[Federal Register Volume 71, Number 68 (Monday, April 10, 2006)]
[Proposed Rules]
[Pages 18023-18030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3452]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 71, No. 68 / Monday, April 10, 2006 / 
Proposed Rules  

[[Page 18023]]



FEDERAL TRADE COMMISSION

16 CFR Part 305

RIN 3084-AB03


``Appliance Labeling Rule''; Energy Labeling; Public Workshop

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Notice announcing public workshop; public comment and 
participation request.

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SUMMARY: The FTC is planning to host a public workshop to discuss 
current energy labeling requirements for consumer products. This 
workshop is part of a rulemaking that the Commission initiated on 
November 2, 2005 (70 FR 66307). The workshop is open to the public, and 
there is no fee for attendance. For admittance to the conference 
center, all attendees will be required to show a valid photo 
identification, such as a driver's license.

DATES: The workshop will be held on Wednesday, May 3, 2006 from 9 a.m. 
to 4 p.m. at the Federal Trade Commission's Satellite Building 
Conference Center located at 601 New Jersey Avenue, NW., Washington, 
DC. Requests to participate as a panelist must be received by April 21, 
2006. Any written comments related to the workshop must be received on 
or before May 17, 2006, two weeks after the conference takes place.

ADDRESSES: Registration information can be found in Section III of this 
Notice. Comments and requests to participate as a panelist should 
respectively refer to ``Energy Labeling Workshop--Comment, Project No. 
P064201'' or ``Energy Labeling Workshop--Request to Participate, 
Project No. P064201'', to facilitate the organization of comments and 
requests to participate. A comment or request to participate as a 
panelist filed in paper form should include this reference both in the 
text and on the envelope, and should be mailed or delivered, with two 
complete copies, to the following address: Federal Trade Commission/
Office of the Secretary, Room H-135 (Annex O), 600 Pennsylvania Avenue, 
NW., Washington, DC 20580. Because U.S. mail in the Washington area and 
at the Agency is subject to delay, please consider submitting your 
comments in electronic form, as prescribed below. Comments and requests 
to participate as a panelist containing confidential material, however, 
must be filed in paper form, must be clearly labeled ``Confidential,'' 
and must comply with Commission Rule 4.9(c).\1\
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    \1\ The comment or request to participate as a panelist 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 or request to 
participate as a panelist to be withheld from the public record. The 
request for confidential treatment will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    Comments filed in electronic form should be submitted by clicking 
on: https://secure.commentworks.com/ftc-energylabelingworkshop and 
following the instructions on the Web-based form. To ensure that the 
Commission considers an electronic comment, you must file it on the 
Web-based form at https://secure.commentworks.com/ftc-energylabelingworkshop. Requests to participate filed in electronic 
form should be submitted by e-mail to [email protected].
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to use in this proceeding as appropriate. 
All timely and responsive public comments, whether filed in paper or 
electronic form, will be considered by the Commission, and will be 
available to the public on the FTC Web site, to the extent practicable, 
at http://www.ftc.gov. As a matter of discretion, the FTC makes every 
effort to remove home contact information for individuals from the 
public comments it receives before placing those comments on the FTC 
Web site. More information, including routine uses permitted by the 
Privacy Act, may be found in the FTC's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, Attorney, 202-326-
2889, Division of Enforcement, Federal Trade Commission.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 137 of the Energy Policy Act of 2005 (Pub. L. No. 109-58) 
amends the Energy Policy and Conservation Act of 1975 (EPCA) (42 U.S.C. 
6291 et seq.) to require that the Commission initiate a rulemaking 
considering ``the effectiveness of the consumer products labeling 
program in assisting consumers in making purchasing decisions and 
improving energy efficiency.'' As part of this effort, the Act directs 
the Commission to consider ``changes to the labeling rules (including 
categorical labeling) that would improve the effectiveness of consumer 
product labels.'' The Act gives the FTC two years to complete the 
rulemaking. To initiate this effort, the Commission published an 
Advance Notice of Proposed Rulemaking (ANPR) on November 2, 2005 (70 FR 
66307). That Notice sought comments on a series of questions about the 
effectiveness of the current label, possible alternatives, and other 
potential changes to the FTC's Appliance Labeling Rule (16 CFR part 
305). The Commission received 27 comments in response to the ANPR. The 
comments can be viewed on the FTC Web site at http://www.ftc.gov/os/comments/energylabeling/index.htm.
    The Commission has scheduled a public workshop to allow interested 
parties to discuss the comments and to provide information on 
additional questions generated by the comments.

II. Issues for Discussion at the Workshop

    The workshop will address issues related to the Commission's 
November 2005 ANPR on the effectiveness of the current energy labeling 
program. The Commission has identified four specific issues for 
discussion at the workshop. We request that participants review these 
issues so that they can provide their views during the workshop or in 
submitted comments. After completion of the discussion of the specific 
issues described in this Notice, there will be time available to 
discuss any other issues raised in the ANPR. The four specific issues 
involve label design, refrigerator categories, heating and cooling 
equipment labels, and television labels.

A. Label Design

    The ANPR sought comments on whether the Commission should change

[[Page 18024]]

the current design and format of the EnergyGuide label, which is 
required on most major household appliances. Many of the comments 
addressed this issue, focusing on whether label information should be 
presented in the form of a ``continuous'' bar graph similar to the 
current label (see Figure 1) \2\ or in the form of discrete categories 
such as stars (i.e., a ``categorical'' label) (see Figure 2). Some 
commenters favored the current continuous-style label while others 
urged the FTC to adopt a categorical label. The workshop will allow 
participants to discuss issues related to these two designs as well as 
a third possible approach discussed below.
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    \2\ Figure 1 is a modified version of the current EnergyGuide 
label.
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1. Continuous Label
    The bar graph on the current continuous label depicts the energy 
use (or efficiency) of the product as it relates to other products on 
the market and provides a range of energy use or efficiency ratings 
based on market data. One end of the scale depicts the energy use of 
the most efficient model on the market while the other end identifies 
the least efficient model. For example, the bar graph on a label for a 
typical refrigerator category may have 539 kWh/yr (kilowatt-hours per 
year) on one end and 698 kWh/yr on the other end. A key feature of the 
current label is that this range or scale is based on data for models 
available on the market.
2. Categorical Label
    The ratings on a categorical label (e.g., stars or letters) 
generally depict the model's energy efficiency rating as compared to 
the minimum government efficiency standards (i.e., the lowest allowable 
efficiency levels) set by the Department of Energy (DOE). For example, 
a five-star dishwasher would have an efficiency rating that exceeded 
the minimum government standard by a certain percentage (e.g., 20%). 
This approach is fundamentally different from that used for the 
continuous label designs based on market data because the range does 
not depict directly the energy use or efficiency of other products on 
the market. Instead, the categories (e.g., stars) correspond to 
thresholds defined by the agency administering the labeling program.
3. Third Label Approach
    A third approach to the EnergyGuide label would combine the 
graphical design of a continuous label with the energy efficiency 
comparison underlying the categorical label. Such a label would include 
a continuous style bar graph that depicts the energy use or efficiency 
of a product in comparison to the DOE minimum efficiency (or 
conservation) standards (see Figure 3). The label would identify the 
percentage by which a model exceeds DOE's minimum efficiency standard. 
The range used on such a label would be roughly proportional to the 
efficiency of models on the market. For example, if the most efficient 
refrigerator exceeds the DOE standards by 35%, then the scale for those 
products would range from 0% to approximately 40%. This label design 
would provide a uniform system of conveying energy information in a 
continuous-style label format. As part of the overall label design 
discussion, the FTC will be seeking comment at the public workshop on 
whether it should consider such a label in addition to the other label 
design approaches discussed in the ANPR and submitted comments.

B. Refrigerator Categories

    The current labeling requirements designate separate comparability 
ranges for various refrigerator sub-categories (or styles) such as 
side-by-side door configurations or models with top-mounted freezers. 
The current range information on the label allows consumers to compare 
the energy use of similarly configured refrigerators but not the energy 
use of models across sub-categories (e.g., a side-by-side model to a 
top-mounted freezer model). This framework is consistent with the style 
categories used by the DOE efficiency standards program and Energy 
Star.
    Nevertheless, some refrigerator configurations are generally less 
efficient than others. For example, top-mounted freezer models 
generally use less electricity than comparably sized side-by-side 
models. As a result, the range information on a particular side-by-side 
refrigerator label may compare favorably to other side-by-sides but 
fail to show that the model uses significantly more energy than an 
average refrigerator with a top-mounted freezer.\3\ Given this concern, 
Consumers Union recommended that refrigerator labels compare the energy 
used by the appliance to the maximum energy consumption allowed by law 
for any refrigerator of comparable internal volumes--independent of 
style.\4\
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    \3\ The energy use and operating costs required on the label 
would allow such cross-category comparisons, but the range itself 
does not.
    \4\ Consumers Union Comments in FTC Matter No. R511994 (Jan. 13, 
2006).
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    Consumers Union suggested that the Commission change its 
requirements to allow consumers to use range information to compare all 
styles of refrigerator-freezers. To accomplish this, the FTC could 
amend the rule so that labels for all refrigerator-freezers feature the 
same range of comparability, regardless of style. Alternatively, if the 
labels were reconfigured to convey efficiency comparisons to the DOE 
efficiency standards (such as in Figures 2 and 3), the range could 
depict the model's energy use as compared to the maximum energy use 
allowed for any refrigerator, regardless of style.\5\ The FTC will be 
seeking comment at the public workshop on whether the FTC should make 
Rule changes to address these concerns, and, if so, what changes would 
be appropriate.
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    \5\ DOE allows a higher energy use for side-by-side/ice service 
models that it does for other full-size refrigerators. Thus, the 
Rule could set the energy use allowed for such models as the 
benchmark on ranges for all full-size refrigerators.
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C. Labels for Heating and Cooling Equipment

    The Appliance Labeling Rule requires EnergyGuide labels on central 
air conditioners, heat pumps, furnaces, boilers, and water heaters (16 
CFR 305.11).\6\ Both the Gas Appliance Manufacturers Association (GAMA) 
and the Air Conditioning and Refrigeration Institute (ARI), trade 
associations representing heating and cooling equipment manufacturers, 
suggested that labels for heating and cooling equipment do not aid 
consumers because these products are not sold through showrooms or by 
other means that allow consumers to examine the label before 
purchase.\7\ GAMA urged that the FTC eliminate the labeling requirement 
for furnaces, boilers, and water heaters,\8\ and ARI made the same 
suggestion for central air conditioners and heat pumps. Both 
organizations urged reliance on existing online databases (such as 
those available on the GAMA and ARI Web sites) to provide consumers 
with energy information about their products in lieu of labeling. In 
addition to GAMA and ARI comments, Natural Resources Canada described 
its voluntary program for heating and cooling products, which does not 
use labeling but instead urges

[[Page 18025]]

manufacturers to print efficiency ratings for their products on 
brochures.\9\
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    \6\ In 1979, the Commission required labeling for furnaces and 
water heaters. 44 FR 66466, 66470 (Nov. 19, 1979). The Commission 
required labels for central air conditioners and heat pumps in 1987 
(52 FR 46888 (Dec. 10, 1987)).
    \7\ GAMA Comments in FTC Matter No. R511994 (Jan. 13, 2006); and 
ARI Comments on FTC Matter No. R511994 (Jan. 13, 2006).
    \8\ GAMA explained that consumers sometimes purchase replacement 
residential water heater from retail outlets, but, as often as not, 
they obtain them through contractors. GAMA also argued the recent 
DOE standards have significantly reduced the differences in energy 
use or efficiency or storage water heaters on the market.
    \9\ Natural Resources Canada Comments in FTC Matter No. R511994 
(Jan. 13, 2006).
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    In contrast, the American Council for an Energy-Efficient Economy 
(ACEEE) raised some concerns about eliminating the EnergyGuide label 
from heating and cooling equipment.\10\ It suggested that the labels 
provide useful information on installed equipment even though most 
consumers do not see the EnergyGuide at the time of purchase for these 
products. According to ACEEE, research indicates that the label 
provides useful verification of the product's efficiency upon 
installation. ACEEE also suggested that the label is also used by 
energy auditors and by consumers purchasing an existing home to 
determine the energy efficiency of equipment installed by previous 
owners. ACEEE suggested that the FTC investigate additional means for 
providing label information to consumers so it can better impact their 
purchase decisions.
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    \10\ ACEEE Comments in FTC Matter No. R511994 (Jan. 13, 2006).
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    Under EPCA, the Commission may exclude central air conditioners, 
heat pumps, and furnaces from the labeling requirements if it 
determines that labeling is not technically or economically feasible 
or, alternatively, that labels are not likely to assist consumers in 
making purchasing decisions. (42 U.S.C. 6294(a)(2)). For water heaters, 
the statute directs the FTC to require labels unless the Commission 
determines that labeling is not technologically or economically 
feasible. (42 U.S.C. 6294(a)(1)). Section 6294(c) gives the Commission 
authority to require disclosures, in printed material displayed or 
distributed at the point of sale, of energy information that may be 
required on a label. In addition, the Commission may direct 
manufacturers to provide additional energy-related disclosures in 
information shipped with the product including instructions for the 
maintenance, use, or repair of the covered product. At the public 
workshop, the Commission seeks further comment on whether the 
Commission should retain labeling requirements for heating and cooling 
equipment and whether the Commission should require an alternative 
means of disclosure, consistent with its authority under the statute.

D. Television Labeling

    Section 324(a) of EPCA requires labels for these products unless 
the Commission determines that labeling is not technologically or 
economically feasible. (42 U.S.C. 6294(a)). The test procedures used 
for labeling televisions must be those prescribed by DOE pursuant to 
section 323 of EPCA. (See 42 U.S.C. 6294(c)). In 1979, the Commission 
determined that labeling for televisions was not economically feasible. 
The FTC found that there was little variation in the annual energy 
costs of competing television models and that this cost was a small 
fraction of the purchase price. The Commission believed it was unlikely 
that labels for televisions would promote industry efforts to increase 
energy efficiency, or provide benefits to consumers. (44 FR 66466, 
66468 (Nov. 19, 1979)).
    According to comments filed by the Natural Resources Defense 
Council (NRDC),\11\ there are now many big screen digital televisions 
on the market that use 500 or more kilowatt-hours per year, which is as 
much energy as many new refrigerators. NRDC estimates that, in some 
cases, consumers will pay several hundred dollars in electricity costs 
for their televisions over the lifetime of the product. NRDC is 
concerned that reliable, model-specific, energy use information is 
virtually non-existent for new televisions. The Consortium for Energy 
Efficiency also urged the Commission to consider labeling for 
televisions stating that ``new technologies and larger sizes of 
televisions that are currently offered on the market argue for their 
inclusion within the scope of the Appliance Labeling Rule.'' \12\
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    \11\ Natural Resources Defense Council Comments in FTC Matter 
No. R511994 (Jan. 13, 2006).
    \12\ Consortium for Energy Efficiency Comments in FTC Matter No. 
R511994 (Jan. 13, 2006).
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    The FTC is seeking additional information about this issue at the 
public workshop. In particular, we request that participants address 
whether the Commission should revisit its decision to exclude 
televisions from the labeling requirements and whether the existing DOE 
test procedures are an appropriate basis for labeling.

III. Public Participation Information

A. Registration Information

    The public workshop will be conducted in a roundtable format. A 
court reporter will be present to record the proceedings so that a 
transcription can be made for the public record. The FTC will accept 
pre-registration for this workshop. Pre-registration is not necessary 
to attend, but is encouraged so that we may better plan this event. To 
pre-register, please e-mail your name and affiliation to 
[email protected]. When you pre-register, we will collect your 
name, affiliation, and your e-mail address. This information will be 
used to estimate how many people will attend and better understand the 
likely audience for the workshop. We may use your e-mail address to 
contact you with information about the workshop. Under the Freedom of 
Information Act (FOIA) or other laws, we may be required to disclose 
the information you provide to outside organizations. For additional 
information, including routine uses permitted by the Privacy Act, see 
the Commission's Privacy Policy at http://www.ftc.gov/ftc/privacy.htm. 
The FTC Act and other laws the Commission administers permit the 
collection of this contact information to consider and use for the 
above purposes.

B. Requests to Participate as a Panelist

    This workshop will be conducted in a roundtable format with 
participation by panelists selected by the FTC staff. Other attendees 
will also have an opportunity to comment and ask questions. Requests to 
participate as a panelist must be received by April 21, 2006. Persons 
will be notified on or before April 26, 2006 if they have been 
selected.
    Requests to participate as a panelist should be submitted 
electronically as part of the participants' pre-registration by e-mail 
to [email protected] or, if mailed, should be submitted in the 
manner detailed in the ADDRESSES section of this Notice, and should be 
captioned ``Energy Labeling Workshop--Request to Participate, Project 
No. P064201.'' Parties are asked to include in their requests a brief 
statement setting forth their expertise in or knowledge of the issues 
on which the workshop will focus as well as their contact information, 
including a telephone number, facsimile number, and e-mail address (if 
available), to enable the FTC to notify them if they are selected. For 
requests filed in paper form, an original and two copies of each 
document should be submitted. The staff will select panelists for the 
workshop using the following criteria: (1) The party has expertise in 
or knowledge of the issues that are the focus of the workshop, (2) the 
party's participation would promote a balance of interests being 
represented at the workshop, and (3) the party has been designated by 
one or more interested parties (who timely file requests to 
participate) as a party who shares interests with the designator(s).

C. Written and Electronic Comments

    The submission of comments is not required for participation in the

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workshop. If a person wishes to submit written or electronic comments 
about the topics to be discussed at the workshop, such comments must be 
received on or before May 17, 2006. For further instructions on 
submitting comments, please see the ADDRESSES section above. To read 
our policy on how we handle the information you submit, please visit 
http://www.ftc.gov/ftc/privacy.htm.
BILLING CODE 6750-01-P

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    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 06-3452 Filed 4-7-06; 8:45 am]
BILLING CODE 6750-01-C