[Federal Register Volume 69, Number 139 (Wednesday, July 21, 2004)]
[Notices]
[Pages 43587-43592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16483]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Proposed Collection; 
Comment Request; Extension

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Notice.

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[[Page 43588]]

SUMMARY: The proposed information collection requirements described 
below will be submitted to the Office of Management and Budget 
(``OMB'') for review, as required by the Paperwork Reduction Act 
(``PRA''). The FTC is seeking public comments on its proposal to extend 
through September 30, 2007 the current PRA clearance for information 
collection requirements contained in its Appliance Labeling Rule 
(``Rule''), promulgated pursuant to the Energy Policy and Conservation 
Act of 1975 (``EPCA''). The clearance expires on September 30, 2004.

DATES: Comments must be submitted on or before September 20, 2004.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Appliance Labeling Rule: Paperwork comment, 
R611004'' to facilitate the organization of comments. A comment filed 
in paper form should include this reference both in the text and on the 
envelope, and should be mailed or delivered to the following address: 
Federal Trade Commission/Office of the Secretary, Room H-159 (Annex U), 
600 Pennsylvania Avenue, NW., Washington, DC 20580. If the comment 
contains any material for which confidential treatment is requested, it 
must be filed in paper form, and the first page of the document must be 
clearly labeled ``Confidential.'' \1\ The FTC is requesting that any 
comment filed in paper form be sent by courier or overnight service, if 
possible, because U.S. postal mail in the Washington area and at the 
Commission is subject to delay due to heightened security precautions.
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments will be 
considered by the Commission, and will be available to the public on 
the FTC Web site, to the extent practicable, at www.ftc.gov. As a 
matter of discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information collection requirements should be 
addressed to Hampton Newsome, Attorney, Bureau of Consumer Protection, 
Division of Enforcement, Room 4616, Federal Trade Commission, 600 
Pennsylvania Ave., NW., Washington, DC 20580 (202-326-2889).

SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501-3520), Federal 
agencies must obtain approval from OMB for each collection of 
information they conduct or sponsor. ``Collection of information'' 
means agency requests or requirements that members of the public submit 
reports, keep records, or provide information to a third party. 44 
U.S.C. 3502(3) and 5 CFR 1320.3(c) As required by section 3506(c)(2)(A) 
of the PRA, the FTC is providing this opportunity for public comment 
before requesting that OMB extend the existing paperwork clearance for 
the Rule (OMB Control Number 3084-0069).
    The FTC invites comments on: (1) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques or 
other forms of information technology, e.g., permitting electronic 
submission of responses.
    The Appliance Labeling Rule (16 CFR Part 305) establishes testing, 
reporting, recordkeeping, and labeling requirements for manufacturers 
of major household appliances (refrigerators, refrigerator-freezers, 
freezers, water heaters, clothes washers, dishwashers, room air 
conditioners, furnaces, central air conditioners, heat pumps, pool 
heaters, certain lighting products, and certain plumbing products). The 
requirements relate specifically to the disclosure of information 
relating to energy consumption and water usage. The Rule's testing and 
disclosure requirements enable consumers purchasing appliances to 
compare the energy use or efficiency of competing models. In addition, 
EPCA and the Rule require manufacturers to submit relevant data to the 
Commission regarding energy or water usage in connection with the 
products they manufacture. The Commission uses this data to compile 
ranges of comparability for covered appliances for publication in the 
Federal Register. These submissions, along with required records for 
testing data, may also be used in enforcement actions involving alleged 
misstatements on labels or in advertisements.

Burden Statement

    Estimated annual hours burden: 445,000 hours.
    The estimated hours burden imposed by Section 324 of EPCA and the 
Commission's Rule include burdens for testing (338,292 hours); 
reporting (1,324 hours); recordkeeping (767 hours); labeling (101,333 
hours); and retail catalog disclosures (2,550 hours). The total burden 
for these activities is 445,000 hours (rounded to the nearest 
thousand), which is the same as staff's previous estimate in its 2001 
submission to OMB.
    The following estimates of the time needed to comply with the 
requirements of the Rule are based on census data, Department of Energy 
figures and estimates, general knowledge of manufacturing practices, 
and industry input and figures. Because compliance burden falls almost 
entirely on manufacturers and importers (with a de minimis burden for 
retailers), burden estimates are calculated on the basis of the number 
of domestic manufacturers and/or the number of units shipped 
domestically in the various product categories.

A. Testing

    Under the Rule, manufacturers of covered products must test each 
basic model they produce to determine energy usage (or, in the case of 
plumbing fixtures, water consumption). The burden imposed by this 
requirement is determined by the number of basic models produced, the 
average number of units tested per model, and the time required to 
conduct the applicable test.
    Manufacturers need not subject each basic model to testing 
annually; they must retest only if the product design changes in such a 
way as to affect energy consumption. The staff estimates that the 
frequency with which models are tested every year ranges roughly 
between 10% and 50% and that the actual percentage of basic models 
tested varies by appliance category. In addition, it is likely that 
only a small portion of the tests conducted is

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attributable to the Rule's requirements. Given the lack of specific 
data on this point, staff has conservatively assumed that all of the 
tests conducted are attributable to the Rule's requirements and will 
use the high end of the range noted above. Accordingly, the burden 
estimates are based on the assumption that 50% of all basic models are 
tested annually. Thus, the estimated testing burden for the various 
categories of products covered by the Rule is as follows \2\.
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    \2\ The following numbers reflect estimates of the basic models 
in the market. The actual numbers will vary from year to year. Since 
2001, the Commission has not identified any changes in the number of 
basic models that would yield a significant increase in the total 
burden hours for testing. The average number of units tested per 
model and the hours per unit tested are based on information from 
industry sources.

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                                                   Percentage of  Avg. number of                   Total annual
    Category of manufacturer         Number of     models tested   units tested   Hours per unit  testing burden
                                   basic models   (FTC required)     per model        tested           hours
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Refrigerators refrigerator-                3,075              50               2               4          12,300
 freezers, and freezers.........
Dishwashers.....................             393              50               2               1             393
Clothes washers.................             500              50               2               2           1,000
Water heaters...................             650              50               2              24          15,600
Room air conditioners...........           1,092              50               2               8           8,736
Furnaces........................           1,900              50               2               8          15,200
Central A/C.....................           1,270              50               2              24          30,480
Heat pumps......................             903              50               2              72          65,016
Pool heaters....................             250              50               2              12           3,000
Fluorescent lamp ballasts.......             975              50               4               3           5,850
Lamp products...................           2,100              50              12              14         176,400
Plumbing fittings...............           1,700              50               2               2           3,400
Plumbing fixtures...............          22,000              50               1           .0833             917
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                                  ..............  ..............  ..............  ..............         338,292
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B. Reporting

    Reporting burden estimates are based on information from industry 
representatives. Manufacturers of some products, such as appliances and 
HVAC equipment (furnaces, central air conditioners, and heat pumps), 
indicate that, for them, the reporting burden is best measured by the 
estimated time required to report on each model manufactured, while 
others, such as makers of fluorescent lamp ballasts and lamp products, 
state that an estimated number of annual burden hours by manufacturer 
is a more meaningful way to measure. The figures below reflect these 
different methodologies as well as the varied burden hour estimates 
provided by manufacturers of the different product categories that use 
the latter methodology.
Appliances, HVAC Equipment, and Pool Heaters
    Staff estimates that the average reporting burden for these 
manufacturers is approximately two minutes per basic model. Based on 
this estimate, multiplied by a total of 10,033 basic models of these 
products, the annual reporting burden for the appliance, HVAC 
equipment, and pool heater industry is an estimated 334 hours (2 
minutes x 10,033 models / 60 minutes per hour).
Fluorescent Lamp Ballasts, Lamp Products, and Plumbing Products
    The total annual reporting burden for manufacturers of fluorescent 
lamp ballasts, lamp products, and plumbing products is based on the 
estimated average annual burden for each category of manufacturers, 
multiplied by the number of manufacturers in each respective category, 
as shown below:

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                                                                   Annual burden                   Total annual
                    Category of manufacturer                         hours per       Number of       reporting
                                                                   manufacturer    manufacturers   burden hours
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Fluorescent lamp ballasts.......................................               6              20             120
Lamp products...................................................              15              50             750
Plumbing products...............................................               1             120             120
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Total Reporting Burden Hours

    The total reporting burden for industries covered by the Rule is 
1,324 hours annually (334 + 120 + 750 + 120).

C. Recordkeeping

    EPCA and the Appliance Labeling Rule require manufacturers to keep 
records of the test data generated in performing the tests to derive 
information included on labels and required by the Rule. As with 
reporting, burden is calculated by number of models for appliances, 
HVAC equipment, and pool heaters, and by number of manufacturers for 
fluorescent lamp ballasts, lamp products, and plumbing products.
Appliances, HVAC Equipment, and Pool Heaters
    The recordkeeping burden for manufacturers of appliances, HVAC 
equipment, and pool heaters varies directly with the number of tests 
performed. Staff estimates total recordkeeping burden to be 
approximately 167 hours for these manufacturers, based on an estimated 
average of one minute per record stored (whether in electronic or paper 
format), multiplied by 10,033 tests performed annually (1 minute x 
10,033 basic models / 60 minutes per hour).\3\
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    \3\ The amount of annual tests performed is derived by 
multiplying the number of basic models within the relevant product 
categories by the average number of units tested per model within 
each category (the underlying information may be drawn from the 
table in Section A.).

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Fluorescent Lamp Ballasts, Lamp Products, and Plumbing Products
    The total annual recordkeeping burden for manufacturers of 
fluorescent lamp ballasts, lamp products, and plumbing products is 
based on the estimated average annual burden for each category of 
manufacturers (derived from industry sources), multiplied by the number 
of manufacturers in each respective category, as shown below:

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                                                                   Annual burden                   Total annual
                    Category of manufacturer                         hours per       Number of     recordkeeping
                                                                   manufacturer    manufacturers   burden hours
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Fluorescent lamp ballasts.......................................               2              20              40
Lamp products...................................................              10              50             500
Plumbing products...............................................              .5             120              60
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Total Recordkeeping Burden Hours

    The total recordkeeping burden for industries covered by the Rule 
is 767 hours annually (167+40+500+60).

D. Labeling

    EPCA and the Rule require that manufacturers of covered products 
provide certain information to consumers, through labels, fact sheets, 
or permanent markings on the products. The burden imposed by this 
requirement consists of (1) the time needed to prepare the information 
to be provided, and (2) the time needed to provide it, in whatever 
form, with the products. The applicable burden for each category of 
products is described below:
Appliances, HVAC Equipment, and Pool Heaters
    EPCA and the Rule specify the content, format, and specifications 
for the required labels, so manufacturers need only add the energy 
consumption figures derived from testing. In addition, most larger 
companies use automation to generate labels, and the labels do not 
change from year to year. Given these considerations, staff estimate 
that the time to prepare labels for appliances, HVAC equipment, and 
pool heaters is no more than four minutes per basic model. Thus, for 
appliances, HVAC equipment, and pool heaters, the approximate annual 
drafting burden involved in preparing labels is 669 hours per year 
[10,033 (basic models) x 4 minutes (drafting time per basic model) / 60 
(minutes per hour)].
    Industry representatives and trade associations have estimated that 
it takes between 4 and 8 seconds to affix each label to each product. 
Based on an average of 6 seconds per unit, the annual burden for 
affixing labels to appliances, HVAC equipment, and pool heaters is 
83,522 hours [6 (seconds) x 50,113,098 (the number of total products 
shipped) / 3,600 (seconds per hour)].
    The Rule also requires that HVAC equipment manufacturers disclose 
energy usage information on a separate fact sheet or in an approved 
industry-prepared directory of products. Staff has estimated the 
preparation of these fact sheets requires approximately 30 minutes per 
basic model. Manufacturers producing at least 95 percent of the 
affected equipment, however, are members of trade associations \4\ that 
produce approved directories (in connection with their certification 
programs independent of the Rule) that satisfy the fact sheet 
requirement. Thus, the drafting burden for fact sheets for HVAC 
equipment is approximately 102 hours annually [4,073 (basic models) x 
.5 hours x .05 (proportion of equipment for which fact sheets are 
required)].
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    \4\ These associations include the Air-Conditioning and 
Refrigeration Institute, the Gas Appliance Manufacturers 
Association, and the Hydronics Institute.
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    The Rule allows manufacturers to prepare a directory containing 
fact sheet information for each retail establishment as long as there 
is a fact sheet for each basic model sold. Assuming that six HVAC 
manufacturers (i.e., approximately 5% of HVAC manufacturers), produce 
fact sheets instead of having required information shown in industry 
directories, and each spends approximately 16 hours per year 
distributing the fact sheets to retailers and in response to occasional 
consumer requests, the total time attributable to this activity would 
also be approximately 96 hours.
    The total annual labeling burden for appliances, HVAC equipment, 
and pool heaters is 669 hours for preparation plus 83,522 hours for 
affixing, or 84,191 hours. The total annual fact sheet burden is 102 
hours for preparation and 96 hours for distribution, or 198 hours. The 
total annual burden for labels and fact sheets for the appliance, HVAC, 
and pool heater industries is, therefore, estimated to be 84,389 hours 
(84,191 + 198).
Fluorescent Lamp Ballasts
    The statute and the Rule require that labels for fluorescent lamp 
ballasts contain an ``E'' within a circle. Since manufacturers label 
these ballasts in the ordinary course of business, the only impact of 
the Rule is to require manufactures to reformat their labels to include 
the ``E'' symbol. Thus, the burden imposed by the Rule for labeling 
fluorescent lamp ballasts is minimal.
Lamp Products
    The burden attributable to labeling lamp products is also minimal, 
for similar reasons. The Rule requires certain disclosures on packaging 
for lamp products. Since manufacturers were already disclosing the 
substantive information required under the Rule prior to its 
implementation, the practical effect of the Rule was to require that 
manufactures redesign packaging materials to ensure they include the 
disclosures in the manner and form prescribed by the Rule. Because this 
effort is now complete, there is no ongoing labeling burden imposed by 
the Rule for lamp products.
Plumbing Products
    The statute and the Rule require that manufacturers disclose the 
water flow rate for plumbing fixtures. Manufacturers may accomplish 
this disclosure by attaching a label to the product, through permanent 
markings imprinted on the product as part of the manufacturing process, 
or by including the required information on packaging material for the 
product. While some methods might impose little or no additional 
incremental time burden and cost on the manufacturer, other methods 
(such as affixing labels) could. Thus, staff estimate an overall 
blended average burden associated with this disclosure requirement of 
one second per unit sold. Staff also estimate that there are 
approximately 9,000,000 covered fixtures and 52,000,000 fittings sold 
annually in the country. Therefore, the estimated annual burden to 
label plumbing products is 16,944 hours [61,000,000 (units) x 1 
(seconds) / 3,600 (seconds per hour)].

Total Burden for Labeling

    The total labeling burden for all industries covered by the Rule is

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101,333 hours (84,389 +16,944) annually.

E. Retail Sales Catalogs Disclosures

    The Rule requires that sellers offering covered products through 
retail sales catalogs (i.e., those publications from which a consumer 
can actually order merchandise) disclose in the catalog energy (or 
water) consumption for each covered product. Because this information 
is supplied by the product manufacturers, the burden on the retailer 
consists of incorporating the information into the catalog 
presentation.
    In the past, staff has estimated that there are 100 sellers who 
offer covered products through paper retail catalogs. While the Rule 
initially imposed a burden on catalog sellers by requiring that they 
draft disclosures and incorporate them into the layouts of their 
catalogs, paper catalog sellers now have substantial experience with 
the Rule and its requirements. Energy and water consumption information 
has obvious relevance to consumers, so sellers are likely to disclose 
much of the required information with or without the Rule. Accordingly, 
given the small number of catalog sellers, their experience with 
incorporating energy and water consumption data into their catalogs, 
and the likelihood that many of the required disclosures would be made 
in the ordinary course of business, staff believe that any incremental 
burden the Rule imposes on these paper catalog sellers would be 
minimal.
    Staff estimates that there are an additional 150 new online sellers 
of covered products who are subject to the Rule's catalog disclosure 
requirements. Many of these sellers may not have the experience the 
paper catalog sellers have in incorporating energy and water 
consumption data into their catalogs. Staff estimates that these online 
sellers each require approximately 17 hours per year to incorporate the 
data into their online catalogs. This estimate is based on the 
assumption that entry of the required information takes 1 minute per 
covered product and an assumption that the average online catalog 
contains approximately 1,000 covered products (based on a sampling of 
websites of affected retailers). Given that there is a great variety 
among sellers in the volume of products they offer online, it is very 
difficult to estimate such volume with precision. In addition, this 
analysis assumes that information for all 1,000 products is entered 
into the catalog. This is a conservative assumption because the number 
of incremental additions to the catalog from year to year is likely to 
be much lower after initial start-up efforts have been completed. The 
total catalog disclosure burden for all industries covered by the Rule 
is 2,550 hours (150 sellers x 17 hours annually).
    Estimated annual cost burden: ($7,906,857 in labor costs and 
$3,519,422 in capital or other non-labor costs).
    Labor Costs: Staff derived labor costs by applying appropriate 
estimated hourly cost figures to the burden hours described above. In 
calculating the cost figures, staff assumes that test procedures are 
conducted by skilled technical personnel at an hourly rate of $20.00, 
and that recordkeeping and reporting, and labeling, marking, and 
preparation of fact sheets, generally are performed by clerical 
personnel at an hourly rate of $10.75.
    Based on the above estimates and assumptions, the total annual 
labor costs for the five different categories of burden under the Rule, 
applied to all the products covered by it, is $7,907,000 (rounded to 
the nearest thousand), derived as follows:

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                                         Burden hours                                              Total annual
               Activity                    per year             Wage category hourly rate           labor cost
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Testing...............................         338,292  Skilled technical/$20...................      $6,765,840
Reporting.............................           1,324  Clerical/$10.75.........................          14,233
Recordkeeping.........................             767  Clerical/$10.75.........................           8,245
Labeling, marking, and fact sheet              101,333  Clerical/$10.75.........................       1,089,330
 preparation.
Catalog disclosures...................           2,550  Clerical/$10.75.........................          27,413
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                                        ..............                                                 7,905,061
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    Capital or Other Non-Labor Costs: $3,519,000 (rounded), determined 
as follows:
    Staff has examined the five distinct burdens imposed by EPCA 
through the Rule--testing, reporting, recordkeeping, labeling, and 
retail catalog disclosures--as they affect the 11 groups of products 
that the Rule covers. Staff has concluded that there are no current 
start-up costs associated with the Rule. Manufacturers have in place 
the capital equipment necessary--especially equipment to measure energy 
and/or water usage--to comply with the Rule.
    Under this analysis, testing, recordkeeping, and retail catalog 
disclosures are activities that incur no capital or other non-labor 
costs. As mentioned above, testing has been performed in these 
industries in the normal course of business for many years as has the 
associated recordkeeping. The same is true regarding compliance 
applicable to the requirements for paper catalogs. Manufacturers and 
retailers who make required disclosures in catalogs already are 
producing catalogs in the ordinary course of their businesses; 
accordingly, capital cost associated with such disclosure would be 
minimal or nil. Staff recognizes that there may be initial costs 
associated with posting online disclosure, and it invites further 
comment to reasonably quantify such costs.
    Manufacturers that submit required reports to the Commission 
directly (rather than through trade associations) incur some nominal 
costs for paper and postage. Staff estimates that these costs do not 
exceed $2,500. Manufacturers must also incur the cost of procuring 
labels and fact sheets used in compliance with the Rule. Based on 
estimates of 50,113,098 units shipped and 128,650 fact sheets 
prepared,\5\ at an average cost of seven cents for each

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label or fact sheet, the total (rounded) labeling cost is $3,516,922.
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    \5\ The units shipped total is based on combined actual or 
estimated industry figures across all of the product categories, 
except for fluorescent lamp ballasts, lamp products, and plumbing 
products. Staff has determined that, for those product categories, 
there are little or no costs associated with the labeling 
requirements. The fact sheet estimation is based on the previously 
noted assumption that five percent of HVAC manufacturers produce 
fact sheets on their own. Based on total HVAC units shipped 
(10,291,965), five percent amounts to 514,598 HVAC units. Because 
manufacturers generally list more than one unit on a fact sheet, 
staff has estimated that manufacturers independently preparing them 
will use one sheet for every four of these 514,598 units. Thus, 
staff estimates that HVAC manufacturers produce approximately 
128,650 fact sheets.

William E. Kovacic,
General Counsel.
[FR Doc. 04-16483 Filed 7-20-04; 8:45 am]
BILLING CODE 6750-01-P