81 FR 62681 - Energy Labeling Rule

FEDERAL TRADE COMMISSION

Federal Register Volume 81, Issue 176 (September 12, 2016)

Page Range		62681-62689
FR Document		2016-21783

The Commission proposes amendments to the Energy Labeling Rule to require labels for portable air conditioners, large-diameter and high-speed small diameter ceiling fans, and instantaneous electric water heaters. Additionally, it proposes eliminating certain marking requirements for plumbing products.

Federal Register, Volume 81 Issue 176 (Monday, September 12, 2016)

[Federal Register Volume 81, Number 176 (Monday, September 12, 2016)]
[Proposed Rules]
[Pages 62681-62689]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-21783]

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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: Notice of proposed rulemaking.

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SUMMARY: The Commission proposes amendments to the Energy Labeling Rule
to require labels for portable air conditioners, large-diameter and
high-speed small diameter ceiling fans, and instantaneous electric
water heaters. Additionally, it proposes eliminating certain marking
requirements for plumbing products.

DATES: Written comments must be received on or before November 14,
2016.

ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write ``Energy Labeling
Amendments (16 CFR part 305) (Project No. R611004)'' on your comment,
and file your comment online at https://ftcpublic.commentworks.com/ftc/plumbingnprm, by following the instructions on the web-based form. If
you prefer to file your comment on paper, mail your comment to the
following address: Federal Trade Commission, Office of the Secretary,
600 Pennsylvania Avenue NW., Suite CC-5610 (Annex E), Washington, DC
20580, or deliver your comment to the following address: Federal Trade
Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW., 5th Floor, Suite 5610 (Annex E), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, Attorney, (202) 326-
2889, 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

[[Page 62682]]

data submitted pursuant to the Rule's reporting requirements.\3\
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\3\ 16 CFR 305.10.
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II. Proposed Amendments to the Energy Labeling Rule

The Commission seeks comments on issues related to recent DOE
regulatory actions or new issues raised by commenters in response to a
November 2, 2015 Notice of Proposed Rulemaking (``2015 NPRM'' or
``NPRM'') (80 FR 67351), including portable air conditioner labeling,
large-diameter and high-speed small-diameter ceiling fan labels,
electric instantaneous water heater labeling, and plumbing disclosures
changes.\4\
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\4\ The comments received in response to the 2015 NPRM are here:
https://www.ftc.gov/policy/public-comments/initiative-601. The
comments included: Association of Home Appliance Manufacturers
(AHAM) (#00016); CSA Group (#00007); California Investor Owned
Utilities (California IOUs) (#00019); Earthjustice (``Joint
Commenters'') (#00018); International Association of Plumbing and
Mechanical Officials (IAPMO) (#00022); NSF International (#00005);
and Plumbing Manufacturers International (PMI) (#00006).
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A. Portable Air Conditioners

Background: In the 2015 NPRM, the Commission sought comment on
labeling for portable air conditioners (portable ACs) in response to a
DOE proposal designating portable air conditioners as covered products
under EPCA.\5\ Given the similarity of portable air conditioners to
room air conditioners (room ACs), the Commission proposed requiring the
same or similar labeling for the two products. In addition, the
Commission proposed requiring such labels after DOE completes its
portable air conditioner test procedure rulemaking.
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\5\ See 78 FR 40403 (July 5, 2013); 42 U.S.C. 6292. Portable air
conditioners are movable units, unlike room air conditioners, which
are permanently installed on the wall or in a window.
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In support of this position, the Commission stated that labels for
this product category are likely to assist consumers in their
purchasing decisions. It is also stated such labels would be
economically and technologically feasible.\6\ Portable air conditioners
are common in the marketplace, use energy equivalent to already-covered
room air conditioners, and vary in their energy use. Specifically, DOE
has reported that the aggregate energy use of portable ACs has been
increasing as these units have become popular in recent years.\7\ DOE
also estimated that these products have a large efficiency rating range
(approximately 8.2-14.3 Energy Efficiency Ratio (EER)). In addition,
DOE estimated average per-household annual electricity consumption for
these products at approximately 650 kWh/yr (750 kWh/yr for EER 8.2, and
400 kWh/yr for EER 14.3). Thus, the Commission stated in the 2015 NPRM
that energy labeling for these products is likely to assist consumers
with their purchasing decisions by allowing them to compare competing
models' energy costs. In addition, because these products closely
resemble room air conditioners, which are currently labeled under the
Rule, the burdens and benefits of labeling these products should not
differ significantly from those already applicable to room air
conditioners.
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\6\ See 42 U.S.C. 6294(a)(3).
\7\ See 78 FR at 40404-05; Technical Support Document: Energy
Efficiency; Program for Consumer Products and Commercial and
Industrial Equipment: Portable Air Conditioners. U.S. Department of
Energy--Office of Energy Efficiency and Renewable Energy (Feb. 18,
2015), http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-
STD-0033-0007.
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Therefore, the Commission proposed requiring labels for portable
air conditioners identical to the current room air conditioner label in
content and format. The proposed amendments included the DOE's proposed
definition of ``portable air conditioner'' in section 305.3.\8\ These
amendments would include separate ranges for portable air conditioners
in the Rule's appendices, which the Commission would publish after data
becomes available. The Commission did not propose combining the ranges
with room air conditioners, stating that it was not clear whether
consumers routinely compare portable air conditioners to room air
conditioners. In addition, consistent with requirements applicable to
room air conditioners, the Commission proposed establishing reporting
requirements identical to DOE's for these products. The Commission also
explained that it would not make a final determination on labeling
until DOE issued a final test procedure and defined ``portable air
conditioner.'' \9\ The NPRM stated that the Commission would provide
manufacturers adequate time to test their products and report energy
data before they must begin complying with any labeling
requirements.\10\
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\8\ To effect new labeling requirements, the proposed amendments
insert the term ``portable air conditioner'' next to ``room air
conditioner'' into appropriate sections of 305.2 (definitions),
305.3 (description of covered products), 305.7 (determinations of
capacity), 305.8 (submission of data), 305.11 (labeling for
appliances), and 305.20 (catalog requirements).
\9\ DOE published a proposed test procedure on February 25, 2015
(80 FR 10212).
\10\ Under EPCA, any energy representations on the label must
reflect the DOE test results. 42 U.S.C. 6293(c).
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Comments: Commenters generally supported requiring EnergyGuide
labels for portable air conditioners. For instance, the Joint
Commenters agreed that requiring EnergyGuide labels for portable air
conditioners will likely assist consumers in making purchasing
decisions and be economically and technologically feasible. As
discussed below, the commenters also addressed the comparative
information for these labels and the timing of the potential
requirements. Although commenters generally supported labeling for
portable ACs, they differed about the comparability information on the
label. AHAM agreed with the Commission's initial proposal not to
combine ranges for portable and room air conditioners. The Joint
Commenters disagreed and specifically recommended a second range bar
comparing room and portable air conditioners of similar capacity. They
explained that consumer questions posted on shopping Web sites suggest
that many consumers directly compare the two product types and use
portable units in a manner similar to room air conditioners. In
addition, some retailers market portable air conditioners as energy-
efficient alternatives to room air conditioners.
Commenters also addressed the timing of DOE's test procedure and
the FTC's labeling requirement. The California IOUs agreed that FTC
should wait until DOE finalizes the test procedure for portable air
conditioners before requiring an EnergyGuide label. They explained that
the DOE procedure is likely to include new metrics to address portable
air conditioners' performance comparability, peak-demand performance,
and actual usage. AHAM strongly urged the Commission to align the label
implementation date to coincide with DOE's compliance date for energy
conservation standards. Given the considerable burdens associated with
designing products to meet such standards, AHAM noted that EPCA sets a
five-year lead-in period for manufacturers to comply.\11\ During that
period, companies must ensure that new and existing products meet the
applicable standard. According to AHAM, the pre-development,
development, and tooling phases for new product launches can take years
and require extensive company resources, time, and coordination. AHAM
cautioned that any requirement to distribute labels prior to the DOE
standards compliance date will require companies to divert resources
from developing new, more efficient

[[Page 62683]]

products.\12\ In addition, in AHAM's view, if FTC requires labels
before this date, manufacturers would have to test and label all the
low-efficiency models they plan to discontinue because such models do
not meet the DOE standards.\13\
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\11\ See 42 U.S.C. 6295(l).
\12\ AHAM also explained that it will take significant time for
manufactures to determine the list of active models and, out of
those models, identify those that qualify as ``basic models'' under
DOE and FTC regulations.
\13\ Finally, AHAM noted that the testing and labeling involved
would be more burdensome than the estimates included in the
Paperwork Reduction Act analysis of the 2015 NPRM. Specifically,
AHAM estimated: 32 hours per model for testing (8 hours x 4 units,
as well as up to 4 hours for preparing the data); 40 hours per model
for reporting; and 40 hours per model for label preparation. It is
unclear whether AHAM's reporting burden estimate refers to annual
certification reports or to new model reports. Annual reports
include all models under current production (including models
previously reported to the database). It is also unclear whether an
estimate of 40 hours for label drafting is per model rather than,
perhaps more justifiably, per product type or per manufacturer. As
noted in the Paperwork Reduction Act discussion below, the
Commission seeks clarification regarding these estimates.
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Discussion: Consistent with the comments, the Commission continues
to conclude that labeling for portable air conditioners will aid
consumers in their purchasing decisions. On June 1, 2016 (81 FR 35242),
DOE issued a final test procedure for these products, thus establishing
a means to test and label them.
However, the content and timing of DOE's new test procedure raises
several new issues. First, in its test procedure notice, DOE explained
that its test procedures do not generate comparable results for
portable and room air conditioners. In response to stakeholder concerns
about this inconsistency, DOE plans to consider amending the room air
conditioner procedure to address this issue. However, it is not clear
when this change will occur. In the meantime, the inconsistent results
might lead consumers to draw inaccurate conclusions regarding
comparative yearly energy cost estimates. However, such problems will
arise only if consumers consider portable and room air conditioners to
be reasonable substitutes for one another. The Commission raised this
issue in the NPRM. In declining to propose combined portable AC and
room AC comparability ranges, the Commission stated that ``it is not
clear whether consumers routinely compare portable air conditioners to
room air conditioners when shopping.'' \14\ As discussed above,
commenters split in their opinions on this issue. AHAM, without
elaboration, agreed with the Commission's proposal to keep the ranges
separate. In contrast, the Joint Commenters, citing several examples,
asserted that consumers do, in fact, make such comparisons. Likewise,
DOE stated in its recent test procedure Notice that ``comparative
ratings between room ACs and portable ACs [are] desirable,'' implying
that consumers do compare these products.\15\ Given the possibility
that the two labels would lead consumers to make inaccurate comparisons
between portable AC and room AC models, the Commission proposes waiting
to issue final portable air conditioner labels until the two test
procedures are harmonized. In addition, once such harmonized data is
available, the Commission proposes combining range categories for
portable ACs and room ACs given commenter evidence suggesting consumers
do, in fact, compare the two product types.\16\ The Commission seeks
comment on all aspects of this proposal.\17\
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\14\ 80 FR at 67357.
\15\ 81 FR at 35251. DOE also noted ``the many similarities
between room ACs and portable ACs in design, cost, functionality,
consumer utility, and applications.'' See 81 FR at 35250.
\16\ The Commission proposes to group the ranges by size only
and not by product configuration (e.g., reverse cycle or louvered
sides).
\17\ Consistent with the Commission's recent decision on room
air conditioners, 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). 80 FR 67285,
67292 (Nov. 2, 2015).
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Second, the Commission seeks comment on the timing and content of
reporting requirements for portable air conditioners. The NPRM
indicated that the Commission would simply follow DOE's reporting
requirements for these products. However, at this time, DOE has not
established such provisions. Given the current absence of DOE reporting
requirements, commenters should address the types of information that
FTC should collect pending DOE reporting rules.
Finally, now that DOE has issued a final test procedure and is
proceeding to set a compliance date for efficiency standards, the
Commission seeks input on the overall timing of label requirements. The
2015 NPRM explained the Commission would establish labeling
requirements sometime after the test procedure's publication. However,
industry commenters, citing significant burdens associated with testing
and labeling, urged the Commission to synchronize any new labeling
requirements with the DOE standards compliance date. In light of these
concerns, the Commission seeks comments on whether the final label
requirement should coincide with the future DOE standards compliance
date or the Commission should require the new labels sooner.

B. Large-Diameter and High-Speed Small Diameter Ceiling Fan Labels

The Commission recently issued updated ceiling fan labels, which
the Commission will require on all fan boxes within two years. In
publishing the new label, the Commission excluded large-diameter fans
(i.e., 84 inches or greater in diameter) and high-speed small-diameter
(HSSD) fans because the new DOE test procedure prescribes significantly
different operating assumptions (hours per day) for these models.\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.\19\ As a result, the DOE test yields substantially
different yearly cost estimates for fans with the same power
consumption. Absent adequate disclosures alerting consumers to the
different operating assumptions on these models, the resulting
inconsistencies could be confusing or even misleading. Accordingly, the
Commission seeks comment on the need for, and content of, large-
diameter and HSSD fan labels. Commenters should address whether
EnergyGuide labels or other required labels for these two fan types are
necessary to help consumers make purchasing decisions, whether
consumers commonly compare these fan types to more conventional fans,
and, if so, what information is necessary on the labels or other
disclosures to prevent confusion.
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\18\ 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.'' DOE also explained 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 1688, 1700, and 1703
(Jan. 13, 2016).
\19\ 81 FR at 48645.
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C. Electric Instantaneous Water Heaters

The Commission also proposes to require EnergyGuide labels for
electric instantaneous water heaters. Although the current Rule
includes such products in the ``water heater'' definition (section
305.3), DOE's test procedure has not included provisions for measuring
the annual energy consumption of electric instantaneous models.
Therefore, the Commission has not required labels for such products.
However, DOE has updated its test procedure to include such a
measurement.\20\ Accordingly, the

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Commission proposes to amend the Rule to require labeling, and publish
comparability ranges for use on these products in a final Rule. The
labels will follow the same format and content as other covered water
heaters. The final Rule will require manufacturers to begin using
labels on their products within 180-days of the final Rule.
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\20\ 79 FR 40542 (July 11, 2014).
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D. Plumbing ASME Reference Update

Background: The Commission also proposed to update the marking and
labeling requirements in Section 305.16 to reference the current ASME
standards for showerheads and faucets (``A112.18.1''), as well as water
closets and urinals (``A112.19.2''). The proposed change would update
these references by removing the letter ``M,'' which appeared in older,
obsolete versions of the standards' titles (e.g., ``A112.18.1M'').
Under the proposal, the Rule would require the markings to read
``A112.18.1'' and ``A112.19.2'' respectively, making them consistent
with the current designations referenced in existing DOE water
efficiency standards (10 CFR part 430). EPCA directs the Commission to
amend the 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 and labeling requirements.\21\ In
the proposal, the Commission indicated it had found no such
inconsistency. Given the routine nature of this change and the minimal
impact it would have on consumers, the Commission proposed providing
manufacturers with two years to revise the marking on their affected
plumbing products to include the updated reference.
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\21\ 42 U.S.C. 6294(a)(2)(E).
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Comments: In response, plumbing manufacturers and standards
organizations, including CSA, IAPMO, PMI, and NSF, recommended the
Commission remove this marking requirement for showerheads and faucets
(A112.18.1), as well as water closets and urinals (A112.19.2).\22\ The
commenters offered several different reasons. First, NSF and PMI argued
that consumers are unaware of the marking's relevance. They explained
that consumers do not associate the ASME markings with product
performance. PMI and CSA also noted that the Energy Labeling Rule does
not require such markings for most other covered products, such as
appliances, subject to similar standards.\23\ Second, the commenters
(e.g., IAPMO, NSF) asserted that existing requirements, as well any
revisions to them, impose unnecessary and unreasonable burdens without
any corresponding benefit. NSF explained that the marking requirements
are particularly burdensome for products that have limited surface
space. Third, according to the commenters, the Rule's marking
requirements are no longer necessary because the ASME standards
themselves no longer require such markings and all applicable plumbing
codes now impose similar disclosures and require manufacturers to
third-party certify their products to the current applicable
standard.\24\
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\22\ The commenters recommended that, consistent with EPCA's
requirements (42 U.S.C. 6294(a)(2)(E)(i) and 42 U.S.C.
6294(a)(2)(F)(i)), the Commission retain the flow rate and water use
disclosures for these products to continue to help consumers with
their purchasing decisions. The commenters also explained that the
``M'' designation, a now obsolete reference to metric that was in
the standard's title when Congress first required marking, has since
been removed from the titles of both standards.
\23\ CSA noted that Canada does not require a similar federal
marking requirement, and that this has not harmed Canadian
residents.
\24\ At the time the Commission promulgated the marking
regulations, no such third-party requirements existed. According to
the commenters, third-party certification also requires a small
certification mark on the product as well as periodic product and
manufacturing facilities auditing to ensure ongoing compliance.
Additionally, certifiers maintain public listings on their Web
sites, which allows verification of product compliance.
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Discussion: The Commission agrees with commenters 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, as noted in the comments, the current
revisions of both ASME standards no longer require these markings.
Because the NPRM did not seek comments on this substantial change, the
Commission has provided amendatory language in this Notice and seeks
comment on this issue.

III. Request for Comment

You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before November 14,
2016. Write ``Energy Labeling Amendments (16 CFR part 305) (Project No.
R611004)'' on your comment. Your comment--including your name and your
state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the public Commission Web
site, at https://www.ftc.gov/policy/public-comments. As a matter of
discretion, the Commission tries to remove individuals' home contact
information from comments before placing them on the Commission Web
site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, such as anyone's Social Security
number, date of birth, driver's license number or other state
identification number or foreign country equivalent, passport number,
financial account number, or credit or debit card number. You are also
solely responsible for making sure that your comment does not include
any sensitive health information, such as medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which is . . . privileged or confidential,'' as discussed in section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you must follow the procedure explained in
FTC Rule 4.9(c), 16 CFR 4.9(c). Your comment will be kept confidential
only if the FTC General Counsel grants your request in accordance with
the law and the public interest.
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/plumbingnprm, by following the instruction on the Web-based form.
If this Notice appears at http://www.regulations.gov, you also may file
a comment through that Web site.
If you prefer to file your comment on paper, mail your comment to
the following address: Federal Trade Commission, Office of the
Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex E),
Washington, DC 20580, or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW., 5th Floor, Suite 5610 (Annex E), Washington, DC
20024. If possible, submit your paper comment to the Commission by
courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
NPRM and the news release describing it. The

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FTC Act and other laws that the Commission administers permit the
collection of public comments to consider and use in this proceeding,
as appropriate. The Commission will consider all timely and responsive
public comments that it receives on or before November 14, 2016. You
can find more information, including routine uses permitted by the
Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm. Because written comments appear adequate to present
the views of all interested parties, the Commission has not scheduled
an oral hearing regarding these proposed amendments. Interested parties
may request an opportunity to present views orally. If such a request
is made, the Commission will publish a document in the Federal Register
stating the time and place for such oral presentation(s) and describing
the procedures that will be followed. Interested parties who wish to
present oral views must submit a hearing request, on or before October
4, 2016, in the form of a written comment that describes the issues on
which the party wishes to speak. If there is no oral hearing, the
Commission will base its decision on the written rulemaking record.

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 proposed amendments make changes
in the Rule's labeling requirements that will increase the PRA burden
as detailed below.\25\ Accordingly, FTC staff will submit this notice
of proposed rulemaking and associated Supporting Statement to OMB for
review under the PRA.\26\
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\25\ The proposed changes to plumbing should impose no
additional burden beyond existing estimates because such changes
either impose no or de minimis additional burdens, or manufacturers
should be able to incorporate the proposed changes into their
normally scheduled package or label revisions without incurring
additional burdens beyond those already accounted for.
\26\ 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
450 basic models (i.e., units with essentially identical physical and
electrical characteristics) affected by these amendments, including 100
electric instantaneous water heater models, 130 large-diameter and 70
high-speed small diameter fan models, and 150 portable air conditioner
models. In addition, FTC staff estimates that there are 6 instantaneous
water heater manufacturers, 20 ceiling fan manufacturers (of large-
diameter and high-speed small diameter models), and 45 portable air
conditioner manufacturers. The FTC estimates that there are
approximately 2,700,000 ceiling fan units (of the type relevant here),
1,000,000 portable air conditioner units, and 100,000 electric
instantaneous water heaters shipped each year in the U.S.
Reporting: FTC staff estimates that the average reporting burden
for manufacturers will be approximately two minutes to enter label data
per basic model. Subject to further public comment, including AHAM
clarification regarding its reporting burden estimate, the FTC
estimates that annual reporting burden is approximately 15 hours [(2
minutes x 450 models)].
Labeling: The FTC additionally seeks further public comment on its
burden estimate for labeling, including AHAM clarification of its
proffered estimate for portable AC labeling. Provisionally, and tied to
prior FTC burden estimates for labeling focused on the time to affix
product labels, FTC staff estimates burden to be six seconds per unit;
accordingly, 6,334 hours (six seconds x 3,800,000 total annual product
shipments).
Testing: Manufacturers will require approximately 3 hours to test
each new basic ceiling fan model, 24 hours for each water heater, and
36 hours for portable air conditioners.\27\ The FTC estimates that, on
average, 50% of the total basic models are tested each year.
Accordingly, the estimated annual testing burden for the three affected
products categories is 4,200 hours [ceiling fans--300 hours (3 hours x
200 x .5); water heaters--1,200 hours (24 hours x 100 x .5); and PACs--
2,700 hours (36 hours x 150 x .5)].
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\27\ For portable ACs, the estimate assumes 3 units tested at 8
hours apiece consistent with DOE requirements, with an additional 4
hours for data analysis. See DOE's Compliance Certification
Management System at https://www.regulations.doe.gov/ccms.
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Recordkeeping: The Rule also requires ceiling fan 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 8 hours, rounded up (1 minute x 450 basic models).
Catalog Disclosures: Based upon FTC staff research concerning the
number of manufacturers and online retailers, staff estimates that
there are an additional 300 catalog sellers who are subject to the
Rule's catalog disclosure requirements. Staff estimates further that
these sellers each require approximately 3 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 200 covered products relevant here. Given that there is
great variety among sellers in the volume of products that they offer
online, it is very difficult to estimate such numbers with precision.
In addition, this analysis assumes that information for all 200 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 ceiling fans covered by the Rule is 900
hours (300 sellers x 3 hours).
Thus, estimated annual burden attributable to the proposed
amendments is 11,457 hours (15 hours for reporting + 6,334 hours for
affixing labels + 4,200 hours for testing + 8 hours for recordkeeping +
900 disclosure hours for catalog sellers).
Annual Labor Costs
Staff derived labor costs by applying assumed hourly wages \28\ 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

[[Page 62686]]

disclosures, and perform recordkeeping. Average hourly wages for these
labor categories, based on BLS data, are as follows: (1) Electrical
engineers ($46.80); (2) electronic equipment installers ($24.22); and
(3) data entry workers ($15.79).
---------------------------------------------------------------------------

\28\ The mean hourly wages that follow are drawn from
``Occupational Employment and Wages--May 2015,'' Bureau of Labor
Statistics (``BLS''), U.S. Department of Labor, Table 1, released
March 30, 2016 (``National employment and wage data from the
Occupational Employment Statistics survey by occupation, May
2015''), available at http://www.bls.gov/news.release/ocwage.t01.htm.
---------------------------------------------------------------------------

Based on the above estimates and assumptions, the total annual
labor cost for the five different categories of burden under the Rule,
applied to the affected product categories, is derived as follows:

Reporting (Data Entry): 15 hours (450 basic models x 2 minutes) x
$15.79/hour (data entry workers) = $237
Labeling (Affixing Labels): 6,334 hours x $24.22 (electronic
equipment installers) = $153,409
Testing: 4,200 hours x $46.80/hour (electrical engineers) = $196,560
Recordkeeping: 8 hours x $15.79/hour (data entry workers) = $126
Catalog Disclosures: 1,200 hours x $15.79/hour (data entry workers)
= $18,948

Thus, the total annual labor cost is approximately $369,280.

Estimated annual non-labor cost burden: Manufacturers are not
likely to require any significant capital costs to comply with the
proposed amendments. Industry members, however, will incur the cost of
printing labels for each covered unit. The estimated label cost, based
on $.03 per label, is $114,000 (3,800,000 x $.03).
Total Estimate: Accordingly, the estimated total hour burden of the
proposed amendments is 11,457 with associated labor costs of $369,280
and annualized capital or other non-labor costs totaling $114,000.
Pursuant to section 3506(c)(2)(A) of the PRA, the FTC invites
comments on: (1) Whether the proposed information collection is
necessary, including whether the information will be practically
useful; (2) the accuracy of our burden estimates, including whether the
methodology and assumptions used are valid; (3) ways to enhance the
quality, utility, and clarity of the information to be collected; and
(4) ways to minimize the burden of the collection of information. All
comments should be filed as prescribed in the ADDRESSES section above,
and must be received on November 14, 2016.
Comments on the proposed recordkeeping, disclosure, and reporting
requirements subject to review under the PRA should additionally be
submitted to OMB. If sent by U.S. mail, they should be addressed to
Office of Information and Regulatory Affairs, Office of Management and
Budget, Attention: Desk Officer for the Federal Trade Commission, New
Executive Office Building, Docket Library, Room 10102, 725 17th Street
NW., Washington, DC 20503. Comments sent to OMB by U.S. postal mail,
however, are subject to delays due to heightened security precautions.
Thus, comments instead should be sent by facsimile to (202) 395-5806.

V. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 through 612,
requires that the Commission provide an Initial Regulatory Flexibility
Analysis (IRFA) with a proposed rule and a Final Regulatory Flexibility
Analysis (FRFA), if any, 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. See 5 U.S.C. 603 through 605.
The Commission does not anticipate that the proposed rule will have
a significant economic impact on a substantial number of small
entities. The Commission recognizes that some of the affected
manufacturers may qualify as small businesses under the relevant
thresholds. However, the Commission does not expect that the economic
impact of the proposed amendments will be significant because these
amendments involved routine labeling requirements commonly implemented
by the affected entities and the burden of the requirements is not
large as discussed in the Paperwork Reduction Act section of this
Notice.
FTC staff estimates that the amendments will apply to 200 online
and paper catalog sellers of covered products and about 71 product
manufacturers. Staff expects that approximately 150 qualify as small
businesses, all of which are online or paper catalog sellers.
Accordingly, this document serves as notice to the Small Business
Administration of the FTC's certification of no effect. To ensure the
accuracy of this certification, however, the Commission requests
comment on whether the proposed rule will have a significant impact on
a substantial number of small entities, including specific information
on the number of entities that would be covered by the proposed rule,
the number of these companies that are small entities, and the average
annual burden for each entity. Although the Commission certifies under
the RFA that the rule proposed in this notice 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 IRFA in order to inquire into the impact of
the proposed rule on small entities. Therefore, the Commission has
prepared the following analysis:

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

The Commission is proposing expanded product coverage and
additional improvements to the Rule to help consumers in their
purchasing decisions for high efficiency products.

B. Statement of the Objectives of, and Legal Basis for, the Proposed
Rule

The objective of the rule is to improve the effectiveness of the
current labeling program. The legal basis for the Rule is the Energy
Policy and Conservation Act (42 U.S.C. 6292 et seq).

C. Small Entities to Which the Proposed Rule 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 150 catalog sellers
subject to the proposed rule's requirements that qualify as small
businesses.\29\ The FTC seeks comment and information regarding the
estimated number or nature of small business entities for which the
proposed rule would have a significant economic impact.
---------------------------------------------------------------------------

\29\ See 75 FR at 41712 (July 19, 2010).
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping and Other Compliance Requirements

The changes under consideration 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 portable
air conditioners, instantaneous electric water heaters, and certain
ceiling fan types. The Commission assumes that the label design change
will be implemented by data entry workers and underlying testing done
by electrical engineers.

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. The Commission invites comment and information on this
issue.

[[Page 62687]]

F. Significant Alternatives to the Proposed Rule

The Commission seeks comment and information on the need, if any,
for alternative compliance methods that, consistent with the statutory
requirements, would reduce the economic impact of the rule on small
entities. For example, the Commission is currently unaware of the need
to adopt any special provisions for small entities. However, if such
issues are identified, the Commission could consider alternative
approaches such as extending the effective date of these amendments for
catalog sellers to allow them additional time to comply beyond the
labeling deadline set for manufacturers. Nonetheless, if the comments
filed in response to this notice identify small entities that are
affected by the proposed rule, as well as alternative methods of
compliance that would reduce the economic impact of the rule on such
entities, the Commission will consider the feasibility of such
alternatives and determine whether they should be incorporated into the
final rule.

VI. Communications by Outside Parties to the Commissioners or Their
Advisors

Written communications and summaries or transcripts of oral
communications respecting the merits of this proceeding, from any
outside party to any Commissioner or Commissioner's advisor, will be
placed on the public record. See 16 CFR 1.26(b)(5).

VII. Proposed 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 proposes to amend
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. 305.2, redesignate paragraph (l)(23) as (l)(24), add new
paragraph (l)(23), and revise paragraph (p) to read as follows:

Sec. 305.2 Definitions.

* * * * *
(l) * * *
(23) Portable air conditioners,
* * * * *
(p) Energy efficiency rating means the following product-specific
energy usage descriptors: Annual fuel utilization efficiency (AFUE) for
furnaces; energy efficiency ratio (EER) for room air conditioners and
portable air conditioners; seasonal energy efficiency ratio (SEER) for
the cooling function of central air conditioners and heat pumps;
heating seasonal performance factor (HSPF) for the heating function of
heat pumps; airflow efficiency for ceiling fans; and, thermal
efficiency (TE) for pool heaters, as these descriptors are determined
in accordance with tests prescribed under section 323 of the Act (42
U.S.C. 6293). These product-specific energy usage descriptors shall be
used in satisfying all the requirements of this part.
* * * * *
0
3. In Sec. 305.3, add paragraph (z) to read as follows:

Sec. 305.3 Description of covered products.

* * * * *
(z) Portable air conditioner means a portable encased assembly,
other than a ``packaged terminal air conditioner,'' ``room air
conditioner,'' or ``dehumidifier,'' that delivers cooled, conditioned
air to an enclosed space, and is powered by single-phase electric
current. It includes a source of refrigeration and may include
additional means for air circulation and heating.
0
4. Amend Sec. 305.7 by revising paragraph (f) to read as follows:

Sec. 305.7 Determinations of capacity.

* * * * *
(f) Room air conditioners and portable air conditioners. The
capacity shall be the cooling capacity in Btu's per hour, as determined
according to appendix F to 10 CFR part 430, subpart B, but rounded to
the nearest value ending in hundreds that will satisfy the relationship
that the value of EER used in representations equals the rounded value
of capacity divided by the value of input power in watts. If a value
ending in hundreds will not satisfy this relationship, the capacity may
be rounded to the nearest value ending in 50 that will.
* * * * *
0
5. In Sec. 305.8, revise paragraph (b)(1) to read as follows:

Sec. 305.8 Submission of data.

* * * * *
(b)(1) All data required by Sec. 305.8(a) except serial numbers
shall be submitted to the Commission annually, on or before the
following dates:

------------------------------------------------------------------------
Deadline for data
Product category submission
------------------------------------------------------------------------
Refrigerators.............................. Aug. 1.
Refrigerators-freezers..................... Aug. 1.
Freezers................................... Aug. 1.
Central air conditioners................... July 1.
Heat pumps................................. July 1.
Dishwashers................................ June 1.
Water heaters.............................. May 1.
Room and portable air conditioners......... July 1.
Furnaces................................... May 1.
Pool heaters............................... May 1.
Clothes washers............................ Oct. 1.
Fluorescent lamp ballasts.................. Mar. 1.
Showerheads................................ Mar. 1.
Faucets.................................... Mar. 1.
Water closets.............................. Mar. 1.
Ceiling fans............................... Mar. 1.
Urinals.................................... Mar. 1.
Metal halide lamp fixtures................. Sept. 1.
General service fluorescent lamps.......... Mar. 1.
Medium base compact fluorescent lamps...... Mar. 1.
General service incandescent lamps......... Mar. 1.
Televisions................................ June 1.
------------------------------------------------------------------------

* * * * *
0
6. Amend Sec. 305.11 by revising the section heading and paragraphs
(f)(5) and (8) to read as follows:

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

* * * * *
(f) * * *
(5) Unless otherwise indicated in this paragraph, estimated annual
operating costs for refrigerators, refrigerator-freezers, freezers,
clothes washers, dishwashers, room air conditioners, portable air
conditioners, and water heaters are as determined in accordance with
Sec. Sec. 305.5 and 305.10. Thermal efficiencies for pool heaters are
as determined in accordance with Sec. 305.5. Labels for clothes
washers and dishwashers must disclose estimated annual operating cost
for both electricity and natural gas as illustrated in the sample
labels in appendix L to this part. Labels for dual-mode refrigerator-
freezers that can operate as either a refrigerator or a freezer must
reflect the estimated energy cost of the model's most energy-intensive
configuration.
* * * * *
(8) Labels for refrigerators, refrigerator-freezers, freezers,
dishwashers, clothes washers, and water heaters must contain the
model's estimated annual energy consumption as determined in accordance
with Sec. 305.5, and as indicated on the sample labels in appendix L
to this part. Labels

[[Page 62688]]

for room air conditioners, portable air conditioners, and pool heaters
must contain the model's energy efficiency rating or thermal
efficiency, as applicable, as determined in accordance with Sec. 305.5
and as indicated on the sample labels in appendix L to this part.
* * * * *
0
7. Amend Sec. 305.13 by revising paragraph (a) to read as follows:

Sec. 305.13 Labeling for ceiling fans.

(a) Ceiling fans.--(1) Content. Any covered product that is a
ceiling fan shall be labeled clearly and conspicuously on the package's
principal display panel with the following information on the label
consistent with the sample label in Appendix L to this part:
(i) Headlines, including the title ``EnergyGuide,'' and text as
illustrated in the sample labels in Appendix L to this part;
(ii) The product's estimated yearly energy cost based on [12 hours
per day for fans greater than 84 inches in diameter and for high
velocity small-diameter fans, and 6.4 hours for all other covered
models] hours use per day and 12 cents per kWh;
(iii) The product's airflow expressed in cubic feet per minute and
determined pursuant to Sec. 305.5 of this part;
(iv) The product's energy use expressed in watts and determined
pursuant to Sec. 305.5 of this part as indicated in the sample label
in appendix L of this part;
(v) The statement ``Based on 12 cents per kWh and [12 hours per day
for fans greater than 84 inches in diameter and for high velocity
small-diameter fans, and 6.4 hours for all other covered models] use
per day'';
(vi) The statement ``Your cost depends on rates and use'';
(vii) The statement ``All estimates based on typical use, excluding
lights'';
(viii) The statement ``The higher the airflow, the more air the fan
will move;''
(ix) The statement ``Airflow Efficiency: ___Cubic Feet Per Minute
Per Watt'';
(x) The address ftc.gov/energy;
(xi) For fans less than 19 inches in diameter, the label shall
display a cost range of $10 to $50 along with the statement underneath
the range ``Cost Range of Similar Models (18'' or smaller)'';
(xii) For fans from 19 or more inches and less than 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''-83'').
(xiii) For fans more than 83 inches in diameter, the label shall
display a cost range of $49 to $734 along with the statement underneath
the range ``Cost Range of Similar Models (greater than 83'').''
(xiv) For high velocity, small diameter fans, the label shall
display a cost range of $8 to $85 along with the statement underneath
the range ``Cost Range of Similar Models.''
(xv) Placement of the labeled product on the scale proportionate to
the lowest and highest estimated annual energy costs as illustrated in
the Sample Labels in appendix L. When the estimated annual energy cost
of a given model falls outside the limits of the current range for that
product, the manufacturer shall place the product at the end of the
range closest to the model's energy cost.
(xvi) The ENERGY STAR logo as illustrated on the ceiling fan label
illustration in Appendix L for qualified products, if desired by the
manufacturer. Only manufacturers that have signed a Memorandum of
Understanding with the Department of Energy or the Environmental
Protection Agency may add the ENERGY STAR logo to labels on qualifying
covered products; such manufacturers may add the ENERGY STAR logo to
labels only on those products that are covered by the Memorandum of
Understanding;
(2) Label size, color, and text font. The label shall be four
inches wide and three inches high. The label colors shall be black text
on a process yellow or other neutral contrasting background. The text
font shall be Arial or another equivalent font. The label's text size,
format, content, and the order of the required disclosures shall be
consistent with the ceiling fan label illustration of appendix L of
this part.
(3) Placement. The ceiling fan label shall be printed on or affixed
to the principal display panel of the product's packaging.
(4) Additional information. No marks or information other than that
specified in this part shall appear on this label, except a model name,
number, or similar identifying information.
(5) Labeling for ``multi-mount'' fans. For ``multi-mount'' fan
models that can be installed either extended from the ceiling or flush
with the ceiling, the label content must reflect the lowest efficiency
(cubic feet per watt) configuration. Manufacturers may provide a second
label depicting the efficiency at the other configuration.
* * * * *
0
8. Amend Sec. 305.16 by revising paragraphs (a)(3), (a)(4), (b)(3),
and (b)(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.''
* * * * *

Sec. 305.20 [Amended]

0
9. In Sec. 305.20, remove the term ``room air conditioners'' wherever
it appears and add, in its place, the term ``room and portable air
conditioners.''
0
10. Add Appendix D6 to read as follows:

Appendix D5 to Part305--Water Heaters--Instantaneous-Electric

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

[[Page 62689]]

``Medium''--2.8 to 3.9...................... * *
``High''--over 4.0.......................... * *
------------------------------------------------------------------------

0
11. Revise Appendix E to read as follows:

Appendix E to Part 305--Room and Portable Air Conditioners

Range Information
------------------------------------------------------------------------
Range of estimated annual
energy costs (dollars/
Manufacturer's rated cooling capacity in year)
Btu's/hr ---------------------------
Low High
------------------------------------------------------------------------
Less than 6,000 Btu......................... * *
6,000 to 7,999 Btu.......................... * *
8,000 to 13,999 Btu......................... * *
14,000 to 19,999 Btu........................ * *
20,000 and more Btu......................... * *
------------------------------------------------------------------------
* No data submitted.

By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-21783 Filed 9-9-16; 8:45 am]
BILLING CODE 6750-01-P

Federal Register / Vol. 81, No. 176 / Monday, September 12, 2016 / Proposed Rules 62683

products.12 In addition, in AHAM’s to keep the ranges separate. In contrast, or the Commission should require the
view, if FTC requires labels before this the Joint Commenters, citing several new labels sooner.
date, manufacturers would have to test examples, asserted that consumers do,
B. Large-Diameter and High-Speed
and label all the low-efficiency models in fact, make such comparisons.
Small Diameter Ceiling Fan Labels
they plan to discontinue because such Likewise, DOE stated in its recent test
models do not meet the DOE procedure Notice that ‘‘comparative The Commission recently issued
standards.13 ratings between room ACs and portable updated ceiling fan labels, which the
Discussion: Consistent with the ACs [are] desirable,’’ implying that Commission will require on all fan
comments, the Commission continues to consumers do compare these boxes within two years. In publishing
conclude that labeling for portable air products.15 Given the possibility that the new label, the Commission excluded
conditioners will aid consumers in their the two labels would lead consumers to large-diameter fans (i.e., 84 inches or
purchasing decisions. On June 1, 2016 make inaccurate comparisons between greater in diameter) and high-speed
(81 FR 35242), DOE issued a final test portable AC and room AC models, the small-diameter (HSSD) fans because the
procedure for these products, thus Commission proposes waiting to issue new DOE test procedure prescribes
establishing a means to test and label final portable air conditioner labels significantly different operating
them. until the two test procedures are assumptions (hours per day) for these
However, the content and timing of harmonized. In addition, once such models.18 The DOE test procedure
DOE’s new test procedure raises several harmonized data is available, the dictates a 6.4-hour per day operating
new issues. First, in its test procedure Commission proposes combining range assumption for standard fans but a 12-
notice, DOE explained that its test categories for portable ACs and room hour per day figure for large-diameter
procedures do not generate comparable ACs given commenter evidence and HSSD models.19 As a result, the
results for portable and room air suggesting consumers do, in fact, DOE test yields substantially different
conditioners. In response to stakeholder compare the two product types.16 The yearly cost estimates for fans with the
concerns about this inconsistency, DOE Commission seeks comment on all same power consumption. Absent
plans to consider amending the room air aspects of this proposal.17 adequate disclosures alerting consumers
conditioner procedure to address this Second, the Commission seeks to the different operating assumptions
issue. However, it is not clear when this comment on the timing and content of on these models, the resulting
change will occur. In the meantime, the reporting requirements for portable air inconsistencies could be confusing or
inconsistent results might lead conditioners. The NPRM indicated that even misleading. Accordingly, the
consumers to draw inaccurate the Commission would simply follow Commission seeks comment on the need
conclusions regarding comparative DOE’s reporting requirements for these for, and content of, large-diameter and
yearly energy cost estimates. However, products. However, at this time, DOE HSSD fan labels. Commenters should
such problems will arise only if has not established such provisions. address whether EnergyGuide labels or
consumers consider portable and room Given the current absence of DOE other required labels for these two fan
air conditioners to be reasonable reporting requirements, commenters types are necessary to help consumers
substitutes for one another. The should address the types of information make purchasing decisions, whether
Commission raised this issue in the that FTC should collect pending DOE consumers commonly compare these
NPRM. In declining to propose reporting rules. fan types to more conventional fans,
combined portable AC and room AC Finally, now that DOE has issued a and, if so, what information is necessary
comparability ranges, the Commission final test procedure and is proceeding to on the labels or other disclosures to
stated that ‘‘it is not clear whether set a compliance date for efficiency prevent confusion.
consumers routinely compare portable standards, the Commission seeks input
air conditioners to room air conditioners on the overall timing of label C. Electric Instantaneous Water Heaters
when shopping.’’ 14 As discussed above, requirements. The 2015 NPRM The Commission also proposes to
commenters split in their opinions on explained the Commission would require EnergyGuide labels for electric
this issue. AHAM, without elaboration, establish labeling requirements instantaneous water heaters. Although
agreed with the Commission’s proposal sometime after the test procedure’s the current Rule includes such products
publication. However, industry in the ‘‘water heater’’ definition (section
12 AHAM also explained that it will take
commenters, citing significant burdens 305.3), DOE’s test procedure has not
significant time for manufactures to determine the associated with testing and labeling,
list of active models and, out of those models, included provisions for measuring the
identify those that qualify as ‘‘basic models’’ under urged the Commission to synchronize annual energy consumption of electric
DOE and FTC regulations. any new labeling requirements with the instantaneous models. Therefore, the
13 Finally, AHAM noted that the testing and
DOE standards compliance date. In light Commission has not required labels for
labeling involved would be more burdensome than of these concerns, the Commission seeks
the estimates included in the Paperwork Reduction such products. However, DOE has
Act analysis of the 2015 NPRM. Specifically, comments on whether the final label updated its test procedure to include
AHAM estimated: 32 hours per model for testing (8 requirement should coincide with the such a measurement.20 Accordingly, the
hours × 4 units, as well as up to 4 hours for future DOE standards compliance date
preparing the data); 40 hours per model for
18 81 FR 48620 (July 25, 2016). In its proposed test
reporting; and 40 hours per model for label
15 81 FR at 35251. DOE also noted ‘‘the many procedure Notice, DOE described a HSSD fan as a
preparation. It is unclear whether AHAM’s
similarities between room ACs and portable ACs in model that has a blade thickness of less than 3.2
asabaliauskas on DSK3SPTVN1PROD with PROPOSALS

reporting burden estimate refers to annual
certification reports or to new model reports. design, cost, functionality, consumer utility, and mm at the edge or a maximum tip speed greater
Annual reports include all models under current applications.’’ See 81 FR at 35250. than applicable limits set out by DOE and does not
production (including models previously reported 16 The Commission proposes to group the ranges otherwise qualify as ‘‘a very small-diameter ceiling
to the database). It is also unclear whether an by size only and not by product configuration (e.g., fan, highly-decorative ceiling fan or belt-driven
estimate of 40 hours for label drafting is per model reverse cycle or louvered sides). ceiling fan.’’ DOE also explained that ‘‘HSSD ceiling
rather than, perhaps more justifiably, per product 17 Consistent with the Commission’s recent fans generally operate at much higher speeds (in
type or per manufacturer. As noted in the decision on room air conditioners, the portable AC terms of RPM) than standard or hugger ceiling fans,
Paperwork Reduction Act discussion below, the label would appear on the product box, not the unit and are installed in commercial applications.’’ 81
Commission seeks clarification regarding these itself. In addition, the portable AC label would FR 1688, 1700, and 1703 (Jan. 13, 2016).
estimates. 19 81 FR at 48645.
disclose the Combined Energy Efficiency Ratio
14 80 FR at 67357. (CEER). 80 FR 67285, 67292 (Nov. 2, 2015). 20 79 FR 40542 (July 11, 2014).

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Federal Register / Vol. 81, No. 176 / Monday, September 12, 2016 / Proposed Rules 62685

FTC Act and other laws that the Burden estimates below are based on Recordkeeping: The Rule also requires
Commission administers permit the Census data, DOE figures and estimates, ceiling fan manufacturers to keep
collection of public comments to general knowledge of manufacturing records of test data generated in
consider and use in this proceeding, as practices, and trade association advice performing the tests to derive
appropriate. The Commission will and figures. The FTC estimates that information included on labels. The
consider all timely and responsive there are about 450 basic models (i.e., FTC estimates that it will take
public comments that it receives on or units with essentially identical physical manufacturers one minute per record
before November 14, 2016. You can find and electrical characteristics) affected (i.e., per model) to store the data.
more information, including routine by these amendments, including 100 Accordingly, the estimated annual
uses permitted by the Privacy Act, in electric instantaneous water heater recordkeeping burden would be
the Commission’s privacy policy, at models, 130 large-diameter and 70 high- approximately 8 hours, rounded up (1
http://www.ftc.gov/ftc/privacy.htm. speed small diameter fan models, and minute × 450 basic models).
Because written comments appear 150 portable air conditioner models. In Catalog Disclosures: Based upon FTC
adequate to present the views of all addition, FTC staff estimates that there staff research concerning the number of
interested parties, the Commission has are 6 instantaneous water heater manufacturers and online retailers, staff
not scheduled an oral hearing regarding manufacturers, 20 ceiling fan estimates that there are an additional
these proposed amendments. Interested manufacturers (of large-diameter and 300 catalog sellers who are subject to
parties may request an opportunity to high-speed small diameter models), and the Rule’s catalog disclosure
present views orally. If such a request is 45 portable air conditioner requirements. Staff estimates further
made, the Commission will publish a manufacturers. The FTC estimates that that these sellers each require
document in the Federal Register there are approximately 2,700,000 approximately 3 hours per year to
stating the time and place for such oral ceiling fan units (of the type relevant incorporate the data into their catalogs.
presentation(s) and describing the here), 1,000,000 portable air conditioner This estimate is based on the
procedures that will be followed. units, and 100,000 electric assumptions that entry of the required
Interested parties who wish to present instantaneous water heaters shipped information takes on average one
oral views must submit a hearing each year in the U.S. minute per covered product and that the
request, on or before October 4, 2016, in Reporting: FTC staff estimates that the average online catalog contains
the form of a written comment that average reporting burden for approximately 200 covered products
describes the issues on which the party manufacturers will be approximately relevant here. Given that there is great
wishes to speak. If there is no oral two minutes to enter label data per basic variety among sellers in the volume of
hearing, the Commission will base its model. Subject to further public products that they offer online, it is very
decision on the written rulemaking comment, including AHAM clarification difficult to estimate such numbers with
record. regarding its reporting burden estimate, precision. In addition, this analysis
the FTC estimates that annual reporting assumes that information for all 200
IV. Paperwork Reduction Act covered products is entered into the
burden is approximately 15 hours [(2
The current Rule contains minutes × 450 models)]. catalog each year. This is a conservative
recordkeeping, disclosure, testing, and Labeling: The FTC additionally seeks assumption because the number of
reporting requirements that constitute further public comment on its burden incremental additions to the catalog
information collection requirements as estimate for labeling, including AHAM from year to year is likely to be much
defined by 5 CFR 1320.3(c), the clarification of its proffered estimate for lower after initial start-up efforts have
definitional provision within the Office portable AC labeling. Provisionally, and been completed. Thus, the total annual
of Management and Budget (OMB) tied to prior FTC burden estimates for disclosure burden for all catalog sellers
regulations that implement the labeling focused on the time to affix of ceiling fans covered by the Rule is
Paperwork Reduction Act (PRA). OMB product labels, FTC staff estimates 900 hours (300 sellers × 3 hours).
has approved the Rule’s existing burden to be six seconds per unit; Thus, estimated annual burden
information collection requirements accordingly, 6,334 hours (six seconds × attributable to the proposed
through May 31, 2017 (OMB Control No. 3,800,000 total annual product amendments is 11,457 hours (15 hours
3084–0069). The proposed amendments shipments). for reporting + 6,334 hours for affixing
make changes in the Rule’s labeling Testing: Manufacturers will require labels + 4,200 hours for testing + 8 hours
requirements that will increase the PRA approximately 3 hours to test each new for recordkeeping + 900 disclosure
burden as detailed below.25 basic ceiling fan model, 24 hours for hours for catalog sellers).
Accordingly, FTC staff will submit this each water heater, and 36 hours for Annual Labor Costs
notice of proposed rulemaking and portable air conditioners.27 The FTC
associated Supporting Statement to Staff derived labor costs by applying
estimates that, on average, 50% of the
OMB for review under the PRA.26 assumed hourly wages 28 to the burden
total basic models are tested each year.
Accordingly, the estimated annual hours described above. In calculating
25 The proposed changes to plumbing should
testing burden for the three affected labor costs, the FTC assumes that
impose no additional burden beyond existing
products categories is 4,200 hours electrical engineers perform test
estimates because such changes either impose no or procedures, electronic equipment
[ceiling fans—300 hours (3 hours × 200
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de minimis additional burdens, or manufacturers
should be able to incorporate the proposed changes × .5); water heaters—1,200 hours (24 installers affix labels, and data entry
into their normally scheduled package or label hours × 100 × .5); and PACs—2,700 workers enter label data, catalog
revisions without incurring additional burdens
beyond those already accounted for.
hours (36 hours × 150 × .5)]. 28 The mean hourly wages that follow are drawn
26 The PRA analysis for this rulemaking focuses from ‘‘Occupational Employment and Wages—May
strictly on the information collection requirements 27 For portable ACs, the estimate assumes 3 units 2015,’’ Bureau of Labor Statistics (‘‘BLS’’), U.S.
created by and/or otherwise affected by the tested at 8 hours apiece consistent with DOE Department of Labor, Table 1, released March 30,
amendments. Unaffected information collection requirements, with an additional 4 hours for data 2016 (‘‘National employment and wage data from
provisions have previously been accounted for in analysis. See DOE’s Compliance Certification the Occupational Employment Statistics survey by
past FTC analyses under the Rule and are covered Management System at https:// occupation, May 2015’’), available at http://
by the current PRA clearance from OMB. www.regulations.doe.gov/ccms. www.bls.gov/news.release/ocwage.t01.htm.

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62686 Federal Register / Vol. 81, No. 176 / Monday, September 12, 2016 / Proposed Rules

disclosures, and perform recordkeeping. 10102, 725 17th Street NW., Therefore, the Commission has prepared
Average hourly wages for these labor Washington, DC 20503. Comments sent the following analysis:
categories, based on BLS data, are as to OMB by U.S. postal mail, however,
A. Description of the Reasons That
follows: (1) Electrical engineers are subject to delays due to heightened
Action by the Agency Is Being Taken
($46.80); (2) electronic equipment security precautions. Thus, comments
installers ($24.22); and (3) data entry instead should be sent by facsimile to The Commission is proposing
workers ($15.79). (202) 395–5806. expanded product coverage and
Based on the above estimates and additional improvements to the Rule to
V. Regulatory Flexibility Act
assumptions, the total annual labor cost help consumers in their purchasing
for the five different categories of The Regulatory Flexibility Act (RFA), decisions for high efficiency products.
burden under the Rule, applied to the 5 U.S.C. 601 through 612, requires that
affected product categories, is derived as the Commission provide an Initial B. Statement of the Objectives of, and
follows: Regulatory Flexibility Analysis (IRFA) Legal Basis for, the Proposed Rule
with a proposed rule and a Final The objective of the rule is to improve
Reporting (Data Entry): 15 hours (450 basic
models × 2 minutes) × $15.79/hour (data
Regulatory Flexibility Analysis (FRFA), the effectiveness of the current labeling
entry workers) = $237 if any, with the final rule, unless the program. The legal basis for the Rule is
Labeling (Affixing Labels): 6,334 hours × Commission certifies that the rule will the Energy Policy and Conservation Act
$24.22 (electronic equipment installers) = not have a significant economic impact (42 U.S.C. 6292 et seq).
$153,409 on a substantial number of small
Testing: 4,200 hours × $46.80/hour (electrical entities. See 5 U.S.C. 603 through 605. C. Small Entities to Which the Proposed
engineers) = $196,560 The Commission does not anticipate Rule Will Apply
Recordkeeping: 8 hours × $15.79/hour (data that the proposed rule will have a
entry workers) = $126 Under the Small Business Size
significant economic impact on a
Catalog Disclosures: 1,200 hours × $15.79/ Standards issued by the Small Business
substantial number of small entities.
hour (data entry workers) = $18,948 Administration, appliance
The Commission recognizes that some
Thus, the total annual labor cost is manufacturers qualify as small
of the affected manufacturers may
approximately $369,280. qualify as small businesses under the businesses if they have fewer than 1,000
Estimated annual non-labor cost relevant thresholds. However, the employees (for other household
burden: Manufacturers are not likely to Commission does not expect that the appliances the figure is 500 employees).
require any significant capital costs to economic impact of the proposed Catalog sellers qualify as small
comply with the proposed amendments. amendments will be significant because businesses if their sales are less than
Industry members, however, will incur these amendments involved routine $8.0 million annually. FTC staff
the cost of printing labels for each labeling requirements commonly estimates that there are approximately
covered unit. The estimated label cost, implemented by the affected entities 150 catalog sellers subject to the
based on $.03 per label, is $114,000 and the burden of the requirements is proposed rule’s requirements that
(3,800,000 × $.03). not large as discussed in the Paperwork qualify as small businesses.29 The FTC
Total Estimate: Accordingly, the Reduction Act section of this Notice. seeks comment and information
estimated total hour burden of the FTC staff estimates that the regarding the estimated number or
proposed amendments is 11,457 with amendments will apply to 200 online nature of small business entities for
associated labor costs of $369,280 and and paper catalog sellers of covered which the proposed rule would have a
annualized capital or other non-labor products and about 71 product significant economic impact.
costs totaling $114,000. manufacturers. Staff expects that D. Projected Reporting, Recordkeeping
Pursuant to section 3506(c)(2)(A) of approximately 150 qualify as small and Other Compliance Requirements
the PRA, the FTC invites comments on: businesses, all of which are online or
(1) Whether the proposed information paper catalog sellers. The changes under consideration
collection is necessary, including Accordingly, this document serves as would slightly increase reporting or
whether the information will be notice to the Small Business recordkeeping requirements associated
practically useful; (2) the accuracy of Administration of the FTC’s with the Commission’s labeling rules as
our burden estimates, including certification of no effect. To ensure the discussed above. The amendments
whether the methodology and accuracy of this certification, however, likely will increase compliance burdens
assumptions used are valid; (3) ways to the Commission requests comment on by extending the labeling requirements
enhance the quality, utility, and clarity whether the proposed rule will have a to portable air conditioners,
of the information to be collected; and significant impact on a substantial instantaneous electric water heaters,
(4) ways to minimize the burden of the number of small entities, including and certain ceiling fan types. The
collection of information. All comments specific information on the number of Commission assumes that the label
should be filed as prescribed in the entities that would be covered by the design change will be implemented by
ADDRESSES section above, and must be proposed rule, the number of these data entry workers and underlying
received on November 14, 2016. companies that are small entities, and testing done by electrical engineers.
Comments on the proposed the average annual burden for each E. Duplicative, Overlapping, or
recordkeeping, disclosure, and reporting entity. Although the Commission
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Conflicting Federal Rules
requirements subject to review under certifies under the RFA that the rule
the PRA should additionally be proposed in this notice would not, if The Commission has not identified
submitted to OMB. If sent by U.S. mail, promulgated, have a significant impact any other federal statutes, rules, or
they should be addressed to Office of on a substantial number of small policies that would duplicate, overlap,
Information and Regulatory Affairs, entities, the Commission has or conflict with the proposed rule. The
Office of Management and Budget, determined, nonetheless, that it is Commission invites comment and
Attention: Desk Officer for the Federal appropriate to publish an IRFA in order information on this issue.
Trade Commission, New Executive to inquire into the impact of the
Office Building, Docket Library, Room proposed rule on small entities. 29 See 75 FR at 41712 (July 19, 2010).

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Document Created: 2016-09-10 00:56:38
Document Modified: 2016-09-10 00:56:38

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Notice of proposed rulemaking.
Dates		Written comments must be received on or before November 14, 2016.
Contact		Hampton Newsome, Attorney, (202) 326- 2889, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580.
FR Citation		81 FR 62681
RIN Number		3084-AB15
CFR Associated		Advertising; Energy Conservation; Household Appliances; Labeling and Reporting and Recordkeeping Requirements