[Federal Register Volume 81, Number 176 (Monday, September 12, 2016)]
[Proposed Rules]
[Pages 62681-62689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21783]



16 CFR Part 305

RIN 3084-AB15

Energy Labeling Rule

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

ACTION: Notice of proposed rulemaking.


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, 

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.


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.

    \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.

    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\

    \3\ 16 CFR 305.10.

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 

    \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).

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.

    \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.

    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 

    \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-

    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 

    \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).

    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\

    \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.

    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\

    \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 
    \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).

    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.

    \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.

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

[[Page 62684]]

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.

    \20\ 79 FR 40542 (July 11, 2014).

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.

    \21\ 42 U.S.C. 6294(a)(2)(E).

    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 

    \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 
    \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.

    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 
    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\

    \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 

    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 
    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)].

    \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.

    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 
    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 

    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 

[[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 

    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:


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

    Authority: 42 U.S.C. 6294.

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.
* * * * *
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.
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.
* * * * *
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.

* * * * *
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 
* * * * *
    (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.
* * * * *
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 
    (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 
    (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 
    (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.
* * * * *
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 
    (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]

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 
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/
  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..........................            *             *

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,
[FR Doc. 2016-21783 Filed 9-9-16; 8:45 am]