information

    ``Compact'' includes all household clothes washers with a tub 
capacity of less than 1.6 cu. ft. or 13 gallons of water.
    ``Standard'' includes all household clothes washers with a tub 
capacity of 1.6 cu. ft. or 13 gallons of water or more.

------------------------------------------------------------------------
                                                   Range of estimated
                                                      annual energy
                   Capacity                       consumption (kWh/yr.)
                                               -------------------------
                                                    Low          High
------------------------------------------------------------------------
COMPACT.......................................          537          607
STANDARD......................................          156         1154
------------------------------------------------------------------------


    3. Sample Label 3 in Appendix L to Part 305 is revised to read as 
follows:

BILLING CODE 6750-01-P

[[Page 16142]]

[GRAPHIC] [TIFF OMITTED] TR27MR00.003


    By direction of the Commission.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 00-7461 Filed 3-24-00; 8:45 am]
BILLING CODE 6750-01-C