[Federal Register Volume 82, Number 123 (Wednesday, June 28, 2017)]
[Rules and Regulations]
[Pages 29230-29236]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13469]


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FEDERAL TRADE COMMISSION

16 CFR Part 305

[3084-AB15]


Energy Labeling Rule

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

ACTION: Final rule.

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SUMMARY: The Commission issues amendments to the Energy Labeling Rule 
to eliminate certain marking requirements for plumbing products and to 
exempt certain ceiling fans from labeling requirements. Additionally, 
the amendments update the Rule to include labeling requirements for 
electric instantaneous water heaters. The Commission also makes non-
substantive, conforming changes to the testing provisions for LED 
covered lamps and minor corrections to other provisions.

DATES: This rule is effective on December 26, 2017, except for the 
amendments to Sec.  305.13, which are effective on September 17, 2018, 
and the amendments to Sec.  305.16, which are effective on July 28, 
2017.

ADDRESSES: Relevant portions of the record 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. 
It also contains labeling requirements for refrigerators, refrigerator-
freezers, freezers, dishwashers, water heaters, clothes washers, room 
air conditioners, furnaces, central air conditioners, heat pumps, 
plumbing products, lighting products, ceiling fans, and televisions.
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    \1\ 44 FR 66466 (Nov. 19, 1979).
    \2\ 42 U.S.C. 6294. EPCA also requires the Department of Energy 
(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.
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    The Rule requires manufacturers to attach yellow EnergyGuide labels 
to many of the covered products and prohibits retailers from removing 
these labels or rendering them illegible. In addition, it directs 
sellers, including retailers, to post label information on Web sites 
and in paper catalogs from which consumers can order products. 
EnergyGuide labels for most covered products contain three key 
disclosures: Estimated annual energy cost, a product's energy 
consumption or energy efficiency rating as determined by DOE test 
procedures, and a comparability range displaying the highest and lowest 
energy costs or efficiency ratings for all similar models. For cost 
calculations, the Rule specifies national average costs for applicable 
energy sources (e.g., electricity, natural gas, oil) as calculated by 
DOE. Under the Rule, the Commission periodically updates comparability 
range and annual energy cost information based on manufacturer data 
submitted pursuant to the Rule's reporting requirements.\3\
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    \3\ 16 CFR 305.10.
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II. Amendments to the Energy Labeling Rule

    In a September 12, 2016 Notice of Proposed Rulemaking (2016 NPRM), 
the Commission sought comment on several issues including portable air 
conditioner (portable AC or PAC) labeling, large-diameter and high-
speed small-diameter (HSSD) ceiling fan labels, electric instantaneous 
water heater labeling, and plumbing disclosures changes. The Commission 
received 10 comments in response.\4\ After reviewing responsive

[[Page 29231]]

comments, the Commission now issues final amendments addressing these 
issues.
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    \4\ See 81 FR 62681. The comments received in response to the 
2016 NPRM are here: https://www.ftc.gov/policy/public-comments/initiative-681. The comments included:
    Delta T Corporation dba Big Ass Solutions (Delta T) (#00009); De 
Longhi Appliances (#00010); A.O. Smith Corporation (#00011); 
Association of Home Appliance Manufacturers (AHAM) (#00012); Rheem 
Manufacturing Company (#00013); Appliance Standards Awareness 
Project (``Joint Commenters'') (#00014); Air-Conditioning, Heating, 
and Refrigeration Institute (AHRI) #00015; Hunter Fan Company 
(#00008); Plumbing Manufacturers International (PMI) #00003; and the 
People's Republic of China (#0016 and #0017).
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A. Portable Air Conditioners

    Background: In its 2016 NPRM, the Commission proposed requiring 
EnergyGuide labels for portable air conditioners, concluding that such 
labels will aid consumers in their purchasing decisions.\5\ Given the 
similarity of portable ACs to room air conditioners (room ACs or RACs), 
the Commission proposed requiring the same or similar labeling for the 
two products. It also noted that DOE had issued a new test procedure 
for portable ACs on June 1, 2016 (81 FR 35242). However, the Commission 
explained that the content and timing of DOE's new test procedure 
raised several new issues that affect such labeling. First, DOE's test 
procedures do not generate comparable results for portable and room air 
conditioners.\6\ This inconsistency could mislead consumers comparing 
the two types of products. The Commission therefore proposed waiting to 
issue portable AC labels until DOE harmonizes the two tests.\7\ It also 
invited comment on whether to combine portable AC and room AC 
comparability ranges.\8\ Finally, the Commission sought input on the 
timing of these requirements, including data reporting, for portable 
air conditioners. Citing significant burdens associated with testing 
and labeling, earlier industry comments urged the Commission to 
synchronize the date for compliance of any new labeling requirements 
with the date of compliance with DOE efficiency standards, which would 
occur roughly five years after DOE issues such standards.
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    \5\ The Commission also stated such labels would be economically 
and technologically feasible. See 42 U.S.C. 6294(a)(3). The 
Commission addressed the benefits and feasibility of labels for 
these products in earlier notices. See 81 FR at 62682-83; 80 FR 
67351, 67357 (Nov. 2, 2015).
    \6\ 81 FR at 35251. DOE stated that it would consider amending 
the room air conditioner procedure to address this issue. However, 
it is not clear when it will do so.
    \7\ Consistent with the Commission's recent decision on room air 
conditioners, the Commission indicated that the portable AC label 
would appear on the product box, not the unit itself. In addition, 
the portable AC label would disclose the Combined Energy Efficiency 
Ratio (CEER). See 80 FR at 67293.
    \8\ In response to an earlier notice, commenters had disagreed 
on this issue. See 81 FR at 62682-83. In DOE's test procedure 
notice, DOE stated that ``comparative ratings between room ACs and 
portable ACs [are] desirable,'' suggesting that consumers do compare 
these products. See 81 FR at 35251. DOE also noted ``the many 
similarities between room ACs and portable ACs in design, cost, 
functionality, consumer utility, and applications.'' Id. at 35250.
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    Comments: Commenters generally supported labeling for portable ACs. 
They also agreed, for different reasons, that the Commission should not 
combine comparability ranges for portable and room ACs at this time. In 
addition, industry members urged the Commission to synchronize the 
timing of new label requirements with proposed DOE energy efficiency 
standards, which may not become effective for several years.
    Industry members, AHAM and DeLonghi, as well as China argued 
against combining label ranges for portable and room ACs because of 
significant differences in how consumers purchase and use these 
products and the consumer confusion such combined information may 
cause.\9\ Specifically, AHAM and DeLonghi argued that consumers are 
unlikely to compare these products because they use them for different 
purposes. In support of its position, AHAM presented consumer research 
suggesting that each product has ``unique key purchase drivers.'' 
Specifically, portable AC buyers generally seek the flexibility to move 
the product from room to room and store it elsewhere in cooler weather. 
In addition, these consumers often purchase portable ACs because room 
models do not fit in their windows. As DeLonghi explained, portable ACs 
generally offer a ``unique solution'' where installation of other air 
conditioner types is ``forbidden or impracticable.'' \10\ AHAM added 
that most air conditioner owners are likely to choose the configuration 
(PAC or RAC) they currently own when they purchase a new unit. AHAM 
noted that room AC owners generally use these products as the principal 
source of cooling, while portable ACs owners often use those products 
for supplemental cooling. Finally, AHAM pointed to DOE research 
suggesting that room ACs are generally operated more hours annually 
than portable ACs. It also noted that the current room ACs have 
different categories for non-louvered and casement RACs, categories 
which do not apply to portable units.\11\
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    \9\ China added that the test methods and the user experience 
for the two product types are different.
    \10\ In AHAM's view, room AC buyers do not need the ability to 
move units from room to room, view PACs as too expensive, or are 
unaware of PACs. AHAM also suggested, based on its research, the 
consumers will not focus on EnergyGuide labels because cooling 
capacity and price are much higher priorities for consumers than 
energy efficiency and operating costs. According to AHAM, even if 
consumers compare RACs and PACs while shopping, they may not be 
comparing energy costs in making purchasing decisions.
    \11\ AHAM also argued that DOE's statement about the 
desirability for harmonized test results, cited by the Commission in 
the NPRM, has no bearing on whether consumers actually compare these 
products when shopping.
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    The Joint Commenters similarly recommended against combining ranges 
at this time. However, they also recommended initiating separate ranges 
to avoid delay and ensure consumers have access to energy labels 
pending DOE test harmonization. They explained that the test conditions 
impose different outdoor temperatures for the two product types. The 
inconsistency favors portable ACs, making them appear more efficient. 
Therefore, although portable AC labels generated under the test will 
not allow for a direct comparison to room AC labels, the labels will 
still accurately depict portable ACs as generally less efficient (and 
thus more costly to operate) than room ACs.\12\
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    \12\ The Joint Commenters suggested that FTC consider label 
language alerting consumers that the room AC test conditions are not 
consistent with those for PACs.
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    In contrast, AHAM and DeLonghi recommended the Commission wait and 
synchronize the labeling requirements with the compliance date for new 
DOE efficiency standards, which would be set five years after DOE 
issues such standards. AHAM explained that its members will devote 
considerable resources over the next few years to ensure product lines 
meet the new DOE standards.\13\ AHAM also stated that the pre-
development, development, and tooling phases of launching a new product 
take years to complete and require extensive resources. According to 
AHAM, complying with an EnergyGuide label requirement before the DOE 
compliance date ``will require companies to divert resources from 
developing new, more efficient products.'' Aligning the compliance 
dates would ``allow manufacturers to engage in the extensive 
development and testing activities required to innovate and bring more 
efficient products to market and to comply with regulatory 
requirements.'' AHAM added that, should FTC decide to move forward with 
labeling/reporting requirements before the DOE compliance date, the 
compliance date for the labeling requirements should not be prior to 
October 1, 2017 and should be synchronized with the annual

[[Page 29232]]

production cycle (i.e., the cooling season) for these products.\14\
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    \13\ AHAM provided additional information involving the expected 
burden of labeling.
    \14\ AHAM also requested more details about the label content, 
compliance dates, and reporting requirements before issuing a final 
rule and urged that the reporting and labeling requirements be 
consistent with DOE's reporting requirements and the DOE test 
procedure. As the Commission has stated before, the proposed label 
content is largely identical to those for room ACs.
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    Discussion: The Commission is not issuing final label requirements 
for portable air conditioners at this time. As discussed above, 
commenters disagree on the timing of compliance with new labeling 
requirements. AHAM and DeLonghi argued that the compliance dates for 
labels and DOE efficiency standards should be synchronized to allow 
industry to focus more of their resources during the five-year 
standards compliance period on developing more efficient products 
rather than on labeling products. The Joint Commenters, on the other 
hand, seek a shorter compliance period, arguing that the label 
information would benefit consumers before implementation of the 
standards.\15\ However, in January 2017, DOE withdrew its final 
efficiency standards from publication in the Federal Register pursuant 
to an Executive Order, leaving any final standards compliance date 
unclear at this time.\16\ Therefore, before considering this issue 
further, the Commission will wait for further clarity regarding DOE's 
energy efficiency standards.
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    \15\ In arguing for a shorter label compliance period, the Joint 
Commenters note that a 2010 Commission rule (75 FR 41699 (July 19, 
2010) required new labeling for certain lighting products prior to 
the effective date of energy efficiency standards for those products 
because labeling ``will provide benefits to consumers that outweigh 
any additional cost to industry.'' However, in response to industry 
concerns in that proceeding, the Commission later exempted some of 
the bulbs in question from the new labeling requirements, explaining 
in part that the exemption would allow manufacturers to focus their 
labeling resources ``on products that will remain in the market well 
into the future . . . .'' 76 FR 20233, 20236 (April 12, 2011).
    \16\ In December 2016, DOE announced a final rule establishing 
reporting requirements and future efficiency standards for portable 
ACs. See ``Issuance: 2016-12-28 Energy Conservation Program: Energy 
Conservation Standards for Portable Air Conditioners; Final Rule,'' 
https://energy.gov/eere/buildings/downloads/issuance-2016-12-28-energy-conservation-program-energy-conservation-2. Pursuant to the 
Presidential Memorandum on Implementation of Regulatory Freeze (Jan. 
24, 2017), DOE subsequently withdrew the final rule from publication 
in the Federal Register.
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B. Large-Diameter and High-Speed Small Diameter Ceiling Fan Labels

    Background: In final amendments published September 15, 2016 (81 FR 
63634) (2016 Final Rule), the Commission issued updated ceiling fan 
labels, which will be required on all fan boxes beginning on September 
17, 2018. In publishing the new label, the Commission excluded large-
diameter fans (i.e., greater than 84 inches) and high-speed small-
diameter fans because new DOE testing requirements prescribe 
significantly different operating assumptions (hours per day) for these 
models.\17\ As a result, the test yields incompatible yearly cost 
estimates among these different fan types.\18\ Absent adequate 
disclosures alerting consumers to these different operating 
assumptions, the resulting inconsistencies could be misleading. 
Accordingly, the Commission sought comment on the need for, and content 
of, large-diameter and HSSD fan labels.
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    \17\ See 81 FR 48620 (July 25, 2016). In its proposed test 
procedure Notice, DOE described a HSSD fan as a model that has a 
blade thickness of less than 3.2 mm at the edge or a maximum tip 
speed greater than applicable limits set out by DOE and does not 
otherwise qualify as ``a very small-diameter ceiling fan, highly-
decorative ceiling fan or belt-driven ceiling fan.'' 81 FR 1688, 
1700, 1703 (Jan. 13, 2016).
    \18\ The DOE test procedure dictates a 6.4-hour per day 
operating assumption for standard fans but a 12-hour per day figure 
for large-diameter and HSSD models. 81 FR at 48645.
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    Comments: Commenters agreed the Commission should not require 
labels for large-diameter fans. Delta T asserted that such labels would 
create little or no benefit for consumers while adding burden and costs 
for manufacturers. Citing DOE research, Delta T explained that large-
diameter fans are typically not sold to individual consumers through 
retail outlets or e-commerce sites. Thus, in its view, labeling would 
not benefit typical purchasers while creating additional burden and 
cost for manufacturers. Hunter indicated that large diameter fan labels 
are likely to confuse consumers if such labels are inconsistent with 
small-diameter fan labels. Delta T cautioned that such inconsistent 
labels would confuse consumers given the vastly different applications 
for these products.
    Should the FTC require labels, Delta T recommended the label 
display integrated efficiency, maximum power consumption, and maximum 
cubic feet per minute of airflow, and cost comparisons limited to 
similar-size products. In addition, Hunter recommended disclosures 
advising consumers not to compare large-diameter models to small ones.
    Discussion: The Commission has determined not to require labels for 
large-diameter and HSSD fans.\19\ Based on the comments and DOE 
information, large-diameter and HSSD fans are generally not sold to 
residential consumers but rather purchased by commercial or industrial 
entities unlikely to use a consumer label.\20\ Therefore, the 
Commission concludes that for these products the labeling costs would 
substantially outweigh labeling benefits.\21\ However, manufacturers 
and other marketers should note that, under EPCA (42 U.S.C. 6293(c)), 
any energy representations (e.g., airflow ratings) made for these 
products, whether on packaging, in advertising, or elsewhere, must 
fairly disclose the results of the DOE test procedure.\22\
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    \19\ The amendments contain a minor correction to section 305.13 
regarding the fan sizes included for covered models.
    \20\ The commenters did not specifically address HSSD fans. 
However, DOE stated in an earlier notice that ``HSSD ceiling fans 
generally operate at much higher speeds (in terms of RPM) than 
standard or hugger ceiling fans, and are installed in commercial 
applications.'' 81 FR at 1703.
    \21\ Under EPCA, the Commission may forgo label requirements for 
covered products if it determines that labeling for a product type 
or class thereof is not ``economically or technically feasible.'' 
See 42 U.S.C. 6294(b)(5). In interpreting this statutory provision, 
the Commission has stated ``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.
    \22\ China requested the Rule include definitions for large-
diameter and HSSD fans. The amendments published by the Commission 
on September 15, 2016 (81 FR at 63646) (section 305.3(x)) reference 
the DOE definitions for these terms in 10 CFR part 430.
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C. Electric Instantaneous Water Heaters

    Background: In its 2016 NPRM, the Commission proposed to include 
EnergyGuide labeling provisions for electric instantaneous water 
heaters. Although such products already fell within the Rule's ``water 
heater'' definition (section 305.3), the Commission in the past did not 
require that they be labeled because DOE did not have an applicable 
test method. In 2014, however, DOE updated its water heater test 
procedure to include such a test method.\23\ Accordingly, in the 2016 
NPRM, the Commission proposed updating the Rule to publish 
comparability ranges and labeling provisions for these water heater 
models.\24\ The labels for the electric instantaneous models are no 
different from other covered water heaters. The Commission proposed 
requiring manufacturers to begin using labels on their products within 
180 days of the final Rule to give manufacturers adequate time to label 
their models.
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    \23\ 79 FR 40542 (July 11, 2014).
    \24\ 81 FR at 62683-84. In earlier comments, AHRI recommended 
labels for these products in light of the DOE test procedure change. 
See AHRI comments (Jan. 11, 2016) (#00015).
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    Comments: The commenters (AHRI, A.O. Smith, and Rheem) supported 
the Commission requiring labels for electric

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instantaneous water heaters. For instance, A.O. Smith stated that 
labeling requirements ``will assure a transparent level playing field 
upon which manufacturers will be able to communicate important 
information to consumers.'' However, these comments raised concerns 
about physically attaching labels to these products. They explained 
that electric instantaneous units are generally too small to 
accommodate the EnergyGuide label. A.O. Smith also noted that these 
products are most commonly displayed in their packaging (i.e., box). 
Therefore, the commenters requested that the Commission either allow 
manufacturers to place the label on packaging (like ceiling fans), 
include the label with other product literature, or affix hang tags 
directly on the product (an option currently prohibited by the 
Rule).\25\
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    \25\ Rheem and AHRI noted conforming changes needed for the 
online sample template label for instantaneous water heaters on the 
FTC Web site. Those changes have been made at https://www.ftc.gov/tips-advice/business-center/guidance/energyguide-labels-templates-manufacturers.
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    Discussion: Consistent with the comments and EPCA's mandate, the 
final amendments impose labeling requirements, including the 
comparability ranges proposed in the 2016 NPRM for electric 
instantaneous water heaters.\26\ The cost figure for the label is 12 
cents per kWh, consistent with the figure currently used for electric 
storage water heater labels. In response to comments indicating that 
the products themselves are generally too small for an adhesive label 
and that the products are usually displayed in boxes, the final Rule 
requires the label to appear conspicuously on the product's packaging, 
not on the product itself.\27\ Manufacturers may incorporate the label 
into the packaging graphics or affixing adhesive labels to the box.\28\
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    \26\ Under EPCA (42 U.S.C. 6294(a)(1)), the Commission must 
require labels for water heaters unless it finds such labeling is 
not technologically or economically feasible. The comments, all from 
industry members supporting the label, identified no such barriers.
    \27\ Consistent with the proposal, the final amendments require 
labels for models produced beginning 180 days after publication of 
this Notice. In addition, the final Rule does not allow labels to be 
included in literature disseminated with the product or affixed as 
hang tags. The inclusion of labels in product literature would 
prevent consumers from examining the label prior to purchase. In 
addition, the Rule (section 305.11(e)(2)) prohibits the placement of 
hang tags on product exteriors because such labels may ``become 
misplaced or damaged easily'' in a retail environment. See 72 FR 
49948, 49961 (Aug. 29, 2007).
    \28\ AHRI's comments also raised concerns about whether gas-
fired instantaneous water heaters can accommodate the size of the 
label. However, the Rule has required labels for gas-fired units for 
decades with no apparent difficulty and the 2016 NPRM did not 
propose any changes for gas-fired model labels. In addition, both 
Rheem and A.O. Smith indicated in their comments that electric 
models are generally smaller than gas-fired ones. The Commission 
therefore has determined not to address labels of gas-fired 
instantaneous water heaters in the final amendments.
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D. Plumbing ASME Reference Update

    Background: In the 2016 NPRM, the Commission also proposed updating 
the marking and labeling requirements in Section 305.16 to remove a 
reference to the ASME (American Society of Mechanical Engineers) 
standards that the Rule requires on showerheads and faucets 
(``A112.18.1''), as well as water closets and urinals (``A112.19.2''). 
The Commission explained that the required marking appears to have 
outlived its usefulness, and that its removal likely will have no 
negative impact on consumers or other market participants. In addition, 
the current revisions of both ASME standards no longer require these 
markings.
    Comments: All commenters addressing this issue supported the 
proposal. PMI agreed these standard markings have outlived their 
usefulness and are no longer required by the latest versions of the 
ASME standards. PMI provided suggested language to ensure that the 
amendments delete the ASME marking requirements from the Rule. PMI also 
requested that the proposed rulemaking become effective no later than 
30 days after it is published in the Federal Register to allow 
manufacturers to remove the markings from their products as soon as 
possible.
    Discussion: As proposed, the final amendments remove the ASME 
references in the Rule.\29\ As discussed in the 2016 NPRM, these 
disclosures are unlikely to aid consumers or industry members and, as 
such, impose unnecessary burdens. The final changes incorporate the 
Rule language suggestions offered by PMI. The amendments will become 
effective 30 days after publication of this Notice in the Federal 
Register.
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    \29\ EPCA directs the Commission to amend the plumbing labeling 
requirements to be consistent with any revisions to these ASME 
standards, unless the Commission finds such amendments would be 
inconsistent with EPCA's purposes or certain labeling requirements 
for plumbing products. 42 U.S.C. 6294(a)(2)(E)(ii). As noted in 
earlier comments, the ASME standards themselves no longer require 
such markings, and applicable plumbing codes now impose similar 
disclosures and require manufacturers to third-party certify their 
products to the current applicable standard. Accordingly, these 
amendments are consistent with EPCA. See 81 FR at 62684.
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E. LED Test Procedure Reference

    The final amendments include a non-substantive, conforming change 
to the Rule's testing provisions (section 305.5) to clarify that 
manufacturers must use DOE test procedures for LED covered lamps. In 
the past, the Rule stated that the Commission will accept tests 
conducted according to IEA LM79 as a reasonable basis for 
representations of light output for general service LED lamps. However, 
on July 1, 2016 (81 FR 43404), DOE issued final test procedures 
incorporating LM79 standard by reference. Because EPCA requires 
manufacturers to use DOE test procedures for labeling,\30\ the Rule 
provision's reference to IEA LM79 is now obsolete. Accordingly, the 
Commission finds good cause for amending the testing provisions for LED 
covered lamps to remove the obsolete reference to IEA LM79 without 
notice and comment because such a procedure is unnecessary in this 
case. See 16 CFR 1.26(b).\31\
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    \30\ 42 U.S.C. 6293(c) and 6294(c)(1)(A).
    \31\ The amendments also include minor corrections to language 
in section 305.11(f) for refrigerators and freezers (e.g., deletes 
an obsolete reference to ``year''), clothes washers, and 
dishwashers, and to the cost figure for television disclosures in 
paper catalogs in section 305.20(b)(1)(i)(F). The Commission finds 
good cause for implementing these corrections without notice and 
comment.
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III. 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 November 
30, 2019 (OMB Control No. 3084-0069). The amendments make changes in 
the Rule's labeling requirements that will increase the PRA burden as 
detailed below.\32\ Accordingly, the Commission is seeking OMB 
clearance specific to the Rule amendments.\33\
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    \32\ The amendments to the plumbing provisions add no additional 
burden beyond existing estimates.
    \33\ 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.
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    Burden estimates below are based on Census data, DOE figures and 
estimates, general knowledge of manufacturing practices, and trade 
association advice and figures. The FTC estimates that there are about 
100 basic models (i.e., units with essentially identical physical and 
electrical characteristics) affected

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by these amendments. In addition, FTC staff estimates that there are 6 
instantaneous water heater manufacturers. The FTC estimates that there 
are 100,000 electric instantaneous water heaters shipped each year in 
the U.S.
Annual Burden Hours
    Reporting: FTC staff estimates that manufacturers will require 
approximately two minutes per model to enter label data per basic 
model. Accordingly, the FTC estimates that cumulative annual reporting 
burden will be 3 hours (2 minutes per model x 100 basic models).
    Labeling: FTC staff estimates that manufacturers will require six 
seconds per unit to affix labels. Accordingly, the FTC estimates that 
cumulative annual disclosure (labeling) burden will be 167 hours to 
affix labels [(six seconds per unit x 100,000 total annual product 
shipments)].
    Testing: For testing, manufacturers will require approximately 24 
hours for each water heater. The FTC estimates that, on average, 50% of 
the total basic models are tested each year. Accordingly, the estimated 
annual testing burden for electric instantaneous water heaters is 1,200 
hours (24 hours x 100 x 0.5).
    Recordkeeping: The Rule also requires electric instantaneous water 
heater manufacturers to keep records of test data generated in 
performing the tests to derive information included on labels. The FTC 
estimates that it will take manufacturers one minute per record (i.e., 
per model) to store the data. Accordingly, the estimated annual 
recordkeeping burden would be approximately 2 hours (1 minute x 100 
basic models).
    Catalog Disclosures: Based upon FTC staff research concerning the 
number of manufacturers and online retailers, staff estimates that 
there are an additional 150 catalog sellers who are subject to the 
Rule's catalog disclosure requirements. Staff estimates further that 
these sellers each require approximately 2 hours per year to 
incorporate the data into their catalogs. This estimate is based on the 
assumptions that entry of the required information takes on average one 
minute per covered product and that the average online catalog contains 
approximately 100 covered products relevant here. Given that there is 
great variety among sellers in how many products that they offer 
online, it is very difficult to estimate such numbers with precision. 
In addition, this analysis assumes that information for all 100 covered 
products is entered into the catalog each year. This is a conservative 
assumption because the number of incremental additions to the catalog 
from year to year is likely to be much lower after initial start-up 
efforts have been completed. Thus, the total annual disclosure burden 
for all catalog sellers of electric instantaneous water heaters covered 
by the Rule is 300 hours (150 sellers x 2 hours).
    Thus, estimated annual burden attributable to the amendments is 
1,672 hours (3 hours for reporting + 167 for labeling + 1,200 for 
testing + 2 hours for recordkeeping + 300 disclosure hours for catalog 
sellers).
Annual Labor Costs
    Staff derived labor costs by applying assumed hourly wages \34\ to 
the burden hours described above. In calculating labor costs, the FTC 
assumes that electrical engineers perform test procedures, electronic 
equipment installers affix labels, and data entry workers enter label 
data, catalog disclosures, and perform recordkeeping. Average hourly 
wages for these labor categories, based on BLS data, are as follows: 
(1) Electrical engineers ($47.41); (2) electronic equipment installers 
($24.27); and (3) data entry workers ($16.24).
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    \34\ The mean hourly wages that follow are drawn from 
``Occupational Employment and Wages--May 2016,'' Bureau of Labor 
Statistics (``BLS''), U.S. Department of Labor, Table 1, released 
March 31, 2017 (``National employment and wage data from the 
Occupational Employment Statistics survey by occupation, May 
2016''), available at https://www.bls.gov/news.release/ocwage.t01.htm.
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    Based on the above estimates and assumptions, the total annual 
labor cost for the various burden categories and sub-categories noted 
above is as follows:

Reporting: 3 hours x $16.24/hour (data entry workers) = $49
Labeling: 167 hours x $24.27 (electronic equipment installers) = $4,053
Testing: 1,200 hours x $47.41/hour (electrical engineers) = $56,892
Recordkeeping: 2 hours x $16.24/hour (data entry workers) = $32
Catalog Disclosures: 300 hours x $16.24/hour (data entry workers) = 
$4,872

Thus, the total annual labor cost is approximately $65,898.
Annual Non-Labor Costs
    Manufacturers are not likely to require any significant capital 
costs to comply with the amendments. Industry members, however, will 
incur the cost of printing package labels for each covered unit. The 
estimated label cost, based on $.03 per label, is $3,000 (100,000 x 
$.03).
    Total Estimated Burden: Accordingly, the estimated total hour 
burden of the final amendments is 1,672 with associated labor costs of 
$65,898 and annualized capital or other non-labor costs totaling 
$3,000.

IV. 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.\35\
---------------------------------------------------------------------------

    \35\ 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 some 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 amendments 
involve routine labeling requirements commonly implemented by the 
affected entities and, as illustrated in the PRA analysis, the PRA 
burden of these requirements is not large. The Commission will provide 
businesses with ample time to implement the requirements. In addition, 
the Commission does not expect that the requirements specified in the 
final amendments will have a significant impact on affected entities.
    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 is issuing a new energy label for electric 
instantaneous water heaters to help consumers with their purchasing 
decisions. It is also amending the Rule's requirements to eliminate 
unnecessary requirements regarding plumbing disclosures.

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. In addition, 
the

[[Page 29235]]

Commission did not receive any comments filed by the Chief Counsel for 
Advocacy of the Small Business Administration. Comments that involve 
impacts on all entities are discussed above in the Paperwork Reduction 
Act section.

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. 
FTC staff estimates that there are approximately 100 catalog sellers 
subject to the proposed rule's requirements that qualify as small 
businesses.\36\
---------------------------------------------------------------------------

    \36\ See 75 FR 41696, 41712 (July 19, 2010). The staff has not 
identified any manufacturers affected by the amendments that are 
small businesses.
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    The amendments would slightly increase reporting or recordkeeping 
requirements associated with the Commission's labeling rules as 
discussed above. The amendments likely will increase compliance burdens 
by extending the labeling requirements to instantaneous electric water 
heaters. As previously explained in the PRA analysis, the Commission 
anticipates that the labeling will be implemented by electronic 
equipment installers.

E. 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 response to comments, the 
Commission has given manufacturers the option of printing or affixing 
labels on electric instantaneous water heaters to provide flexibility 
in meeting that requirement. The Commission also removed outdated 
references on plumbing products that are unlikely to aid consumers or 
industry members and, as such, impose unnecessary burdens.

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. Amend Sec.  305.11 by revising paragraph (d) introductory text, 
adding paragraph (d)(3), and revising paragraphs (f)(9)(i), (iv), and 
(vii) through (x) 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. Except as indicated in paragraph (d)(3) of this 
section, the labels must be affixed to the product in the form of an 
adhesive label or a hang tag as follows:
* * * * *
    (3) Package labels for certain products. Labels for electric 
instantaneous water heaters shall be printed on or affixed to the 
product's packaging in a conspicuous location.
* * * * *
    (f) * * *
    (9) * * *
    (i) Labels for refrigerators and refrigerator-freezers must contain 
a statement as illustrated in the prototype labels in appendix L and 
specified as follows (fill in the blanks with the appropriate energy 
cost figure):
    Your cost will depend on your utility rates and use.
    Both cost ranges based on models of similar size capacity.
    [Insert statement required by Sec.  305.11(f)(9)(iii)].
    Estimated energy cost based on a national average electricity cost 
of __ cents per kWh.
    ftc.gov/energy.
* * * * *
    (iv) Labels for freezers must contain a statement as illustrated in 
the prototype labels in appendix L and specified as follows (fill in 
the blanks with the appropriate energy cost figure):
    Your cost will depend on your utility rates and use.
    [Insert statement required by Sec.  305.11(f)(10)(v)].
    Estimated energy cost based on a national average electricity cost 
of __ cents per kWh.
    ftc.gov/energy.
* * * * *
    (vii) For water heaters covered by appendices D1, D2, and D3, the 
statement will read as follows (fill in the blanks with the appropriate 
fuel type, and energy cost figures):
    Your costs will depend on your utility rates and use.
    Cost range based only on models fueled by [natural gas, oil, 
propane, or electricity] with a [very small, low, medium, or high] 
first hour rating [fewer than 18 gallons, 18-50.9 gallons, 51-74.9 
gallons, or greater than 75 gallons].
    Estimated energy cost is based on a national average [electricity, 
natural gas, propane, or oil] cost of [__ cents per kWh or $__ per 
therm or gallon].
    Estimated yearly energy use: __ [kWh or therms].
    ftc.gov/energy.
    (viii) For instantaneous water heaters (appendices D4 and D5), the 
statement will read as follows (fill in the blanks with the appropriate 
model type, and the energy cost figures):
    Your costs will depend on your utility rates and use.
    Cost range based only on [electric models or models fueled by 
natural gas] with a [very small, low, medium, or high] gallons per 
minute rating [0 to 1.6, 1.7 to 2.7, 2.8 to 4.0, or greater than 4.0].
    Estimated energy cost is based on a national average [electricity, 
natural gas, or propane] cost of [ __ cents per kWh or $__ per therm or 
gallon].
    Estimated yearly energy use: __ [kWh or therms].
    ftc.gov/energy.
    (ix) For dishwashers covered by appendices C1 and C2, the statement 
will read as follows (fill in the brackets with the appropriate 
capacity and the energy cost figures):
    Your costs will depend on your utility rates and use.
    Cost range based only on [compact/standard] capacity models.
    Estimated energy cost is based on four washloads a week, and a 
national average electricity cost of [__] cents per kWh and natural gas 
cost of $[__] per therm.
    For more information, visit www.ftc.gov/energy.
    (x) For clothes washers covered by appendices F1 and F2, the 
statement will read as follows (fill in the blanks with the appropriate 
capacity and energy cost figures):
    Your costs will depend on your utility rates and use.
    Cost range based only on [compact/standard] capacity models.
    Estimated operating cost is based on six wash loads a week and a 
national

[[Page 29236]]

average electricity cost of __ cents per kWh and natural gas cost of $ 
__ per therm.
    ftc.gov/energy.
* * * * *

0
3. In Sec.  305.13, revise paragraph (a)(1)(xii), as added September 
15, 2015, at 81 FR 63649, and effective September 17, 2018, to read as 
follows:


Sec.  305.13  Labeling for ceiling fans.

    (a) * * *
    (1) * * *
    (xii) For fans from 19 or more inches and less than or equal to 84 
inches in diameter, the label shall display a cost range of $3 to $34 
along with the statement underneath the range ``Cost Range of Similar 
Models (19''-84'').
* * * * *

0
4. In Sec.  305.16, effective July 28, 2017, revise paragraphs (a)(3) 
and (4) and (b)(3) and (4) to read as follows:


Sec.  305.16  Labeling and marking for plumbing products.

    (a) * * *
    (3) The package for each showerhead and faucet shall disclose the 
manufacturer's name and the model number.
    (4) The package or any label attached to the package for each 
showerhead or faucet shall contain at least the following: The flow 
rate expressed in gallons per minute (gpm) or gallons per cycle (gpc), 
and the flow rate value shall be the actual flow rate or the maximum 
flow rate specified by the standards established in subsection (j) of 
section 325 of the Act, 42 U.S.C. 6295(j). Each flow rate disclosure 
shall also be given in liters per minute (L/min) or liters per cycle 
(L/cycle).
    (b) * * *
    (3) The package, and any labeling attached to the package, for each 
water closet and urinal shall disclose the flow rate, expressed in 
gallons per flush (gpf), and the water use value shall be the actual 
water use or the maximum water use specified by the standards 
established in subsection (k) of section 325 of the Act, 42 U.S.C. 
6295(k). Each flow rate disclosure shall also be given in liters per 
flush (Lpf).
    (4) With respect to any gravity tank-type white 2-piece toilet 
offered for sale or sold before January 1, 1997, which has a water use 
greater than 1.6 gallons per flush (gpf), any printed matter 
distributed or displayed in connection with such product (including 
packaging and point-of-sale material, catalog material, and print 
advertising) shall include, in a conspicuous manner, the words ``For 
Commercial Use Only.''
* * * * *

0
5. In Sec.  305.20, revise paragraph (b)(1)(i)(F) to read as follows:


Sec.  305.20   Paper catalogs and Web sites.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (F) Televisions. The estimated annual operating cost determined in 
accordance with Sec.  305.5 and a disclosure stating ``Your energy cost 
depends on your utility rates and use. The estimated cost is based on 
12 cents per kWh and 5 hours of use per day. For more information, 
visit www.ftc.gov/energy.''
* * * * *

0
6. Revise appendix D5 to read as follows:

Appendix D5 to Part 305--Water Heaters--Instantaneous--Electric

                            Range Information
------------------------------------------------------------------------
                                             Range of estimated annual
                                           energy costs  (dollars/year)
                Capacity                 -------------------------------
                                                Low            High
------------------------------------------------------------------------
Capacity (maximum flow rate); gallons
 per minute (gpm):
    ``Very Small''--less than 1.6.......             $72             $74
    ``Low''--1.7 to 2.7.................               *               *
    ``Medium''--2.8 to 3.9..............               *               *
    ``High''--over 4.0..................               *               *
------------------------------------------------------------------------


    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-13469 Filed 6-27-17; 8:45 am]
 BILLING CODE 6750-01-P