Agency Information Collection Activities; Comment Request, 36088-36096 [06-5631]

Agencies

• FEDERAL TRADE COMMISSION

[Federal Register Volume 71, Number 121 (Friday, June 23, 2006)]
[Notices]
[Pages 36088-36096]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-5631]


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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Comment Request

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

ACTION: Notice.

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SUMMARY: The FTC intends to conduct consumer research to examine the 
effectiveness of the FTC's current energy labeling requirements for 
consumer products and obtain information about alternatives to those 
labels. This activity is part of the Commission's efforts to

[[Page 36089]]

examine the current labeling program, as required by section 137 of the 
Energy Policy Act of 2005 (Pub. L. 109-58). The information collection 
requirements described below will be submitted to the Office of 
Management and Budget (``OMB'') for review, as required by the 
Paperwork Reduction Act (``PRA'') (44 U.S.C. 3501-3520).

DATES: Comments must be received on or before July 24, 2006.

ADDRESSES: Interested parties are invited to submit written comments. 
Comments should refer to ``Appliance Labeling Research: No. P064200'' 
to facilitate the organization of comments. A comment filed in paper 
form should include this reference both in the text and on the envelope 
and should be mailed or delivered, with two complete copies, to the 
following address: Federal Trade Commission/Office of the Secretary, 
Room H-135 (Annex J), 600 Pennsylvania Avenue, NW., Washington, DC 
20580. Because paper mail in the Washington area and at the Commission 
is subject to delay, please consider submitting your comments in 
electronic form, as prescribed below. However, if the comment contains 
any material for which confidential treatment is requested, the comment 
must be filed in paper form, and the first page of the document must be 
clearly labeled ``Confidential.'' \1\ The FTC is requesting that any 
comment filed in paper form be sent by courier or overnight service, if 
possible.
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    Comments filed in electronic form should be submitted by clicking 
on the following Weblink: https://secure.commentworks.com/FTC-
ApplianceResearch and following the instructions on the Web-based form. 
To ensure that the Commission considers an electronic comment, you must 
file it on the web-based form at the https://secure.commentworks.com/
FTC-ApplianceResearch weblink. If this notice appears at https://
www.regulations.gov, you may also file an electronic comment through 
that Web site. The Commission will consider all comments that 
regulations.gov forwards to it.
    Comments should also be submitted to: Office of Management and 
Budget, Attention: Desk Officer for the Federal Trade Commission. 
Comments should be submitted via facsimile to (202) 395-6974 because 
U.S. Postal Mail is subject to lengthy delays due to heightened 
security precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. All timely and responsive public comments will be 
considered by the Commission and will be available to the public on the 
FTC Web site, to the extent practicable, at https://www.ftc.gov. As a 
matter of discretion, the FTC makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy at https://www.ftc.gov/ftc/privacy.htm.

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

SUPPLEMENTARY INFORMATION: Section 324 of the Energy Policy and 
Conservation Act of 1975 (``EPCA''), 42 U.S.C. 6291-6309, requires the 
Commission to prescribe labeling rules for the disclosure of estimated 
annual energy cost or alternative energy consumption information for a 
variety of products covered by the statute, including home appliances 
(e.g., refrigerators, dishwashers, air conditioners, and furnaces), 
lighting, and plumbing products. The Commission's Appliance Labeling 
Rule (``Rule''), 16 CFR part 305, implements these requirements by 
directing manufacturers to disclose energy information about major 
household appliances. This information enables consumers to compare the 
energy use or efficiency and operating costs of competing models. When 
initially published in 1979, the Rule applied to eight appliance 
categories: Refrigerators, refrigerator-freezers, freezers, 
dishwashers, water heaters, clothes washers, room air conditioners, and 
furnaces. Since then, the Commission has expanded the Rule's coverage 
to include central air conditioners, heat pumps, fluorescent lamp 
ballasts, plumbing products, lighting products, pool heaters, and some 
other types of water heaters.
    Section 137 of the Energy Policy Act of 2005 amends the EPCA (42 
U.S.C. 6294(a)(2)) to require the Commission to initiate a rulemaking 
to consider ``the effectiveness of the consumer products labeling 
program in assisting consumers in making purchasing decisions and 
improving energy efficiency.'' As part of this effort, the EPCA directs 
the Commission to consider ``changes to the labeling rules (including 
categorical labeling) that would improve the effectiveness of consumer 
product labels.''
    On November 2, 2005, the Commission published an Advance Notice of 
Proposed Rulemaking (``ANPR'') seeking comments on the effectiveness of 
the FTC's energy labeling regulations for consumer products. 70 FR 
66307 (November 2, 2005). In that Notice, the Commission stated that 
the American Council for an Energy Efficient Environment (``ACEEE'') 
released a report in 2002 summarizing its research on the EnergyGuide 
label's efficacy and on alternative formats and graphical elements for 
the label.\2\ More recently, the Association of Home Appliance 
Manufacturers (``AHAM'') conducted research that also examined the 
current label and alternatives.\3\ The conclusions reached by AHAM and 
ACEEE are not in accord. As part of the ongoing rulemaking proceeding 
concerning the effectiveness of the FTC's energy labeling regulations, 
the FTC proposes to conduct its own consumer research related to the 
existing label requirements and possible alternatives.
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    \2\ Thorne, Jennifer and Egan, Christine, ``An Evaluation of the 
Federal Trade Commission's EnergyGuide Label: Final Report and 
Recommendations,'' ACEEE, August 2002. The report is available 
online at https://aceee.org/pubs/a021full.pdf.
    \3\ AHAM submitted the research results as part of its comments 
on the ANPR. See AHAM Comments in FTC Matter No. R511994, (January 
13, 2006) (https://www.ftc.gov/os/comments/energylabeling/519870-
00016.htm).
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    The FTC's proposed research design builds on the findings and 
strategies of prior research and on the comments received during the 
rulemaking proceeding. For example, similar to prior research by ACEEE, 
the FTC research will include questions designed to understand how well 
consumers comprehend information presented in different labeling 
formats. Similar to the research conducted by AHAM, the FTC's proposed 
study will involve an Internet panel. While the project will build on 
this prior work, the FTC's proposed study will address several issues 
not raised in the prior studies and will also consider a label design 
not addressed in detail by ACEEE or AHAM.
    On March 15, 2006 (71 FR 13398), the FTC published a Federal 
Register

[[Page 36090]]

Notice seeking comments from the public concerning the FTC's proposal 
to conduct consumer research to examine the effectiveness of the FTC's 
current energy labeling requirements for consumer products and obtain 
information about alternatives to those labels. No comments were 
received in response to that Notice. Nonetheless, several comments 
received as part of the FTC's Energy Labeling Public Workshop held on 
May 3, 2006, see 71 FR 18023 (April 10, 2006), address the FTC's 
proposed consumer research for energy labels.\4\ The issues raised in 
such comments are discussed below under the applicable subheadings.
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    \4\ The comments received as part of the FTC's Energy Labeling 
Workshop and the Workshop transcript are available at https://
www.ftc.gov/os/publiccomments.htm.
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    Pursuant to the OMB regulations that implement the PRA (5 CFR part 
1320), the FTC is providing this second opportunity for public comment 
while requesting that OMB grant clearance for the proposed consumer 
research. All comments should be filed as prescribed in the ADDRESSES 
section above, and must be received on or before July 24, 2006.

I. Description of the Collection of Information and Proposed Use

    The FTC proposes to collect information from consumers in order to 
gather data on the effectiveness of current energy labels and possible 
alternative label designs. The proposed research study will involve a 
sample of 3,000 individuals who are at least 18 years old and are 
likely or recent major appliance (e.g., refrigerator or dishwasher) 
purchasers.\5\ A nationwide Internet panel will be used to identify 
potential respondents and the questionnaire will be administered 
online. All information will be collected on a voluntary basis.
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    \5\ FTC staff would like to understand the extent to which 
recent purchasers used current EnergyGuide labels in addition to the 
likely effects of EnergyGuide labels in the future.
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    Subject to OMB approval, the FTC has contracted with Harris 
Interactive, a consumer research firm that has substantial experience 
assessing consumer communications using the Internet and other 
alternative protocols. The contractor will first identify respondents 
using any relevant pre-existing data in its Internet panel database and 
any necessary additional screening questions. The screener questions 
will be designed to ensure that the demographic composition of the 
sample reasonably matches that of the target population.\6\ Allowing 
for non-response, the screener questions will be asked of approximately 
20,000 consumers, as screening that number should enable the FTC to 
reach its target sample size of 3,000 individuals. In addition, the FTC 
will pretest the study on 300 individuals to ensure that all questions 
are easily understood. The pretest participants will be drawn from the 
sample population.
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    \6\ As discussed in Section III.D. of this Notice, if necessary, 
the FTC will use quota sampling, or another appropriate method 
determined in conjunction with the contractor, to increase the 
probability that the selected sample represents the characteristics 
of the target population in terms of geography, gender, age, 
education, and race/ethnicity.
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    Respondents will be randomly assigned to one of approximately eight 
to ten label conditions using a number of different label designs.\7\ 
For example, one group of respondents will view the current EnergyGuide 
label for four refrigerators with different energy characteristics, 
whereas, a different group of respondents will view a categorical 
version of the label for the same refrigerators. Respondents will then 
answer a series of objective questions about the characteristics of the 
products described in the labels. Respondents will be asked, for 
example, to rank the refrigerators in terms of annual operating costs, 
annual energy use, and energy efficiency. In addition, respondents will 
likely answer questions about the magnitude of cost, efficiency, or 
energy use differences between different models and about any 
differences in product quality communicated by the labels. The 
proportion of consumers who correctly answer such questions for each 
condition will be tallied. If there are differences in accuracy rates 
between label conditions, the direction and statistical significance of 
these differences will aid FTC staff in assessing whether one type of 
label design is more comprehensible to consumers than alternative 
designs.
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    \7\ Several draft labels appear as Figures 1 and 2 at the end of 
this Notice.
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    The proposed study will also include label conditions with the 
ENERGY STAR logo, i.e., some groups of respondents will view labels 
bearing the ENERGY STAR logo and some other groups will view the same 
label without the ENERGY STAR logo. In addition to answering the same 
questions posed for other label sets (described above), respondents 
that view the ENERGY STAR label conditions will answer questions about 
which model or models in the set qualify for ENERGY STAR and the 
location of the ENERGY STAR logo on the label. The FTC's regulations 
currently allow manufacturers to place the ENERGY STAR logo on the 
EnergyGuide label of qualified products (see 16 CFR 305.19). The 
collection of this information will allow the FTC staff to gather 
information about the impacts various label designs have on consumer 
comprehension of energy performance information when labels bear the 
ENERGY STAR logo.
    The proposed study will also include a control no-label (pure 
information) condition. For this condition, respondents will view 
information about appliances, but the information would not be in a 
label format. The purpose of this condition will be to explore what 
information is likely to be most useful to consumers outside of the 
EnergyGuide labeling context. Finally, the research study will also 
likely include a refrigerator condition that combines all full-size 
refrigerators into one category (i.e., eliminates separate ranges of 
comparability for configurations such as side-by-side doors and bottom-
mounted freezers). This condition will allow the FTC staff to explore 
the possible effect of changing the current refrigerator categorization 
system.
    In addition to comprehension questions, respondents will be asked 
questions about their prior experience using EnergyGuide labels in 
order to assess how useful the current labels have been and to assess 
how prior experience might impact accuracy rates. Respondents will also 
be asked general questions about the perceived usefulness of certain 
types of energy-related information to assess whether labels that 
feature certain types of information, such as energy usage measured in 
kWh, categorical measures of energy efficiency, or operating costs, are 
likely to be useful.
    In sum, the label designs will include the current EnergyGuide 
label design (the control label), a revised version of the current 
design using a continuous bar graph, a categorical ``five-star'' label, 
and a fourth label prominently featuring operating costs (see Figures 1 
and 2 at the end of this Notice). The research will also include a 
version of each label including the ENERGY STAR logo. Thus, the eight 
primary treatments include: (1) The current label with and without the 
ENERGY STAR logo, (2) the modified version of the current label with 
and without the ENERGY STAR logo, (3) the categorical label with and 
without the ENERGY STAR logo, and (4) the label featuring operating 
costs with and without the ENERGY STAR logo. The two other treatments 
that are likely to be used include the no label (pure information) 
condition and a condition collapsing all of the full size refrigerators 
into one category.

[[Page 36091]]

    As discussed above, after being randomly assigned to a condition, 
respondents will view one type of label format and be given shopping 
scenarios for two products (e.g., dishwashers and refrigerators). The 
order of the scenarios will be rotated. The design of the proposed 
study will allow for approximately 300 respondents per cell.

  Table 1.--Label Conditions and Cell Sample Sizes for Appliance Label
                                Research
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                       Condition                           Sample size
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Current EnergyGuide Label..............................              300
Current EnergyGuide Label with ENERGY STAR logo........              300
Modified Version of Current Label......................              300
Modified Version of Current Label with ENERGY STAR logo              300
Categorical Label......................................              300
Categorical Label with ENERGY STAR logo................              300
Label Featuring Operating Cost.........................              300
Label Featuring Operating Cost with ENERGY STAR logo...              300
Pure Information (No Recognizable Label Format)........              300
Current EnergyGuide Label with Collapsed Refrigerator                300
 Categories............................................
                                                        ----------------
    Total Sample.......................................             3000
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II. Labels for the Consumer Research

    As discussed above, the FTC plans to present research participants 
with labels from several hypothetical refrigerator-freezer models and 
dishwasher models for each specific label design category. The 
respondents will then answer a series of questions about these models. 
For example, respondents viewing categorical label designs will see 
four categorical-type labels representing different models with varying 
energy performance attributes. The staff plans to use labels that are 
representative of models on the market but do not necessarily reflect 
the attributes of actual products. The data that the staff plans to use 
for these various labels are as follows:

                                Table 2.--Dishwasher Models for Consumer Research
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                                                                                           Yearly
                                                 Yearly                     Yearly        opeating
                                               energy use     Energy       operating     cost--nat.   Number of
                                                (kWh/yr)   factor (EF)  cost--electric   gas water      stars
                                                                        water  heating    heating
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Model A.....................................          433         .497            $42           $35            1
Model B.....................................          380         .566             37            30            3
Model C.....................................          363         .592             36            28            4
Model D.....................................          297         .724             29            22            5
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       Table 3.--Refrigerator-Freezer Models For Consumer Research
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                                      Yearly       Yearly
                                    energy use   operating    Number of
                                     (kWh/yr)       cost        stars
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Model A..........................          680          $67            1
Model B..........................          600           59            3
Model C..........................          580           57            4
Model D..........................          539           53            5
------------------------------------------------------------------------

    In calculating the operating costs for these models, the FTC staff 
used the Department of Energy (``DOE'') 2006 Representative Average 
Unit Costs of $0.0981 per kWh for electricity and $1.415 per therm for 
natural gas. All dishwasher models are standard-size units. All 
refrigerator-freezer models feature side-by-side door configurations 
with through-the-door ice service. The volume of each refrigerator 
model is assumed to be 23 cubic feet and the adjusted volume for each 
is assumed to be 27.7 cubic feet. The applicable range of comparability 
for these refrigerator models is 539 to 698 kWh/yr (see 16 CFR 305, 
Appendix A8). Models C and D for both appliance categories qualify as 
ENERGY STAR models.\8\
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    \8\ The letter designations ``A,'' ``B,'' ``C,'' and ``D'' will 
not be used during the research.
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    The system for assigning categorical stars to these models stems 
from a comparison of the model's energy performance to DOE minimum 
standards expressed as a percentage above that standard. The FTC staff 
has developed these categories for the limited purpose of drafting a 
small number of labels for use in the consumer research. Nevertheless, 
the staff has considered models currently available on the market in 
creating these designations. See https://www.ftc.gov/appliancedata. For 
dishwashers, the categories are as follows: 0 to 9.99 % = 1 star; 10 to 
19.99% = 2 stars; 20 to 24.99% = 3 stars; 25 to 29.9% = 4 stars; and 
30% and over = 5 stars. For refrigerators, the categories are: 0 to 
4.99% = 1 star; 5 to 9.99% = 2 stars; 10 to 14.99% = 3 stars; 15% to 
19.99 % = 4 stars; and 20% or greater = 5 stars. ENERGY STAR models 
correspond to four or five stars under this categorical system.

[[Page 36092]]

III. Public Comments

    As noted above, the FTC did not receive any comments in response to 
its March 15, 2005 Federal Register Notice related to the Paperwork 
Reduction Act. However, as part of the FTC's Energy Labeling Workshop 
held on May 3, 2006, the Commission invited and received written 
comments. Several of these comments directly addressed the FTC's 
proposed consumer research for energy labels and are discussed below.

A. ENERGY STAR and Consumer Research

    Comment: The Consortium on Energy Efficiency (``CEE'') urged the 
FTC to consider the impact that a categorical label would have on 
consumer understanding of ENERGY STAR.\9\ For example, CEE suggested 
that, in analyzing a categorical label design, the FTC should consider 
the consumer impacts of equating the ENERGY STAR level consistently 
with a category 4 (i.e., 4 stars). CEE asked about the impacts of 
setting different ENERGY STAR categories for different products (e.g., 
ENERGY STAR is equivalent to category 3 or higher for clothes washers 
and category 4 or higher for dishwashers). CEE also suggested that the 
FTC research address the fact that ENERGY STAR does not apply to all 
products bearing an EnergyGuide label (e.g., water heaters). Finally, 
CEE urged the FTC to explore how a revised EnergyGuide label would 
impact voluntary efficiency programs, such as those administered by CEE 
members.
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    \9\ Consortium for Energy Efficiency Comments in FTC Matter No. 
P064201 (May 17, 2006), pp. 1-3 (hereinafter ``CEE Comments'').
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    Discussion: The FTC consumer research will consider the impacts of 
various label designs on the ENERGY STAR logo. By testing whole groups 
of labels with and without the ENERGY STAR logo, the research should 
yield useful information about the effect that various label designs 
have on consumer comprehension when the designs are coupled with the 
ENERGY STAR logo. Respondents will also address questions specifically 
related to the ENERGY STAR logo. For the purposes of the research, the 
categorical label designs will equate ENERGY STAR with four and five 
star ratings. Given resource and time constraints, it is necessary for 
the FTC staff to manage the scope and detail of issues explored in the 
research. Although the FTC does not plan to address all the scenarios 
involving the ENERGY STAR logo suggested by CEE, FTC staff believes the 
planned research will provide useful information about the impacts of 
the various label designs viewed in conjunction with the ENERGY STAR 
logo. For similar reasons, the FTC does not plan to address the impact 
of revised label designs on voluntary efficiency programs in its 
consumer research. This is an important issue, however, and it is 
expected that stakeholders will provide their views on this issue as 
the rulemaking proceeding continues.

B. Purpose of Labeling Program

    Comment: ACEEE indicated that the ``FTC should make clear its 
interpretation of Congress's intent for the appliance labeling program 
prior to conducting research on the program.''\10\
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    \10\ American Council for an Energy-Efficienty Economy Comments 
in FTC Matter No. P064201 (May 17, 2006) (hereinafter ``ACEEE 
Comments'').
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    Discussion: In promulgating the Appliance Labeling Rule in 1979 (44 
FR 66466 (November 19, 1979)), the Commission provided the following 
statement: ``The primary purpose of the Commission's rule is to 
encourage consumers to comparison-shop for energy-efficient household 
appliances. By mandating a uniform disclosure scheme for energy 
consumption information, the rule will permit consumers to compare the 
energy efficiency of competing appliances and to weigh this attribute 
against other product features in making their purchasing decisions. If 
the labeling program works as expected, the availability of this new 
information should enhance consumer demand for appliances that save 
energy. In turn, competition should be generated among manufacturers to 
meet this demand by producing more energy-efficient appliances.'' FTC 
staff believes this Commission statement provides sufficient guidance 
for the proposed consumer research.

C. Importance of Prior Research

    Comment: Some commenters urged the FTC to build on prior research 
results in conducting the consumer research for this proceeding. In 
particular, ACEEE indicated that to ``make the most of the time and 
resources available, any research conducted should build on the results 
of prior research on the EnergyGuide labeling program and the design of 
effective energy labels conducted in the U.S. and abroad.'' In 
addition, ACEEE stated that any new EnergyGuide variations ``must be 
tested alongside the primary alternatives identified in earlier 
research * * *.'' Both CEE and ACEEE recommend that the FTC review 
existing domestic and international research before crafting its own 
research plan. CEE also requested that the FTC develop and publish a 
timeline that defines the necessary steps in this rulemaking.
    Discussion: In developing the consumer research, the FTC staff has 
considered the prior work in this area including the ACEEE and AHAM 
research. This prior work has allowed the FTC to narrow its focus to a 
few specific label designs and several specific questions regarding 
those label designs. For example, the focus group work conducted by 
ACEEE has helped to identify concerns that the current label design is 
wordy, cluttered, and too complex.\11\ In addition, the FTC staff has 
chosen not to pursue several label designs that did not fare well in 
the ACEEE research such as speedometer and thermometer formats. 
Moreover, the FTC plans to include both the categorical star label and 
the revised bar-graph label in its research.\12\ These designs figured 
prominently in both the AHAM and ACEEE research.\13\
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    \11\ See Thorne and Eagan, supra n. 3.
    \12\ See Figures 1 and 2 at the end of this Notice.
    \13\ The FTC staff is also aware of studies that have been 
conducted in other countries. See, e.g., Collaborative Labeling and 
Appliance Standards Program (CLASP) Comments in FTC Matter No. 
R511994 (Jan. 13, 2006).
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    The FTC will not conduct the planned consumer research until it 
receives clearance from the OMB under the Paperwork Reduction Act. The 
timing of such clearance is not certain. Once clearance is granted and 
the research is completed, the FTC staff will recommend proposed rule 
changes, if any, to the Commission. The Commission will issue a Federal 
Register Notice soliciting comment on any proposed rule changes. 
Congress has directed the Commission to issue any final amendments to 
the Rule by August 2007.

D. Nationally Representative Research

    Comment: One commenter stated that the ``sampling technique 
utilized in quantitative market research must allow the sample to be 
representative of the census (entire body) of the group being surveyed. 
In the case of appliance purchasers, the research must be `nationally 
representative,' or represent the U.S. adult population.'' \14\
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    \14\ Whirlpool Comments in FTC Matter No. P064201.
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    Discussion: As discussed above, the FTC has contracted with Harris 
Interactive to administer the study. The sample for the study will be 
drawn from Harris Interactive's existing Internet panel, which has more 
than 4 million members throughout the nation. The panel is derived from 
a variety of

[[Page 36093]]

convenience sampling procedures, rather than true probability sampling 
techniques. The sample for this research will therefore not be 
nationally representative in the classic sense. However, Harris 
Interactive has studied the relationship between samples from its 
Internet panel and samples collected using more traditional probability 
sampling techniques. Based on these studies, Harris has developed 
procedures to ensure that differences between the results of Harris' 
Internet panel studies, and studies based on true probability samples 
of the nation, are minimized. More specifically, Harris has used a 
variety of techniques, including demographic weighting, propensity 
scoring, and quota sampling in order to obtain accurate projections of 
national sentiment based on samples drawn from its Internet panel. 
Accordingly, FTC staff will work with Harris to ensure that the sample 
is as representative of the nation as possible. At the same time, the 
FTC staff recognizes that there may be some limitations in the use of 
an Internet panel, rather than a national probability sample, and plans 
to discuss such issues in any analysis of the data and reports of the 
findings.

E. Percentage Label and Cost Label

    Comment: As part of its Energy Labeling Workshop, the FTC sought 
comment on an alternative label design that compared a model's energy 
efficiency to DOE minimum standards in the form of a percentage. See 71 
FR 18023. Several workshop participants raised concerns that percentage 
information may be confusing to consumers, inadequately distinguish the 
energy efficiency of some products (such as water heaters), and create 
complications as DOE minimum standards change over time.\15\ 
Conversely, several workshop participants suggested that operating 
costs is a measure that is easy for consumers to understand.\16\ 
Indeed, one written comment suggested that the FTC consider such a 
label and provided an example.\17\
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    \15\ See, e.g., Energy Labeling Workshop Transcript (May 3, 
2006) at pp. 56-61, and 82 (``Workshop Transcript'') available at 
https://www.ftc.gov/os/comments/energylabeling-workshop/
060503wrkshoptrnscript.pdf; Edison Electric Institute Comments in 
FTC Matter No. P064201 (May 17, 2006).
    \16\ See Workshop Transcript at 125-126. One written comment 
suggested that the FTC consider such a label and provided an 
example.
    \17\ Whirlpool Corporation Comments in FTC Matter No. P064201 
(May 17, 2006).
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    Discussion: Given these concerns, FTC staff is not planning to use 
the percentage label design in its proposed consumer research. In lieu 
of testing the percentage label, FTC staff is planning to consider a 
design that focuses on operating cost as the primary descriptor (see 
Figures 1 and 2 at the end of this Notice). Unlike the current label 
design, which provides information on energy use for some products and 
energy efficiency for others, operating costs provide information that 
is consistent across all labels. At the same time, FTC staff recognizes 
that the cost information can create concerns if the fuel prices (e.g., 
national electricity rates or natural gas prices) used to calculate 
label information change frequently. Under the current Rule, the FTC 
changes the fuel costs only when the ranges for a particular product 
change. This means that the ranges (and thus the fuel rates) for most 
products change on an irregular basis (usually once every several 
years). At the Workshop, one participant suggested that the FTC change 
the underlying fuel costs used to calculate such information once every 
several years on a regular basis.\18\ Such an approach could minimize 
the potential problems associated with frequent fuel rate changes. FTC 
staff intends to consider this issue during the underlying rulemaking 
process.
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    \18\ See Workshop Transcript at 133.
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F. Miscellaneous Comments

    Comment: CEE suggested that the FTC consider whether consumers find 
certain elements of the categorical or continuous labels confusing or 
redundant. CEE also suggested that the FTC explore the consumer impacts 
of limiting the number of products that qualify for the highest rating 
for a categorical label system.
    Discussion: The FTC's proposed research will ask consumers to 
conduct a series of tasks related to a group of labels. This should 
provide data about the effectiveness of the alternative labels, 
including whether they convey accurate information or cause confusion. 
Given resource and time constraints, the research will not directly 
address the impacts of limiting the number of products that qualify for 
the highest rating for a categorical system. Commenters may submit 
views on such impacts.
    Comment: CEE asked whether the research would address the impacts 
on consumer comprehension of replacing annual operating cost 
information with lifecycle costs (which the FTC staff assumes to 
include factors such as emissions of air pollutants associated with a 
product's manufacture and use).
    Discussion: The FTC staff does not plan to consider lifecycle cost 
in the consumer research. Under the EPCA (42 U.S.C. 6294), the 
disclosures on EnergyGuide labels must be derived from DOE test 
procedures. It is the FTC staff's understanding that such test 
procedures do not contain information about lifecycle costs such as 
emissions of air pollutants and carbon dioxide. Accordingly, the 
consumer research will focus on alternative label designs that contain 
information readily provided by existing DOE test procedures such as 
annual operating cost and electricity use.

IV. Estimated Hours Burden

    As discussed above, allowing for non-response, screener questions 
will be asked of approximately 20,000 respondents in order to obtain 
the FTC's target sample size of 3,000 individuals who are at least 18 
years old and are likely major appliance purchasers. FTC staff 
estimates that it will take consumers one minute to respond to the 
screener questions. Thus, the total burden related to the screener 
questions will be approximately 333 hours (20,000 respondents x 1 
minute).
    The FTC also intends to pretest the consumer questionnaires on 
approximately 300 respondents to ensure that all questions are easily 
understood. The FTC staff estimates that conducting the pretest will 
take approximately 20 minutes on average per person, resulting in a 
total of approximately 100 burden hours (300 respondents x 20 minutes). 
Although the target sample is 3,000 individuals, the procedures used by 
the contractor may yield responses from a slightly higher number of 
individuals. Accordingly, using a conservative estimate of 3,200 
individuals, the FTC staff further estimates that participating in the 
study will require an additional 1067 hours as a whole (3,200 
respondents x 20 minutes). Thus, the total burden hours for the 
proposed study will be approximately 1,500 hours (333 hours + 100 hours 
+ 1067 hours).

V. Estimated Cost Burden

    The cost per respondent should be negligible. Participation is 
voluntary and will not require start-up, capital, or labor expenditures 
by respondents.
BILLING CODE 6490-01-P

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John D. Graubert,
Acting General Counsel.
[FR Doc. 06-5631 Filed 6-22-06; 8:45 am]
BILLING CODE 6750-01-C