[Federal Register Volume 76, Number 228 (Monday, November 28, 2011)]
[Proposed Rules]
[Pages 72872-72875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-30436]


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FEDERAL TRADE COMMISSION

16 CFR Part 305

[RIN 3084-AB03]


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

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Advance notice of proposed rulemaking and public meeting 
announcement.

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SUMMARY: The Commission seeks comment on disclosures to help consumers, 
distributors, contractors, and installers easily determine whether a 
specific furnace, central air conditioner, or heat pump meets the 
applicable new Department of Energy efficiency standard for the regions 
where it will be installed. The Commission seeks comment on the 
content, location, and format of such disclosures. As part of this 
effort, the Commission staff will hold a public meeting with the 
Department of Energy to discuss possible disclosures.

DATES: Comments must be received by January 10, 2012. The public 
meeting will be held on December 16, 2011.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Regional Labeling for 
Heating and Cooling Equipment (16 CFR Part 305) (Project No. P114202)'' 
on your comment, and file your comment online at https://public.commentworks.com/ftc/regional-disclosuresanpr, by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, mail or deliver your comment to the following address: 
Federal Trade Commission, Office of the Secretary, Room H-113 (Annex 
H), 600 Pennsylvania Avenue NW., Washington, DC 20580.

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

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Commission seeks comment on new labeling requirements and other 
disclosures for residential furnaces, central air conditioners, and 
heat pumps (i.e., heating and cooling equipment) to help consumers and 
industry members install equipment with the efficiency rating 
appropriate for their location under new regional efficiency standards 
issued by the Department of Energy (DOE). These new standards impose 
minimum efficiency levels which vary by region for different types of 
equipment.
    To facilitate the development of such disclosures, the Commission 
seeks comment on their appropriate content, location, and format. After 
considering comments, the Commission will publish specific proposed 
requirements for comment and then publish final disclosure requirements 
as amendments to the Commission's Appliance Labeling Rule (16 CFR Part 
305).

II. Background

    The Commission's Appliance Labeling Rule, issued pursuant to the 
Energy Policy and Conservation Act (EPCA),\1\ requires energy labeling 
for major household appliances and other consumer products to help 
consumers compare competing models.\2\ When first published in 1979,\3\ 
the Rule applied to eight appliance categories: refrigerators, 
refrigerator-freezers, freezers, dishwashers, water heaters, clothes 
washers, room air conditioners, and furnaces. Since 1979, the 
Commission has expanded the Rule's coverage to include central air 
conditioners, heat pumps, plumbing products, lighting products, ceiling 
fans, certain types of water heaters, and televisions.\4\ The Rule 
requires manufacturers to attach yellow EnergyGuide labels to all 
covered furnaces, central air conditioners, and heat pumps.\5\ The Rule 
also prohibits retailers from removing these labels or rendering them 
illegible.\6\ In addition, sellers, including retailers, must post 
label information on Web sites and in paper catalogs from which covered 
products can be ordered.\7\
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    \1\ 42 U.S.C. 6291 et seq.
    \2\ More information about the Rule can be found at http://www.ftc.gov/appliances.
    \3\ 44 FR 66466 (Nov. 19, 1979).
    \4\ See 52 FR 46888 (Dec. 10, 1987) (central air conditioners 
and heat pumps); 54 FR 28031 (Jul. 5, 1989) (fluorescent lamp 
ballasts); 58 FR 54955 (Oct. 25, 1993) (certain plumbing products); 
59 FR 25176 (May 13, 1994) (lighting products); 59 FR 49556 (Sep. 
28, 1994) (pool heaters); 71 FR 78057 (Dec. 26, 2006) (ceiling 
fans); and 76 FR 1038 (Jan. 6, 2011) (televisions).
    \5\ See 42 U.S.C. 6302(a)(1) and 16 CFR 305.4(a)(1).
    \6\ See 42 U.S.C. 6302(a)(2) and 16 CFR 305.4(a)(2).
    \7\ See 42 U.S.C. 6296(a) and 16 CFR 305.20.
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    The EnergyGuide labels for heating and cooling equipment contain 
two key disclosures: (1) The product's efficiency

[[Page 72873]]

rating,\8\ and (2) a ``range of comparability'' showing the highest and 
lowest ratings for all similar models.\9\ The Rule also specifies the 
label's format. For example, the label must be yellow and feature the 
EnergyGuide headline in a specific format and type. Additionally, 
manufacturers cannot place any information on the label other than that 
specifically allowed by the Rule.
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    \8\ Efficiency ratings for these products include annual fuel 
utilization efficiency (AFUE) for furnaces, and seasonal energy 
efficiency ratio (SEER) and heating performance seasonal factor 
(HSPF) for central air conditioners and heat pumps.
    \9\ 16 CFR 305.13.
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    The Rule also requires manufacturers to provide distributors and 
installers with energy information about their furnaces, central air 
conditioners, and heat pumps in paper or electronic form (including 
internet-based access).\10\ In turn, retailers, including installers, 
must show this information to their customers and let them read the 
information before purchase.
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    \10\ 16 CFR 305.14.
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III. DOE Regional Standards for Heating and Cooling Equipment

    On June 27, 2011,\11\ DOE published a direct final rule notice 
promulgating new efficiency standards for residential furnaces, central 
air conditioners, and heat pumps as authorized by the Energy 
Independence and Security Act of 2007 (EISA).\12\ DOE's direct final 
rule became effective on October 25, 2011.\13\ Unlike existing DOE 
standards which impose uniform, national efficiency levels, the new 
standards for certain products vary by region.\14\ As detailed in 
Tables 1 and 2, the DOE standards impose regional efficiency standards 
for split air conditioners, package air conditioners, and gas furnaces 
(non-weatherized and mobile home). The standards for other covered 
heating and cooling equipment are national.
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    \11\ 76 FR 37408.
    \12\ Public Law 110-140; 42 U.S.C. 6295(o)(6). EISA amended EPCA 
to authorize separate regional standards for these products.
    \13\ See 76 FR 67037 (Oct. 31, 2011). Although DOE's final 
standards became effective on October 25, 2011, DOE is not requiring 
compliance until later. Specifically, DOE will require 
nonweatherized gas furnaces to comply by May 1, 2013; and 
weatherized gas furnaces and central air conditioner and heat pump 
product classes to comply by January 1, 2015.
    \14\ 42 U.S.C. 6295(o)(6)(B). The DOE standards apply to three 
regions: The North, Southeast, and Southwest. For furnaces, the 
standards are the same for the southeastern and southwestern 
regions. The Northern region encompasses Alaska, Colorado, 
Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, 
Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New 
Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, 
Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, Washington, 
West Virginia, Wisconsin, and Wyoming. The Southeastern region 
encompasses Alabama, Arkansas, Delaware, Florida, Georgia, Hawaii, 
Kentucky, Louisiana, Maryland, Mississippi, North Carolina, 
Oklahoma, South Carolina, Tennessee, Texas, Virginia, and the 
District of Columbia. The Southwest includes Arizona, California, 
New Mexico, and Nevada. 76 FR 37422.

                             Table 1--DOE Regional Efficiency Standards for Furnaces
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             System type                        North                  Southeast                Southwest
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Non-weatherized......................  90% AFUE...............  80% AFUE...............  80% AFUE.
Mobile home gas......................  90% AFUE...............  80% AFUE...............  80% AFUE.
Non-weatherized......................  83% AFUE...............  83% AFUE...............  83% AFUE.
Weatherized gas......................  81% AFUE...............  81% AFUE...............  81% AFUE.
Mobile home oil-fired................  75% AFUE...............  75% AFUE...............  75% AFUE.
Weatherized oil-fired................  78% AFUE...............  78% AFUE...............  78% AFUE.
Electric.............................  78% AFUE...............  78% AFUE...............  78% AFUE.
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             Table 2--DOE Regional Efficiency Standards for Central Air Conditioners and Heat Pumps
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             System type                        North                  Southeast                Southwest
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Split-system air.....................  13 SEER \15\...........  14 SEER................  14 SEER/12.2 EER \16\
                                                                                          <45,000 Btu/h.
Split-system heat pumps..............  14 SEER/8.2 HSPF \17\..  14 SEER/8.2 HSPF.......  14 SEER/8.2 HSPF.
Single package air conditioners......  14 SEER................  14 SEER................  14 SEER/11.0 EER.
Single-Package Heat Pumps............  14 SEER/8.0 HSPF.......  14 SEER/8.0 HSPF.......  14 SEER/8.0 HSPF.
Small-duct, high-velocity systems....  13 SEER/7.7 HSPF.......  13 SEER/7.7 HSPF.......  13 SEER/7.7 HSPF.
Space-constrained products--air        12 SEER................  12 SEER................  12 SEER.
 conditioners.
Space-constrained products--heat       12 SEER/7.4 HSPF.......  12 SEER/7.4 HSPF.......  12 SEER/7.4 HSPF.
 pumps.
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    To promote compliance with these new standards, DOE is developing 
an EISA-directed enforcement plan which will specify the 
responsibilities of various entities (e.g., installers, distributors, 
and manufacturers) to meet the new standards and to make any required 
disclosures.\18\ DOE must complete this plan within 15 months after 
issuance of the final regional standards. To augment DOE's enforcement 
efforts, EISA grants states the authority to enforce the regional 
standards in Federal court.\19\
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    \15\ Seasonal Energy Efficiency Rating.
    \16\ Energy Efficiency Rating.
    \17\ Heating Seasonal Performance Factor.
    \18\ 42 U.S.C. 6295(o)(6)(G).
    \19\ Id.
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IV. FTC Disclosures for Heating and Cooling Equipment

    To help consumers and businesses determine whether a product 
conforms with the regional standards promulgated by DOE, EISA directs 
the FTC to develop new disclosures for furnaces, central air 
conditioners, and heat pumps. Specifically, the law requires the 
Commission to ``determine the appropriate 1 or more methods for 
disclosing information so that consumers, distributors, contractors, 
and installers can easily determine whether a specific piece of 
equipment that is installed in a specific building is in conformance 
with the regional standard that applies to the building.'' \20\ The 
statute also authorizes the Commission to modify the Energy Guide label 
or develop other disclosure

[[Page 72874]]

``methods that make it easy for consumers and installers to use and 
understand at the point of installation.'' \21\ The Commission must 
complete this effort within 15 months of DOE's final publication of the 
regional standards. To begin this effort, the Commission requests 
comment on the content, location, and format for the new disclosure 
requirements.
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    \20\ 42 U.S.C. 6295(o)(6)(H).
    \21\ Id.
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    The content of the new disclosures must help consumers and industry 
members avoid installing equipment in violation of regional standards. 
The Commission seeks suggestions for the best disclosure content to 
meet this goal. For example, such disclosures could simply explain that 
a particular product may or may not be installed in certain 
regions:\22\
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    \22\ Efficiency ratings for central air conditioner systems 
depend on the particular condenser and evaporator coil paired to 
form the system. Thousands of possible condenser and coil 
combinations exist. Given the impracticality of including all such 
combinations on a label, the current EnergyGuide label discloses a 
condenser's efficiency rating when paired with the coil with which 
it is most commonly sold. The current label appears on the condenser 
only.
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     [For split air conditioner systems rated lower than 14 
SEER]:
    Federal law prohibits installation of this unit in Alabama, 
Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, 
Kentucky, Louisiana, Maryland, Mississippi, New Mexico, Nevada, North 
Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, or the 
District of Columbia.
     [For split air conditioner systems smaller than 45,000 
Btu/h and rated lower than 12.2 EER, split air conditioner systems 
larger than or equal to 45,000 Btu/h and rated lower than 11.7 EER, and 
single-package air conditioner systems rated lower than 11.0 EER]:
    Federal law prohibits installation of this unit in Arizona, 
California, New Mexico, or Nevada.
     [For non-weatherized gas furnaces (including mobile home 
gas furnaces) rated lower than 90% AFUE]:
    Federal law prohibits the installation of this unit in Alaska, 
Colorado, Connecticut, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, 
Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New 
Hampshire, New Jersey, New York, North Dakota, Ohio, Oregon, 
Pennsylvania Rhode Island, South Dakota, Utah, Vermont, Washington, 
West Virginia, Wisconsin, or Wyoming.
     [For all other covered products]:
    Federal law allows installation of this unit in any U.S. state.
These examples represent one possible approach for providing the 
content of the disclosures. Other possibilities include providing more 
detailed explanations of the standards or using illustrations, such as 
a map of the U.S. to indicate where the law prohibits installation of 
certain equipment.\23\ The Commission seeks comments on these options 
and other possible disclosures. Please address whether the label should 
include additional information that may be relevant to regional 
standards compliance, such as the Energy Efficiency Rating (EER) for 
central air conditioners.\24\ Commenters should also refer to the 
specific questions set forth in section V.
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    \23\ New ENERGY STAR logo specifications adopted by the 
Environmental Protection Agency use a U.S. map to communicate 
whether a product meets the energy efficiency levels for that 
program. http://www.energystar.gov/ia/partners/prod_development/revisions/downloads/furnaces/Furnaces_Final_V3_and_V4_Cover_Memo.pdf.
    \24\ Currently, the EnergyGuide label for these products only 
discloses the Seasonal Energy Efficiency Rating (SEER). The SEER 
reflects a model's energy performance over a range of temperature 
conditions while EER measures energy performance at a single, high 
temperature.
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    Comments should also address the location and format for the 
required disclosures. For instance, the EnergyGuide label could be 
revised to include information about whether a specific piece of 
equipment meets standards for installation in a specific region. 
Alternatively, the manufacturer could provide the required disclosures 
through other means such as product nameplates, product packaging, 
brochures, user manuals, Web sites, or online databases. Such 
alternative methods might provide more space than the EnergyGuide 
labels for the disclosure of detailed compliance information. The 
disclosure format could also involve a combination of these approaches. 
For example, the Energy Guide label could include a QR (Quick Response) 
scan code to provide mobile phone access to an online database 
containing detailed product information in addition to disclosures on 
the label or elsewhere. The EPA recently adopted such an approach for 
new fuel economy labels on automobiles.\25\ In addressing these issues, 
commenters should also consider the specific questions in section V.
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    \25\ http://yosemite.epa.gov/opa/admpress.nsf/names/hq_2011-5-25_fueleconomylabel.
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V. Issues and Questions for Comment

    The Commission seeks general comments on potential disclosure 
methods to help consumers, distributors, contractors, and installers 
easily determine whether residential heating and cooling equipment 
meets applicable regional efficiency standards. The Commission invites 
interested persons to submit written comments on any issue of fact, law 
or policy that may bear upon the FTC's current labeling requirements. 
Please provide details to support your comments. We encourage 
commenters to consider the questions below when preparing comments.
    (1) Content: What information is necessary to inform consumers and 
industry members whether equipment complies with DOE-mandated regional 
energy standards in a particular region? Should the disclosures use 
images (e.g., a map of the U.S.) to illustrate the scope of the 
regional standards? What changes would be required to the EnergyGuide 
label (e.g., EER disclosures) in addition to disclosures specifically 
related to regional standards?
    (2) Location and Format: Should the required disclosures appear on 
the label affixed to the product, on packaging, through point of sale 
materials, on the Internet, or through some other means? Should the 
disclosures appear in a combination of these formats in multiple 
locations? If so, which ones? Should the FTC explore the use of QR 
(Quick Response) scan codes to allow installers and consumers to access 
detailed information about the equipment through mobile phones? If the 
disclosures appear on the product itself, should the Commission replace 
the EnergyGuide label with permanent disclosure on the product 
nameplate or a similar location?
    (3) Separate Disclosures: Should the Commission develop separate 
disclosures for furnaces, central air conditioners, and heat pumps 
given differences in the way these products are rated on the 
EnergyGuide label and how they are installed? Should the Rule require 
separate disclosures for industry members and consumers? Should the 
Rule require different disclosures or instructions for various industry 
members such as distributors and installers?
    (4) Installer Requirements: What changes, if any, should the 
Commission make to the content and format of disclosures installers 
must provide to their customers?
    (5) Database Information: Are there existing databases the 
Commission could use to help industry members and consumers determine 
whether equipment complies with the regional energy standards, 
including the efficiency ratings of specific compressor and coil 
combinations for central air conditioners?

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    (6) Benefits: What benefits, if any, will the new disclosures 
provide to consumers? What evidence supports the asserted benefits? 
What benefits, if any, will the new disclosures provide to industry 
members? What is the magnitude of such benefits? What evidence supports 
the asserted benefits?
    (7) Costs: What costs, if any, would the potential new disclosures 
impose on businesses, and in particular on small businesses such as 
installers? What would be the magnitude of such costs? What evidence 
supports the asserted costs?
    (8) Other Federal, State, or Local Requirements: Would the new 
disclosures overlap or conflict with other federal, state, or local 
laws or regulations? If so, how?

VI. Request for Comment

    The Commission invites interested persons to submit written 
comments on any issue of fact, law, or policy that may bear upon the 
proposals under consideration. Please include explanations for any 
answers provided, as well as supporting evidence where appropriate. 
After examining the comments, the Commission will determine whether to 
issue specific amendments.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before January 10, 
2012. Write ``Regional Labeling for Heating and Cooling Equipment, (16 
CFR Part 305) (Project No. P114202)'' on your comment. Your comment--
including your name and your state--will be placed on the public record 
of this proceeding, including, to the extent practicable, on the public 
Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a 
matter of discretion, the Commission tries to remove individuals' home 
contact information from comments before placing them on the Commission 
Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, such as anyone's Social Security 
number, date of birth, driver's license number or other state 
identification number or foreign country equivalent, passport number, 
financial account number, or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is obtained from any person and which is privileged or 
confidential,'' as provided in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). If you want the 
Commission to give your comment confidential treatment, you must file 
it in paper form, with a request for confidential treatment, and you 
have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 
4.9(c).\26\ Your comment will be kept confidential only if the FTC 
General Counsel, in his or her sole discretion, grants your request in 
accordance with the law and the public interest.
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    \26\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online, or to send them to the Commission by courier or 
overnight service. To make sure that the Commission considers your 
online comment, you must file it at https://public.commentworks.com/ftc/regional-disclosuresanpr, by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you file your comment on paper, write ``Regional Labeling for 
Heating and Cooling Equipment, (16 CFR Part 305) (Project No.114202)'' 
on your comment and on the envelope, and mail or deliver it to the 
following address: Federal Trade Commission, Office of the Secretary, 
Room H-113 (Annex H), 600 Pennsylvania Avenue NW., Washington, DC 
20580. If possible, submit your paper comment to the Commission by 
courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before January 10, 2012. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

VII. Public Meeting Information

    The Commission and DOE staff have scheduled a public meeting to 
give interested parties an opportunity to provide their views on 
potential FTC disclosures and the DOE enforcement plan related to new 
regional standards for furnaces, central air conditioners, and heat 
pumps. The public meeting will be held on December 16, 2011 at DOE. DOE 
will provide details regarding time, location, attendance and 
participation at the meeting.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011-30436 Filed 11-25-11; 8:45 am]
BILLING CODE 6750-01-P