[Federal Register Volume 80, Number 211 (Monday, November 2, 2015)]
[Rules and Regulations]
[Pages 67285-67302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27772]


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FEDERAL TRADE COMMISSION

16 CFR Part 305

RIN 3084-AB15


Energy Labeling Rule

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

ACTION: Final rule.

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SUMMARY: The Commission issues final amendments to expand coverage of 
the Lighting Facts label, require room air conditioner labels on 
packaging instead of the units themselves, enhance the durability of 
appliance labels, and improve plumbing disclosure requirements. This 
Notice completes the Commission's recent regulatory review of the 
Energy Labeling Rule.

DATES: The amendments published in this document are effective on 
December 2, 2015, except for the amendments to Sec.  305.11, which 
become effective November 2, 2016, and Sec. Sec.  305.3(z), 305.8, 
305.15, 305.20, and Appendix L, which become effective November 2, 
2017.

ADDRESSES: Relevant portions of this proceeding, including this 
document, are available at http://www.ftc.gov.

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

SUPPLEMENTARY INFORMATION:

I. Background

    The Commission issued the Energy Labeling Rule (``Rule'') in 
1979,\1\ pursuant to the Energy Policy and Conservation Act of 1975 
(EPCA).\2\ The Rule requires energy labeling for major home appliances 
and other consumer products to help consumers compare competing models. 
When first published, the Rule applied to eight product categories: 
Refrigerators, refrigerator-freezers, freezers, dishwashers, water 
heaters, clothes washers, room air conditioners, and furnaces. The 
Commission subsequently expanded the Rule's coverage to include central 
air conditioners, heat pumps, plumbing products, lighting products, 
ceiling fans, and televisions.\3\
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    \1\ 44 FR 66466 (Nov. 19, 1979) (Rule's initial promulgation).
    \2\ 42 U.S.C. 6294. EPCA also requires the DOE to develop test 
procedures that measure how much energy appliances use and to 
determine the representative average cost a consumer pays for 
different types of energy.
    \3\ See 52 FR 46888 (Dec. 10, 1987) (central air conditioners 
and heat pumps); 54 FR 28031 (July 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); 76 FR 1038 (Jan. 6, 2011) (televisions).

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[[Page 67286]]

    The Rule requires manufacturers to attach yellow EnergyGuide labels 
for many of the covered products and prohibits retailers from removing 
the labels or rendering them illegible. In addition, the Rule directs 
sellers, including retailers, to post label information on Web sites 
and in paper catalogs from which consumers can order products. 
EnergyGuide labels for covered products contain three key disclosures: 
Estimated annual energy cost (for most products); a product's energy 
consumption or energy efficiency rating as determined from Department 
of Energy (DOE) test procedures; and a comparability range displaying 
the highest and lowest energy costs or efficiency ratings for all 
similar models. For energy cost calculations, the Rule specifies 
national average costs for applicable energy sources (e.g., 
electricity, natural gas, oil) as calculated by DOE. The Rule sets a 
five-year schedule for updating comparability range and annual energy 
cost information.\4\ The Commission updates the range information based 
on manufacturer data submitted pursuant to the Rule's reporting 
requirements.
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    \4\ 16 CFR 305.10.
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II. Regulatory Review

    In a March 15, 2012 Federal Register Notice (77 FR 15298) (``Notice 
of Proposed Rulemaking'' or ``NPRM''), the Commission initiated a 
review of the Energy Labeling Rule seeking comment on several proposed 
improvements to the FTC's labeling requirements. The Commission 
completed the first stage of the regulatory review on January 10, 2013, 
by issuing final amendments to streamline data reporting and improve 
online disclosures as proposed in the March 2012 NPRM. On July 23, 2013 
(78 FR 43974), the Commission followed those improvements with new 
labels to help consumers comparison shop for refrigerators and clothes 
washers after the implementation of upcoming changes to the Department 
of Energy (DOE) test procedures, as well as updates to the Rule's 
comparability ranges.

III. Final Regulatory Review Issues

    On June 18, 2014 (79 FR 34642), the Commission published a 
Supplemental Notice of Proposed Rulemaking (SNPRM) seeking comments on 
a broad array of issues raised over the course of the review proceeding 
and proposing related amendments.\5\ These issues include expanded 
light bulb label coverage, an online label database, more durable 
labels for appliances, room and portable air conditioner box labels, 
ceiling fan labels, consolidated refrigerator ranges, updates to 
furnace labels, QR (``Quick Response'') Codes, television label 
updates, a range revision schedule, retailer responsibility, 
marketplace Web sites, set-top box labeling, clothes dryer labels, and 
plumbing products. Following the 2014 Notice, the Commission issued a 
final rule on December 29, 2014, related to heating and cooling 
equipment labels and a separate December 31, 2014 Notice seeking 
comment on labels for miscellaneous refrigerator products in response 
to recent test procedures proposed by DOE.\6\ The Commission also 
published updated comparability ranges for television labels on March 
27, 2015 (80 FR 16259).
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    \5\ The comments received in response to the SNPRM are here: 
https://www.ftc.gov/policy/public-comments/initiative-569. The 
comments included: Air-Conditioning, Heating, and Refrigeration 
Institute (#00016); Alliance Laundry Systems LLC (#00010); Amazon 
(#00005); American Lighting Association (#00009); American Gas 
Association (#00013); American Public Gas Association (#00012); 
Association of Home Appliance Manufacturers (#00014); Direct 
Marketing Association (#00007); Earthjustice (``Joint Commenters'') 
(#00017); Energy Solutions (#00018); Glickman (#00002); Goodman 
Global, Inc. (#00008); Laclede Gas (#00011); National Electrical 
Manufacturers Association (#00006); Nicholas (#00003); Plumbing 
Manufacturers International (#00004); Republic of Korea (#00019); 
and Whirlpool Corporation (#00015).
    \6\ 79 FR 77868 (Dec. 29, 2014); 79 FR 78736 (Dec. 31, 2014).
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    In the present Notice, the Commission concludes the regulatory 
review by issuing final amendments for expanded light bulb labeling, 
improvements to appliance and room air conditioner labels, and updates 
to plumbing requirements. In a separate Notice, the Commission proposes 
several amendments on issues that have arisen recently or require 
additional consideration, including a new online database, revised 
central air conditioner labels, refrigerator ranges, new ceiling fan 
labels, and revised labels for heating and cooling equipment in 
response to recent DOE efforts.

A. Expanded Light Bulb Labeling

    Background: In the 2014 SNPRM (79 FR at 34643), the Commission 
proposed to expand the Lighting Facts label coverage to decorative and 
other specialty bulbs that have energy use and light output similar to 
general service bulbs already labeled under the Rule. For general 
service light bulbs,\7\ the Commission issued a new Lighting Facts 
labels in 2010 (75 FR 41696 (July 19, 2010)) that disclose information 
about the bulb's brightness, estimated annual energy cost, life, color 
appearance, and energy use.\8\ The requirements for these new labels 
cover most general service medium screw base incandescent, compact 
fluorescent, and LED (light-emitting diode) bulbs.\9\ The current Rule 
excludes several other consumer bulbs, such as decorative bulbs (e.g., 
globe and bent-tip decorative bulbs rated 40 watts or fewer), non-
medium screw base bulbs, shatter resistant bulbs, and vibration service 
bulbs.\10\
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    \7\ This document uses the terms lamp, light bulb, and bulb 
interchangeably. The Rule's definition of ``general service lamp'' 
in section 305.3(l) is consistent with EPCA's definition (42 U.S.C. 
6291), except for the addition of two lamp categories (reflector 
lamps and three-way bulbs) excluded by the statute. See 75 FR 41696, 
41698, n. 13 (Jul. 19, 2010) (explaining the Commission's decision 
to include these categories under the labeling requirements).
    \8\ 16 CFR 305.15(b). The Energy Independence and Security Act 
of 2007 (EISA) directed the Commission to examine existing light 
bulb labeling requirements. Pub. L. 110-140; see 42 U.S.C. 
6294(a)(2)(D)(iii). EISA amended the Energy Policy and Conservation 
Act (EPCA) (42 U.S.C. 6291 et seq.).
    \9\ 16 CFR 305.3(l).
    \10\ 16 CFR 305.3(l)(2), (n)(3)(ii). In 2011, the Commission 
proposed to expand the labeling coverage by including a broad array 
of additional bulb shapes generally available to consumers. 76 FR 
45715 (Aug. 1, 2011). In response to comments received on that 
earlier Notice, the Commission revised its proposal in the 2014 
Notice to focus coverage on specialty bulb types with energy use or 
light output similar to general service bulbs already covered by the 
Lighting Facts label. 79 FR at 34644.
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    The 2014 SNPRM sought comment on labeling for specialty bulb types 
with energy use or light output similar to the general service bulbs 
already covered by the Lighting Facts label. The proposal set specific 
wattage and light output thresholds and excluded bulbs with shapes or 
uses not generally sought by typical consumers (e.g., mine service 
bulbs). It included special marking provisions for some bulbs and an 
abbreviated, single-label option for smaller packages often used for 
specialty bulbs. The proposal allowed manufacturers to use the Lighting 
Facts label for consumer light bulbs not covered by the proposed 
requirements, if they follow the Rule's content and format 
requirements. Finally, to avoid confusion, the Commission proposed 
implementing the expanded coverage by adding the term ``specialty 
consumer lamp'' to the Rule instead of amending the Rule's definition 
of ``general service lamp.''
    Comments: The comments generally supported the SNPRM proposal.

[[Page 67287]]

However, as discussed below, the comments offered suggestions about the 
scope of the proposal's coverage, test requirements, the label's 
location and size for smaller packages, and the compliance period. 
Commenters also raised issues about existing requirements.
    Benefits: The comments described several benefits the new label 
coverage provides to consumers. The Joint Commenters (several energy 
efficiency groups commenting together) and the California Utilities 
explained that the presence of uniform disclosures for brightness, 
operating cost, and lifetime information on additional products will 
enable consumers to quickly compare the growing number of specialty 
consumer lamps to competing general service lamps in the 
marketplace.\11\ They also noted the proposed lower wattage limit (30 
watts) will ensure consumers receive accurate information about many 
lamps outside the scope of existing federal efficiency standards.
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    \11\ According to DOE information cited by the Joint Commenters, 
the combined shipments of incandescent lamp types covered under the 
proposal have increased from 16.6 million units in 2010 to more than 
18 million units in 2013.
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    Coverage: Although the comments generally supported the proposal, 
they provided different views on the scope of the proposed coverage. 
The Joint Commenters repeated their earlier recommendation that the FTC 
require labels for all screw-based lamp products, not just the most 
common bulb shapes or socket fittings. In their view, consumers will 
benefit significantly from access to the Lighting Facts labels, even 
where the market for a particular lamp is small because high efficiency 
lighting technology is widely available.
    The National Electrical Manufacturers Association (NEMA) supported 
the proposed labeling for most lamps under the proposed coverage,\12\ 
but urged the Commission to exclude two proposed categories: 
intermediate screw base lamps and plant light lamps. NEMA argued that 
intermediate screw base lamp labeling would yield little consumer 
benefit because these products have very low sales volume, are often 
colored (e.g., red, green, etc.), and typically use only incandescent 
technology. Thus, in NEMA's view, labeling these lamps would not serve 
EPCA's directive to consider labeling changes ``to help consumers 
understand lamp alternatives'' because there are ``no meaningful lamp 
alternatives.'' \13\ In addition, because wattage information routinely 
appears on these packages, consumers already receive adequate energy 
information to make informed choices.\14\ NEMA also urged the 
Commission to exclude plant light lamps, explaining that consumers do 
not generally use these bulbs for standard lighting applications due to 
their unique color spectrum. Also, in NEMA's view, given their low 
lumen output, these bulbs are not suitable for general illumination.
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    \12\ NEMA noted that labels for vibration service, rough 
service, appliance and shatter resistant lamps ``may inform a 
residential user of the lumen and life differences of vibration 
service, rough service, appliance and shatter resistant lamps, and 
this information may have some value for the consumer.''
    \13\ Citing 42 U.S.C. 6294(a)(2)(D)(iii)(II).
    \14\ NEMA also noted that EPCA prohibits screw base adapters 
that would make these usable in medium screw base applications (see 
42 U.S.C. 6302(a)(6)), so there is no potential loophole for these 
lamps to substitute for general service lamps.
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    Label Size: NEMA also raised concerns about whether the proposed 
special label for small packages would fit on certain small packages 
for specialty bulbs, particularly blister packs, which often comprise a 
single piece of cardboard covered largely by the bulbs themselves. It 
recommended a provision allowing the required label on the back of 
these packages, with a brief reference to the label on the front. 
Alternatively, NEMA suggested that the Rule allow an 80% reduction in 
the label's size, similar to food labeling requirements. It also noted 
that, given the small size of candelabra bases, the 8-point FTC mercury 
disclosure (``Mercury disposal: epa.gov/cfl'') may not fit, and 
therefore urged alternatives such as a 5-point disclosure, a shortened 
disclosure, or the use of the mercury symbol only (encircled Hg) on the 
bulb's base.
    Testing: The comments also provided suggestions about testing. 
Because DOE generally does not require test procedures for the bulbs 
covered by these amendments, the Rule's basic substantiation provision 
would apply.\15\ The California Utilities noted the need to test newly-
covered lamps will not pose significant burden because manufacturers 
already test these bulbs under industry-developed procedures and often 
display the relevant metrics on packages. However, the Joint Commenters 
argued that the absence of specific testing and reporting requirements 
raises concerns about the accuracy of label content. To address this 
concern, they recommended two measures to help ensure consumers have 
access to accurate information. First, they urged the Commission to 
consider applying current DOE test procedures for general service lamps 
to the new specialty category. Second, they recommended that the 
Commission require manufacturers to submit their labels through DOE's 
Compliance Certification and Management System (``CCMS'') Web site.
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    \15\ See 16 CFR 305.5(b) (``For any representations required by 
this part but not subject to Department of Energy requirements and 
not otherwise specified in this section, manufacturers and private 
labelers of any covered product must possess and rely upon a 
reasonable basis consisting of competent and reliable scientific 
tests and procedures substantiating the representation.'').
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    Compliance Period: The comments also addressed the timing of the 
new label requirements. The Joint Commenters recommended an effective 
date of one year. They argued that, because the label information is 
routinely included in catalogs for specialty consumer lamps, 
significant testing will not likely be necessary for the new labels. 
Likewise, package redesign should not consume significant time because 
many manufacturers have already applied the Lighting Facts label to 
these lamps. These commenters also explained that an extended lead time 
would be inconsistent with EPCA deadlines for similar products in the 
past (e.g., one year for general service lamps) and past FTC deadlines 
(e.g., 18 months for Lighting Facts labels in announced in 2011). To 
the extent FTC determines that manufacturers need additional time, the 
Joint Commenters urged the Commission to consider a phased approach 
that gives priority to labeling specialty consumer lamp types with the 
highest sales volume and the greatest aggregate energy consumption.\16\
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    \16\ The Joint Commenters also urged the Commission to clarify 
that the Rule's catalogue requirements (section 305.20) apply to 
specialty consumer lamps the same as general service lamps and 
repeated their earlier request for guidance on claims related to the 
``watt equivalency'' of a bulb's light output (e.g., ``60-watt 
equivalent). The Joint Commenters also identified a misnumbered 
paragraph in the Rule language in section 305.15. This has been 
corrected in the final language. The amendments also contain 
conforming changes to provisions for bulk packaging and cost 
representations in section 305.15(f)(5)&(6).
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    Color Appearance: The Joint Commenters urged the Commission to 
require color ink on the label's ``light appearance'' bar, which 
depicts whether the bulb has a warm or cool appearance. They pointed to 
a recent Consumer Reports poll indicating that only 23% of respondents 
found the warm to cool scale helpful and argued that a color scale 
would be more meaningful. The Joint Commenters also noted that a dozen 
light bulbs recently tested by Consumer Reports all featured color ink 
somewhere on the package. In addition, a few manufacturers already 
provide a color graphic to communicate color

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temperature in addition to the black and white Lighting Facts label.
    Discussion: Consistent with the proposal in the SNPRM, the final 
rule requires Lighting Facts labels for specialty consumer bulbs with 
energy use or light output similar to the general service bulbs already 
covered by the Lighting Facts label. As discussed below, the final 
requirements differ from the proposal because they do not cover 
intermediate screw base lamps and plant light lamps and allow the label 
on the back of small blister packs for specialty bulbs.\17\ 
Manufacturers will have two years to phase in the new requirements. 
Online retailers and paper catalog sellers will have six months to post 
the new labels after these requirements become effective.\18\
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    \17\ Consistent with SNPRM, the final rule does not alter the 
Rule's current definition of ``general service lamp.'' However, the 
Commission has changed to the definition of ``fluorescent lamp 
ballast'' to conform with an updated DOE definition for those 
products. See 76 FR 70548 (Nov. 14, 2011).
    \18\ The final rule language also clarifies that the catalog 
provisions of the Rule in section 305.20 apply to specialty consumer 
lamp labels. The 2014 SNPRM discussed such requirements but did not 
contain amendatory language. See 79 FR at 34661.
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    The final rule sets specific thresholds for wattage and light 
output for covered bulbs and excludes certain bulbs for which labeling 
is not likely to provide substantial consumer benefit. The new rule 
includes special marking provisions for some bulbs and provides a 
smaller, single-label option for smaller packages. For consumer bulbs 
not covered by the requirements, manufacturers may use the Lighting 
Facts label if they follow the Rule's content and format requirements.
    The new requirements are consistent with EPCA's directive to 
develop labels that help consumers with their purchasing decisions.\19\ 
Under EPCA, the Commission can require labeling for any consumer 
product if such labeling is ``likely to assist consumers in making 
purchasing decisions.'' \20\ Therefore, the Commission may look beyond 
EPCA's specific lamp definitions, which generally cover products 
subject to DOE's efficiency standards.\21\ Indeed, EPCA directed FTC to 
issue labeling requirements that ``enable consumers to select the most 
energy efficient lamps which meet their needs.'' \22\ In addition, 
without specifying bulb coverage, the 2007 EPCA amendments encouraged 
the Commission to revise labels to help consumers ``understand new 
high-efficiency lamp products'' and allow them to choose products that 
meet their needs for light output, light quality, and lamp 
lifetime.\23\
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    \19\ 42 U.S.C. 6294(a)(2)(D), (a)(6).
    \20\ 42 U.S.C. 6294(a)(6).
    \21\ 42 U.S.C. 6291(30), 6292(a)(14). Recognizing that labeling 
may be appropriate for some products even in the absence of an 
efficiency standard, the Commission has already used this general 
authority to cover three-way incandescent bulbs and high-efficiency 
LED bulbs. See 75 FR at 41698.
    \22\ 42 U.S.C. 6294(a)(2)(D)(i).
    \23\ 42 U.S.C. 6294(a)(2)(D)(iii). The statute also directs the 
Commission to consider additional labeling changes to help consumers 
understand light bulb alternatives. Id.
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    The Commission addresses the following specific issues raised 
during the proceeding: Product coverage, exclusions, package size, 
product markings, testing, voluntary labeling, compliance period, watt-
equivalence claims, and color appearance.
    Coverage: The final rule covers lamp types with wattages and light 
output similar to currently covered general service bulbs. 
Specifically, the final rule defines ``specialty consumer lamp'' to 
cover bulbs that: (1) Are rated at 30 watts or higher or produce 310 
lumens or more; (2) have a medium, candelabra, GU-10, or GU-24 base; 
and (3) do not meet the ``general service lamp'' definition.\24\ The 
30-watt and 310-lumen thresholds are consistent with Congressionally-
established benchmarks set by EPCA's definition of ``general service 
lamps.'' \25\ Finally, the Rule covers specialty bulbs that look and 
operate like traditional incandescent bulbs, but are currently excluded 
from coverage, such as vibration-service lamps, rough service lamps, 
appliance lamps, and shatter resistant lamps (including a shatter proof 
lamp and a shatter protected lamp).
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    \24\ On December 9, 2013 (78 FR 73737), DOE initiated a 
proceeding to consider whether to expand the current definition of 
``general service lamp.'' The Commission will seek to ensure future 
labeling amendments harmonize with amended DOE definitions.
    \25\ See 42 U.S.C. 6291(30)(C)-(D). Consistent with the statute, 
the coverage includes upper limits of 199 watts and 2,600 lumens.
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    The final rule meets the statute's directive to provide labels that 
will assist consumers in purchasing the most efficient bulbs among 
common bulb types on store shelves. Specifically, the new labels will 
provide a means for consumers to compare the energy use, brightness, 
and other attributes of commonly available bulb types and technologies 
that are likely to appear side-by-side on store shelves with general 
service bulbs. The record suggests that the newly-covered bulbs have a 
significant market presence, are available in models that have light 
output or energy use ratings similar to general service bulbs, and 
often come in different technologies (with their different energy 
costs).\26\ By tailoring the new coverage to bulbs that have light 
output and energy use similar to general service lamps, the balance of 
consumer benefits and industry burdens created by the new labels should 
be the same or similar to that provided by existing labels. Though some 
commenters suggested a much broader coverage, it does not appear that 
there would be a significant benefit to consumers from labeling these 
products given their limited availability for typical consumers, their 
specialized applications, or their relatively low light output and 
energy use.
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    \26\ As discussed in the SNPRM (79 FR at 34645, n. 31), the 
principal bulb types newly covered by these amendments have the 
following attributes:
    A-shape:--Often available in medium bases; used in residential 
applications, including ceiling fans; used for incandescent rough 
service and shatter proof bulbs at high wattages;
    B-shape:--Decorative ``torpedo'' shaped bulbs used in 
residential applications; available in CFL and LED versions; 
previous NEMA comments suggest that 40-watt or fewer B-shape lamps 
account for about 7% of the incandescent market;
    BA and CA shape:--Bent tip decorative lamps used in residential 
settings; available with medium and candelabra bases; wattages as a 
high as 60; available in incandescent and LED versions; represents 
between 6-7% of the incandescent market according to NEMA comments;
    F-Shape:--Decorative flame-shaped bulb; use as much as 40 watts; 
available in CFL and LED versions;
    G-Shape:--Often used in residential bathrooms; available in CFL 
and LED versions; according to comments, G16 \1/2\ lamps represent 
2.5% of the incandescent market, G25 lamps represent 5%, and G30 
lamps represent about 0.5%; and
    Spiral shape:--Commonly used for CFLs with intermediate screw 
bases and GU-24 pin-based bulbs; increasingly used in new 
construction.
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    Exclusions: The final rule excludes bulbs for which labeling is not 
likely to provide substantial consumer benefit. These final exclusions 
include: Intermediate screw-based lamps, plant light lamps, black light 
lamps, bug lamps, colored lamps, infrared lamps, left-hand thread 
lamps, marine lamps, marine signal service lamps, mine service lamps, 
sign service lamps, silver bowl lamps, showcase lamps, traffic signal 
lamps, G-shape lamps with diameter of 5 inches or more, and C7, M-14, 
P, RP, S, and T-shape lamps.\27\ These bulbs do not share the basic 
attributes of general service lamps currently covered by the label 
(i.e., they generally use fewer than 30 watts, produce low light 
output, have little market presence, or mostly appear in commercial 
applications). The final rule also excludes intermediate screw base 
bulbs and plant light bulbs because they have little market presence 
according to the comments. Thus, labeling is unlikely to assist 
consumers in purchasing decisions. Should new

[[Page 67289]]

information in the future suggest that these exclusions are no longer 
appropriate, the Commission may reconsider the coverage.
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    \27\ See section 305.3(z)(3) (final amendments).
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    Package Size: Consistent with the proposal, the new requirements 
allow manufacturers to use a smaller, single label option on the front 
of small packages for certain specialty bulbs.\28\ Because packaging 
for some specialty bulbs consists of a blister pack on a small, single-
sided card, the double-panel labeling under the current rules may not 
be feasible. The smaller label discloses lumens, energy cost, and bulb 
life, but not watts and light appearance.\29\ In addition, this smaller 
label does not apply to certain large bulbs in the specialty category, 
such as vibration-service lamps, that resemble traditional general 
service lamps in size and function and thus are likely to have 
packaging similar to general service bulbs.
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    \28\ This option does not apply to vibration-service lamps, 
rough service lamps, appliance lamps, and shatter resistant lamps. 
305.15(c)(2) (final amendments).
    \29\ Consistent with the proposal, the new, smaller labels do 
not require wattage and light appearance because specialty bulbs are 
less likely to have high wattage ratings and because color 
appearance is not essential to understanding the bulbs' energy 
efficiency. Nothing in the amendments, however, prohibits 
manufacturers from using the full Lighting Facts label or from 
otherwise providing such information elsewhere on the package.
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    In response to comments about small specialty bulb packages, the 
final rule also contains a special provision for very small blister 
packs that cannot accommodate the required label on the front. The 
final rule states that, if the required disclosures (i.e., either the 
abbreviated specialty bulb disclosure or the standard general service 
lamp label) would not be legible on the front of a single-card blister 
package due to its size, the manufacturer may use a smaller label that 
says ``See Back for Lighting Facts'' and include the full Lighting 
Facts label on the package rear. This exception should accommodate 
manufacturers' practical needs, while still providing information 
important information to consumers.
[GRAPHIC] [TIFF OMITTED] TR02NO15.001

    Product Marking: In addition to the labeling requirements, the 
amendments require marking on certain bulb shapes (i.e., the lumen and 
mercury marking currently required for general service lamps).\30\ For 
vibration-service, rough service, and shatter resistant lamps, the 
final rule requires the same markings (i.e., lumens and mercury) that 
currently apply to general service lamps because the size and shape of 
these bulbs is similar. Consistent with this proposal, the amendments 
do not require lumen markings on the lamps themselves for decorative 
size bulbs, such as B, BA, F, and G-shapes, to avoid detracting from 
those products' appearance. However, the Rule does require mercury 
disclosures on the lamps to ensure

[[Page 67290]]

consumers have access to such information for cleanup and disposal.\31\
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    \30\ 16 CFR 305.15(c)(2)(iii) (final amendments).
    \31\ Because mercury disclosures generally apply only to compact 
fluorescent bulbs, which include a ballast, manufacturers should be 
able to place such information on the ballast in most cases, where 
other information is commonly printed. Industry comments raised 
concerns about fitting the mercury disclosure on some specialty 
lamps. Manufacturers that cannot physically fit the required mercury 
disclosure on their bulbs can petition the Commission for an 
alternative approach.
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    Testing and Reporting: The final rule does not alter the Rule's 
existing test procedure and reporting requirements. Under the current 
requirements, manufacturers (or private labelers) must use applicable 
DOE test procedures.\32\ If there is no such procedure for a particular 
lamp, the Rule requires manufacturers to possess and rely upon a 
reasonable basis consisting of competent and reliable scientific tests 
and procedures substantiating the representation.\33\ As indicated in 
the comments, manufacturers already use industry-developed standards 
published by the Illuminating Engineering Society (IES) as part of 
their Lighting Measurement (LM) series for testing these products. In 
the past, the Commission has identified IES procedures as competent and 
reliable tests for covered light bulbs.\34\ The Commission expects that 
manufacturers will continue to use the IES tests for bulbs covered in 
these new labeling amendments. Accordingly, the Commission sees no need 
to require the IES tests in the Rule, particularly if DOE expands its 
test procedures to cover more of these products.\35\ Manufacturers that 
fail to use competent and reliable tests generally accepted by experts 
in this field may be subject to enforcement action for deceptive 
claims.\36\
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    \32\ See 16 CFR 305.5.
    \33\ 16 CFR 305.5(b). FTC case law generally defines ``competent 
and reliable scientific'' evidence to include ``tests, analyses, 
research, studies, or other evidence based on the expertise of 
professionals in the relevant area, that have been conducted and 
evaluated in an objective manner by persons qualified to do so, 
using procedures generally accepted in the profession to yield 
accurate and reliable results.'' See, e.g., In the Matter of 
Schering Corp., 118 F.T.C. 1030, 1127 (1994).
    \34\ See 59 FR 25176, 25208 (May 13, 1994).
    \35\ See, e.g., ``Preliminary Technical Support Document: Energy 
Efficiency Program for Consumer Products and Commercial and 
Industrial Equipment: General Service Lamps'' (Chapter 3), DOE, Dec. 
1, 2014 at http://www.regulations.gov/#!documentDetail;D=EERE-2013-
BT-STD-0051-0022 (discussing DOE plans for lighting program).
    \36\ Because DOE has no comprehensive testing requirements at 
this time for ``specialty'' bulbs covered by the new labeling 
proposal, the amendments, consistent with EPCA, contain no new 
reporting. 42 U.S.C. 6296(b)(4). If DOE develops and requires new 
test procedures for these newly-labeled products, EPCA requires 
manufacturers to begin using such tests for labeling and any other 
energy representations 180 days after DOE issuance. 42 U.S.C. 
6293(c). In a separate Notice, the Commission will consider whether 
to require manufacturers to submit links to their online labels as 
part of the Rule's reporting requirements.
---------------------------------------------------------------------------

    Voluntary Labeling For Non-Covered Products: For bulbs not covered 
by the proposal (e.g., consumer bulbs rated below 30 watts and below 
310 lumens), the amendments allow, but do not require, manufacturers to 
use the Lighting Facts label.\37\ However, all voluntary Lighting Facts 
labels must follow the Rule's content and formatting requirements to 
ensure the label's consistency across products.\38\ Whether 
manufacturers use the Lighting Facts label or not, the FTC Act's 
general prohibition against deceptive claims requires manufacturers to 
substantiate any light bulb claims they make with competent and 
reliable scientific evidence.\39\
---------------------------------------------------------------------------

    \37\ See 16 CFR 305.15(d). The catalog disclosure requirements 
in section 305.20 apply only to products required to bear a Lighting 
Facts label (or other required disclosure).
    \38\ The FTC staff has observed that the Lighting Facts label 
already appears widely on products that fall beyond the Rule's 
current coverage for general service lamps.
    \39\ 15 U.S.C. 45(a). The amendments do not require online 
retailers to post the label for such voluntarily-labeled products 
due to the burdens associated with determining, on a model-by-model 
basis, whether manufacturers have chosen to use the Lighting Facts 
format.
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    Watt-Equivalency Claims: The Commission addressed the issue of 
equivalency claims in an earlier Notice (75 FR 41696, 41701 (July 19, 
2010)) and has not altered that guidance. In essence, to avoid 
deception, manufacturers must ensure they can substantiate their watt-
equivalence claims. Such substantiation must take into account 
brightness, as well as other material factors, such as color. In doing 
so, the ENERGY STAR watt-equivalence standards provide an important 
benchmark. Indeed, manufacturers making watt-equivalence claims that 
stray from the ENERGY STAR standard must possess another competent and 
reliable basis to substantiate their claims. Moreover, manufacturers 
that make watt-equivalence claims for bulbs with lower lumen ratings 
than those prescribed in the ENERGY STAR standards should consider 
whether they need to qualify their claims to avoid deception.\40\
---------------------------------------------------------------------------

    \40\ See Federal Trade Commission v. Lights of America, Inc., et 
al., SACV10-1333 JVS (MLGx) (C.D. Cal. 2014).
---------------------------------------------------------------------------

    Color Appearance Disclosure: The Commission does not propose to 
change the color appearance disclosure from its current monochromatic 
scale. As suggested in the comments, there may be some benefit to a 
color version of the scale, and many manufacturers use color packaging. 
However, it is not clear that all manufacturers use full color printing 
for all packages, nor is it certain that a color scale would provide 
significant benefit compared to the existing scale. Accordingly, the 
Commission is reluctant to impose this additional burden for what may 
be a marginal benefit. However, nothing prohibits manufacturers from 
providing a color scale on their packages off the label, as long as 
such information is truthful and substantiated.
    Compliance Period: The final rule provides manufacturers with two 
years to implement changes for the newly-covered bulbs. Though the 
Commission earlier sought comments on a two-and-a-half year compliance 
period (76 FR at 45721), manufacturers now have had notice of these 
impending changes for more than a year and the two year period should 
provide ample time to make these changes. A two year compliance period 
is appropriate because package changes are generally more complicated 
and burdensome than simple label changes and there is no impending 
market or regulatory change (e.g., new DOE standards) to warrant an 
earlier date. However, manufacturers may begin using the new labeling 
requirements prior to the deadline. As with other labeling 
requirements, online retailers must post the new Lighting Facts labels. 
To provide online retailers with time to comply with the requirements, 
the final rule requires compliance six months after the packaging 
deadline (i.e., a total of two and half years).\41\
---------------------------------------------------------------------------

    \41\ The Rule does not require catalog sellers (e.g., online 
retailers) to post the labels for products not covered by these new 
amendments but labeled voluntarily by manufacturers.
---------------------------------------------------------------------------

B. More Durable Labels for Clothes Washers, Dishwashers, and 
Refrigerators

    Background: In its March 15, 2012 NPRM, the Commission discussed 
the need to improve the availability of EnergyGuide labels in retailer 
showrooms. Information gathered by the FTC and the Government 
Accountability Office (GAO) demonstrates that many covered products 
displayed in retailer showrooms were missing the required EnergyGuide 
labels.\42\
---------------------------------------------------------------------------

    \42\ For example, in 2008, the FTC found labels either detached 
or missing on approximately 38% of the 8,500 appliances it examined 
across 89 retail locations in nine metropolitan areas. 77 FR at 
15300.
---------------------------------------------------------------------------

    The Rule currently permits manufacturers of refrigerators, 
dishwashers, and clothes washers to

[[Page 67291]]

post the required EnergyGuide labels either using adhesive labels or 
hang tags.\43\ In examining floor models, FTC staff found that products 
labeled with hang tags appear more likely to have detached or missing 
labels than those labeled with adhesives.\44\ Additionally, comments 
received during the television label rulemaking indicated that hang 
tags often become twisted or dislodged in stores, supporting the FTC 
staff's past findings.\45\
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    \43\ 16 CFR 305.11(d)-(e). Because the Rule does not allow hang 
tags on the exterior of appliances, manufacturers must use adhesive 
labels for products with no accessible interior (e.g. water 
heaters).
    \44\ See 77 FR at 15300 & n. 24.
    \45\ See 76 FR 1038, 1042 (Jan. 6, 2011).
---------------------------------------------------------------------------

    Concerned that hang tags may be less secure and more prone to 
detachment than adhesive labels, the Commission, in its March 15, 2012 
NPRM, proposed prohibiting hang tags for clothes washers, dishwashers, 
and refrigerators.\46\ In response, comments argued that adhesive 
labels applied directly to products might leave marks, especially on 
stainless steel finishes which appear on nearly a third of major home 
appliances. They also noted that affixing an adhesive to the protective 
film that covers products would be counterproductive because retailers 
likely would remove the film from display models, and may not reattach 
the label before displaying the product. They further explained that 
temperature and humidity might cause adhesive labels on products in 
storage or transit to become too sticky or lose their adhesive 
qualities. The commenters, therefore, recommended that the Commission 
consider other options.\47\
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    \46\ 77 FR at 15299-15300. EPCA permits the Commission to 
prescribe the manner in which EnergyGuide labels are displayed 42 
U.S.C. 6294(c)(3), (c)(9).
    \47\ 79 FR at 34648.
---------------------------------------------------------------------------

    In the 2014 SNPRM, the Commission, recognizing the legitimate 
concerns raised in the comments, did not propose eliminating hang tags 
altogether. Instead, it proposed requiring that hang tags be affixed to 
products using cable ties (i.e., ``zip ties''), double strings 
connected through reinforced punch holes, or material with equivalent 
or greater strength. The Commission reasoned that these methods should 
improve label resilience, which in turn should reduce the incidence of 
missing labels, without posing undue burden for manufacturers. The 
Commission invited comments on this proposal.
    Comments: The comments were split. The Joint Commenters and the 
California Utilities supported the proposal but provided some 
additional suggestions detailed below. Conversely, several industry 
comments opposed the change arguing it would do little to address the 
problem of missing labels.
    The Joint Commenters agreed that hang tags should be more durable 
but recommended the Rule require reinforced punch holes on all hang tag 
labels, independent of the attachment method. They also argued that 
this would improve the uniformity of labels' appearance. Though the 
California Utilities supported the proposal, they noted that adhesive 
labels on the inside panels of products would address manufacturer 
concerns about damage to stainless steel products.\48\
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    \48\ Goodman, a heating and cooling equipment manufacturer, 
recommended that the Commission extend the hang tag option to the 
products they sell. However, as discussed in the SNPRM, the Rule 
does not allow hang tags for products that have no interior given 
the likelihood that hang tags will not remain in place if affixed on 
product exteriors. 79 FR at 34648, n. 53.
---------------------------------------------------------------------------

    In contrast, appliance industry members opposed the proposal 
because, in their view, it would increase manufacturers' costs without 
accomplishing the goal of decreasing the incidence of missing labels. 
The Association of Home Appliance Manufacturers (AHAM) asserted that 
the SNPRM did not provide adequate evidence that the proposal will 
increase label durability or, more importantly, that increased label 
durability will reduce the incidence of missing labels. It stated that, 
because the attaching material (cable tie, double string, etc.) is 
stronger than the reinforced paper used for the label, a determined 
consumer (or retailer) can easily remove the tag. In addition, some 
refrigerators, particularly those lacking a wire shelf or door handle, 
have no location to affix a cable or string hang tag without taping the 
string or cable tie to the shelf. Instead of new labeling requirements, 
AHAM urged the Commission to find ways for retailers to display labels 
in such a way that consumers do not try to detach them (or that 
retailers themselves do not feel compelled to remove them to 
effectively display the product). According to AHAM, retailers are in 
the best position to display labels in a way that prevents removal.
    Both Alliance Laundry Systems and AHAM also repeated earlier 
requests to limit the Rule's label requirements to display models. They 
explained that most labels never appear on the showroom floor because 
retailers only use a handful of units as display models. For most 
units, consumers view the labels only upon delivery in their home. At 
that point, consumers generally want to remove the label from the 
products. Alliance therefore recommended that the Commission consider 
options that remove the burden associated with affixing physical labels 
on every unit.
    Similarly, AHAM urged the Commission to consider eliminating 
physical labels on every unit sold and, instead, rely on electronic 
labels on Web sites. The Joint Commenters disagreed, arguing that, even 
though consumers may conduct online research prior to purchase, labels 
in showrooms are still necessary to allow consumers to examine multiple 
competing products.
    Discussion: The final rule contains provisions to improve the 
durability of labels for refrigerators, clothes washers, and 
dishwashers, while providing manufacturers flexibility in doing so. 
Under the final rule, manufacturers have the option of using 
traditional adhesive labels and flap tags, labels affixed with strips 
of tape along the label's entire top and bottom, and hang tags using 
cable ties (i.e., ``zip ties'') or double strings connected through 
reinforced punch holes, or with attachment and label material of 
equivalent or greater strength and durability. Manufacturers will have 
one year to come into compliance.
    As discussed in earlier notices, more durable hang tag labels 
should increase the likelihood that labels remain affixed to products 
in showrooms. The Commission understands that determined consumers can 
remove labels from showroom products. However, the new requirements are 
not intended to prevent such deliberate actions. Rather, by their 
nature, the stronger labels should increase the likelihood that labels 
will remain on products during shipping and handling through the retail 
chain and during normal examination and inspection by consumers.
    While the final rule increases the durability of labels, it 
provides manufacturers flexibility to use label methods most suited to 
their products. In recent informal visits to retail stores, the FTC 
staff has observed that manufacturers currently use a variety of means 
to attach labels on refrigerators, dishwashers, and clothes washers 
including conventional adhesive labels affixed to an interior or 
exterior surface, labels attached with wide pieces of reinforced tape 
on the top and bottom, hang tags attached with cable ties, hang tags 
attached with string, and hang tags made of laminated paper or plastic. 
Labels taped onto models across the entire top and bottom edge of the 
label appear to provide durability similar to a traditional adhesive 
label. Likewise, hang tags made of laminated paper or plastic provide 
durability similar to a

[[Page 67292]]

paper hang tag with a reinforced punch hole. Accordingly, the final 
rule, in addition to specifying acceptable means of affixing hang tags 
through the use of zip ties and reinforced punch holes, also provides 
manufacturers the flexibility to use any method that provides the same 
or greater durability as those methods specified in the Rule.
    Finally, as explained above, the Commission does not propose 
abandoning physical labels. Notwithstanding the growing availability of 
Internet access, physical labels, especially those displayed at the 
point-of-sale, likely help a substantial number of consumers. Not all 
consumers have convenient online access, and not all of those who do 
conduct online research before making purchase decisions in stores. 
Moreover, even consumers who research products online are likely to 
benefit from viewing the physical labels in the store as they make 
final decisions and compare products at the point-of-purchase.\49\ 
Nevertheless, the Commission will continue to consider evolving buying 
patterns and potential changes to the Rule. The Commission will 
consider any research that provides information on these issues or any 
specific proposals parties may have to change the Rule to decrease the 
burden on industry, while ensuring consumers have access to EnergyGuide 
information.\50\
---------------------------------------------------------------------------

    \49\ 42 U.S.C. 6294(c)(3) (the Commission may require the label 
to be displayed in a manner that the Commission determines is likely 
to assist consumers in purchasing decisions). As the Commission 
explained in the 2014 SNPRM (79 FR at 34649), it does not propose to 
limit labels to display models because retailers may not receive 
specific products designated for display and the appearance of 
labels on non-display models provides consumers useful energy 
consumption information after the purchase to help them understand 
the estimated energy use of their product.
    \50\ The amendments also eliminate obsolete sample labels (1 and 
2) for refrigerators and clothes washers in Appendix L.
---------------------------------------------------------------------------

C. Labels on Room Air Conditioner Boxes

    Background: In the SNPRM, the Commission proposed to require labels 
on room air conditioner boxes. The Commission based its proposal, in 
part, on staff observations during visits to major retail chains across 
the country, that room air conditioner models are usually displayed in 
boxes.\51\ Under the proposal, the labels would appear on the package's 
primary display panel. The Commission invited comments.
---------------------------------------------------------------------------

    \51\ See 79 FR at 34649. The visit results showed that room air 
conditioners were either in the box only (50% of models observed) or 
in the box with a few display units located on or near the boxes 
(29% of models observed). Only 21% were displayed solely out of 
boxes. These results are based on FTC staff's review of more than 
160 models (not individual units) offered for sale at a variety of 
stores in eight different metropolitan areas. The results are not 
necessarily nationally representative.
---------------------------------------------------------------------------

    The Commission also proposed two changes related to recent DOE 
regulatory actions. First, it proposed to amend the room air 
conditioner label to replace Energy Efficiency Ratio (EER) ratings with 
Combined Energy Efficiency Ratio (CEER) ratings consistent with recent 
DOE changes for these products. The Commission indicated that the 
differences between EER and CEER should be minor. The Commission also 
proposed conforming changes to the label's capacity description for 
room air conditioners in section 305.7 and ratings on Sample Label 4. 
Second, the Commission proposed requiring EnergyGuide labels for 
portable air conditioners, in light of a recent DOE proposal to 
designate portable air conditioners as covered products under EPCA.\52\ 
The Commission is addressing the portable air conditioner issue in more 
detail in a separate notice.
---------------------------------------------------------------------------

    \52\ 78 FR 40403 (July 5, 2013). Portable air conditioners are 
movable units, unlike room air conditioners, which are permanently 
installed on the wall or in a window.
---------------------------------------------------------------------------

    Comments: The comments generally supported the proposal to place 
labels on room air conditioner boxes. Specifically, the comments 
identified the benefits of having labels on the box, recommended the 
Commission consider alternative disclosures for retailers who do not 
display boxes, urged coordination with Canadian labeling requirements, 
and supported the replacement of EER disclosures with CEER.
    The Joint Commenters repeated their earlier recommendation to 
require labels on both room air conditioner boxes and on the units 
themselves because a substantial portion (21%) of the models observed 
by FTC staff were displayed only outside of their boxes. The commenters 
explained that their own observations indicate the practice is even 
more common, though they did not provide specifics. They also argued 
the operating cost information on the room air conditioner label is 
particularly important because most households that rely on one or more 
room air conditioners have an annual household income below $40,000. 
Additionally, they noted that room air conditioner labels can provide 
important information to renters who pay for equipment operation but do 
not purchase the units themselves.\53\
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    \53\ The Joint Commenters noted that approximately 32 percent of 
households in rental housing rely on one or more room air 
conditioners for space cooling; for owner[hyphen]occupied housing, 
the figure is less than 19 percent. In their view, if the air 
conditioner itself is labeled, even if the label is removed from the 
unit upon installation, that label is less likely to be thrown away 
(and more likely to be provided to the tenant) than a label found 
only on the unit's packaging.
---------------------------------------------------------------------------

    Finally, the Joint Commenters urged the Commission to consider 
creating an affirmative labeling requirement for retailers who chose to 
display their room air conditioner without boxes. The commenters 
explained that, even if FTC does not require manufacturers to label 
both the room air conditioner and its packaging, EPCA grants the 
Commission authority to ``require disclosure, in any printed matter 
displayed or distributed at the point-of-sale of such product.'' 42 
U.S.C. 6294(c)(4).
    AHAM indicated it did not object to requiring EnergyGuide labels on 
room air conditioner boxes as long as Natural Resources Canada (NRCAN) 
harmonizes its EnerGuide requirements with the Commission's. Absent 
such harmonization, AHAM strongly opposes the proposal because it would 
impose substantial burdens by forcing manufacturers to create labels 
for both the product (to meet Canadian requirements) and the box (to 
meet U.S. requirements). Accordingly, AHAM recommended that FTC work on 
such harmonization, consistent with the President's directive regarding 
international regulatory cooperation. AHAM also recommended a two year 
period to implement the changes.
    The comments also supported the proposal to replace the EER 
reference on the room air conditioner label with CEER. AHAM, which 
proposed this change in earlier comments, explained that the switch 
would make the label consistent with the efficiency metric 
manufacturers currently report to DOE. The California Utilities also 
supported the proposal but further recommended disclosures for all 
efficiency metrics specified in the DOE energy conservation standards. 
Specifically, they reiterated their recommendation to require reporting 
of energy factor for water heaters, in addition to the cost and energy 
use. They stressed the importance of efficiency performance information 
to consumers and other market actors, particularly in the 
implementation of various national, regional, state, and utility 
programs. The commenters further recommended that the labels disclose 
any performance metric required for compliance with energy efficiency 
standards, including regulated performance metrics for room ACs, 
central ACs, and water heaters.

[[Page 67293]]

    Discussion: The Commission plans to issue final amendments to 
require labels on room air conditioner boxes and replace the EER 
disclosure with CEER. The Commission will publish the final amendments 
and announce a compliance date in the future to provide ample time to 
comply with both FTC and possible NRCAN requirements. Finally, the 
Commission does not plan to include additional efficiency rating 
information on various labels.
    The final rule provides manufacturers with flexibility. 
Specifically, manufacturers have the flexibility to choose a background 
color for the label, thus avoiding full redesign of some boxes. In 
addition, manufacturers may use stickers on the box itself, allowing 
easy label updates in response to test procedure or range changes. With 
the notice provided by this proceeding, manufacturers should be able to 
incorporate the label on packaging without additional burden. The 
labels must appear on the package's principal display panel, that part 
of a label most likely to be displayed, presented, shown, or examined 
under normal and customary conditions of display for retail sale.\54\
---------------------------------------------------------------------------

    \54\ See, e.g., 15 U.S.C. 1459(f) (definition of ``principal 
display panel'' under the Fair Packaging & Labeling Act).
---------------------------------------------------------------------------

    In the SNPRM, the Commission explained that it is not proposing to 
require labels on both the product and the box. Over the years, 
retailers have shifted away from displaying most room air conditioner 
models outside of packaging. Given this trend, the Commission expects 
that retailers will continue to display the vast majority of these 
products in boxes. While some retailers may display some models outside 
the packaging, the label's absence is mitigated in those limited 
situations by recent provisions increasing the labels' availability to 
consumers online.\55\ Accordingly, the benefits of requiring the label 
on both the package and the product are likely to be small, while the 
burden of such a requirement would be substantial. However, the 
Commission may consider further requirements in the future if retail 
practices change.
---------------------------------------------------------------------------

    \55\ Such measures include new requirements to ensure the 
label's presence on retailer and manufacturer Web sites (78 FR 2200 
(Jan. 10, 2013)) and, as proposed in a separate Notice, the 
inclusion of EnergyGuide labels on DOE's Web site.
---------------------------------------------------------------------------

    Finally, given concerns raised by commenters about coordinating 
with Canadian labeling, the Commission will not announce a final 
compliance date for these new requirements until NRCAN implements 
conforming regulatory changes. Such coordination will prevent the 
burden of labeling units in two places (i.e., box and unit). After 
NRCAN has addressed the issue, the Commission will issue a separate 
notice containing the final amendments and set an effective date and a 
compliance date of one year.
    In addition, the California Utilities recommended that the 
Commission require disclosures such as water heater energy factor (EF) 
information to help consumers and aid in compliance with state building 
code standards. The Commission declines to change the Rule at this 
time. The labels for heating and cooling equipment already display 
metrics applicable to federal standards, including SEER, EER, and AFUE 
where appropriate. For central air conditioners, the Commission 
recently required EnergyGuide labels on product packaging for many 
models and these labels include SEER information as the primary 
disclosure. 78 FR 8362 (Feb. 6, 2013). For water heaters, the current 
label includes yearly energy cost as the primary disclosure. It is 
unclear whether the inclusion of EF information would be helpful 
because we have no evidence that most consumers are familiar with the 
term. In addition, state code enforcers can obtain such EF information 
from DOE's Compliance Certification Management System (CCMS) 
database.\56\ Therefore, the Commission is not proposing to include EF 
information on the labels at this time.
---------------------------------------------------------------------------

    \56\ See https://www.regulations.doe.gov/ccms. As proposed in 
the SNPRM (79 FR at 34663), the final rule amends section 305.7 to 
clarify that the capacity for instantaneous water heaters should be 
expressed in gallons-per-minute.
---------------------------------------------------------------------------

D. Additional Information on EnergyGuide Labels

    Background: In the 2012 NPRM, the FTC sought comment on whether to 
require Quick Response (QR) codes on EnergyGuide labels. 77 FR at 
15302. QR codes are black and white matrix barcodes that provide access 
to a Web site through a mobile phone equipped with scanning software. A 
QR code could connect consumers to energy use information, including 
the broad energy impacts and greenhouse gas emissions associated with a 
product's use, through government Web sites or other source 
information. In the 2014 SNPRM (79 FR at 34654), the Commission did not 
propose requiring QR codes on labels. Until the development of Web site 
content to supplement information already on the EnergyGuide label, the 
Commission explained that it was premature to propose any specific 
vehicle for linking consumers to that content.
    The Notice also indicated that the FTC staff would continue to 
consider providing full-fuel cycle and greenhouse gas information to 
consumers, on labels or elsewhere, and keep track of DOE's efforts to 
incorporate full-fuel-cycle analysis into their decision-making.\57\ To 
aid that process, the Commission invited comments on these issues, 
including the overall usefulness of such information in consumer 
purchasing decisions.
---------------------------------------------------------------------------

    \57\ See, e.g., 77 FR 49701 (Aug. 17, 2012).
---------------------------------------------------------------------------

    Comments: In response to the SNPRM, the Commission received several 
comments from members of the natural gas industry--American Gas 
Association (AGA), American Public Gas Association (APGA), and Laclede 
Gas--urging the FTC and DOE to move forward with the development of 
consumer disclosures related to the full-fuel-cycle impacts of energy 
use.\58\ Specifically, two of these commenters argued that the current 
EnergyGuide label should provide more than the current ``site-based'' 
energy information, which does not disclose production costs associated 
with the energy consumers ultimately use. Laclede also asserted that 
the labels lack useful information for comparing gas to electric 
operating costs and questioned the utility of existing information, 
such as information at productinfo.energy.gov, because it only allows 
for comparisons between the same fuel sources using site-based 
performance indicators.
---------------------------------------------------------------------------

    \58\ The comments did not revisit the specific issue of QR codes 
on labels.
---------------------------------------------------------------------------

    The comments explained that ``site'' energy disclosures only 
provide information about the energy an appliance consumes in the home. 
According to AGA, such ``site'' energy information is not only 
inadequate, but can be misleading to consumers who may assume that a 
higher ``site'' efficiency rating means that an appliance uses less 
energy and emits fewer greenhouse gases overall. 
``Full[hyphen]fuel[hyphen]cycle'' energy information addresses this 
shortfall by including not only energy consumption in the consumer's 
home, but also the losses that occur in the transportation and 
distribution of the fuel or its generation, as well as the energy 
consumed in its production or extraction. In AGA's view, 
full[hyphen]fuel[hyphen]cycle disclosures enable a more accurate 
analysis of the total energy usage and environmental impacts.\59\
---------------------------------------------------------------------------

    \59\ For appliances that use natural gas, nearly all of the 
energy losses and emissions occur at the point-of-use according to 
these comments. In addition, the comments indicated the overall 
natural gas delivery system on a full[hyphen]fuel[hyphen]cycle basis 
is highly efficient because approximately 92 percent of the energy 
produced reaches the consumer as usable energy.

---------------------------------------------------------------------------

[[Page 67294]]

    These commenters also argued that source-based energy information 
would allow utilities, state regulators, and consumers to understand 
the environmental benefits or costs, including the greenhouse gas 
emissions associated with appliance use.
    APGA also noted that DOE, the National Academy of Sciences, and the 
ENERGY STAR program have recognized the shortcomings of site-based 
analysis. It explained that labels derived using a source based 
approach will fully identify the emissions reduction through the entire 
energy cycle. AGA agreed, arguing that the label or other required 
disclosures should include information reflecting the energy use, 
life[hyphen]cycle cost, and associated emissions on a 
full[hyphen]fuel[hyphen]cycle basis. AGA recommended consideration of 
full[hyphen]fuel[hyphen]cycle energy use and emissions information on a 
regional basis.
    The commenters urged the Commission to expedite interaction with 
DOE on this issue. According to AGA, DOE already has all the 
information available through the existing residential furnace 
efficiency test procedure on full-fuel-cycle and emissions data. DOE 
agreed to work with the Commission to improve existing online 
databases, to increase consumer access to energy use and emissions data 
through web[hyphen]based information tools, and to collaboratively 
determine if changes to the Energy Guide labeling requirements would be 
beneficial to consumers. 76 FR 51281 (Aug. 18, 2011).
    Discussion: The FTC staff is discussing options with DOE staff for 
providing consumers with information related to full-fuel-cycle impacts 
and greenhouse gases. The staff will focus on considering possible 
changes to existing online resources, either at DOE or FTC, to provide 
consumers with relevant information as it relates to certain products. 
The Commission does not plan to consider content changes to the Energy 
Guide label itself until such online content is fully developed.
    The comments raise concerns about the failure of ``site'' 
efficiency rating disclosures (e.g., energy factor for water heaters or 
annual fuel utilization efficiency for furnaces) to reveal relevant 
differences in energy costs and other environmental aspects of product 
operation. Although the FTC will continue to consider ways to 
communicate full-fuel-cycle impacts as discussed above, the Commission 
notes that the primary disclosures on EnergyGuide labels for water 
heaters, clothes washers, and dishwashers are the estimated annual 
energy costs the consumer will pay, not the product's efficiency 
rating. In the past, the Commission has identified estimated operating 
cost as the best comparative descriptor for consumers on energy 
labels.\60\ Such cost information is featured prominently on most 
EnergyGuide labels. Although the label cost disclosures do not provide 
details about the full-fuel-cycle impacts or associated greenhouse gas 
emissions, they do demonstrate significant differences among the energy 
costs associated with different fuels used to operate these products 
that may not be provided by efficiency ratings. In addition, for 
furnaces and central air conditioners, FTC and DOE have developed an 
online cost calculator to provide similar onsite cost estimates for 
those products through DOE's Web site.
---------------------------------------------------------------------------

    \60\ See, e.g., 72 FR 49948, 49953 (Aug. 29, 2007).
---------------------------------------------------------------------------

E. Schedule for Range Revisions

    Background: In the 2012 NPRM, the Commission sought comment on 
whether to update range and cost information more frequently than the 
five years required by 16 CFR 305.10(a). In earlier comments, several 
energy efficiency organizations suggested that the FTC adopt a three-
year schedule for most products.\61\ In the 2014 SNPRM (79 FR at 
34657), the Commission did not propose to change the five-year 
schedule, explaining that it strikes a reasonable balance by providing 
appropriate updates without imposing unnecessary costs or creating 
inconsistencies between showroom labels.
---------------------------------------------------------------------------

    \61\ Joint Comments from Energy-Efficiency and Consumer 
Organizations (May 16, 2012) (#560957-00015).
---------------------------------------------------------------------------

    Comments: The Joint Commenters argued that a comprehensive label 
database on the existing DOE Web site, https://www.regulations.doe.gov/ccms, would make more frequent updates easier to implement because 
retailers could print new labels and replace older ones or simply 
provide links to this information.\62\ They also urged the Commission 
to avoid delays in updating range information by considering DOE's 
rulemaking schedule and coordinating updates to the EnergyGuide labels 
so that information does not become stale. Finally, the Joint 
Commenters recommended that the Commission update the label ranges for 
heat pump electric storage water heaters because a new model has 
appeared on the market that has an estimated annual energy cost nearly 
$60 less than the lowest cost displayed on the current label.
---------------------------------------------------------------------------

    \62\ 79 FR at 34656-57.
---------------------------------------------------------------------------

    In contrast, several comments supported the five-year update 
schedule. Alliance Laundry Systems argued the current approach 
maintains certainty, allowing manufacturers to plan for label changes, 
lowers scrap costs of the printed labels, and reduces disruption to the 
manufacturing process. It also reduces consumer confusion in the 
marketplace because more frequent fuel energy rate and range changes 
would yield energy labels with differing descriptors on the same model 
manufactured on different dates. AHAM argued that frequent updates 
could also impact label information during the transition periods and 
make it difficult for consumers to compare old and new labels. AHAM, 
therefore, argued that the existing five-year schedule strikes the 
proper balance between maintaining consistent labels and providing 
updates to the cost and range information.\63\
---------------------------------------------------------------------------

    \63\ NEMA also agreed with the Commission's approach.
---------------------------------------------------------------------------

    Discussion: The Commission does not plan to change the five-year 
schedule for updating ranges. However, as suggested by the Joint 
Commenters, the Commission, in a separate notice, will seek comment on 
updating water heater range information given recent changes to the DOE 
test procedure. 79 FR 40541 (July 11, 2014).
    In establishing the current five-year schedule, the Commission 
sought to strike a balance between maintaining consistent labels and 
providing updates to cost and range information.\64\ Though there are 
benefits to more frequent updates, the transition periods between such 
updates create inconsistent labels in the market, which can cause 
confusion, hamper comparison shopping, and reduce confidence in the 
label.\65\ Moreover, the current five-year interval range is consistent 
with past trends in market data.\66\ For example, before 2007, the 
Commission reviewed model data every year and revised the ranges if 
they deviated 15% or more from the previous year. Using this approach, 
the Commission generally updated product ranges at about five-year 
intervals.\67\ If parties identify ranges or fuel rate information that 
should be updated before the five-year period ends, they should alert 
the

[[Page 67295]]

Commission. Finally, the FTC staff will continue to work with DOE staff 
to coordinate range updates with ongoing DOE changes to test procedures 
and standards.
---------------------------------------------------------------------------

    \64\ See also 78 FR 1779, 1781 (Jan. 9, 2013).
    \65\ See 72 FR 49948, 49959 (Aug. 29, 2007) (discussing 
potential problems associated with frequent updates).
    \66\ See 79 FR at 34657 (further discussion of such trends).
    \67\ 72 FR at 49952.
---------------------------------------------------------------------------

F. Retailer Responsibility

    Background: Currently, the Rule prohibits retailers from removing 
labels or rendering them illegible,\68\ but does not otherwise require 
retailers to display labels at the points-of-sale. In 2011, when the 
Commission issued additional label requirements for televisions, it 
declined to impose new retailer obligations, noting that the amendments 
for labels (both in stores and online) contain measures calculated to 
keep labels attached and visible on display models.\69\
---------------------------------------------------------------------------

    \68\ 16 CFR 305.4(a)(2).
    \69\ 76 FR 1038, 1047 (Jan. 6, 2011).
---------------------------------------------------------------------------

    In the 2014 SNPRM, the Commission explained its plans to pursue 
improvements in label design to increase label presence on display 
models before imposing new responsibilities for retail stores. The 
Commission reasoned that it was premature to impose costs on retailers 
when better label requirements and greater availability of online 
labels may alleviate the problem.
    Comments: The comments provided different views on the retailer 
liability issue. The Joint Commenters urged the Commission to 
reconsider its position, arguing that the SNPRM overstated the burdens 
imposed by expanded retailer liability. According to these comments, 
retailers already monitor product displays on a near[hyphen]constant 
basis when they clean display models and ensure pricing and other 
product information is present. In addition, some retailers appear to 
replace missing or damaged EnergyGuide labels. Given the Commission's 
plans to require the submission of labels to DOE's Web site, https://www.regulations.doe.gov/ccms, retailers are less likely to become 
confused when replacing missing labels. In addition, AHAM expressed a 
general concern ``that retailer responsibility needs to be addressed.'' 
However, it did not recommend changes to the current requirements, 
which already prohibit retailers from removing labels or rendering them 
illegible. AHAM did request a clarification stating that manufacturers 
have no responsibility for labels once a unit leaves the manufacturer's 
control.
    In contrast, the Direct Marketing Association (DMA), which 
represents retailers, encouraged the Commission to refrain from 
imposing affirmative duties on retailers. In DMA's view, the Commission 
can best ensure increased information to consumers by pursuing label 
attachment improvements without imposing new burdens at the point-of-
sale. DMA also argued that an affirmative retailer requirement, in its 
opinion, could increase mislabeling inadvertently because retailers are 
not well-positioned to identify the correct labels and do not have 
readily available access to a library of substitute or replacement 
labels. A new retailer requirement would force sales personnel to halt 
customer service and verify correct product labels, attempt to locate 
proper labels, and attach a substitute label whenever a missing label 
was noticed. DMA also argued that a new requirement would penalize 
retailers for situations beyond their control (e.g., when labels become 
damaged while the product is in transit, or when consumers damage the 
labels on display products).
    Discussion: Consistent with the discussion in the SNPRM, the 
Commission does not plan to expand the general retailer requirements at 
this time.\70\ It is premature to impose these costs when better 
labeling, required by the amendments, and greater availability of 
online labels may solve the problem. If these new solutions fail, the 
Commission can reconsider whether additional requirements are 
necessary.\71\
---------------------------------------------------------------------------

    \70\ 79 FR at 34658.
    \71\ In response to AHAM's concerns about manufacturer 
responsibility for showroom products, the Commission notes that the 
current Rule does not direct manufacturers to replace missing labels 
in a retailer showroom. However, the Rule prohibits manufacturers, 
in addition to retailers, distributors, and private labelers, from 
removing or rendering illegible any label required by the Rule. 16 
CFR 305.4(a)(2).
---------------------------------------------------------------------------

G. Marketplace Web Sites

    Background: In January 2013, the Commission published final 
amendments to the Rule's catalog provision, requiring Internet sellers 
to display the label--either in full or as a logo icon with a 
hyperlink--for most covered products.\72\ This requirement applies to 
``[a]ny manufacturer, distributor, retailer, or private labeler who 
advertises a covered product on an Internet Web site in a manner that 
qualifies its site as a catalog under this Part.'' \73\ The Rule 
defines ``catalog'' as ``printed material, including material 
disseminated over the Internet, which contains the terms of sale, 
retail price, and instructions for ordering, from which a retail 
consumer can order a covered product.''\74\
---------------------------------------------------------------------------

    \72\ See 78 FR at 2209 (amending 16 CFR 305.20; effective 
January 15, 2014). For a limited set of covered products--
showerheads, faucets, water closes, urinals, general service 
fluorescent lamps, fluorescent lamp ballasts, and metal halide lamp 
fixtures--the Rule requires the disclosure of specific information 
instead of displaying the EnergyGuide or Lighting Facts label. See 
id. (amending 16 CFR 305.20(a)(ii)).
    \73\ 16 CFR 305.20(a).
    \74\ 16 CFR 305.2(h).
---------------------------------------------------------------------------

    Those amendments do not cover Web sites that serve solely as 
platforms for sellers by performing functions such as hosting sellers' 
advertising, matching buyers' searches to sellers' products, and 
processing payment and shipment directions.\75\ The Rule does not 
require such entities to either display, or ensure the display of, 
labels for covered products sold by third parties. However, the Rule 
continues to apply to those third parties (retailers, manufacturers, 
distributors, and private labelers) that sell their products on such 
Web sites. The Rule also applies to these marketplace Web sites if they 
act as retailers on their own Web sites.\76\
---------------------------------------------------------------------------

    \75\ EPCA states that if a ``manufacturer or any distributor, 
retailer, or private labeler of such product advertises such product 
in a catalog from which it may be purchased, such catalog shall 
contain all information required to be displayed on the label, 
except as otherwise provided by rule of the Commission.'' 42 U.S.C. 
6296(a). EPCA defines a ``retailer'' as ``a person to whom a 
consumer product is delivered or sold, if such delivery or sale is 
for purposes of sale or distribution in commerce to purchasers who 
buy such product for purposes other than resale,'' and a 
``distributor'' as ``a person (other than a manufacturer or 
retailer) to whom a consumer product is delivered or sold for 
purposes of distribution in commerce.'' It defines ``manufacturer'' 
as ``any person who manufactures a consumer product,'' and ``private 
labeler'' as ``an owner of a brand or trademark on the label of a 
consumer product, which bears a private label.'' 42 U.S.C. 6291(12)-
(15). The Rule's definitions of ``manufacturer,'' ``distributor,'' 
``retailer,'' and ``private labeler'' are consistent with EPCA's 
definitions. See 16 CFR 305.2.
    \76\ Taking physical possession of the product would likely 
render the marketplace Web site a ``retailer'' or ``distributor'' 
under EPCA and the Rule. See fn. 74, supra. Therefore, a product's 
delivery to a marketplace Web site's warehouse for temporary storage 
before proceeding in shipment to the consumer may trigger the 
marketplace Web site's responsibility for displaying the product's 
label online under the current Rule.
---------------------------------------------------------------------------

    Comments: In response to the SNPRM, the Joint Commenters continued 
to urge the Commission to create a specific requirement for marketplace 
Web sites. The commenters argued that marketplace Web site liability is 
the only practicable way to police the thousands of listings from 
diverse sellers who often have little control over the final content 
that appears online. The Joint Commenters also provided more 
information regarding non-compliance of retailers participating on 
marketplace Web sites.
    The Direct Marketing Association disagreed and supported the 
Commission's proposal. DMA argued that the Rule's current requirements 
appropriately place responsibility for

[[Page 67296]]

labeling on the parties with the greatest ability to verify the 
accuracy of the information. According to DMA, imposing these 
requirements on marketplace Web sites would be costly and 
unintentionally increase the risk of inadvertent mislabeling.
    DMA argued that additional requirements on marketplace Web sites 
would create ``secondary'' or duplicate coverage, as this information 
is already provided to consumers elsewhere. At present, in its view, 
the burdens of imposing the requirement far outweigh any benefit to 
consumers from providing information that would be, at best, redundant.
    Discussion: The Commission is not proposing additional 
requirements. As explained in the 2012 SNPRM (79 FR at 34658), the Rule 
requires retailers participating on marketplace sites to display labels 
for the products they are offering for sale pursuant to section 305.20 
of the Rule. The Rule already requires retailers, manufacturers, 
distributors, and private labelers selling covered products on 
marketplace Web sites to display labels for those products. Therefore, 
an additional requirement aimed at marketplace Web sites would create a 
secondary layer of coverage. Although added coverage may improve the 
availability of information to consumers, it is not clear whether that 
potential benefit outweighs the added burdens on such Web sites. 
However, the FTC staff will continue to monitor this issue as online 
retail practices evolve.

H. Clothes Dryer Labels

    Background: When the Commission initially issued the energy 
labeling requirements in 1979, it declined to label dryers, citing 
their limited annual energy cost range.\77\ At that time, the maximum 
annual energy cost difference between dryers was only five dollars and 
the Commission concluded the costs of testing and labeling would ``far 
outweigh the potential benefits'' of labeling.\78\ In the SNPRM, the 
Commission explained that recent DOE dryer information suggests that 
dryer efficiency continues to vary little across available models.\79\ 
Although electric dryers using heat-pump technology are more efficient 
than current models, few such models are currently available in the 
U.S. Absent meaningful variation in energy usage, the Commission 
doubted that labeling would significantly aid consumer choices. 
However, the Commission explained that changes to the DOE test 
procedure may reveal greater differences among models.
---------------------------------------------------------------------------

    \77\ Under EPCA, the Commission must prescribe labels for dryers 
unless it finds labeling would not be technologically or 
economically feasible. 42 U.S.C. 6294(a)(1).
    \78\ 44 FR 66466, 66469 (Nov. 19, 1979).
    \79\ See U.S. DOE, Technical Support Document (TSD) for Energy 
Conservation Program: Energy Conservation Standards for Residential 
Clothes Dryers and Room Air Conditioners; Direct Final Rule TSD, 
Table 8.2.26, available at http://www.regulations.gov/#!documentDetail;D=EERE-2007-BT-STD-0010-0053. The table indicates 
that the difference in annual energy use between the baseline model 
and the most efficient non-heat-pump dryer is 89 kWh. At energy 
prices of $0.12 per kWh, this is approximately $11 per year. 
Considering inflation, this spread is even smaller than the cost 
range identified by the Commission in 1979. In addition, DOE's data 
suggests that annual operating costs for these dryers is generally 
lower than $80.
---------------------------------------------------------------------------

    Comments: In response to the SNPRM, commenters offered different 
views on the Commission's decision to forego proposing clothes dryer 
labels. For example, Alliance Laundry Systems supported the position 
because DOE testing indicates only small differences between the 
operating costs of the most efficient and least efficient electric 
models currently available.
    However, the Joint Commenters urged the Commission to revisit the 
issue. They asserted that the SNPRM did not provide adequate evidence 
to demonstrate that the benefits of clothes dryer labels would be 
minimal. First, they argued that high-efficiency dryers are likely to 
populate the market soon. According to the comments, one manufacturer 
has unveiled plans to introduce a heat pump dryer and another has 
introduced new efficient models. In addition, according to the Joint 
Commenters, dryers already exist that meet the new ENERGY STAR 
specifications, which require, on average, approximately 20% less 
energy use than allowed under DOE's 2015 minimum efficiency standards. 
This is a larger energy use spread than the new ENERGY STAR 
specifications for refrigerators. The Joint Commenters also stated 
that, according to DOE energy data, dryer labels may help some 
consumers choose between gas and electric dryers because a substantial 
number of consumers currently use gas for cooking but electricity for 
clothes drying.
    The Joint Commenters also took issue with the Commission's 
interpretation of EPCA's test for requiring clothes dryer labels. They 
explained that EPCA requires clothes dryer labels as long as labeling 
is ``technologically and economically feasible.'' In their view, EPCA 
does not allow the Commission to consider whether the costs of labeling 
outweigh the benefit.\80\ Instead, the Commission can forego labeling 
only if it determines that manufacturers are not ``economically 
capable'' of labeling these products. In the Joint Commenters' view, 
the FTC has not made such a finding.
---------------------------------------------------------------------------

    \80\ Citing Am. Textile Mfrs. Inst., Inc. v. Donovan, 452 U.S. 
490, 508-09 (1981) (interpretation of the term ``feasible'' in the 
context of the Occupational Safety and Health Act of 1970).
---------------------------------------------------------------------------

    Finally, the Joint Commenters noted that DOE currently allows 
manufacturers to use two alternative test procedures.\81\ They 
recommended that the Commission require manufacturers to use the 
procedure codified at Appendix D2 to 10 CFR part 430 Subpart B. The 
Commenters reasoned that this version of the test will better assist 
consumers in making purchasing decisions because ENERGY STAR already 
requires it, and the procedure is more accurate.
---------------------------------------------------------------------------

    \81\ See 78 FR 49608, 49641 (Aug. 14, 2013).
---------------------------------------------------------------------------

    Discussion: The Commission will continue to follow developments 
with clothes dryers. The commenters make several compelling arguments 
for label requirements. As more models appear, the Commission will 
consider establishing a labeling requirement for these products.
    However, in the meantime, the existence of two separate DOE test 
procedures raises serious complications for creating labeling 
requirements. Given the existence of two DOE tests, the Commission does 
not plan to require one DOE version over another because, by doing so, 
the Commission would, in essence, circumvent DOE's efforts to resolve 
the conflicts in its own testing requirements. The resolution of this 
technical issue is best left to DOE. The Commission will consider 
revisiting this after DOE resolves the testing issue.\82\
---------------------------------------------------------------------------

    \82\ The Commission disagrees with the commenters' 
interpretation of EPCA's requirement that labeling be 
technologically and economically feasible. In initially promulgating 
the Rule in 1979, the Commission, after examining the statute and 
statutory history, concluded ``the Commission believes that 
Congress['s] intent was to permit the exclusion of any product 
category, if the Commission found that the costs of the labeling 
program would substantially outweigh any potential benefits to 
consumers.'' 44 FR at 66467-68. In the Commission's view, labeling 
in such circumstances would not be ``economically feasible.'' 42 
U.S.C. 6294(a)(1).
---------------------------------------------------------------------------

I. Plumbing Products

    Consistent with the proposal in the SNPRM, the final amendments 
include two minor changes related to plumbing products.\83\ First, the 
amendments clarify that retail Web sites may use a hyperlink (labeled, 
``water usage'') to guide consumers to flow rate information for the 
covered plumbing

[[Page 67297]]

products they sell. Recent amendments to section 305.20 allow online 
retailers to use a hyperlink to connect consumers to EnergyGuide and 
Lighting Facts labels for specific products, but do not specifically 
allow online sellers to link to required plumbing disclosures.\84\ The 
Plumbing Manufacturers Institute supported this change, but suggested 
the Commission allow other descriptors in the hyperlink such as ``flow 
rate'' and ``water consumption'' to provide flexibility to sellers. The 
Commission agrees. Unlike EnergyGuide and Lighting Facts labels, the 
Rule requires no uniform format for plumbing disclosures. Accordingly, 
a uniform hyperlink to connect consumers to such information is not 
necessary. Second, the amendments effect a conforming change to the 
definition of ``showerhead'' in Part 305 to the reflect recent DOE 
amendments.\85\
---------------------------------------------------------------------------

    \83\ In a separate notice, the Commission plans to propose an 
update to the reference to American Society of Mechanical Engineers 
(ASME) standards in section 305.16 of the Rule.
    \84\ 78 FR 2200 (Jan. 10, 2013).
    \85\ 78 FR 62970 (Oct. 23, 2013).
---------------------------------------------------------------------------

IV. Paperwork Reduction Act

    The current Rule contains recordkeeping, disclosure, testing, and 
reporting requirements that constitute information collection 
requirements as defined by 5 CFR 1320.3(c), the definitional provision 
within the Office of Management and Budget (OMB) regulations that 
implement the Paperwork Reduction Act (PRA). OMB has approved the 
Rule's existing information collection requirements through May 31, 
2017 (OMB Control No. 3084 0069). The amendments make changes in the 
Rule's labeling requirements that will increase the PRA burden as 
detailed below.\86\ Accordingly, the Commission is seeking OMB 
clearance specific to the Rule amendments.
---------------------------------------------------------------------------

    \86\ As indicated in the SNPRM, 79 FR at 34660, n. 139, several 
labeling changes, including changes to label attachment methods and 
refrigerator ranges, should impose no or de minimis additional 
burden beyond existing estimates, or manufacturers should be able to 
incorporate the proposed changes into their normally scheduled 
package or label revisions. The PRA analysis for this rulemaking 
focuses strictly on the information collection requirements created 
by and/or otherwise affected by the amendments. Unaffected 
information collection provisions have previously been accounted for 
in past FTC analyses under the Rule and are covered by the current 
PRA clearance from OMB.
---------------------------------------------------------------------------

    Package and Product Labeling (expanded lamp coverage): The final 
amendments require manufacturers to label several new bulb types. 
Accordingly, manufacturers will have to amend their package and product 
labeling to include new disclosures. The new requirements impose a one-
time adjustment for manufacturers. Commission staff estimates that 
there are 50 manufacturers making approximately 3,000 of these newly 
covered products. This adjustment will require an estimated 600 hours 
per manufacturer on average. Annualized for a single year reflective of 
a prospective 3-year PRA clearance, this averages to 200 hours per 
year. Thus, the label design change will result in cumulative 
annualized burden of 10,000 hours (50 manufacturers x 200 hours). In 
estimating the associated labor cost, FTC staff assumes that the label 
design change will be implemented by graphic designers at an hourly 
wage rate of $24.36 per hour based on Bureau of Labor Statistics 
information.\87\ Thus, staff estimates annual labor cost for this 
adjustment will total $243,600 (10,000 hours x $24.36 per hour).
---------------------------------------------------------------------------

    \87\ The mean hourly wage cited above and those that follow are 
drawn from Bureau of Labor Statistics, U.S. Department of Labor, 
Occupational Employment and Wages--May 2014, Table 1 (National 
employment and wage data from the Occupational Employment Statistics 
survey by occupation, May 2014), available at: http://www.bls.gov/news.release/ocwage.t01.htm.
---------------------------------------------------------------------------

    Testing (expanded lamp coverage): Commission staff assumes that 
manufacturers will have to test 3,000 basic light bulb models out of an 
estimated 6,000 covered products. The Commission also assumes that 
testing will require 14 hours for each model for a total of 42,000 
hours. In calculating the associated labor cost estimate, staff assumes 
that this work will be implemented by electrical engineers at an hourly 
wage rate of $46.05 per hour. Thus, Commission staff estimates that the 
label design change will result in associated labor costs of 
approximately $1,934,100 (42,000 hours x $46.05 per hour).
    Recordkeeping (expanded lamp coverage): Pursuant to section 305.21 
of the amended Rule, manufacturers of the newly covered specialty bulbs 
must keep test data on file for a period of two years after the 
production of a covered product model has been terminated. Assuming one 
minute per model and 3,000 basic models, the recordkeeping burden would 
total 50 hours. Assuming further that these filing requirements will be 
implemented by data entry workers at an hourly wage rate of $15.48 per 
hour, the associated labor cost for recordkeeping would be 
approximately $774 per year.
    Catalog Disclosures (expanded lamp coverage): The amendments would 
require sellers offering covered products through catalogs (both online 
and print) to disclose energy use for each light bulb for sale. Because 
this information is supplied by the product manufacturers, the burden 
on the retailer consists of incorporating the information into the 
catalog presentation. FTC staff estimates that there are 200 online and 
paper catalogs for these products that would be subject to the Rule's 
catalog disclosure requirements. Staff additionally estimates that the 
average catalog contains approximately 250 such products and that entry 
of the required information takes one minute per covered product.\88\ 
The cumulative disclosure burden for catalog sellers is thus 833 hours 
(200 retailer catalogs x 250 products per catalog x 1 minute each per 
product shown). Assuming that the additional disclosure requirement 
will be implemented by data entry workers at an hourly wage rate of 
$15.48, associated labor cost would be approximately $12,894 per year.
---------------------------------------------------------------------------

    \88\ This estimate has been increased from the 2014 SNPRM to 
reflect the likelihood that retail Web sites offer a larger number 
of specialty consumer lamp models than first estimated.
---------------------------------------------------------------------------

    Estimated annual non-labor cost burden (expanded lamp coverage): 
Commission staff estimates that the annualized capital cost of 
expanding the light bulb label coverage is $1,535,000. This estimate is 
based on the assumptions that manufacturers will have to change 3,000 
model packages over an approximate three-year period to meet the new 
requirements \89\ and that package label changes for each product will 
cost $1,335.\90\ Manufacturers place information on products in the 
normal course of business. Annualized in the context of a 3-year PRA 
clearance, these non-labor costs would average $1,335,000 (3,000 model 
packages x $1,335 each over 3 years). As for product labeling, the 
Commission assumes that the one-time labeling change will cost $200 per 
model for an annualized estimated total of $200,000 (3,000 models x 
$200 over 3 years). Annualized in the context of a 3-year PRA 
clearance, the total non-labor costs would thus average $1,535,000.
---------------------------------------------------------------------------

    \89\ This assumes that manufacturers will change packages for 
one-third of their products in the normal course of business each 
year. The multi-year compliance period (two and a half years) and 
the notice provided by this proceeding should minimize the 
likelihood that manufacturers will have to discard package 
inventory. In addition, manufacturers may use stickers in lieu of 
discarding inventory.
    \90\ See 75 FR at 41712 n. 149 and accompanying text.
---------------------------------------------------------------------------

    Total Estimate: Accordingly, the revised estimated total hour 
burden of the amendments is 52,883 with associated labor costs of 
$2,191,368 and annualized capital or other non-labor costs totaling 
$1,535,000.

[[Page 67298]]

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires 
that the Commission provide an Initial Regulatory Flexibility Analysis 
(IRFA) with a Proposed Rule, and a Final Regulatory Flexibility 
Analysis (FRFA) with the final Rule, unless the Commission certifies 
that the Rule will not have a significant economic impact on a 
substantial number of small entities.\91\
---------------------------------------------------------------------------

    \91\ 5 U.S.C. 603-605.
---------------------------------------------------------------------------

    The Commission does not anticipate that the final amendments will 
have a significant economic impact on a substantial number of small 
entities. The Commission recognizes that many affected entities may 
qualify as small businesses under the relevant thresholds. The 
Commission does not expect, however, that the economic impact of 
implementing the amendments will be significant because the Commission 
plans to provide businesses with ample time to implement the 
requirements, and the amendments involve simple information disclosures 
that do not impose substantial burdens.
    The Commission estimates that the amendments will apply to about 75 
light bulb manufacturers and an additional 150 online and paper catalog 
sellers of covered products. The Commission expects that approximately 
150 of these entities qualify as small businesses.
    Although the Commission certified under the RFA that the amendments 
would not, if promulgated, have a significant impact on a substantial 
number of small entities, the Commission has determined, nonetheless, 
that it is appropriate to publish an FRFA in order to explain the 
impact of the amendments on small entities as follows:

A. Description of the Reasons That Action by the Agency Is Being Taken

    The Commission initiated this rulemaking to increase the 
availability of energy labels to consumers while minimizing burdens on 
industry, and generally improve existing requirements.

B. Issues Raised by Comments in Response to the IRFA

    The Commission did not receive any comments specifically related to 
the impact of the final amendments on small businesses. No comments 
were filed by the Chief Counsel for Advocacy of the Small Business 
Administration in response to the proposed rule amendments. Comments 
that involve impacts on all entities are discussed above.

C. Estimate of Number of Small Entities to Which the Amendments Will 
Apply

    Under the Small Business Size Standards issued by the Small 
Business Administration, appliance manufacturers qualify as small 
businesses if they have fewer than 1,000 employees (for other household 
appliances the figure is 500 employees). Catalog sellers qualify as 
small businesses if their sales are less than $8.0 million annually. 
The Commission estimates that there are approximately 150 entities 
subject to the proposed rule's requirements that qualify as small 
businesses.\92\
---------------------------------------------------------------------------

    \92\ See 75 FR at 41712.
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    As discussed above, the changes would slightly increase reporting 
or recordkeeping requirements associated with the Commission's labeling 
rules. The amendments likely will increase compliance burdens by 
extending the labeling requirements to new types of light bulbs. The 
Commission assumes that the label design change will be implemented by 
graphic designers.

E. Duplicative, Overlapping, or Conflicting Federal Rules

    The Commission has not identified any other federal statutes, 
rules, or policies that would duplicate, overlap, or conflict with the 
proposed Rule.

F. Description of Steps Taken To Minimize Significant Economic Impact, 
If Any, on Small Entities, Including Alternatives

    The Commission sought comment and information on the need, if any, 
for alternative compliance methods that would reduce the economic 
impact of the Rule on such small entities. In particular, the 
Commission sought comments on whether it should time the Rule's 
effective date to provide additional time for small business compliance 
and whether to reduce the amount of information catalog sellers must 
provide. As discussed in this Notice, the Commission received no 
comments suggesting shorter compliance periods for requirements. 
However, to minimize the impacts on manufacturers and retailers in 
posting the required labels, the Commission has set effective dates for 
the new requirements to minimize burden on manufacturers as they 
implement them.

Final Rule

List of Subjects in 16 CFR Part 305

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

    For the reasons discussed above, the Commission amends part 305 of 
title 16, Code of Federal Regulations, as follows:

PART 305--ENERGY AND WATER USE LABELING FOR CONSUMER PRODUCTS UNDER 
THE ENERGY POLICY AND CONSERVATION ACT (``ENERGY LABELING RULE'')

0
1. The authority citation for part 305 continues to read as follows:

    Authority: 42 U.S.C. 6294.


0
2. In Sec.  305.3, revise paragraphs (j) and (r) and add paragraph (z) 
to read as follows:


Sec.  305.3  Description of covered products.

* * * * *
    (j) Fluorescent lamp ballast means a device which is used to start 
and operate fluorescent lamps by providing a starting voltage and 
current and limiting the current during normal operation.
* * * * *
    (r) Showerhead means a component or set of components distributed 
in commerce for attachment to a single supply fitting, for spraying 
water onto a bather, typically from an overhead position, excluding 
safety shower showerheads.
* * * * *
    (z) Specialty consumer lamp means
    (1) Any lamp that:
    (i) Is not included under the definition of general service lamp in 
this part;
    (ii) Has a lumen range between 310 lumens and no more than 2,600 
lumens or a rated wattage between 30 and 199;
    (iii) Has one of the following bases:
    (A) A medium screw base;
    (B) A candelabra screw base;
    (C) A GU-10 base; or
    (D) A GU-24 base; and
    (iv) Is capable of being operated at a voltage range at least 
partially within 110 and 130 volts.
    (2) Inclusions. The term specialty consumer lamp includes, but is 
not limited to, the following lamps if such lamps meet the conditions 
listed in paragraph (1):
    (i) vibration-service lamps as defined at 42 U.S.C. 6291(30)(AA);
    (ii) rough service lamps as defined at 42 U.S.C. 6291(30)(X);
    (iii) appliance lamps as defined at 42 U.S.C. 6291(30)(T); and

[[Page 67299]]

    (iv) shatter resistant lamps (including a shatter proof lamp and a 
shatter protected lamp) as defined in 42 U.S.C. 6291(30)(Z).
    (3) Exclusions. The term specialty consumer lamp does not include:
    (i) A black light lamp;
    (ii) A bug lamp;
    (iii) A colored lamp;
    (iv) An infrared lamp;
    (v) A left-hand thread lamp;
    (vi) A marine lamp;
    (vii) A marine signal service lamp;
    (viii) A mine service lamp;
    (ix) A sign service lamp;
    (x) A silver bowl lamp;
    (xi) A showcase lamp;
    (xii) A traffic signal lamp;
    (xiii) A G-shape lamp with diameter of 5 inches or more;
    (xiv) A C7, M-14, P, RP, S, or T shape lamp;
    (xv) A intermediate screw-base lamp; and
    (xvi) A plant light lamp.
* * * * *

0
3. In Sec.  305.7, revise paragraph (d) to read as follows:


Sec.  305.7  Determinations of capacity.

* * * * *
    (d) Water heaters. The capacity shall be the first hour rating (for 
storage-type models) and gallons per minute (for instantaneous-type 
models), as determined according to appendix E to 10 CFR part 430, 
subpart B.
* * * * *

0
4. In Sec.  305.8, paragraph (a)(4) is revised to read as follows:


Sec.  305.8  Submission of data.

    (a) * * *
    (4) This section does not require reports for general service 
light-emitting diode (LED or OLED) lamps or specialty consumer lamps.
* * * * *

0
5. In Sec.  305.11, paragraph (d) is revised to read as follows:


Sec.  305.11  Labeling for refrigerators, refrigerator-freezers, 
freezers, dishwashers, clothes washers, water heaters, room air 
conditioners, and pool heaters.

* * * * *
    (d) Label types. The labels must be affixed to the product in the 
form of an adhesive label or a hang tag as follows:
    (1) Adhesive labels. All adhesive labels should be applied so they 
can be easily removed without the use of tools or liquids, other than 
water, but should be applied with an adhesive with an adhesion capacity 
sufficient to prevent their dislodgment during normal handling 
throughout the chain of distribution to the retailer or consumer. The 
paper stock for pressure-sensitive or other adhesive labels shall have 
a basic weight of not less than 58 pounds per 500 sheets (25'' x 38'') 
or equivalent, exclusive of the release liner and adhesive. A minimum 
peel adhesion capacity for the adhesive of 12 ounces per square inch is 
suggested, but not required if the adhesive can otherwise meet the 
above standard. In lieu of a label with adhesive backing, manufacturers 
may adhere the label with adhesive tape, provided the tape is affixed 
along the entire top and bottom of the label.
    (2) Hang tags. Labels may be affixed to the product in the form of 
a hang tag using cable ties or double strings connected through 
reinforced punch holes, or with attachment and label material of 
equivalent or greater strength and durability. If paper stock is used 
for hang tags, it shall have a basic weight of not less than 110 pounds 
per 500 sheets (25\1/2\'' x 30\1/2\'' index). When materials are used 
to attach the hang tags to appliance products, the materials shall be 
of sufficient strength to insure that if gradual pressure is applied to 
the hang tag by pulling it away from where it is affixed to the 
product, the hang tag will tear before the material used to affix the 
hang tag to the product breaks.
* * * * *

0
6. In Sec.  305.15, revise paragraph (b); redesignate paragraphs (c), 
(d), (e), and (f) as paragraphs (e), (f), (g), and (h); add new 
paragraphs (c) and (d); and revise newly redesignated paragraphs (f)(1) 
and (f)(4) through (6) to read as follows:


Sec.  305.15  Labeling for lighting products.

* * * * *
    (b) General service lamps. Except as provided in paragraph (f) of 
this section, any covered product that is a general service lamp shall 
be labeled as follows:
* * * * *
    (c) Specialty consumer lamps. (1) Any specialty consumer lamp that 
is a vibration-service lamp as defined at 42 U.S.C. 6291, rough service 
lamp as defined at 42 U.S.C. 6291(30), appliance lamp as defined at 42 
U.S.C. 6291(30); or shatter resistant lamp (including a shatter proof 
lamp and a shatter protected lamp) must be labeled pursuant to the 
requirements in paragraphs (b)(1) through (7) of this section.
    (2) Specialty consumer lamp Lighting Facts label content. All 
specialty consumer lamps not covered by paragraph (c)(1) of this 
section shall be labeled pursuant to the requirements of paragraphs 
(b)(1) through (7) of this section or as follows:
    (i) The principal display panel of the product package shall be 
labeled clearly and conspicuously with the following information 
consistent with the Prototype Labels in Appendix L:
    (A) The light output of each lamp included in the package, 
expressed as ``Brightness'' in average initial lumens rounded to the 
nearest five;
    (B) The estimated annual energy cost of each lamp included in the 
package, expressed as ``Estimated Energy Cost'' in dollars and based on 
usage of 3 hours per day and 11 cents ($0.11) per kWh; and
    (C) The life, as defined in Sec.  305.2(w), of each lamp included 
in the package, expressed in years rounded to the nearest tenth (based 
on 3 hours operation per day).
    (ii)(A) If the lamp contains mercury, the principal display panel 
shall contain the following statement in minimum 10 point font:
    ``Contains Mercury For more on clean up and safe disposal, visit 
epa.gov/cfl.''
    (B) The manufacturer may also print an ``Hg[Encircled]'' symbol on 
package after the term ``Contains Mercury.''
    (iii) If the lamp contains mercury, the lamp shall be labeled 
legibly on the product with the following statement: ``Mercury 
disposal: epa.gov/cfl'' in minimum 8 point font.
    (iv) If the required disclosures for a lamp covered by paragraph 
(c)(2) of this section will not be legible on the front panel of a 
single-card, blister package due to the small size of the panel, the 
manufacturer or private labeler may print the statement ``Lighting 
Facts see back'' on the principal display panel consistent with the 
sample label in Appendix L as long as the Lighting Facts label required 
by paragraph (b)(3) of this section appears on the rear panel.
    (v) No marks or information other than that specified in this part 
shall appear on the Lighting Facts label.
    (3) Specialty Lighting Facts label format. Information specified in 
paragraph (c)(2) of this section shall be presented on covered lamp 
packages in the format, terms, explanatory text, specifications, and 
minimum sizes as shown in the Prototype Labels of appendix L and 
consistent in format and orientation with Sample Labels in Appendix L 
of this part. The text and lines shall be all black or one color type, 
printed on a white or other neutral contrasting background whenever 
practical.
    (i) The Lighting Facts information shall be set off in a box by use 
of hairlines and shall be all black or one color type, printed on a 
white or other neutral contrasting background whenever practical.

[[Page 67300]]

    (ii) All information within the Lighting Facts label shall utilize:
    (A) Arial or an equivalent type style;
    (B) Upper and lower case letters;
    (C) Leading as indicated in the Prototype Labels in Appendix L of 
this part;
    (D) Letters that never touch;
    (E) The box and hairlines separating information as illustrated in 
the Prototype Labels in appendix L of this part; and
    (F) The minimum font sizes and line thicknesses as illustrated in 
Prototype Labels in Appendix L of this part.
    (iii) For small package labels covered by (c)(2)(iv) of this 
section, the words ``Lighting Facts see back'' shall appear on the 
primary display panel in a size and format specified in appendix L of 
this part.
    (4) Bilingual labels. The information required by paragraph (c) of 
this section may be presented in a second language either by using 
separate labels for each language or in a bilingual label with the 
English text in the format required by this section immediately 
followed by the text in the second language. All required information 
must be included in both languages. Numeric characters that are 
identical in both languages need not be repeated.
    (d) For lamps that do not meet the definition of general service 
lamp or specialty consumer lamp, manufacturers and private labelers 
have the discretion to label with the Lighting Facts label as long as 
they comply with all requirements applicable to specialty consumer 
lamps in this part.
* * * * *
    (f) * * *
    (1) The required disclosures of any covered product that is a 
general service lamp or specialty consumer lamp shall be measured at 
120 volts, regardless of the lamp's design voltage. If a lamp's design 
voltage is 125 volts or 130 volts, the disclosures of the wattage, 
light output, energy cost, and life ratings shall in each instance be:
* * * * *
    (4) For any covered product that is a general service lamp or 
specialty consumer lamp and operates at discrete, multiple light levels 
(e.g., 800, 1600, and 2500 lumens), the light output, energy cost, and 
wattage disclosures required by this section must be provided at each 
of the lamp's levels of light output and the lamp's life provided on 
the basis of the shortest lived operating mode. The multiple numbers 
shall be separated by a ``/'' (e.g., 800/1600/2500 lumens) if they 
appear on the same line on the label.
    (5) A manufacturer or private labeler who distributes general 
service fluorescent lamps, general service lamps, or specialty consumer 
lamp without labels attached to the lamps or without labels on 
individual retail-sale packaging for one or more lamps may meet the 
package disclosure requirements of this section by making the required 
disclosures, in the manner and form required by those paragraphs, on 
the bulk shipping cartons that are to be used to display the lamps for 
retail sale.
    (6) Any manufacturer or private labeler who makes any 
representation, other than those required by this section, on a package 
of any covered product that is a general service fluorescent lamp, 
general service lamp, or specialty consumer lamp regarding the cost of 
operation or life of such lamp shall clearly and conspicuously disclose 
in close proximity to such representation the assumptions upon which it 
is based, including, e.g., purchase price, unit cost of electricity, 
hours of use, patterns of use. If those assumptions differ from those 
required for the cost and life information on the Lighting Facts label 
(11 cents per kWh and 3 hours per day), the manufacturer or private 
labeler must also disclose, with equal clarity and conspicuousness and 
in close proximity to, the same representation based on the assumptions 
for cost and life required on the Lighting Facts label.
* * * * *

0
7. In Sec.  305.20, revise paragraphs (a)(1)(i) and (a)(1)(ii) 
introductory text to read as follows:


Sec.  305.20  Paper catalogs and Web sites.

    (a) * * *
    (1) Content--(i) Products required to bear EnergyGuide or Lighting 
Facts labels. All Web sites advertising covered refrigerators, 
refrigerator-freezers, freezers, room air conditioners, clothes 
washers, dishwashers, ceiling fans, pool heaters, central air 
conditioners, heat pumps, furnaces, general service lamps, specialty 
consumer lamps (for products offered for sale after May 2, 2018), and 
televisions must display, for each model, a recognizable and legible 
image of the label required for that product by this part. The Web site 
may hyperlink to the image of the label using the sample EnergyGuide 
and Lighting Facts icons depicted in appendix L of this part. The Web 
site must hyperlink the image in a way that does not require consumers 
to save the hyperlinked image in order to view it.
    (ii) Products not required to bear EnergyGuide or Lighting Facts 
labels. All Web sites advertising covered showerheads, faucets, water 
closets, urinals, general service fluorescent lamps, fluorescent lamp 
ballasts, and metal halide lamp fixtures must include the following 
disclosures for each covered product. For plumbing products, the Web 
site may hyperlink to the disclosures using a prominent link labeled 
``Water Usage'' or a similar description which facilitates the 
disclosure of the covered product's rated water usage.
* * * * *

0
8. In Appendix L, remove Sample Labels 1 and 2, redesignate Sample 
Labels 1A and 2A as Sample Labels 1 and 2, respectively, and add 
Prototype Label 7A and Sample Labels 13C and 13D.
    The additions read as follows:

Appendix L to Part 305--Sample Labels

* * * * *
BILLING CODE 6750-01-P

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* * * * *

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-27772 Filed 10-30-15; 8:45 am]
BILLING CODE 6750-01-C