Energy Labeling Rule, 9274-9285 [2020-28880]

Download as PDF 9274 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. For the reasons discussed above, I certify that this AD: (1) Is not a ‘‘significant regulatory action’’ under Executive Order 12866, and (2) Will not affect intrastate aviation in Alaska. List of Subjects in 14 CFR Part 39 Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety. The Amendment Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows: (g) Special Flight Permit A special flight permit may be issued with the following limitations: Operation in areas of known turbulence and aerobatic flight are prohibited. PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: ■ Authority: 49 U.S.C. 106(g), 40113, 44701. § 39.13 [Amended] 2. The FAA amends § 39.13 by adding the following new airworthiness directive: ■ 2021–04–06 Pilatus Aircraft Ltd.: Amendment 39–21427; Docket No. FAA–2021–0049; Project Identifier MCAI–2021–00033–A. (a) Effective Date This airworthiness directive (AD) is effective February 12, 2021. (b) Affected ADs None. (c) Applicability This AD applies to Pilatus Aircraft Ltd. Model PC–7 airplanes, all serial numbers, certificated in any category. (d) Subject Joint Aircraft System Component (JASC) Code 2510, Flight Compartment and 2560, Emergency Equipment. (e) Unsafe Condition This AD was prompted by a report of a missing release bar retaining screw on a Harley-type buckle assembly installed on a harness shoulder strap. The FAA is issuing this AD to detect and address defective buckle assembly release bar screws. The unsafe condition, if not addressed, could result in loss of pilot restraint with consequent loss of airplane control or injuries to the crew. (f) Actions and Compliance (1) For airplanes with a Harley-type seat buckle assembly or buckle component listed in the Effectivity, paragraph 2.A., of IrvinGQ VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 Limited Service Bulletin IGQSB033, Issue 2, dated December 2020 (IrvinGQ SB IGQSB033, Issue 2), before further flight after the effective date of this AD, inspect each seat buckle assembly on the front and rear seats (4 buckle assemblies total) for movement of the release bar retaining screws by following the Accomplishment Instructions, section 3.C.(1), of IrvinGQ SB IGQSB033, Issue 2. If there is any movement of a release bar retaining screw, before further flight, repair or replace the buckle assembly by following the Accomplishment Instructions, section 3.C.(2), of IrvinGQ SB IGQSB033 Issue 2. (2) As of the effective date of this AD, do not install a Harley-type buckle assembly or buckle component listed in the Effectivity, paragraph 2.A., of IrvinGQ SB IGQSB033 Issue 2, on the seat harness of any airplane unless it has been inspected as required by paragraph (f)(1) of this AD. (h) Alternative Methods of Compliance (AMOCs) (1) The Manager, International Validation Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the certification office, send it to the attention of the person identified in Related Information. (2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/ certificate holding district office. (i) Related Information (1) Refer to Federal Office of Civil Aviation (FOCA) AD HB–2021–001–E, dated January 8, 2021, for more information. You may examine the FOCA AD at https:// www.regulations.gov by searching for and locating Docket No. FAA–2021–0049. (2) For more information about this AD, contact Doug Rudolph, Aviation Safety Engineer, General Aviation & Rotorcraft Section, International Validation Branch, FAA, 901 Locust, Room 301, Kansas City, Missouri 64106; phone: (816) 329–4059; fax: (816) 329–4090; email: doug.rudolph@ faa.gov. (j) Material Incorporated by Reference (1) The Director of the Federal Register approved the incorporation by reference of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51. (2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise. (i) IrvinGQ Limited Service Bulletin IGQSB033, Issue 2, dated December 2020. (ii) [Reserved] PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 (3) For IrvinGQ Limited service information identified in this AD, contact Pilatus Aircraft Ltd., CH–6371, Stans, Switzerland; phone: +41 848 24 7 365; email: techsupport.ch@pilatus-aircraft.com; website: http://www.pilatus-aircraft.com/. (4) You may view this service information at FAA, Airworthiness Products Section, Operational Safety Branch, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329–4148. (5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, email: fedreg.legal@nara.gov, or go to: https://www.archives.gov/federal-register/cfr/ ibr-locations.html. Issued on February 4, 2021. Gaetano A. Sciortino, Deputy Director for Strategic Initiatives, Compliance & Airworthiness Division, Aircraft Certification Service. [FR Doc. 2021–02793 Filed 2–10–21; 11:15 am] BILLING CODE 4910–13–P FEDERAL TRADE COMMISSION 16 CFR Part 305 RIN 3084–AB15 Energy Labeling Rule Federal Trade Commission. Final rule. AGENCY: ACTION: The Federal Trade Commission (‘‘FTC’’ or ‘‘Commission’’) amends the Energy Labeling Rule (‘‘Rule’’) to require EnergyGuide labels for portable air conditioners and issue amendments to central air conditioner labels to conform with Department of Energy (‘‘DOE’’) changes to efficiency descriptors. SUMMARY: Amendatory instructions 1 (authority), 3 (for § 305.2), 5 (for § 305.3), 6 (for § 305.7), 7 (for § 305.10), 8 (for § 305.11), 9 (for § 305.13), 10 (for § 305.18), 12 (for § 305.27), 13 (for appendix E), and 14 (for appendix K2) are effective on October 1, 2022, and amendatory instructions 2 (for part 305), 4 (for § 305.2), and 11 (for § 305.20) are effective on January 1, 2023. ADDRESSES: Copies of this document are available on the Commission’s website, www.ftc.gov. FOR FURTHER INFORMATION CONTACT: Hampton Newsome (202–326–2889), Attorney, Bureau of Consumer Protection, Federal Trade Commission, Room CC–9528, 600 Pennsylvania Avenue NW, Washington, DC 20580. SUPPLEMENTARY INFORMATION: DATES: E:\FR\FM\12FER1.SGM 12FER1 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations I. Background on the Energy Labeling Rule 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 the energy usage and costs of 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. 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 websites 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. The Rule requires marketers to use national average costs for applicable energy sources (e.g., electricity, natural gas, oil) as calculated by DOE in all cost calculations. Under the Rule, the Commission periodically updates comparability range and annual energy cost information based on manufacturer data submitted pursuant to the Rule’s reporting requirements.3 II. Notice of Proposed Rulemaking In an April 10, 2020 Notice of Proposed Rulemaking (NPRM) (85 FR 20218), the Commission sought comments on EnergyGuide labels for portable air conditioners, updates to efficiency descriptors for central air conditioner labels, and the need for changes to the current label layout and format requirements. A. Proposed EnergyGuide Labels for Portable Air Conditioners The NPRM proposed establishing EnergyGuide labeling for portable air 1 44 FR 66466 (Nov. 19, 1979). 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. 3 16 CFR 305.10. 2 42 VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 conditioners. Under EPCA, the Commission may require labeling for DOE-designated covered products if it determines labeling will ‘‘assist purchasers in making purchasing decisions’’ and will be ‘‘economically and technologically feasible.’’ 42 U.S.C. 6294(a)(3). Prior to the NPRM, the Commission sought comment on labeling requirements for portable air conditioners in several previous Federal Register notices. In those publications, the Commission discussed the benefits and burdens of such labels, as well as their format and content, which would largely match the labels already required for room air conditioners.4 Over the course of this proceeding, the Commission found, in accordance with its EPCA authority, labeling for this product category is likely to be economically and technologically feasible and assist consumers in their purchasing decisions.5 Over several rounds of comments, a wide array of stakeholders, including industry members, utilities, and consumer groups supported (or did not oppose) the proposal. In 2017, the Commission delayed final label requirements due to uncertainty about when DOE would promulgate efficiency standards for these products.6 Specifically, in January of that year, DOE withdrew its final efficiency standards from Federal Register publication pursuant to the Presidential Memorandum on Implementation of Regulatory Freeze, leaving the final standards compliance date unclear. In early 2020, DOE announced a compliance date for the standards resolving any uncertainty.7 Accordingly, the Commission then released an NPRM proposing EnergyGuide labels for portable air conditioners and a January 10, 2025 compliance date to coincide with the effective date of the DOE standards. In previous notices on these issues, the Commission addressed the benefits 4 79 FR 34642 (June 18, 2014); 80 FR 67351 (Nov. 2, 2015); 81 FR 62681 (Sept. 12, 2016); and 82 FR 29230 (June 28, 2017). Earlier in this proceeding, the Commission waited on label requirements pending a final DOE-issued test procedure for these products. DOE published that test procedure on June 1, 2016 (81 FR 35242), and it became mandatory for energy use representations on November 28, 2016. 5 80 FR at 67357; and 81 FR at 62683. In discussing similar economic and technological feasibility determinations for labels in 1979, the Commission concluded ‘‘that Congress[’s] intent was to permit the exclusion of any product category, if the Commission found that the costs of the labeling program would substantially outweigh any potential benefits to consumers.’’ 44 FR at 66467–68 (discussing determinations under 42 U.S.C. 6294(a)(1)). 6 82 FR at 29232. 7 85 FR 1378 (Jan. 10, 2020). PO 00000 Frm 00023 Fmt 4700 Sfmt 4700 9275 as well as the economic and technological feasibility of portable air conditioner labels. In a 2015 notice, for example, it found portable air conditioners are common in the marketplace, vary in energy efficiency, and use energy similar to or greater than, currently labeled room air conditioners.8 In addition, DOE reported the aggregate energy use of portable air conditioners has increased.9 According to DOE estimates, sellers shipped 1.32 million units in the United States in 2014, with future growth projected.10 DOE also found these products exhibit a wide range of efficiency ratings and energy costs for similarly sized units (a difference of about $100 per year between the most and least efficient models). After the 2025 implementation of DOE standards, that range is likely to be smaller, but remain significant (a difference of about $30– $50 depending on the size category as indicated in Appendix E2). DOE estimated average per-household annual electricity consumption for these products at 804 kWh/yr, generating $105 in annual energy costs (at $0.13 per kWh/hr).11 Given this information, the Commission concluded energy labels are likely to assist consumers with their purchasing decisions by allowing them to compare the energy costs of competing models and, consequently, save significant money on their electric bills. Further, in the NPRM, the Commission stated there is no evidence labeling is economically or technologically infeasible (i.e., the costs of labeling substantially outweigh consumer benefits). Indeed, the burdens (discussed infra in the Paperwork Reduction Act section) of labeling are not likely to differ significantly from those for room air conditioners, which already have EnergyGuide labels.12 As discussed in the NPRM, the proposed portable air conditioner label would be mostly identical to the current room air conditioner label in content, format, and placement (i.e., on packaging, not the product itself). The proposed amendments incorporated DOE’s definition of ‘‘portable air 8 80 FR at 67357–58. 78 FR 40403, 40404–05 (July 5, 2013). 10 The most recent DOE shipment statistics are from 2014. 85 FR 1378; and ‘‘2016–12 Final Rule Technical Support Document: Energy Efficiency Program for Consumer Products and Commercial and Industrial Equipment: Portable Air Conditioners’’ (‘‘DOE TSD’’) December 2016 at https://www.regulations.gov/document?D=EERE2013-BT-STD-0033-0047. 11 DOE TSD at Table 7.3.2. 12 See 80 FR at 67357 and 81 FR at 62683. 9 See E:\FR\FM\12FER1.SGM 12FER1 9276 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations conditioner’’ at § 305.3.13 Applying the same electricity cost rate ($0.13 kWh/hr) currently used for room air conditioners, the NPRM also contained cost ranges specifically for portable air conditioners in three size categories and derived from DOE energy use data.14 Consistent with findings made in the 2016 and 2017 notices, the NPRM did not propose combining the ranges for portable and room air conditioners because it is not clear whether consumers routinely compare the two product categories when shopping.15 However, consumers who want to compare them would be able to do so easily using the label’s energy cost disclosure. In addition, consistent with provisions applicable to room air conditioners, the proposed amendments contained reporting requirements identical to those created by DOE for these products. Finally, in the NPRM, the Commission proposed establishing an effective date for the label coinciding with the compliance date for DOE standards. Citing burdens associated with testing and labeling, industry comments earlier in this proceeding urged the Commission to synchronize any new labeling requirements with the DOE standards compliance date.16 B. Efficiency Descriptors for Central Air Conditioners In the NPRM, the Commission also sought comments on updates to the efficiency descriptors on central air conditioner labels. In 2017, as part of an efficiency standards proceeding, DOE announced changes to the rating methods and associated efficiency descriptors for central air conditioners (e.g., from ‘‘Seasonal Energy Efficiency Ratio (SEER)’’ to ‘‘Seasonal Energy Efficiency Ratio 2 (SEER2)’’).17 The DOE changes become effective on January 1, 2023. To ensure consistency with the DOE standards, the NPRM proposed changing all applicable references in Part 305, effective on January 1, 2023. Given the relatively small differences in the ratings produced by the old and the 13 To effect new labeling requirements, the proposed amendments inserted the term ‘‘portable air conditioner’’ next to ‘‘room air conditioner’’ into appropriate paragraphs of the Rule as detailed in the amendatory language included in this Notice. 14 See DOE TSD, Chapter 3 at 24–25 and Ch. 5 at 5–20. Using estimates for the most energy consumptive models based on the DOE standards, the ranges by size category expressed in yearly energy consumption are: (1) Less than 6,000 Btu/ hr: (375–753 kWh/yr), (2) 6,000 to 7,999 Btu/hr: (663–916 kWh/yr), and (3) 8,000 Btu/yr or greater: (807–1034 kWh/yr). 15 81 FR at 62682; and 82 FR at 29231–29232. 16 82 FR 29231. 17 82 FR 1786 (Jan. 6, 2017); and 82 FR 24211 (May 26, 2017). VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 new rating methods, the Commission did not propose any additional label changes. The Commission noted plans to update ranges in Appendix H and I, as well as applicable numbers on the sample labels in Appendix L, when new data becomes available. C. Questions on Label Layout and Format Requirements The Commission also requested comment on whether it should revise requirements in the Rule related to layout, format, and placement of EnergyGuide labels. Specifically, the NPRM asked whether some of these requirements (e.g., § 305.13(b)) are too prescriptive. In addition, the NPRM asked whether the Rule should contain a general label durability and disclosure format requirement in lieu of the existing, specific provisions for layout, type style, setting, and label attachment. The NPRM also asked whether industry members interpret existing guidance in the Rule related to adhesive labels as a ‘‘required standard.’’ Finally, the NPRM contained several questions about the Rule’s cost and benefits and the potential impact of more flexible requirements. V. Comments on the NPRM The Commission received seven comments in response to the NPRM.18 As detailed below, the commenters generally supported (or did not oppose) labels for portable air conditioners and the transition to the new DOE efficiency descriptors. However, they provided differing views on the need to revise existing label requirements. Finally, some commenters offered broad suggestions for replacing physical labels with electronic labels. A. Portable Air Conditioner Labels All the commenters supported (or did not oppose) adding portable air conditioner labels to the Rule.19 As discussed below, they asserted the 18 The comments are available at www.regulations.gov. The comments consist of AirConditioning, Heating, and Refrigeration Institute (AHRI) (#33–09); Association of Home Appliance Manufacturers (AHAM) (#33–04); Appliance Standards Awareness Project (ASAP) (including American Council for an Energy-Efficient Economy (ACEEE), National Consumer Law Center, on behalf of its low-income clients (NCLC), Natural Resources Defense Council (NRDC), & Northwest Energy Efficiency Alliance (NEEA)) (ASAP et al.) (#33–06); Goodman Manufacturing (#33–08); Jieun Rim (#33– 02); Consumer Federation of America, National Consumer Law Center, Sierra Club, Earthjustice (‘‘Joint Commenters’’) (#33–05); and the California Investor-Owned Utilities (Pacific Gas and Electric Company, San Diego Gas and Electric, and Southern California Edison) (CA IOUs) (#33–07). 19 Joint Commenters, Jieun Rim, and ASAP et al. supported the proposal. AHAM stated that it did not oppose the labeling. PO 00000 Frm 00024 Fmt 4700 Sfmt 4700 labels’ energy cost information would help consumers choose among portable air conditioners and alert them to the relative cost of portable and room models. The commenters also supported providing comparability ranges separate from room air conditioners. The comments emphasized the label’s consumer benefits. For example, CFA explained the labels ‘‘will provide significant value to consumers making purchasing decisions.’’ The Joint Commenters noted the energy costs disclosures ‘‘will correctly indicate to consumers that portable units are typically less efficient than room air conditioners.’’ AHAM, which represents portable air conditioner manufacturers, did not oppose the label but, as discussed further below, urged the Commission to eliminate physical labels for all products and transition to an electronic label structure. The commenters supported (or did not oppose) separate comparability ranges for portable and room air conditioners. AHAM, which ‘‘fully agreed’’ with the proposed approach on ranges, explained ‘‘consumers can adequately compare the two products, to the extent they even wish to do so for these two different products, easily using the label’s energy cost disclosure.’’ Referencing earlier comments, it argued combining the ranges would cause confusion because consumers of these products are different, and the two air conditioner categories do not have similar usage. AHAM also argued consumers focus mostly on capacity and purchase price when buying air conditioner units and thus may not use comparative energy costs information between the two categories. Commenters further recommended two additional items. First, two commenters noted the regulatory text in § 305.10 should include a reference for DOE capacity and rounding determinations for portable air conditioners (Appendix CC to 10 CFR part 430, subpart B).20 Second, the CA IOUs recommended statements on product packaging and literature about proper portable air conditioner operation, explaining the need for ducting to vent the heat produced by a unit to the outside. Commenters, however, offered differing views on the timing for the new labels. AHAM strongly supported a compliance date coinciding with the DOE standards. It asserted that designing products to meet the new standards requires ‘‘considerable effort,’’ a fact reflected in EPCA’s five-year lead20 See E:\FR\FM\12FER1.SGM ASAP et al. and AHAM. 12FER1 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations in period for DOE standards. According to AHAM, the pre-development, development, and tooling phases of launching a new product take years to complete and require extensive company resources. In its view, instituting a label mandate prior to the DOE compliance date would require companies to divert resources from developing new, more efficient products to labeling. AHAM also explained that aligning the compliance dates with the DOE standards and EnergyGuide labels would allow manufacturers to engage in the extensive development and testing activities required to innovate and bring more efficient products to market, as well as to comply with regulatory requirements. In contrast, the Joint Commenters, ASAP et al., and the California InvestorOwned Utilities (CA IOUs) disagreed. The Joint Commenters argued consumers who currently lack the protection of a DOE minimum efficiency standard should have access to labels sooner to help identify and avoid inefficient models. Given the delays in the proceeding caused by the DOE litigation, these commenters argued manufacturers have had ‘‘ample time to make the investments they have claimed are necessary to deploy the labels.’’ In addition, with the issuance of DOE’s test procedure in 2016, manufacturers must, pursuant to EPCA (42 U.S.C. 6293(c)), disclose the DOE results in any energy representations they make. Thus, according to the Joint Commenters, manufacturers ‘‘have had more than three years to gain familiarity with the test procedures and to understand how different basic models perform under test.’’ The CA IOUs also noted manufacturers are currently reporting their models’ efficiency ratings to the California state database. ASAP et al. agreed FTC should require labeling sooner, stating: ‘‘[l]abeling in advance of the compliance date of the DOE standards will provide consumers with information to compare portable AC units as well as an indication that portable ACs are less efficient than room ACs.’’ B. Energy Efficiency Descriptor Transition AHRI, Goodman, and the CA–IOUs generally supported the proposal to update the efficiency descriptors on the label. No commenter opposed the proposal. However, AHRI and Goodman urged the Commission to issue these updates as part of a broader overhaul to the Rule, which, as discussed in section V.C., would involve a transition from physical labels on individual units to VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 online labels accessed through websites or QR codes. These commenters also discussed the importance of updating the efficiency descriptors. In preparation for the DOE change, AHRI’s members are designing, testing, certifying, and introducing new equipment. They are also educating industry members and consumers by modifying AHRI’s product directory and certification program. AHRI expects manufacturers to release products with updated efficiency descriptors prior to the 2023 compliance deadline. DOE has issued guidance allowing early compliance with the test procedures, as long as the represented efficiencies comply with the 2023 minimum requirements. Given this timing, AHRI urged the Commission to complete label updates by summer 2021, so manufacturers may release compliant products as early as January 2022. In contrast, Goodman urged the Commission to issue the updates earlier, by December 2020, to give manufacturers even more time. To minimize market confusion from such early compliance, AHRI is developing a communications campaign ‘‘to inform distributors, contractors, regulators, and building inspectors about the transition.’’ AHRI did not offer any specific proposals for addressing the transition on the physical label itself. It also opposed any FTC mandate for two separate labels requiring disclosures of the old and new metrics. Instead, it recommended a transition to an ‘‘electronic label’’ beginning in 2023 as discussed further below. Prior to that date, under AHRI’s proposal, manufacturers choosing to display the new efficiency descriptor earlier would use the physical EnergyGuide label along with a smaller label containing regional installation information, as well as a QR (or equivalent) link to an updated FTC electronic label. Finally, on a separate issue involving central air conditioners, Goodman suggested the Commission modify range information for split-systems to revert to a format that appeared on labels prior to 2016. In its view, the current label, which limits the efficiency ratings to a single value, leads to consumer confusion because the actual efficiency rating for a system depends on the combination of the outdoor condenser and indoor unit. C. Label Burdens Commenters offered a variety of views regarding the Rule’s approach to labeling. First, the Joint Commenters, the CA IOUs, and Goodman offered differing views on whether the Rule’s labeling requirements are PO 00000 Frm 00025 Fmt 4700 Sfmt 4700 9277 ‘‘unnecessarily prescriptive.’’ Second, as discussed in section D, both AHAM and AHRI recommended the Commission completely revise the Rule to transition to online or virtual energy labels. The Joint Commenters and the CA IOUs rejected the notion that the Rule’s requirements for label layout, type style and setting, and label adhesion are too prescriptive. In the CA IOUs’ view, increased flexibility in the labeling requirements ‘‘could result in poor or inconsistent label quality that could inhibit consumers from making informed decisions regarding product performance.’’ Further, they asserted that uniform presentation facilitates effective ‘‘information delivery’’ and avoids ‘‘unnecessary confusion.’’ The CA IOUs further suggested the labels would better serve consumers if they appeared on both packages and the products themselves. Similarly, the Joint Commenters described the label specifications as ‘‘vital to the success of this program’’ and contended the questions in the NPRM ignore the ‘‘unique context and history of the EnergyGuide label program.’’ In their view, because the EnergyGuide label has more information (e.g., operating costs, efficiency ratings, comparative range bars, key product features, and explanatory statements) than many other required disclosures in other programs (e.g., labels for textiles and leather goods), the energy labels require a format ‘‘highly standardized to ease comparisons.’’ In addition, they argued allowing variability in layout and type style would hinder the label’s effectiveness in assisting consumers with their purchasing decisions. Finally, the Joint Commenters asserted the NPRM’s questions regarding label flexibility ‘‘exhibits amnesia as to the widespread noncompliance that the inadequate specificity in [the FTC’s] prior regulations had fostered.’’ The commenters cited past store visits demonstrating ‘‘the use of adhesives varied widely and that certain approaches were associated with higher rates of missing or detached labels.’’ The Joint Commenters noted that, in response to these findings, FTC added ‘‘specificity to its regulations governing adhesives.’’ In their view, reducing this specificity would ‘‘only encourage a return to labelling practices that deprive consumers of access to the important information that EnergyGuide labels provide.’’ In contrast, Goodman, a heating and cooling equipment manufacturer, offered several detailed suggestions to eliminate specific labeling requirements in § 305.20. It argued that these changes E:\FR\FM\12FER1.SGM 12FER1 9278 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations would simplify the Rule and free ‘‘businesses from unnecessarily prescriptive requirements.’’ Specifically, Goodman recommended the Rule specify only minimum dimensions instead of the current range of widths and lengths and include only whole number minimums (e.g., 7 inches for the length as opposed to 73⁄8 inches). It also suggested removal of requirements related to picas for copy set, the centering of text, and type style and setting, which includes requirements for a uniform font type. Goodman also recommended elimination of the existing paper stock requirement (‘‘58 pounds per 500 sheets or equivalent’’) and minimum peel adhesion capacity (‘‘12 ounces per square inch’’). Finally, it claimed the suggested minimum peel adhesion capacity in § 305.20(d) ‘‘is typically taken to be’’ a requirement despite the Rule’s language to the contrary. D. Transition to Electronic Labeling Three commenters discussed issues beyond whether the Rule’s specific label requirements should be less prescriptive. Specifically, AHAM, AHRI, and Goodman urged the Commission to consider ‘‘whether physical labels continue to provide value to consumers.’’ AHAM, whose members manufacture large household appliances, such as refrigerators and dishwashers, argued the ‘‘showroom focus’’ of the label is outdated and recommended a ‘‘transition away from physical labels’’ and a shift to a program providing label content solely online. In addition to helping manufacturers by significantly reducing compliance costs, AHAM argued such an approach would help consumers by reflecting evolving shopping patterns. According to AHAM, the majority of consumers research appliances online before entering a store or purchasing from a website. Moreover, energy efficiency is not a primary factor in consumers’ appliance purchases. Instead, according to AHAM, consumers focus on other factors, primarily purchase ‘‘cost.’’ Should the FTC retain requirements for a physical label, AHAM recommended more flexible requirements, but also urged the Commission to retain the existing label specifications as a safe harbor. According to AHAM, companies have invested time and resources in developing labels compliant with the existing requirements. A safe harbor would allow them to benefit from these investments and provide more certainty even if the Commission shifts to less detailed regulations. In AHAM’s view, conditions have changed even in the last decade, and VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 significant opportunities exist to permit ‘‘the electronic delivery of label information.’’ It noted the Commission has already laid the groundwork for such a shift by requiring manufacturers to provide electronic access to label content (e.g., § 305.9 (online availability of labels) and § 305.11 (submission of website address for online labels)). With these regulatory requirements in place, AHAM predicted a transition to electronic labels would involve a ‘‘small step’’ that would ‘‘dramatically reduce regulatory burden and cost’’ and eliminate the redundancy of requiring labels in both digital and paper format. AHAM asserted such a change would allow consumers ‘‘to access the content in the form and manner that best suits them’’ and allow them to ‘‘readily access the content wherever they may be researching their purchase.’’ It also suggested such a shift would allow retailers to access labels from the DOE Compliance Certification Management System (CCMS) and provide flexibility to ‘‘present the label content through printouts, electronic displays, or other means’’ suitable to consumer needs. In addition, an online format would allow manufacturers to more easily update labels and make corrections to online content. Finally, AHAM urged the Commission to coordinate such efforts with Canada to ‘‘align data elements, reporting and content.’’ AHRI and Goodman offered similar suggestions but focused their comments on specific aspects of heating and cooling equipment. AHRI noted the FTC has the discretion under EPCA (42 U.S.C. 6294(a)) to discontinue the use of EnergyGuide labels for central air conditioners and heat pumps if it determines the label does not assist consumers in making purchasing decisions. It agreed with AHAM that the FTC has ‘‘already taken the most dramatic step forward in the virtual revolution by requiring all manufacturers to have a pdf or link version of its FTC label available online.’’ Nevertheless, according to AHRI, the label’s small value for heating and cooling equipment renders its administrative burden ‘‘outsized.’’ However, as discussed below, AHRI did not recommend the ‘‘wholesale retirement of EnergyGuide labels,’’ but rather a ‘‘modernization’’ using QR codes and electronic labels to inform consumers without requiring ‘‘anachronistic prescriptive stickers.’’ In discussing the Rule’s current approach, AHRI argued the label on central air conditioners does not help consumers with their purchasing decisions because consumers generally do not buy these products ‘‘off-the- PO 00000 Frm 00026 Fmt 4700 Sfmt 4700 shelf’’ in retail stores and, for new home purchases, a builder (not the consumer) typically chooses equipment. In addition, contractors usually sell replacement products in the consumer’s home, often in urgent situations. In such transactions, contractors usually provide homeowners with information about their products using the ‘‘manufacturer’s literature, the AHRI Directory of Certified Product Performance, energy code requirements, incentive programs, and specific design features.’’ AHRI also argued, given the many different efficiency ratings of various outdoor-indoor unit combinations, ‘‘the actual value of the physical label is questionable at best.’’ Accordingly, not only are consumers unlikely to view the label prior to purchase, information provided directly by the contractor, including efficiency ratings for various unit combinations, is ‘‘significantly more accurate.’’ In lieu of the current labeling approach, AHRI recommended a modified, smaller label giving both electronic access to consumer information online (e.g., through a QR code), as well as regional standards compliance statements in ‘‘clear text.’’ In AHRI’s view, this approach would bring ‘‘the cost-benefit equation’’ of the labeling program ‘‘into balance.’’ It would also allow consumers to learn about the product’s efficiency, while dramatically reducing the burden associated with affixing labels to the equipment. V. Final Amendments The Commission issues the final amendments as proposed, with modifications discussed below. The amendments finalize the labeling requirements for portable air conditioners with a compliance date coinciding with the DOE standards. Additionally, the amendments contain the proposed changes to the efficiency descriptors on central air conditioner labels. The Commission, however, declines to propose additional wideranging changes (e.g., a transition to electronic labeling) to the EnergyGuide program at this time. Instead, the Commission may seek further comment on these issues, including the elimination of physical labels, in a future proceeding, where the Commission could gather the evidence necessary to fully consider significant amendments to the entire Rule. A. Portable Air Conditioner Labels As proposed in the NPRM and supported by commenters, the Commission adopts the proposed amendments containing new labeling E:\FR\FM\12FER1.SGM 12FER1 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations rules for portable air conditioners. As detailed in this and previous notices, these products are common in the marketplace, vary in energy efficiency, and use energy similar to, or greater than, currently labeled room air conditioners.21 Further, energy labels for these products are likely to assist consumers with purchasing decisions by allowing them to compare the energy costs of competing models and, consequently, save significantly on their electric bills. In addition, there is no evidence labeling is economically or technologically infeasible (i.e., that the costs of labeling substantially outweigh consumer benefits).22 After considering the comments, the Commission adjusts the compliance date to October 1, 2022.23 As some commenters noted, manufacturers have sufficient information to create labels because, pursuant to 42 U.S.C. 6293(c), they have been testing their products since 2016 using the DOE procedure to substantiate any energy-related claims (including unit capacity) for all their models. Therefore, the proposed 2025 compliance date appears to be overly long, particularly given the expected consumer benefits from labeling very low efficiency units prior to the DOE standards. The Commission, however, understands such packaging changes can take time, particularly where manufacturers must redesign their box labels to accommodate the EnergyGuide. Accordingly, the final amendments establish an October 2022 compliance date to provide companies ample time to incorporate the label into packaging while getting these labels into the market sooner than originally proposed. As the Commission has noted in the past, manufacturers generally deploy their lines for these types of products on an annual basis beginning in October of each year.24 The final compliance date, which coincides with the beginning of the model year, will allow manufacturers to incorporate the changes into their normal production schedules with minimal disruption. In addition, the Rule allows manufacturers to incorporate the label into the primary packaging display or affix them to label packaging (relieving them from redesigning boxes for models scheduled to be phased out before the 2025 standards).25 The final amendments also contain several other minor changes for the 21 80 FR at 67357–58. 80 FR at 67357 and 81 FR at 62683. manufacturers must include the new label on all units produced on or after that date. 24 83 FR 7593, 7594 (Feb. 22, 2018). 25 80 FR 67285, 67293 (Nov. 2, 2015). 22 See 23 Specifically, VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 portable air conditioner labels in response to comments.26 First, the final Rule requires manufacturers to determine model capacity using the DOE testing requirements specifically applicable to portable air conditioners. Second, the final amendments contain a small change to the language in § 305.18(a)(9) to clarify that the comparative information on the portable air conditioners applies to models of similar capacity only (without the various configurations applicable to room air conditioners).27 B. Energy Efficiency Descriptor Transition The final Rule adopts the proposed amendments to require manufacturers to update the efficiency descriptors for central air conditioners to conform to pending DOE changes. The change for all applicable references in Part 305 will become effective on January 1, 2023 to ensure consistency with the new DOE requirements. To aid the transition, manufacturers may begin using the new information prior to January 1, 2023 in a manner consistent with DOE guidance. Given the relatively small differences produced by the old and the new rating methods, the amendments do not require dual labels or any additional explanatory information. As indicated in its comments, AHRI is developing a communications campaign to help various entities with the transition to the new descriptors. In addition, as part of the scheduled 2022 update to comparability ranges for all product classes (§ 305.12), the Commission will update ranges in Appendix H and I, as well as applicable numbers and terms on the sample labels in Appendix L. C. Label Burdens and Electronic Labeling The final amendments do not make any broad changes to the Rule, although commenters recommended a wide array of potential changes. For instance, both AHRI and AHAM recommended a transition away from the current physical label to a system that relies on electronic web-based labels or energy 26 The final amendments also contain minor changes in section 305.27 (Paper Catalogs and websites) to include references to portable air conditioners. 27 As with the room air conditioner labels, the portable air conditioner labels include the operating assumptions behind the energy cost estimates. In addition, the amendments do not contain requirements related to the need for ducting. Manufacturers have an incentive to ensure consumers understand how to operate their products properly and should not need a mandate from the FTC to do so. However, should problems arise in the marketplace, the Commission may reconsider such requirements in the future. PO 00000 Frm 00027 Fmt 4700 Sfmt 4700 9279 data to aid consumer purchasing decisions. Although these proposals warrant further exploration, such broad issues would require additional rounds of notice and comment to consider and develop. Accordingly, the Commission may consider those proposals during a future proceeding to avoid delay in promulgating the present amendments for portable air conditioner labels and update to efficiency descriptors for central air conditioners. These broad industry suggestions are part of a larger inquiry about the Rule’s future, particularly as online information continues to become more prevalent and consumer shopping habits change. EPCA’s basic labeling provisions, developed in the 1970’s, are predicated upon an understanding that consumers routinely examine and purchase products in retail showrooms with little prior information. Further, to ensure any covered product displayed in a showroom bears a label, the Rule requires manufacturers to affix the label on every unit it produces, apparently based on the expectation that any unit may be displayed in a store. Over the years, however, buying patterns have changed. Consumers now frequently compare and purchase products without ever visiting a store. To help consumers in this evolving marketplace, the Commission’s revisions in the last several years reflect these new buying patterns. Specifically, the FTC previously updated the Rule with clear requirements that retailers display labels on websites (§ 305.27), for manufacturers to make their labels accessible online (§ 305.9), and for manufacturers to submit links to those labels as part of their routine data reports filed through DOE’s CCMS (§ 305.11). Further amendments may reduce burdens while ensuring energy information is available to consumers. For instance, the Commission could examine whether the Rule should continue to require manufacturers to affix a display-ready EnergyGuide label on every appliance typically displayed in showrooms. Indeed, only a tiny fraction of units shipped actually appear in retail store displays, while the costs of affixing display-ready labels to all units can impose significant burden. On the other hand, past commenters have noted that consumers use the label affixed to their old product in choosing a new one. In addition, the Commission could consider changes to the label content to help consumers better compare products and understand issues not currently communicated by the label, such as climate change impacts, Smart E:\FR\FM\12FER1.SGM 12FER1 9280 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations Grid technologies, and better ways to display comparative energy cost information. However, without further commenter input, we do not know how valuable this information would be for consumers, and how easy it would be to convey such information with existing DOE-generated data. These issues represent a few of many possible issues the Commission could consider in a future proceeding. In weighing any alternatives to the Rule, the Commission would need to ensure any new approach is consistent with its existing authority under EPCA. The Commission must also ensure consumers have access to clear, truthful energy information to assist them in their purchasing decisions while minimizing burdens placed on industry members. Fully evaluating these issues requires a more extensive proceeding focused from the outset at broad issues affecting the Rule in the 21st century. The Commission also declines to propose amendments to eliminate the current physical labels for central air conditioners and replace them with a smaller label with a QR code (or its equivalent) linking consumers to online content as AHRI and Goodman recommended. Such substantial changes to the labeling program would require further study and consideration in a future rulemaking proceeding. In the meantime, the updated EnergyGuide label for central air conditioners, which contains both EPCA-mandated energy efficiency ratings and regional standards information for installers, will continue to aid both consumers and industry members. Finally, the Commission may consider changes to the detailed label requirements (e.g., the changes to current label layout and content advocated by Goodman) in a future proceeding. Some of the Rule’s detailed requirements mentioned in the NPRM may have indeed become obsolete. At the same time, detailed, uniform requirements for consumer labels like the EnergyGuide provide benefits to consumers by presenting information in a format that allows consumers to easily compare products across multiple categories. Moreover, the FTC’s online, editable EnergyGuide templates already include all the label’s general information in the size, font, and location required by the Rule and thus largely free manufacturers from having to navigate the detailed format requirements. VI. Paperwork Reduction Act The current Rule contains recordkeeping, disclosure, testing, and reporting requirements that constitute VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 information collection requirements as defined by the Paperwork Reduction Act (‘‘PRA’’).28 Under the PRA, an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement, unless it displays a currently valid Office of Management and Budget (‘‘OMB’’) control number. OMB has approved the Rule’s existing information collection requirements through December 31, 2022 (OMB Control No. 3084–0069). The amendments include new labeling requirements for portable air conditioners that constitute information collections under the PRA. The Commission submitted these proposed information collections for review by OMB in conjunction with its publication of the NPRM. The Commission received no comments pertaining to its PRA estimates. OMB has approved these amended information collection requirements under the existing control number for the Rule (3084–0069). Burden estimates below are based on Census data, DOE figures and estimates, public comments, general knowledge of manufacturing practices, and trade association advice and figures. The FTC estimates there are about 150 basic models of portable air conditioners (i.e., units with essentially identical physical and electrical characteristics). In addition, FTC staff estimates there are 45 portable air conditioner manufacturers and 1,500,000 portable air conditioner units shipped each year in the U.S. Reporting: The Rule requires manufacturers of covered products to annually submit a report for each model in current production containing the same information that must be submitted to the Department of Energy pursuant to 10 CFR part 429. In lieu of submitting the required information to the Commission, manufacturers may submit such information to DOE directly via the agency’s Compliance Certification Management System, available at https://regulations.doe.gov/ ccms, as provided by 10 CFR 429.12. Because manufacturers are already required to submit these reports to DOE, FTC staff estimates any additional burden associated with providing the information to the FTC is minimal. FTC staff estimates the average reporting burden for manufacturers of portable air conditioners will be approximately 15 hours per manufacturer. Based on this estimate, the annual reporting burden for manufacturers of portable air conditioners is 675 hours (15 hours × 45 28 44 PO 00000 U.S.C. 3501 et seq.; see also 5 CFR 1320.3(c). Frm 00028 Fmt 4700 Sfmt 4700 manufacturers).29 Staff estimates that information processing staff, at an hourly rate of $16.24,30 will typically perform the required tasks, for an estimated annual labor cost of $10,962. Labeling: The amendments require that manufacturers label portable air conditioners. The burden imposed by this requirement consists of the time needed to draft labels and incorporate them onto package designs. Since EPCA and the Rule specify the content and format for the required labels and FTC staff provide online label templates, manufacturers need only input the energy consumption figures and other product-specific information derived from testing. FTC staff estimates the time to incorporate the required information into labels and label covered products is five hours per basic model. Accordingly, staff estimates that the approximate annual burden involved in labeling covered products is 750 hours [150 basic models × 5 hours]. Staff estimates that information processing staff, at an hourly rate of $16.24,31 will typically perform the required tasks, for an estimated annual labor cost of $12,180. Testing: Manufacturers of portable air conditioners must test each basic model they produce to determine energy usage, but the majority of tests conducted are required by DOE rules. As a result, it is likely only a small portion of the tests conducted are attributable to the Rule’s requirements. In addition, manufacturers need not subject each basic model to testing annually; they must retest only if the product design changes in such a way as to affect energy consumption. FTC staff estimates manufacturers will require approximately 36 hours for testing of portable air conditioners,32 and that 25% of all basic models are tested annually due to the Rule’s requirements. Accordingly, the estimated annual testing burden for portable air 29 In earlier comments, AHAM (#681–00012) estimated the data entry involved in filing reports with the FTC is not particularly burdensome, but estimated that other tasks involved in reporting (such as performing the required testing and gathering information) could take as long as 40 hours per manufacturer. As noted above, however, testing and reporting are required and accounted for in DOE regulations. As a result, staff estimates that the primary burdens associated with reporting are due to DOE requirements. 30 These labor cost estimates are derived from the Bureau of Labor Statistics figures in ‘‘Table 1.’’ National employment and wage data from the Occupational Employment Statistics survey by occupation, May 2018,’’ available at: https:// www.bls.gov/news.release/ocwage.t01.htm. 31 Id. 32 AHAM estimated manufacturers would require 32 hours per model for testing and up to 4 hours for preparing the test data. AHAM Comment, #681– 0016. E:\FR\FM\12FER1.SGM 12FER1 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations conditioners is 1,368 hours ((150 basic models × 25%) × 36 hours). Staff estimates that engineering technicians, at an hourly rate of $28.37,33 will typically perform the required tasks, for an estimated annual labor cost of $38,300. Recordkeeping: The Rule also requires manufacturers of covered products to retain records of test data generated in performing the tests to derive information included on labels. See 16 CFR 305.21. The FTC estimates the annual recordkeeping burden for manufacturers of portable air conditioners will be approximately one minute per basic model to store relevant data. Accordingly, the estimated annual recordkeeping burden would be approximately 3 hours (150 basic models × one minute). Staff estimates that information processing staff, at an hourly rate of $16.24,34 will typically perform the required tasks, for an estimated annual labor cost of $50. Online and Retail Catalog Disclosures: Staff estimates there are approximately 400 sellers of products covered under the Rule who are subject to the Rule’s catalog disclosure requirements. Staff has previously estimated covered online and catalog sellers spend approximately 17 hours per year to incorporate relevant product data for products that are currently covered by the Rule. Staff estimates the portable air conditioner requirements will add one additional hour per year in incremental burden per seller. Staff estimates these additions will result in an incremental burden of 400 hours (400 sellers × one hour annually). Staff estimates that information processing staff, at an hourly rate of $16.24,35 will typically perform the required tasks, for an estimated incremental annual labor cost of $6,496. Estimated annual non-labor cost burden: Staff anticipates that manufacturers are not likely to require any significant capital costs to comply with the amendments. VII. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 through 612, requires the Commission provide an Initial Regulatory Flexibility Analysis (IRFA) with a proposed rule and a Final Regulatory Flexibility Analysis (FRFA), with the final rule, if any, 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. 33 See supra note 20. 34 Id. 35 Id. VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 The Commission does not anticipate that the amendments 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. The Commission estimates that the amendments will apply to 300 online and paper catalog sellers of covered products and about 45 portable air conditioner manufacturers. The Commission expects that approximately 150 of these various entities qualify as small businesses. Although the Commission has certified under the RFA that the amendments would not have a significant impact on a substantial number of small entities, the Commission has determined, nonetheless, that it is appropriate to publish an FRFA in order to explain the impact of the amendments on small entities as follows: A. Description of the Reasons That Action by the Agency Is Being Taken Based upon the record, including public comments, the Commission is amending the Rule to expand product coverage and make additional improvements to the Rule to help consumers in their purchasing decisions for portable air conditioners. B. Issues Raised by Comments in Response to the IRFA The Commission did not receive any comments specifically related to the impact of the final amendments on small businesses. In addition, the Chief Counsel for Advocacy of the Small Business Administration did not submit comments. C. Estimate of Number of Small Entities to Which the Amendments Will Apply Under the Small Business Size Standards issued by the Small Business Administration, appliance manufacturers qualify as small businesses if they have fewer than 500 employees. Catalog sellers qualify as small businesses if their sales are less than $8.0 million annually. The Commission estimates that there are approximately 150 entities subject to the final amendments that qualify as small businesses. The Commission estimates that the amendments will not have a significant impact on small businesses. D. Projected Reporting, Recordkeeping, and Other Compliance Requirements The amendments will slightly increase reporting, recordkeeping, and disclosure requirements associated with the Commission’s labeling rules as PO 00000 Frm 00029 Fmt 4700 Sfmt 4700 9281 discussed above. The amendments likely will increase compliance burdens by extending the labeling requirements to portable air conditioners. The Commission anticipates that the label design change will be implemented by graphic designers. E. Description of Steps Taken To Minimize Significant Economic Impact, if Any, on Small Entities, Including Alternatives The Commission sought comment and information on the need, if any, for alternative compliance methods that would reduce the economic impact of the Rule on such small entities. To allow time for industry to come into compliance with the revised Rule and minimize the impact of the amendments on covered entities, the Commission has given manufacturers until October 1, 2022 to implement portable air conditioner labels. The Commission may consider other proposals related to electronic labeling and additional issues in a future proceeding. VIII. Other Matters Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Office of Information and Regulatory Affairs designated this rule as not a ‘‘major rule,’’ as defined by 5 U.S.C. 804(2). Final Rule Language List of Subjects in 16 CFR Part 305 Advertising, Energy conservation, Household appliances, Labeling, Reporting and recordkeeping requirements. For the reasons stated above, the Commission amends part 305 of title 16 of the Code of Federal Regulations as follows: PART 305—ENERGY AND WATER USE LABELING FOR CONSUMER PRODUCTS UNDER THE ENERGY POLICY AND CONSERVATION ACT (‘‘ENERGY LABELING RULE’’) 1. The authority citation for part 305 continues to read as follows: ■ Authority: 42 U.S.C. 6294. 2. In part 305, effective January 1, 2023: ■ a. Revise all references to ‘‘seasonal energy efficiency ratio (SEER)’’ to read ‘‘seasonal energy efficiency ratio 2 (SEER2)’’; ■ b. Revise all references to ‘‘SEER’’ to read ‘‘SEER2’’; ■ c. Revise all references to ‘‘heating seasonal performance factor’’ to read ‘‘heating seasonal performance factor 2’’; ■ E:\FR\FM\12FER1.SGM 12FER1 9282 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations d. Revise all references to ‘‘HSPF’’ to read ‘‘HSPF2’’; ■ e. Revise all references to ‘‘Energy Efficiency Ratio’’ to read ‘‘Energy Efficiency Ratio 2’’; and ■ f. Revise all references to ‘‘EER’’ to read ‘‘EER2.’’ ■ 3. In § 305.2, effective October 1, 2022, redesignate paragraph (l)(23) as (l)(24) and add new paragraph (l)(23) to read as follows: ■ § 305.2 Definitions. * * * * * (l) * * * (23) Portable air conditioners. * * * * * ■ 4. In § 305.2, effective January 1, 2023, revise paragraph (p) to read as follows: § 305.2 Definitions. * * * * * (p) Energy efficiency rating means the following product-specific energy usage descriptors: Annual fuel utilization efficiency (AFUE) for furnaces; combined energy efficiency ratio (CEER) for room and portable air conditioners; seasonal energy efficiency ratio 2 (SEER2) for the cooling function of central air conditioners and heat pumps; heating seasonal performance factor 2 (HSPF2) 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. * * * * * ■ 5. In § 305.3, effective October 1, 2022, add paragraph (j) to read as follows: § 305.3 Description of appliances and consumer electronics. * * * * * (j) 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. ■ 6. In § 305.7, effective October 1, 2022, add paragraph (e)(3) to read as follows: § 305.7 * Prohibited acts. * * (e) * * * VerDate Sep<11>2014 * * 16:41 Feb 11, 2021 Jkt 253001 (3) The requirements of this part shall not apply to any portable air conditioner produced before October 1, 2022. * * * * * ■ 7. In § 305.10, effective October 1, 2022, revise paragraph (f) to read as follows: § 305.10 Determinations of capacity. * * * * * (f) Room air conditioners and portable air conditioners. The capacity for room air conditioners shall be the cooling capacity in Btu 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 energy efficiency value 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. The capacity for portable air conditioners shall be determined according to appendix CC to 10 CFR part 430, subpart B, with rounding determined in accordance with 10 CFR part 430. * * * * * ■ 8. In § 305.11, effective October 1, 2022, revise paragraph (b)(1) to read as follows: § 305.11 Submission of data. * * * * * (b)(1) All data required by paragraph (a) of this section except serial numbers shall be submitted to the Commission annually, on or before the following dates: TABLE 1 TO § 305.11(b)(1) Deadline for data submission Product category Refrigerators ............................. Refrigerators-freezers ............... Freezers .................................... Central air conditioners ............ Heat pumps .............................. Dishwashers ............................. Water heaters ........................... Room air conditioners .............. Portable air conditioners ........... Furnaces ................................... Pool heaters ............................. Clothes washers ....................... Fluorescent lamp ballasts ......... Showerheads ............................ Faucets ..................................... Water closets ............................ Ceiling fans ............................... Urinals ....................................... Metal halide lamp fixtures ........ General service fluorescent lamps ..................................... PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 Aug. Aug. Aug. July July June May July Feb. May May Oct. Mar. Mar. Mar. Mar. Mar. Mar. Sept. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. 1. Mar. 1. TABLE 1 TO § 305.11(b)(1)— Continued Product category Medium base compact fluorescent lamps ............................. General service incandescent lamps ..................................... Televisions ................................ Deadline for data submission Mar. 1. Mar. 1. June 1. * * * * * 9. In § 305.13, effective October 1, 2022, revise the section heading and paragraph (e)(3) to read as follows: ■ § 305.13 Layout, format, and placement of labels for refrigerators, refrigeratorfreezers, freezers, dishwashers, clothes washers, water heaters, room air conditioners, portable air conditioners, and pool heaters. * * * * * (e) * * * (3) Package labels for certain products. Labels for electric instantaneous water heaters shall be printed on or affixed to the product’s packaging in a conspicuous location. Labels for room air conditioners produced on or after October 1, 2019 and portable air conditioners, shall be printed on or affixed to the principal display panel of the product’s packaging. The labels for electric instantaneous water heaters, room air conditioners, and portable air conditioners shall be black type and graphics on a process yellow or other neutral contrasting background. * * * * * ■ 10. In § 305.18, effective October 1, 2022, revise the section heading and paragraph (a)(9) to read as follows: § 305.18 Label content for room air conditioners and portable air conditioners. (a) * * * (9) Labels must contain a statement as illustrated in the prototype labels in appendix L of this part and specified as follows (fill in the blanks with the appropriate model type, year, energy type, and energy cost figure): Your costs will depend on your utility rates and use. Cost range based only on models [of similar capacity; of similar capacity without reverse cycle and with louvered sides; of similar capacity without reverse cycle and without louvered sides; with reverse cycle and with louvered sides; or with reverse cycle and without louvered sides]. Estimated annual energy cost is based on a national average electricity cost of ll cents per kWh and a seasonal use E:\FR\FM\12FER1.SGM 12FER1 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations of 8 hours use per day over a 3-month period. For more information, visit www.ftc.gov/energy. * * * * * ■ 11. In § 305.20, effective January 1, 2023, revise paragraphs (g)(11) through (14) to read as follows: § 305.20 Labeling for central air conditioners, heat pumps, and furnaces. * * * * * (g) * * * (11) For any single-package air conditioner with a minimum Energy Efficiency Ratio 2 (EER2) of at least 10.6, any split system central air conditioner with a rated cooling capacity of at least 45,000 Btu/h and minimum efficiency ratings of at least 13.8 SEER2 and 11.2 EER2 or at least 15.2 SEER2 and 9.8 EER2, and any split-system central air conditioners with a rated cooling capacity less than 45,000 Btu/h and minimum efficiency ratings of at least 14.3 SEER2 and 11.7 EER2 or at least 15.2 SEER2 and 9.8 EER2, the label must contain the following regional standards information: (i) A statement that reads: Notice Federal law allows this unit to be installed in all U.S. states and territories. (ii) For split systems, a statement that reads: Energy Efficiency Ratio 2 (EER2): The installed system’s minimum EER2 is ll. (iii) For single-package air conditioners, a statement that reads: Energy Efficiency Ratio 2 (EER2): This model’s EER2 is [ll]. (12) For any split system central air conditioner with a rated cooling capacity of at least 45,000 Btu/h and minimum efficiency ratings of at least 13.8 SEER2 but lower than 11.2 EER2 or at least 15.2 SEER2 but lower than 9.8 EER2, and any split-system central air conditioners with a rated cooling capacity less than 45,000 Btu/h and minimum efficiency ratings of at least 14.3 SEER2 but lower than 11.7 EER2 or at least 15.2 SEER2 but lower than 9.8 EER2, the label must contain the following regional standards information: (i) A statement that reads: Notice Federal law allows this unit to be installed only in: AK, AL, AR, CO, CT, DC, DE, FL, GA, HI, ID, IL, IA, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WV, WI, WY and U.S. territories. Federal law prohibits installation of this unit in other states. VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 (ii) A map appropriate for the model and accompanying text as illustrated in the sample label 7 in appendix L of this part. (iii) A statement that reads: Energy Efficiency Ratio 2 (EER2): The installed system’s minimum EER2 is ll. (13) For any split system central air conditioner with a rated cooling capacity of at least 45,000 Btu/h and a minimum rated efficiency rating less than 13.8 SEER2, and any split-system central air conditioners with a rated cooling capacity less than 45,000 Btu/h and minimum efficiency ratings of less than 14.3 SEER2, the label must contain the following regional standards information: (i) A statement that reads: Notice Federal law allows this unit to be installed only in: AK, CO, CT, ID, IL, IA, IN, KS, MA, ME, MI, MN, MO, MT, ND, NE, NH, NJ, NY, OH, OR, PA, RI, SD, UT, VT, WA, WV, WI, and WY. Federal law prohibits installation of this unit in other states. (ii) A map appropriate for the model and accompanying text as illustrated in the sample label 7 in appendix L of this part. (iii) A statement that reads: Energy Efficiency Ratio 2 (EER2): The installed system’s minimum EER2 is ll. (14) For any single-package air conditioner with a minimum EER2 below 10.6, the label must contain the following regional standards information: (i) A statement that reads: Notice Federal law allows this unit to be installed only in: AK, AL, AR, CO, CT, DC, DE, FL, GA, HI, ID, IL, IA, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WV, WI, WY and U.S. territories. Federal law prohibits installation of this unit in other states. (ii) A map appropriate for the model and accompanying text as illustrated in the sample label 7 in appendix L of this part. * * * * * ■ 12. In § 305.27, effective October 1, 2022, revise the section heading and paragraphs (a)(1)(i), (b)(1)(i) introductory text, and (b)(1)(i)(B) to read as follows: § 305.27 Paper catalogs and websites. All websites advertising covered refrigerators, refrigerator-freezers, freezers, room air conditioners, portable air conditioners, clothes washers, dishwashers, ceiling fans, pool heaters, central air conditioners, heat pumps, furnaces, general service lamps, specialty consumer lamps (for products offered for sale after May 2, 2018), and televisions must display, for each model, a recognizable and legible image of the label required for that product by this part. The website may hyperlink to the image of the label using the sample EnergyGuide and Lighting Facts icons depicted in appendix L of this part. The website must hyperlink the image in a way that does not require consumers to save the hyperlinked image in order to view it. * * * * * (b) * * * (1) * * * (i) Products required to bear EnergyGuide or Lighting Facts labels. All paper catalogs advertising covered products required by this part to bear EnergyGuide or Lighting Facts labels illustrated in appendix L of this part (refrigerators, refrigerator-freezers, freezers, room air conditioners, portable air conditioners, clothes washers, dishwashers, ceiling fans, pool heaters, central air conditioners, heat pumps, furnaces, general service fluorescent lamps, general service lamps, and televisions) must either display an image of the full label prepared in accordance with this part, or make a text disclosure as follows: * * * * * (B) Room air conditioners, portable air conditioners, and water heaters. The capacity of the model determined in accordance with this part, the estimated annual operating cost determined in accordance with this part, and a disclosure stating ‘‘Your operating costs will depend on your utility rates and use. The estimated operating cost is based on a [electricity, natural gas, propane, or oil] cost of [$ llper kWh, therm, or gallon]. For more information, visit www.ftc.gov/energy.’’ * * * * * 13. Effective October 1, 2022, redesignate appendix E to part 305 as appendix E1 and add appendix E2 to part 305. The addition reads as follows: ■ (a) * * * (1) * * * (i) Products required to bear EnergyGuide or Lighting Facts labels. PO 00000 Frm 00031 Fmt 4700 Sfmt 4700 9283 E:\FR\FM\12FER1.SGM 12FER1 9284 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations Appendix E2 to Part 305—Portable Air Conditioners RANGE INFORMATION Seasonally adjusted cooling capacity range (Btu/h) Range of estimated annual energy costs (dollars/year) Low Less than 6,000 Btu .................... 6,000 to 7,999 Btu ...................... 8,000 or greater Btu .................... High $48 87 104 $98 120 135 14. Effective October 1, 2022, revise appendix K2 to part 305 to read as follows: ■ Appendix K2 to Part 305— Representative Average Unit Energy Costs for Dishwasher, Room Air Conditioner, Portable Air Conditioner Labels §§ 305.16, 305.18 and 305.27 for dishwashers, room air conditioners, and portable air conditioners. This Table is based on information published by the U.S. Department of Energy in 2017. This Table contains the representative unit energy costs that must be utilized to calculate estimated annual energy cost disclosures required under As required by DOE test procedure Type of energy In commonly used terms Electricity ........................................................................... Natural Gas ....................................................................... No. 2 Heating Oil .............................................................. Propane ............................................................................ Kerosene ........................................................................... ¢13.00/kWh1 .................................................................... $1.05/therm 2 or $10.86/MCF 3 ........................................ $2.59/gallon 4 ................................................................... $1.53/gallon 5 ................................................................... $3.01/gallon 6 ................................................................... $.1300/kWh. $0.00001052/Btu. $0.00001883/Btu. $0.00001672/Btu. $0.00002232/Btu. 1 kWh stands for kilowatt hour. kWh = 3,412 Btu (British thermal units). = 100,000 Btu. 3 MCF stands for 1,000 cubic feet. For the purposes of this table, one cubic foot of natural gas has an energy equivalence of 1,032 Btu. 4 For the purposes of this table, one gallon of No. 2 heating oil has an energy equivalence of 137,561 Btu. 5 For the purposes of this table, one gallon of liquid propane has an energy equivalence of 91,333 Btu. 6 For the purposes of this table, one gallon of kerosene has an energy equivalence of 135,000 Btu. 2 therm By direction of the Commission, Commissioner Wilson dissenting. April J. Tabor, Acting Secretary. Editorial Note: The Office of the Federal Register received this document on December 23, 2020. Note: The following will not appear in the Code of Federal Regulations. Dissenting Statement of Commissioner Christine S. Wilson Today’s Commission action finalizes required changes to the Energy Labeling Rule, but fails to remove prescriptive aspects of the Rule that I believe are unnecessary and that could hinder important aspects of competition. For the reasons described below, I dissent. The current amendments were proposed in March 2020. At that time, and at my urging,1 the Commission also sought comment on the more 1 See Dissenting Statement of Commissioner Christine S. Wilson on the Notice of Proposed Rulemaking: Energy Labeling Rule (Dec. 10, 2018) (expressing my view that the Commission should seek comment on the prescriptive labeling requirements), https://www.ftc.gov/publicstatements/2018/12/dissenting-statementcommissioner-christine-s-wilson-notice-proposed; See Dissenting Statement of Commissioner Christine S. Wilson on the Notice of Proposed Rulemaking: Energy Labeling Rule (Oct. 22, 2019) (urging the Commission to seek comment on the labeling requirements), https://www.ftc.gov/system/ files/documents/public_statements/1551786/ r611004_wilson_dissent_energy_labeling_rule.pdf. VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 prescriptive aspects of the Rule.2 I was pleased to receive many interesting and thoughtful comments submitted by stakeholders. For example, industry members explained that changes in the market and consumer behavior indicate that affixed labels with detailed information may have ceased to provide benefits to consumers.3 Industry members also proposed providing the labeling information online or through QR codes at brick-and-mortar locations.4 Making this information easier to access in the digital era could foster greater competition among appliance manufacturers and more informed purchasing decisions by consumers. Rather than act on these comments or proposals, though, the Commission has chosen to finalize only the air conditioning proposals necessary to conform to Department of Energy changes. The Federal Register Notice approved by a majority of the 2 See Concurring Statement of Commissioner Christine S. Wilson on the Notice of Proposed Rulemaking: Energy Labeling Rule (Mar. 20, 2020), https://www.ftc.gov/system/files/documents/ public_statements/1569815/r611004_wilson_ statement_energy_labeling.pdf. 3 See, e.g., Air-Conditioning, Heating and Refrigeration Institute (AHRI) Comment (#33–09), available at: https://www.regulations.gov/ document?D=FTC-2020-0033-0009; Association of Home Appliance Manufacturers (AHAM) Comment (#33–04), available at: https://www.regulations.gov/ document?D=FTC-2020-0033-0004; Goodman Manufacturing Comment (#33–08), available at: https://www.regulations.gov/document?D=FTC2020-0033-0008. 4 Id. PO 00000 Frm 00032 Fmt 4700 Sfmt 4700 Commission explains that revising other aspects of the labeling obligations imposed by the Rule will require further exploration. I see no reason for the Commission to forego that exploration now. We can both finalize these changes and ask stakeholders for additional input on how to improve the rest of the Rule. The FTC promulgated the Energy Labeling Rule in the 1970s, an era when the agency was engaged in prolific rulemaking.5 As I have noted previously,6 no area of commerce was too straightforward or mundane to escape the Commission’s notice: • The Rule on Misbranding and Deception as to Leather Content of 5 See, e.g., Timothy J. Muris, Paper: Will the FTC’s Success Continue?, George Mason Law & Economics No. 18 (Sept. 24, 2018) (discussing the successes and failures of the FTC’s enforcement efforts including the aggressive rulemaking activities in the 1970s), available at: https:// papers.ssrn.com/sol3/papers.cfm?abstract_ id=3254294; Timothy J. Muris, Rules Without Reason, AEI J. on Gov’t and Society (Sept/Oct. 1982) (describing failed FTC rulemaking proceedings), available at: https://www.cato.org/ sites/cato.org/files/serials/files/regulation/1982/9/ v6n5-4.pdf; Teresa Schwartz, Regulating Unfair Practices Under The FTC Act: The Need For a Legal Standard of Unfairness, 11 Akron Law Rev. 1 (1978) (explaining that the judicial reversals of FTC regulations resulted from a failure to establish an adequate legal basis for the regulations), available at: https://ideaexchange.uakron.edu/ akronlawreview/vol11/iss1/1/. 6 See Concurring Statement of Commissioner Christine S. Wilson, Amplifier Rule (Dec. 17, 2020), https://www.ftc.gov/system/files/documents/ public_statements/1585038/csw_amplifier_rule_ stmt_11192020.pdf. E:\FR\FM\12FER1.SGM 12FER1 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations Waist Belts prescribed unlawful practices in connection with the sale of belts when not offered for sale as part of a garment. Among other things, the Rule prohibited the sale of belts that looked like leather, but that were made of split, ground, pulverized, or shredded leather or non-leather material, absent disclosures.7 • The Guides for Shoe Content Labeling and Advertising required leather, split leather, and concealed insoles ‘‘containing . . . non-leather material which are concealed from view, but which also contain other visible parts of leather,’’ to bear a label clearly disclosing the presence of the non-leather innersole.8 • The Hosiery Guides established that the term ‘‘long staple cotton’’ used to describe hosiery ‘‘is understood to mean cotton fiber which is not less than 1 1⁄8″ in length of staple’’ and that the term ‘‘lisle’’ represents hosiery ‘‘made of yarn composed of two or more ply of combed long staple cotton fiber.’’ 9 A federal statute mandated that the FTC promulgate the Energy Labeling Rule.10 The FTC must implement the will of Congress, but it need not adopt a prescriptive approach while doing so. Here, the FTC itself has chosen to specify the trim size dimensions for labels, including the precise width (between 51⁄4″ to 5 1⁄2″) and length (between 7 3⁄8″ and 7 5⁄8″); the number of picas for the copy set (between 27 and 29); the type style (Arial) and setting; the weight of the paper stock on which the labels are printed (not less than 58 pounds per 500 sheets or equivalent); and a suggested minimum peel adhesive capacity of 12 ounces per square inch.11 I urged the Commission take the opportunity to review these detailed labeling requirements in 2018, and again in 2019, when the Commission sought comment and revised other sections of this Rule.12 7 16 CFR 405.4, https://www.ftc.gov/sites/default/ files/documents/federal_register_notices/traderegulation-rule-misbranding-and-deception-leathercontent-waist-belts-16-cfr-part-405/ 960522traderegulationruleonmisbranding.pdf. 8 16 CFR 231.3, https://www.ftc.gov/sites/default/ files/documents/federal_register_notices/guidesluggage-and-related-products-industry-guides-shoecontent-labeling-and-advertising-and-guides/ 950918luggageandrelatedproducts.pdf. 9 16 CFR 22.3, https://www.ftc.gov/sites/default/ files/documents/federal_register_notices/guideshosiery-industry-16-cfr-part-22/ 960202hosieryindustry.pdf. 10 Energy Policy and Conservation Act, 42 U.S.C. 6295. 11 See 16 CFR §§ 305.13 and 305.20 12 Dissenting Statement of Commissioner Christine S. Wilson on the Notice of Proposed Rulemaking: Energy Labeling Rule (Dec. 10, 2018), https://www.ftc.gov/public-statements/2018/12/ dissenting-statement-commissioner-christine-s- VerDate Sep<11>2014 16:41 Feb 11, 2021 Jkt 253001 The Commission last conducted a full review of the Energy Labeling Rule in 2015; under our 10-year regulatory schedule, the next review is scheduled for 2025. However, since 2015, the Commission has sought comment on provisions of this Rule at least three times, including the current proceeding, and has made numerous amendments.13 This piecemeal approach has clarified the Rule’s requirements—and I appreciate FTC staff’s efforts to keep this Rule clear and current—but the Commission can and should do more. Specifically, the Commission should conduct a full review of the Rule to consider removing all dated and prescriptive provisions, and to consider the recent comments suggesting changes. Nothing prevents the Commission from conducting this review now—we do not have to wait until the 10-year anniversary. I urge the Commission to act on these comments, eliminate the more prescriptive aspects of the Rule, and maximize the positive impact of this Rule for consumers. If we are statutorily mandated to maintain this Rule, we should endeavor to make it beneficial for consumers and competition. [FR Doc. 2020–28880 Filed 2–11–21; 8:45 am] BILLING CODE 6750–01–P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9933] RIN 1545–BO79 Unrelated Business Taxable Income Separately Computed for Each Trade or Business; Correction Internal Revenue Service (IRS), Treasury. ACTION: Final rule; correction. AGENCY: This document contains corrections to the final regulations (Treasury Decision 9933) that published in the Federal Register on Wednesday, SUMMARY: wilson-notice-proposed; Dissenting Statement of Commissioner Christine S. Wilson on the Notice of Proposed Rulemaking: Energy Labeling Rule (Oct. 22, 2019), https://www.ftc.gov/system/files/ documents/public_statements/1551786/r611004_ wilson_dissent_energy_labeling_rule.pdf. 13 See 81 FR 62861 (Sept. 12, 2016) (seeking comment on proposed amendments regarding portable air conditioners, ceiling fans, and electric water heaters); 84 FR 9261 (Mar. 14, 2019) (proposing amendments to organize the Rule’s product descriptions); 85 FR 20218 (Apr. 10, 2020) (seeking comment on proposed amendments regarding central and portable air conditioners). PO 00000 Frm 00033 Fmt 4700 Sfmt 4700 9285 December 2, 2020. The final regulations provide guidance on how an exempt organization subject to the unrelated business income tax determines if it has more than one unrelated trade or business, and, if so, how the exempt organization calculates unrelated business taxable income. DATES: These corrections are effective on February 12, 2021 and are applicable on December 2, 2020. FOR FURTHER INFORMATION CONTACT: Jonathan A. Carter at (202) 317–5800 or Stephanie N. Robbins at (202) 317–4086 (not toll-free numbers). SUPPLEMENTARY INFORMATION: Background The final regulations (TD 9933) that are the subject of this correction are issued under section 512 of the Internal Revenue Code. Need for Correction As published the final regulations (TD 9933) contain errors that needs to be corrected. Correction of Publication Accordingly, the final regulations (TD 9933), that are the subject of FR Doc. 2020–25954, published on December 2, 2020 (85 FR 77952), are corrected to read as follows: 1. On page 77952, the third column, the seventeenth line from the top of the second full paragraph, the language ‘‘balances legislative’’ is corrected to read ‘‘balances the legislative’’. 2. On page 77954, the third column, the first line of the first full paragraph, the language ‘‘Because the NAICS’’ is corrected to read ‘‘Because NAICS’’. 3. On page 77961, the second column, the third line from the bottom of the first partial paragraph, the language ‘‘rule’’ is corrected to read ‘‘test’’. 4. On page 77964, the second column, removing the language ‘‘of the supported organization’’ from the third and fourth lines from the bottom of the last full paragraph. 5. On page 77964, the third column, the second line from the bottom of the last partial paragraph, the language ‘‘Accordingly, the’’ is corrected to read ‘‘The’’. 6. On page 77965, the second column, the thirteenth line from the top of the first partial paragraph, the language ‘‘owns interest’’ is corrected to read ‘‘owns the interest’’. 7. On page 77965, the third column, the third line from the bottom of the first full paragraph, the language ‘‘E.O.;’’ is corrected to read ‘‘exempt organization’’. 8. On page 77967, the second column, the fifth line from the bottom of the first E:\FR\FM\12FER1.SGM 12FER1

Agencies

[Federal Register Volume 86, Number 28 (Friday, February 12, 2021)]
[Rules and Regulations]
[Pages 9274-9285]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28880]


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FEDERAL TRADE COMMISSION

16 CFR Part 305

RIN 3084-AB15


Energy Labeling Rule

AGENCY: Federal Trade Commission.

ACTION: Final rule.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') 
amends the Energy Labeling Rule (``Rule'') to require EnergyGuide 
labels for portable air conditioners and issue amendments to central 
air conditioner labels to conform with Department of Energy (``DOE'') 
changes to efficiency descriptors.

DATES: Amendatory instructions 1 (authority), 3 (for Sec.  305.2), 5 
(for Sec.  305.3), 6 (for Sec.  305.7), 7 (for Sec.  305.10), 8 (for 
Sec.  305.11), 9 (for Sec.  305.13), 10 (for Sec.  305.18), 12 (for 
Sec.  305.27), 13 (for appendix E), and 14 (for appendix K2) are 
effective on October 1, 2022, and amendatory instructions 2 (for part 
305), 4 (for Sec.  305.2), and 11 (for Sec.  305.20) are effective on 
January 1, 2023.

ADDRESSES: Copies of this document are available on the Commission's 
website, www.ftc.gov.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome (202-326-2889), 
Attorney, Bureau of Consumer Protection, Federal Trade Commission, Room 
CC-9528, 600 Pennsylvania Avenue NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

[[Page 9275]]

I. Background on the Energy Labeling Rule

    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 the 
energy usage and costs of competing models. It also contains labeling 
requirements for refrigerators, refrigerator-freezers, freezers, 
dishwashers, water heaters, clothes washers, room air conditioners, 
furnaces, central air conditioners, heat pumps, plumbing products, 
lighting products, ceiling fans, and televisions.
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    \1\ 44 FR 66466 (Nov. 19, 1979).
    \2\ 42 U.S.C. 6294. EPCA also requires the Department of Energy 
(``DOE'') to develop test procedures that measure how much energy 
appliances use, and to determine the representative average cost a 
consumer pays for different types of energy.
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    The Rule requires manufacturers to attach yellow EnergyGuide labels 
to many of the covered products and prohibits retailers from removing 
these labels or rendering them illegible. In addition, it directs 
sellers, including retailers, to post label information on websites 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. The Rule requires marketers 
to use national average costs for applicable energy sources (e.g., 
electricity, natural gas, oil) as calculated by DOE in all cost 
calculations. Under the Rule, the Commission periodically updates 
comparability range and annual energy cost information based on 
manufacturer data submitted pursuant to the Rule's reporting 
requirements.\3\
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    \3\ 16 CFR 305.10.
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II. Notice of Proposed Rulemaking

    In an April 10, 2020 Notice of Proposed Rulemaking (NPRM) (85 FR 
20218), the Commission sought comments on EnergyGuide labels for 
portable air conditioners, updates to efficiency descriptors for 
central air conditioner labels, and the need for changes to the current 
label layout and format requirements.

A. Proposed EnergyGuide Labels for Portable Air Conditioners

    The NPRM proposed establishing EnergyGuide labeling for portable 
air conditioners. Under EPCA, the Commission may require labeling for 
DOE-designated covered products if it determines labeling will ``assist 
purchasers in making purchasing decisions'' and will be ``economically 
and technologically feasible.'' 42 U.S.C. 6294(a)(3). Prior to the 
NPRM, the Commission sought comment on labeling requirements for 
portable air conditioners in several previous Federal Register notices. 
In those publications, the Commission discussed the benefits and 
burdens of such labels, as well as their format and content, which 
would largely match the labels already required for room air 
conditioners.\4\ Over the course of this proceeding, the Commission 
found, in accordance with its EPCA authority, labeling for this product 
category is likely to be economically and technologically feasible and 
assist consumers in their purchasing decisions.\5\ Over several rounds 
of comments, a wide array of stakeholders, including industry members, 
utilities, and consumer groups supported (or did not oppose) the 
proposal.
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    \4\ 79 FR 34642 (June 18, 2014); 80 FR 67351 (Nov. 2, 2015); 81 
FR 62681 (Sept. 12, 2016); and 82 FR 29230 (June 28, 2017). Earlier 
in this proceeding, the Commission waited on label requirements 
pending a final DOE-issued test procedure for these products. DOE 
published that test procedure on June 1, 2016 (81 FR 35242), and it 
became mandatory for energy use representations on November 28, 
2016.
    \5\ 80 FR at 67357; and 81 FR at 62683. In discussing similar 
economic and technological feasibility determinations for labels in 
1979, the Commission concluded ``that Congress['s] intent was to 
permit the exclusion of any product category, if the Commission 
found that the costs of the labeling program would substantially 
outweigh any potential benefits to consumers.'' 44 FR at 66467-68 
(discussing determinations under 42 U.S.C. 6294(a)(1)).
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    In 2017, the Commission delayed final label requirements due to 
uncertainty about when DOE would promulgate efficiency standards for 
these products.\6\ Specifically, in January of that year, DOE withdrew 
its final efficiency standards from Federal Register publication 
pursuant to the Presidential Memorandum on Implementation of Regulatory 
Freeze, leaving the final standards compliance date unclear. In early 
2020, DOE announced a compliance date for the standards resolving any 
uncertainty.\7\ Accordingly, the Commission then released an NPRM 
proposing EnergyGuide labels for portable air conditioners and a 
January 10, 2025 compliance date to coincide with the effective date of 
the DOE standards.
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    \6\ 82 FR at 29232.
    \7\ 85 FR 1378 (Jan. 10, 2020).
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    In previous notices on these issues, the Commission addressed the 
benefits as well as the economic and technological feasibility of 
portable air conditioner labels. In a 2015 notice, for example, it 
found portable air conditioners are common in the marketplace, vary in 
energy efficiency, and use energy similar to or greater than, currently 
labeled room air conditioners.\8\ In addition, DOE reported the 
aggregate energy use of portable air conditioners has increased.\9\ 
According to DOE estimates, sellers shipped 1.32 million units in the 
United States in 2014, with future growth projected.\10\
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    \8\ 80 FR at 67357-58.
    \9\ See 78 FR 40403, 40404-05 (July 5, 2013).
    \10\ The most recent DOE shipment statistics are from 2014. 85 
FR 1378; and ``2016-12 Final Rule Technical Support Document: Energy 
Efficiency Program for Consumer Products and Commercial and 
Industrial Equipment: Portable Air Conditioners'' (``DOE TSD'') 
December 2016 at https://www.regulations.gov/document?D=EERE-2013-BT-STD-0033-0047.
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    DOE also found these products exhibit a wide range of efficiency 
ratings and energy costs for similarly sized units (a difference of 
about $100 per year between the most and least efficient models). After 
the 2025 implementation of DOE standards, that range is likely to be 
smaller, but remain significant (a difference of about $30-$50 
depending on the size category as indicated in Appendix E2). DOE 
estimated average per-household annual electricity consumption for 
these products at 804 kWh/yr, generating $105 in annual energy costs 
(at $0.13 per kWh/hr).\11\ Given this information, the Commission 
concluded energy labels are likely to assist consumers with their 
purchasing decisions by allowing them to compare the energy costs of 
competing models and, consequently, save significant money on their 
electric bills.
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    \11\ DOE TSD at Table 7.3.2.
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    Further, in the NPRM, the Commission stated there is no evidence 
labeling is economically or technologically infeasible (i.e., the costs 
of labeling substantially outweigh consumer benefits). Indeed, the 
burdens (discussed infra in the Paperwork Reduction Act section) of 
labeling are not likely to differ significantly from those for room air 
conditioners, which already have EnergyGuide labels.\12\
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    \12\ See 80 FR at 67357 and 81 FR at 62683.
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    As discussed in the NPRM, the proposed portable air conditioner 
label would be mostly identical to the current room air conditioner 
label in content, format, and placement (i.e., on packaging, not the 
product itself). The proposed amendments incorporated DOE's definition 
of ``portable air

[[Page 9276]]

conditioner'' at Sec.  305.3.\13\ Applying the same electricity cost 
rate ($0.13 kWh/hr) currently used for room air conditioners, the NPRM 
also contained cost ranges specifically for portable air conditioners 
in three size categories and derived from DOE energy use data.\14\ 
Consistent with findings made in the 2016 and 2017 notices, the NPRM 
did not propose combining the ranges for portable and room air 
conditioners because it is not clear whether consumers routinely 
compare the two product categories when shopping.\15\ However, 
consumers who want to compare them would be able to do so easily using 
the label's energy cost disclosure. In addition, consistent with 
provisions applicable to room air conditioners, the proposed amendments 
contained reporting requirements identical to those created by DOE for 
these products.
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    \13\ To effect new labeling requirements, the proposed 
amendments inserted the term ``portable air conditioner'' next to 
``room air conditioner'' into appropriate paragraphs of the Rule as 
detailed in the amendatory language included in this Notice.
    \14\ See DOE TSD, Chapter 3 at 24-25 and Ch. 5 at 5-20. Using 
estimates for the most energy consumptive models based on the DOE 
standards, the ranges by size category expressed in yearly energy 
consumption are: (1) Less than 6,000 Btu/hr: (375-753 kWh/yr), (2) 
6,000 to 7,999 Btu/hr: (663-916 kWh/yr), and (3) 8,000 Btu/yr or 
greater: (807-1034 kWh/yr).
    \15\ 81 FR at 62682; and 82 FR at 29231-29232.
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    Finally, in the NPRM, the Commission proposed establishing an 
effective date for the label coinciding with the compliance date for 
DOE standards. Citing burdens associated with testing and labeling, 
industry comments earlier in this proceeding urged the Commission to 
synchronize any new labeling requirements with the DOE standards 
compliance date.\16\
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    \16\ 82 FR 29231.
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B. Efficiency Descriptors for Central Air Conditioners

    In the NPRM, the Commission also sought comments on updates to the 
efficiency descriptors on central air conditioner labels. In 2017, as 
part of an efficiency standards proceeding, DOE announced changes to 
the rating methods and associated efficiency descriptors for central 
air conditioners (e.g., from ``Seasonal Energy Efficiency Ratio 
(SEER)'' to ``Seasonal Energy Efficiency Ratio 2 (SEER2)'').\17\ The 
DOE changes become effective on January 1, 2023. To ensure consistency 
with the DOE standards, the NPRM proposed changing all applicable 
references in Part 305, effective on January 1, 2023. Given the 
relatively small differences in the ratings produced by the old and the 
new rating methods, the Commission did not propose any additional label 
changes. The Commission noted plans to update ranges in Appendix H and 
I, as well as applicable numbers on the sample labels in Appendix L, 
when new data becomes available.
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    \17\ 82 FR 1786 (Jan. 6, 2017); and 82 FR 24211 (May 26, 2017).
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C. Questions on Label Layout and Format Requirements

    The Commission also requested comment on whether it should revise 
requirements in the Rule related to layout, format, and placement of 
EnergyGuide labels. Specifically, the NPRM asked whether some of these 
requirements (e.g., Sec.  305.13(b)) are too prescriptive. In addition, 
the NPRM asked whether the Rule should contain a general label 
durability and disclosure format requirement in lieu of the existing, 
specific provisions for layout, type style, setting, and label 
attachment. The NPRM also asked whether industry members interpret 
existing guidance in the Rule related to adhesive labels as a 
``required standard.'' Finally, the NPRM contained several questions 
about the Rule's cost and benefits and the potential impact of more 
flexible requirements.

V. Comments on the NPRM

    The Commission received seven comments in response to the NPRM.\18\ 
As detailed below, the commenters generally supported (or did not 
oppose) labels for portable air conditioners and the transition to the 
new DOE efficiency descriptors. However, they provided differing views 
on the need to revise existing label requirements. Finally, some 
commenters offered broad suggestions for replacing physical labels with 
electronic labels.
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    \18\ The comments are available at www.regulations.gov. The 
comments consist of Air-Conditioning, Heating, and Refrigeration 
Institute (AHRI) (#33-09); Association of Home Appliance 
Manufacturers (AHAM) (#33-04); Appliance Standards Awareness Project 
(ASAP) (including American Council for an Energy-Efficient Economy 
(ACEEE), National Consumer Law Center, on behalf of its low-income 
clients (NCLC), Natural Resources Defense Council (NRDC), & 
Northwest Energy Efficiency Alliance (NEEA)) (ASAP et al.) (#33-06); 
Goodman Manufacturing (#33-08); Jieun Rim (#33-02); Consumer 
Federation of America, National Consumer Law Center, Sierra Club, 
Earthjustice (``Joint Commenters'') (#33-05); and the California 
Investor-Owned Utilities (Pacific Gas and Electric Company, San 
Diego Gas and Electric, and Southern California Edison) (CA IOUs) 
(#33-07).
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A. Portable Air Conditioner Labels

    All the commenters supported (or did not oppose) adding portable 
air conditioner labels to the Rule.\19\ As discussed below, they 
asserted the labels' energy cost information would help consumers 
choose among portable air conditioners and alert them to the relative 
cost of portable and room models. The commenters also supported 
providing comparability ranges separate from room air conditioners.
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    \19\ Joint Commenters, Jieun Rim, and ASAP et al. supported the 
proposal. AHAM stated that it did not oppose the labeling.
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    The comments emphasized the label's consumer benefits. For example, 
CFA explained the labels ``will provide significant value to consumers 
making purchasing decisions.'' The Joint Commenters noted the energy 
costs disclosures ``will correctly indicate to consumers that portable 
units are typically less efficient than room air conditioners.'' AHAM, 
which represents portable air conditioner manufacturers, did not oppose 
the label but, as discussed further below, urged the Commission to 
eliminate physical labels for all products and transition to an 
electronic label structure.
    The commenters supported (or did not oppose) separate comparability 
ranges for portable and room air conditioners. AHAM, which ``fully 
agreed'' with the proposed approach on ranges, explained ``consumers 
can adequately compare the two products, to the extent they even wish 
to do so for these two different products, easily using the label's 
energy cost disclosure.'' Referencing earlier comments, it argued 
combining the ranges would cause confusion because consumers of these 
products are different, and the two air conditioner categories do not 
have similar usage. AHAM also argued consumers focus mostly on capacity 
and purchase price when buying air conditioner units and thus may not 
use comparative energy costs information between the two categories.
    Commenters further recommended two additional items. First, two 
commenters noted the regulatory text in Sec.  305.10 should include a 
reference for DOE capacity and rounding determinations for portable air 
conditioners (Appendix CC to 10 CFR part 430, subpart B).\20\ Second, 
the CA IOUs recommended statements on product packaging and literature 
about proper portable air conditioner operation, explaining the need 
for ducting to vent the heat produced by a unit to the outside.
---------------------------------------------------------------------------

    \20\ See ASAP et al. and AHAM.
---------------------------------------------------------------------------

    Commenters, however, offered differing views on the timing for the 
new labels. AHAM strongly supported a compliance date coinciding with 
the DOE standards. It asserted that designing products to meet the new 
standards requires ``considerable effort,'' a fact reflected in EPCA's 
five-year lead-

[[Page 9277]]

in period for DOE standards. According to AHAM, the pre-development, 
development, and tooling phases of launching a new product take years 
to complete and require extensive company resources. In its view, 
instituting a label mandate prior to the DOE compliance date would 
require companies to divert resources from developing new, more 
efficient products to labeling. AHAM also explained that aligning the 
compliance dates with the DOE standards and EnergyGuide labels would 
allow manufacturers to engage in the extensive development and testing 
activities required to innovate and bring more efficient products to 
market, as well as to comply with regulatory requirements.
    In contrast, the Joint Commenters, ASAP et al., and the California 
Investor-Owned Utilities (CA IOUs) disagreed. The Joint Commenters 
argued consumers who currently lack the protection of a DOE minimum 
efficiency standard should have access to labels sooner to help 
identify and avoid inefficient models. Given the delays in the 
proceeding caused by the DOE litigation, these commenters argued 
manufacturers have had ``ample time to make the investments they have 
claimed are necessary to deploy the labels.'' In addition, with the 
issuance of DOE's test procedure in 2016, manufacturers must, pursuant 
to EPCA (42 U.S.C. 6293(c)), disclose the DOE results in any energy 
representations they make. Thus, according to the Joint Commenters, 
manufacturers ``have had more than three years to gain familiarity with 
the test procedures and to understand how different basic models 
perform under test.'' The CA IOUs also noted manufacturers are 
currently reporting their models' efficiency ratings to the California 
state database. ASAP et al. agreed FTC should require labeling sooner, 
stating: ``[l]abeling in advance of the compliance date of the DOE 
standards will provide consumers with information to compare portable 
AC units as well as an indication that portable ACs are less efficient 
than room ACs.''

B. Energy Efficiency Descriptor Transition

    AHRI, Goodman, and the CA-IOUs generally supported the proposal to 
update the efficiency descriptors on the label. No commenter opposed 
the proposal. However, AHRI and Goodman urged the Commission to issue 
these updates as part of a broader overhaul to the Rule, which, as 
discussed in section V.C., would involve a transition from physical 
labels on individual units to online labels accessed through websites 
or QR codes.
    These commenters also discussed the importance of updating the 
efficiency descriptors. In preparation for the DOE change, AHRI's 
members are designing, testing, certifying, and introducing new 
equipment. They are also educating industry members and consumers by 
modifying AHRI's product directory and certification program. AHRI 
expects manufacturers to release products with updated efficiency 
descriptors prior to the 2023 compliance deadline. DOE has issued 
guidance allowing early compliance with the test procedures, as long as 
the represented efficiencies comply with the 2023 minimum requirements. 
Given this timing, AHRI urged the Commission to complete label updates 
by summer 2021, so manufacturers may release compliant products as 
early as January 2022. In contrast, Goodman urged the Commission to 
issue the updates earlier, by December 2020, to give manufacturers even 
more time.
    To minimize market confusion from such early compliance, AHRI is 
developing a communications campaign ``to inform distributors, 
contractors, regulators, and building inspectors about the 
transition.'' AHRI did not offer any specific proposals for addressing 
the transition on the physical label itself. It also opposed any FTC 
mandate for two separate labels requiring disclosures of the old and 
new metrics. Instead, it recommended a transition to an ``electronic 
label'' beginning in 2023 as discussed further below. Prior to that 
date, under AHRI's proposal, manufacturers choosing to display the new 
efficiency descriptor earlier would use the physical EnergyGuide label 
along with a smaller label containing regional installation 
information, as well as a QR (or equivalent) link to an updated FTC 
electronic label.
    Finally, on a separate issue involving central air conditioners, 
Goodman suggested the Commission modify range information for split-
systems to revert to a format that appeared on labels prior to 2016. In 
its view, the current label, which limits the efficiency ratings to a 
single value, leads to consumer confusion because the actual efficiency 
rating for a system depends on the combination of the outdoor condenser 
and indoor unit.

C. Label Burdens

    Commenters offered a variety of views regarding the Rule's approach 
to labeling. First, the Joint Commenters, the CA IOUs, and Goodman 
offered differing views on whether the Rule's labeling requirements are 
``unnecessarily prescriptive.'' Second, as discussed in section D, both 
AHAM and AHRI recommended the Commission completely revise the Rule to 
transition to online or virtual energy labels.
    The Joint Commenters and the CA IOUs rejected the notion that the 
Rule's requirements for label layout, type style and setting, and label 
adhesion are too prescriptive. In the CA IOUs' view, increased 
flexibility in the labeling requirements ``could result in poor or 
inconsistent label quality that could inhibit consumers from making 
informed decisions regarding product performance.'' Further, they 
asserted that uniform presentation facilitates effective ``information 
delivery'' and avoids ``unnecessary confusion.'' The CA IOUs further 
suggested the labels would better serve consumers if they appeared on 
both packages and the products themselves. Similarly, the Joint 
Commenters described the label specifications as ``vital to the success 
of this program'' and contended the questions in the NPRM ignore the 
``unique context and history of the EnergyGuide label program.'' In 
their view, because the EnergyGuide label has more information (e.g., 
operating costs, efficiency ratings, comparative range bars, key 
product features, and explanatory statements) than many other required 
disclosures in other programs (e.g., labels for textiles and leather 
goods), the energy labels require a format ``highly standardized to 
ease comparisons.'' In addition, they argued allowing variability in 
layout and type style would hinder the label's effectiveness in 
assisting consumers with their purchasing decisions.
    Finally, the Joint Commenters asserted the NPRM's questions 
regarding label flexibility ``exhibits amnesia as to the widespread 
noncompliance that the inadequate specificity in [the FTC's] prior 
regulations had fostered.'' The commenters cited past store visits 
demonstrating ``the use of adhesives varied widely and that certain 
approaches were associated with higher rates of missing or detached 
labels.'' The Joint Commenters noted that, in response to these 
findings, FTC added ``specificity to its regulations governing 
adhesives.'' In their view, reducing this specificity would ``only 
encourage a return to labelling practices that deprive consumers of 
access to the important information that EnergyGuide labels provide.''
    In contrast, Goodman, a heating and cooling equipment manufacturer, 
offered several detailed suggestions to eliminate specific labeling 
requirements in Sec.  305.20. It argued that these changes

[[Page 9278]]

would simplify the Rule and free ``businesses from unnecessarily 
prescriptive requirements.'' Specifically, Goodman recommended the Rule 
specify only minimum dimensions instead of the current range of widths 
and lengths and include only whole number minimums (e.g., 7 inches for 
the length as opposed to 7\3/8\ inches). It also suggested removal of 
requirements related to picas for copy set, the centering of text, and 
type style and setting, which includes requirements for a uniform font 
type. Goodman also recommended elimination of the existing paper stock 
requirement (``58 pounds per 500 sheets or equivalent'') and minimum 
peel adhesion capacity (``12 ounces per square inch''). Finally, it 
claimed the suggested minimum peel adhesion capacity in Sec.  305.20(d) 
``is typically taken to be'' a requirement despite the Rule's language 
to the contrary.

D. Transition to Electronic Labeling

    Three commenters discussed issues beyond whether the Rule's 
specific label requirements should be less prescriptive. Specifically, 
AHAM, AHRI, and Goodman urged the Commission to consider ``whether 
physical labels continue to provide value to consumers.'' AHAM, whose 
members manufacture large household appliances, such as refrigerators 
and dishwashers, argued the ``showroom focus'' of the label is outdated 
and recommended a ``transition away from physical labels'' and a shift 
to a program providing label content solely online. In addition to 
helping manufacturers by significantly reducing compliance costs, AHAM 
argued such an approach would help consumers by reflecting evolving 
shopping patterns. According to AHAM, the majority of consumers 
research appliances online before entering a store or purchasing from a 
website. Moreover, energy efficiency is not a primary factor in 
consumers' appliance purchases. Instead, according to AHAM, consumers 
focus on other factors, primarily purchase ``cost.'' Should the FTC 
retain requirements for a physical label, AHAM recommended more 
flexible requirements, but also urged the Commission to retain the 
existing label specifications as a safe harbor. According to AHAM, 
companies have invested time and resources in developing labels 
compliant with the existing requirements. A safe harbor would allow 
them to benefit from these investments and provide more certainty even 
if the Commission shifts to less detailed regulations.
    In AHAM's view, conditions have changed even in the last decade, 
and significant opportunities exist to permit ``the electronic delivery 
of label information.'' It noted the Commission has already laid the 
groundwork for such a shift by requiring manufacturers to provide 
electronic access to label content (e.g., Sec.  305.9 (online 
availability of labels) and Sec.  305.11 (submission of website address 
for online labels)). With these regulatory requirements in place, AHAM 
predicted a transition to electronic labels would involve a ``small 
step'' that would ``dramatically reduce regulatory burden and cost'' 
and eliminate the redundancy of requiring labels in both digital and 
paper format. AHAM asserted such a change would allow consumers ``to 
access the content in the form and manner that best suits them'' and 
allow them to ``readily access the content wherever they may be 
researching their purchase.'' It also suggested such a shift would 
allow retailers to access labels from the DOE Compliance Certification 
Management System (CCMS) and provide flexibility to ``present the label 
content through printouts, electronic displays, or other means'' 
suitable to consumer needs. In addition, an online format would allow 
manufacturers to more easily update labels and make corrections to 
online content. Finally, AHAM urged the Commission to coordinate such 
efforts with Canada to ``align data elements, reporting and content.''
    AHRI and Goodman offered similar suggestions but focused their 
comments on specific aspects of heating and cooling equipment. AHRI 
noted the FTC has the discretion under EPCA (42 U.S.C. 6294(a)) to 
discontinue the use of EnergyGuide labels for central air conditioners 
and heat pumps if it determines the label does not assist consumers in 
making purchasing decisions. It agreed with AHAM that the FTC has 
``already taken the most dramatic step forward in the virtual 
revolution by requiring all manufacturers to have a pdf or link version 
of its FTC label available online.'' Nevertheless, according to AHRI, 
the label's small value for heating and cooling equipment renders its 
administrative burden ``outsized.'' However, as discussed below, AHRI 
did not recommend the ``wholesale retirement of EnergyGuide labels,'' 
but rather a ``modernization'' using QR codes and electronic labels to 
inform consumers without requiring ``anachronistic prescriptive 
stickers.''
    In discussing the Rule's current approach, AHRI argued the label on 
central air conditioners does not help consumers with their purchasing 
decisions because consumers generally do not buy these products ``off-
the-shelf'' in retail stores and, for new home purchases, a builder 
(not the consumer) typically chooses equipment. In addition, 
contractors usually sell replacement products in the consumer's home, 
often in urgent situations. In such transactions, contractors usually 
provide homeowners with information about their products using the 
``manufacturer's literature, the AHRI Directory of Certified Product 
Performance, energy code requirements, incentive programs, and specific 
design features.'' AHRI also argued, given the many different 
efficiency ratings of various outdoor-indoor unit combinations, ``the 
actual value of the physical label is questionable at best.'' 
Accordingly, not only are consumers unlikely to view the label prior to 
purchase, information provided directly by the contractor, including 
efficiency ratings for various unit combinations, is ``significantly 
more accurate.''
    In lieu of the current labeling approach, AHRI recommended a 
modified, smaller label giving both electronic access to consumer 
information online (e.g., through a QR code), as well as regional 
standards compliance statements in ``clear text.'' In AHRI's view, this 
approach would bring ``the cost-benefit equation'' of the labeling 
program ``into balance.'' It would also allow consumers to learn about 
the product's efficiency, while dramatically reducing the burden 
associated with affixing labels to the equipment.

V. Final Amendments

    The Commission issues the final amendments as proposed, with 
modifications discussed below. The amendments finalize the labeling 
requirements for portable air conditioners with a compliance date 
coinciding with the DOE standards. Additionally, the amendments contain 
the proposed changes to the efficiency descriptors on central air 
conditioner labels. The Commission, however, declines to propose 
additional wide-ranging changes (e.g., a transition to electronic 
labeling) to the EnergyGuide program at this time. Instead, the 
Commission may seek further comment on these issues, including the 
elimination of physical labels, in a future proceeding, where the 
Commission could gather the evidence necessary to fully consider 
significant amendments to the entire Rule.

A. Portable Air Conditioner Labels

    As proposed in the NPRM and supported by commenters, the Commission 
adopts the proposed amendments containing new labeling

[[Page 9279]]

rules for portable air conditioners. As detailed in this and previous 
notices, these products are common in the marketplace, vary in energy 
efficiency, and use energy similar to, or greater than, currently 
labeled room air conditioners.\21\ Further, energy labels for these 
products are likely to assist consumers with purchasing decisions by 
allowing them to compare the energy costs of competing models and, 
consequently, save significantly on their electric bills. In addition, 
there is no evidence labeling is economically or technologically 
infeasible (i.e., that the costs of labeling substantially outweigh 
consumer benefits).\22\
---------------------------------------------------------------------------

    \21\ 80 FR at 67357-58.
    \22\ See 80 FR at 67357 and 81 FR at 62683.
---------------------------------------------------------------------------

    After considering the comments, the Commission adjusts the 
compliance date to October 1, 2022.\23\ As some commenters noted, 
manufacturers have sufficient information to create labels because, 
pursuant to 42 U.S.C. 6293(c), they have been testing their products 
since 2016 using the DOE procedure to substantiate any energy-related 
claims (including unit capacity) for all their models. Therefore, the 
proposed 2025 compliance date appears to be overly long, particularly 
given the expected consumer benefits from labeling very low efficiency 
units prior to the DOE standards. The Commission, however, understands 
such packaging changes can take time, particularly where manufacturers 
must redesign their box labels to accommodate the EnergyGuide. 
Accordingly, the final amendments establish an October 2022 compliance 
date to provide companies ample time to incorporate the label into 
packaging while getting these labels into the market sooner than 
originally proposed. As the Commission has noted in the past, 
manufacturers generally deploy their lines for these types of products 
on an annual basis beginning in October of each year.\24\ The final 
compliance date, which coincides with the beginning of the model year, 
will allow manufacturers to incorporate the changes into their normal 
production schedules with minimal disruption. In addition, the Rule 
allows manufacturers to incorporate the label into the primary 
packaging display or affix them to label packaging (relieving them from 
redesigning boxes for models scheduled to be phased out before the 2025 
standards).\25\
---------------------------------------------------------------------------

    \23\ Specifically, manufacturers must include the new label on 
all units produced on or after that date.
    \24\ 83 FR 7593, 7594 (Feb. 22, 2018).
    \25\ 80 FR 67285, 67293 (Nov. 2, 2015).
---------------------------------------------------------------------------

    The final amendments also contain several other minor changes for 
the portable air conditioner labels in response to comments.\26\ First, 
the final Rule requires manufacturers to determine model capacity using 
the DOE testing requirements specifically applicable to portable air 
conditioners. Second, the final amendments contain a small change to 
the language in Sec.  305.18(a)(9) to clarify that the comparative 
information on the portable air conditioners applies to models of 
similar capacity only (without the various configurations applicable to 
room air conditioners).\27\
---------------------------------------------------------------------------

    \26\ The final amendments also contain minor changes in section 
305.27 (Paper Catalogs and websites) to include references to 
portable air conditioners.
    \27\ As with the room air conditioner labels, the portable air 
conditioner labels include the operating assumptions behind the 
energy cost estimates. In addition, the amendments do not contain 
requirements related to the need for ducting. Manufacturers have an 
incentive to ensure consumers understand how to operate their 
products properly and should not need a mandate from the FTC to do 
so. However, should problems arise in the marketplace, the 
Commission may reconsider such requirements in the future.
---------------------------------------------------------------------------

B. Energy Efficiency Descriptor Transition

    The final Rule adopts the proposed amendments to require 
manufacturers to update the efficiency descriptors for central air 
conditioners to conform to pending DOE changes. The change for all 
applicable references in Part 305 will become effective on January 1, 
2023 to ensure consistency with the new DOE requirements. To aid the 
transition, manufacturers may begin using the new information prior to 
January 1, 2023 in a manner consistent with DOE guidance. Given the 
relatively small differences produced by the old and the new rating 
methods, the amendments do not require dual labels or any additional 
explanatory information. As indicated in its comments, AHRI is 
developing a communications campaign to help various entities with the 
transition to the new descriptors. In addition, as part of the 
scheduled 2022 update to comparability ranges for all product classes 
(Sec.  305.12), the Commission will update ranges in Appendix H and I, 
as well as applicable numbers and terms on the sample labels in 
Appendix L.

C. Label Burdens and Electronic Labeling

    The final amendments do not make any broad changes to the Rule, 
although commenters recommended a wide array of potential changes. For 
instance, both AHRI and AHAM recommended a transition away from the 
current physical label to a system that relies on electronic web-based 
labels or energy data to aid consumer purchasing decisions. Although 
these proposals warrant further exploration, such broad issues would 
require additional rounds of notice and comment to consider and 
develop. Accordingly, the Commission may consider those proposals 
during a future proceeding to avoid delay in promulgating the present 
amendments for portable air conditioner labels and update to efficiency 
descriptors for central air conditioners.
    These broad industry suggestions are part of a larger inquiry about 
the Rule's future, particularly as online information continues to 
become more prevalent and consumer shopping habits change. EPCA's basic 
labeling provisions, developed in the 1970's, are predicated upon an 
understanding that consumers routinely examine and purchase products in 
retail showrooms with little prior information. Further, to ensure any 
covered product displayed in a showroom bears a label, the Rule 
requires manufacturers to affix the label on every unit it produces, 
apparently based on the expectation that any unit may be displayed in a 
store.
    Over the years, however, buying patterns have changed. Consumers 
now frequently compare and purchase products without ever visiting a 
store. To help consumers in this evolving marketplace, the Commission's 
revisions in the last several years reflect these new buying patterns. 
Specifically, the FTC previously updated the Rule with clear 
requirements that retailers display labels on websites (Sec.  305.27), 
for manufacturers to make their labels accessible online (Sec.  305.9), 
and for manufacturers to submit links to those labels as part of their 
routine data reports filed through DOE's CCMS (Sec.  305.11).
    Further amendments may reduce burdens while ensuring energy 
information is available to consumers. For instance, the Commission 
could examine whether the Rule should continue to require manufacturers 
to affix a display-ready EnergyGuide label on every appliance typically 
displayed in showrooms. Indeed, only a tiny fraction of units shipped 
actually appear in retail store displays, while the costs of affixing 
display-ready labels to all units can impose significant burden. On the 
other hand, past commenters have noted that consumers use the label 
affixed to their old product in choosing a new one.
    In addition, the Commission could consider changes to the label 
content to help consumers better compare products and understand issues 
not currently communicated by the label, such as climate change 
impacts, Smart

[[Page 9280]]

Grid technologies, and better ways to display comparative energy cost 
information. However, without further commenter input, we do not know 
how valuable this information would be for consumers, and how easy it 
would be to convey such information with existing DOE-generated data.
    These issues represent a few of many possible issues the Commission 
could consider in a future proceeding. In weighing any alternatives to 
the Rule, the Commission would need to ensure any new approach is 
consistent with its existing authority under EPCA. The Commission must 
also ensure consumers have access to clear, truthful energy information 
to assist them in their purchasing decisions while minimizing burdens 
placed on industry members. Fully evaluating these issues requires a 
more extensive proceeding focused from the outset at broad issues 
affecting the Rule in the 21st century.
    The Commission also declines to propose amendments to eliminate the 
current physical labels for central air conditioners and replace them 
with a smaller label with a QR code (or its equivalent) linking 
consumers to online content as AHRI and Goodman recommended. Such 
substantial changes to the labeling program would require further study 
and consideration in a future rulemaking proceeding. In the meantime, 
the updated EnergyGuide label for central air conditioners, which 
contains both EPCA-mandated energy efficiency ratings and regional 
standards information for installers, will continue to aid both 
consumers and industry members.
    Finally, the Commission may consider changes to the detailed label 
requirements (e.g., the changes to current label layout and content 
advocated by Goodman) in a future proceeding. Some of the Rule's 
detailed requirements mentioned in the NPRM may have indeed become 
obsolete. At the same time, detailed, uniform requirements for consumer 
labels like the EnergyGuide provide benefits to consumers by presenting 
information in a format that allows consumers to easily compare 
products across multiple categories. Moreover, the FTC's online, 
editable EnergyGuide templates already include all the label's general 
information in the size, font, and location required by the Rule and 
thus largely free manufacturers from having to navigate the detailed 
format requirements.

VI. Paperwork Reduction Act

    The current Rule contains recordkeeping, disclosure, testing, and 
reporting requirements that constitute information collection 
requirements as defined by the Paperwork Reduction Act (``PRA'').\28\ 
Under the PRA, an agency may not collect or sponsor the collection of 
information, nor may it impose an information collection requirement, 
unless it displays a currently valid Office of Management and Budget 
(``OMB'') control number. OMB has approved the Rule's existing 
information collection requirements through December 31, 2022 (OMB 
Control No. 3084-0069).
---------------------------------------------------------------------------

    \28\ 44 U.S.C. 3501 et seq.; see also 5 CFR 1320.3(c).
---------------------------------------------------------------------------

    The amendments include new labeling requirements for portable air 
conditioners that constitute information collections under the PRA. The 
Commission submitted these proposed information collections for review 
by OMB in conjunction with its publication of the NPRM. The Commission 
received no comments pertaining to its PRA estimates. OMB has approved 
these amended information collection requirements under the existing 
control number for the Rule (3084-0069).
    Burden estimates below are based on Census data, DOE figures and 
estimates, public comments, general knowledge of manufacturing 
practices, and trade association advice and figures. The FTC estimates 
there are about 150 basic models of portable air conditioners (i.e., 
units with essentially identical physical and electrical 
characteristics). In addition, FTC staff estimates there are 45 
portable air conditioner manufacturers and 1,500,000 portable air 
conditioner units shipped each year in the U.S.
    Reporting: The Rule requires manufacturers of covered products to 
annually submit a report for each model in current production 
containing the same information that must be submitted to the 
Department of Energy pursuant to 10 CFR part 429. In lieu of submitting 
the required information to the Commission, manufacturers may submit 
such information to DOE directly via the agency's Compliance 
Certification Management System, available at https://regulations.doe.gov/ccms, as provided by 10 CFR 429.12. Because 
manufacturers are already required to submit these reports to DOE, FTC 
staff estimates any additional burden associated with providing the 
information to the FTC is minimal. FTC staff estimates the average 
reporting burden for manufacturers of portable air conditioners will be 
approximately 15 hours per manufacturer. Based on this estimate, the 
annual reporting burden for manufacturers of portable air conditioners 
is 675 hours (15 hours x 45 manufacturers).\29\ Staff estimates that 
information processing staff, at an hourly rate of $16.24,\30\ will 
typically perform the required tasks, for an estimated annual labor 
cost of $10,962.
---------------------------------------------------------------------------

    \29\ In earlier comments, AHAM (#681-00012) estimated the data 
entry involved in filing reports with the FTC is not particularly 
burdensome, but estimated that other tasks involved in reporting 
(such as performing the required testing and gathering information) 
could take as long as 40 hours per manufacturer. As noted above, 
however, testing and reporting are required and accounted for in DOE 
regulations. As a result, staff estimates that the primary burdens 
associated with reporting are due to DOE requirements.
    \30\ These labor cost estimates are derived from the Bureau of 
Labor Statistics figures in ``Table 1.'' National employment and 
wage data from the Occupational Employment Statistics survey by 
occupation, May 2018,'' available at: https://www.bls.gov/news.release/ocwage.t01.htm.
---------------------------------------------------------------------------

    Labeling: The amendments require that manufacturers label portable 
air conditioners. The burden imposed by this requirement consists of 
the time needed to draft labels and incorporate them onto package 
designs. Since EPCA and the Rule specify the content and format for the 
required labels and FTC staff provide online label templates, 
manufacturers need only input the energy consumption figures and other 
product-specific information derived from testing. FTC staff estimates 
the time to incorporate the required information into labels and label 
covered products is five hours per basic model. Accordingly, staff 
estimates that the approximate annual burden involved in labeling 
covered products is 750 hours [150 basic models x 5 hours]. Staff 
estimates that information processing staff, at an hourly rate of 
$16.24,\31\ will typically perform the required tasks, for an estimated 
annual labor cost of $12,180.
---------------------------------------------------------------------------

    \31\ Id.
---------------------------------------------------------------------------

    Testing: Manufacturers of portable air conditioners must test each 
basic model they produce to determine energy usage, but the majority of 
tests conducted are required by DOE rules. As a result, it is likely 
only a small portion of the tests conducted are attributable to the 
Rule's requirements. In addition, manufacturers need not subject each 
basic model to testing annually; they must retest only if the product 
design changes in such a way as to affect energy consumption. FTC staff 
estimates manufacturers will require approximately 36 hours for testing 
of portable air conditioners,\32\ and that 25% of all basic models are 
tested annually due to the Rule's requirements. Accordingly, the 
estimated annual testing burden for portable air

[[Page 9281]]

conditioners is 1,368 hours ((150 basic models x 25%) x 36 hours). 
Staff estimates that engineering technicians, at an hourly rate of 
$28.37,\33\ will typically perform the required tasks, for an estimated 
annual labor cost of $38,300.
---------------------------------------------------------------------------

    \32\ AHAM estimated manufacturers would require 32 hours per 
model for testing and up to 4 hours for preparing the test data. 
AHAM Comment, #681-0016.
    \33\ See supra note 20.
---------------------------------------------------------------------------

    Recordkeeping: The Rule also requires manufacturers of covered 
products to retain records of test data generated in performing the 
tests to derive information included on labels. See 16 CFR 305.21. The 
FTC estimates the annual recordkeeping burden for manufacturers of 
portable air conditioners will be approximately one minute per basic 
model to store relevant data. Accordingly, the estimated annual 
recordkeeping burden would be approximately 3 hours (150 basic models x 
one minute). Staff estimates that information processing staff, at an 
hourly rate of $16.24,\34\ will typically perform the required tasks, 
for an estimated annual labor cost of $50.
---------------------------------------------------------------------------

    \34\ Id.
---------------------------------------------------------------------------

    Online and Retail Catalog Disclosures: Staff estimates there are 
approximately 400 sellers of products covered under the Rule who are 
subject to the Rule's catalog disclosure requirements. Staff has 
previously estimated covered online and catalog sellers spend 
approximately 17 hours per year to incorporate relevant product data 
for products that are currently covered by the Rule. Staff estimates 
the portable air conditioner requirements will add one additional hour 
per year in incremental burden per seller. Staff estimates these 
additions will result in an incremental burden of 400 hours (400 
sellers x one hour annually). Staff estimates that information 
processing staff, at an hourly rate of $16.24,\35\ will typically 
perform the required tasks, for an estimated incremental annual labor 
cost of $6,496.
---------------------------------------------------------------------------

    \35\ Id.
---------------------------------------------------------------------------

    Estimated annual non-labor cost burden: Staff anticipates that 
manufacturers are not likely to require any significant capital costs 
to comply with the amendments.

VII. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 through 612, 
requires the Commission provide an Initial Regulatory Flexibility 
Analysis (IRFA) with a proposed rule and a Final Regulatory Flexibility 
Analysis (FRFA), with the final rule, if any, 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 amendments 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. The 
Commission estimates that the amendments will apply to 300 online and 
paper catalog sellers of covered products and about 45 portable air 
conditioner manufacturers. The Commission expects that approximately 
150 of these various entities qualify as small businesses.
    Although the Commission has certified under the RFA that the 
amendments would not have a significant impact on a substantial number 
of small entities, the Commission has determined, nonetheless, that it 
is appropriate to publish an FRFA in order to explain the impact of the 
amendments on small entities as follows:

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

    Based upon the record, including public comments, the Commission is 
amending the Rule to expand product coverage and make additional 
improvements to the Rule to help consumers in their purchasing 
decisions for portable air conditioners.

B. Issues Raised by Comments in Response to the IRFA

    The Commission did not receive any comments specifically related to 
the impact of the final amendments on small businesses. In addition, 
the Chief Counsel for Advocacy of the Small Business Administration did 
not submit comments.

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

    Under the Small Business Size Standards issued by the Small 
Business Administration, appliance manufacturers qualify as small 
businesses if they have fewer than 500 employees. Catalog sellers 
qualify as small businesses if their sales are less than $8.0 million 
annually. The Commission estimates that there are approximately 150 
entities subject to the final amendments that qualify as small 
businesses. The Commission estimates that the amendments will not have 
a significant impact on small businesses.

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    The amendments will slightly increase reporting, recordkeeping, and 
disclosure 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. The Commission anticipates that the label design change 
will be implemented by graphic designers.

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

    The Commission sought comment and information on the need, if any, 
for alternative compliance methods that would reduce the economic 
impact of the Rule on such small entities. To allow time for industry 
to come into compliance with the revised Rule and minimize the impact 
of the amendments on covered entities, the Commission has given 
manufacturers until October 1, 2022 to implement portable air 
conditioner labels. The Commission may consider other proposals related 
to electronic labeling and additional issues in a future proceeding.

VIII. Other Matters

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a ``major rule,'' as defined by 5 U.S.C. 804(2).

Final Rule Language

List of Subjects in 16 CFR Part 305

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

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

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

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

    Authority: 42 U.S.C. 6294.


0
2. In part 305, effective January 1, 2023:
0
a. Revise all references to ``seasonal energy efficiency ratio (SEER)'' 
to read ``seasonal energy efficiency ratio 2 (SEER2)'';
0
b. Revise all references to ``SEER'' to read ``SEER2'';
0
c. Revise all references to ``heating seasonal performance factor'' to 
read ``heating seasonal performance factor 2'';

[[Page 9282]]

0
d. Revise all references to ``HSPF'' to read ``HSPF2'';
0
e. Revise all references to ``Energy Efficiency Ratio'' to read 
``Energy Efficiency Ratio 2''; and
0
f. Revise all references to ``EER'' to read ``EER2.''

0
3. In Sec.  305.2, effective October 1, 2022, redesignate paragraph 
(l)(23) as (l)(24) and add new paragraph (l)(23) to read as follows:


Sec.  305.2  Definitions.

* * * * *
    (l) * * *
    (23) Portable air conditioners.
* * * * *

0
4. In Sec.  305.2, effective January 1, 2023, revise paragraph (p) to 
read as follows:


Sec.  305.2  Definitions.

* * * * *
    (p) Energy efficiency rating means the following product-specific 
energy usage descriptors: Annual fuel utilization efficiency (AFUE) for 
furnaces; combined energy efficiency ratio (CEER) for room and portable 
air conditioners; seasonal energy efficiency ratio 2 (SEER2) for the 
cooling function of central air conditioners and heat pumps; heating 
seasonal performance factor 2 (HSPF2) for the heating function of heat 
pumps; airflow efficiency for ceiling fans; and, thermal efficiency 
(TE) for pool heaters, as these descriptors are determined in 
accordance with tests prescribed under section 323 of the Act (42 
U.S.C. 6293). These product-specific energy usage descriptors shall be 
used in satisfying all the requirements of this part.
* * * * *

0
5. In Sec.  305.3, effective October 1, 2022, add paragraph (j) to read 
as follows:


Sec.  305.3  Description of appliances and consumer electronics.

* * * * *
    (j) Portable air conditioner means a portable encased assembly, 
other than a packaged terminal air conditioner, room air conditioner, 
or dehumidifier, that delivers cooled, conditioned air to an enclosed 
space, and is powered by single-phase electric current. It includes a 
source of refrigeration and may include additional means for air 
circulation and heating.

0
6. In Sec.  305.7, effective October 1, 2022, add paragraph (e)(3) to 
read as follows:


Sec.  305.7  Prohibited acts.

* * * * *
    (e) * * *
    (3) The requirements of this part shall not apply to any portable 
air conditioner produced before October 1, 2022.
* * * * *

0
7. In Sec.  305.10, effective October 1, 2022, revise paragraph (f) to 
read as follows:


Sec.  305.10  Determinations of capacity.

* * * * *
    (f) Room air conditioners and portable air conditioners. The 
capacity for room air conditioners shall be the cooling capacity in Btu 
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 energy efficiency value 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. The capacity for portable air 
conditioners shall be determined according to appendix CC to 10 CFR 
part 430, subpart B, with rounding determined in accordance with 10 CFR 
part 430.
* * * * *

0
8. In Sec.  305.11, effective October 1, 2022, revise paragraph (b)(1) 
to read as follows:


Sec.  305.11  Submission of data.

* * * * *
    (b)(1) All data required by paragraph (a) of this section except 
serial numbers shall be submitted to the Commission annually, on or 
before the following dates:

                     Table 1 to Sec.   305.11(b)(1)
------------------------------------------------------------------------
                                                               Deadline
                      Product category                         for data
                                                              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 air conditioners......................................      July 1.
Portable air conditioners..................................      Feb. 1.
Furnaces...................................................       May 1.
Pool heaters...............................................       May 1.
Clothes washers............................................      Oct. 1.
Fluorescent lamp ballasts..................................      Mar. 1.
Showerheads................................................      Mar. 1.
Faucets....................................................      Mar. 1.
Water closets..............................................      Mar. 1.
Ceiling fans...............................................      Mar. 1.
Urinals....................................................      Mar. 1.
Metal halide lamp fixtures.................................     Sept. 1.
General service fluorescent lamps..........................      Mar. 1.
Medium base compact fluorescent lamps......................      Mar. 1.
General service incandescent lamps.........................      Mar. 1.
Televisions................................................      June 1.
------------------------------------------------------------------------

* * * * *

0
9. In Sec.  305.13, effective October 1, 2022, revise the section 
heading and paragraph (e)(3) to read as follows:


Sec.  305.13  Layout, format, and placement of labels for 
refrigerators, refrigerator-freezers, freezers, dishwashers, clothes 
washers, water heaters, room air conditioners, portable air 
conditioners, and pool heaters.

* * * * *
    (e) * * *
    (3) Package labels for certain products. Labels for electric 
instantaneous water heaters shall be printed on or affixed to the 
product's packaging in a conspicuous location. Labels for room air 
conditioners produced on or after October 1, 2019 and portable air 
conditioners, shall be printed on or affixed to the principal display 
panel of the product's packaging. The labels for electric instantaneous 
water heaters, room air conditioners, and portable air conditioners 
shall be black type and graphics on a process yellow or other neutral 
contrasting background.
* * * * *

0
10. In Sec.  305.18, effective October 1, 2022, revise the section 
heading and paragraph (a)(9) to read as follows:


Sec.  305.18  Label content for room air conditioners and portable air 
conditioners.

    (a) * * *
    (9) Labels must contain a statement as illustrated in the prototype 
labels in appendix L of this part and specified as follows (fill in the 
blanks with the appropriate model type, year, energy type, and energy 
cost figure):
    Your costs will depend on your utility rates and use.
    Cost range based only on models [of similar capacity; of similar 
capacity without reverse cycle and with louvered sides; of similar 
capacity without reverse cycle and without louvered sides; with reverse 
cycle and with louvered sides; or with reverse cycle and without 
louvered sides].
    Estimated annual energy cost is based on a national average 
electricity cost of __ cents per kWh and a seasonal use

[[Page 9283]]

of 8 hours use per day over a 3-month period.
    For more information, visit www.ftc.gov/energy.
* * * * *

0
11. In Sec.  305.20, effective January 1, 2023, revise paragraphs 
(g)(11) through (14) to read as follows:


Sec.  305.20  Labeling for central air conditioners, heat pumps, and 
furnaces.

* * * * *
    (g) * * *
    (11) For any single-package air conditioner with a minimum Energy 
Efficiency Ratio 2 (EER2) of at least 10.6, any split system central 
air conditioner with a rated cooling capacity of at least 45,000 Btu/h 
and minimum efficiency ratings of at least 13.8 SEER2 and 11.2 EER2 or 
at least 15.2 SEER2 and 9.8 EER2, and any split-system central air 
conditioners with a rated cooling capacity less than 45,000 Btu/h and 
minimum efficiency ratings of at least 14.3 SEER2 and 11.7 EER2 or at 
least 15.2 SEER2 and 9.8 EER2, the label must contain the following 
regional standards information:
    (i) A statement that reads:
    Notice
    Federal law allows this unit to be installed in all U.S. states and 
territories.
    (ii) For split systems, a statement that reads:
    Energy Efficiency Ratio 2 (EER2): The installed system's minimum 
EER2 is __.
    (iii) For single-package air conditioners, a statement that reads:
    Energy Efficiency Ratio 2 (EER2): This model's EER2 is [__].
    (12) For any split system central air conditioner with a rated 
cooling capacity of at least 45,000 Btu/h and minimum efficiency 
ratings of at least 13.8 SEER2 but lower than 11.2 EER2 or at least 
15.2 SEER2 but lower than 9.8 EER2, and any split-system central air 
conditioners with a rated cooling capacity less than 45,000 Btu/h and 
minimum efficiency ratings of at least 14.3 SEER2 but lower than 11.7 
EER2 or at least 15.2 SEER2 but lower than 9.8 EER2, the label must 
contain the following regional standards information:
    (i) A statement that reads:
    Notice
    Federal law allows this unit to be installed only in: AK, AL, AR, 
CO, CT, DC, DE, FL, GA, HI, ID, IL, IA, IN, KS, KY, LA, MA, ME, MD, MI, 
MN, MO, MS, MT, NC, ND, NE, NH, NJ, NY, OH, OK, OR, PA, RI, SC, SD, TN, 
TX, UT, VA, VT, WA, WV, WI, WY and U.S. territories. Federal law 
prohibits installation of this unit in other states.
    (ii) A map appropriate for the model and accompanying text as 
illustrated in the sample label 7 in appendix L of this part.
    (iii) A statement that reads:
    Energy Efficiency Ratio 2 (EER2): The installed system's minimum 
EER2 is __.
    (13) For any split system central air conditioner with a rated 
cooling capacity of at least 45,000 Btu/h and a minimum rated 
efficiency rating less than 13.8 SEER2, and any split-system central 
air conditioners with a rated cooling capacity less than 45,000 Btu/h 
and minimum efficiency ratings of less than 14.3 SEER2, the label must 
contain the following regional standards information:
    (i) A statement that reads:
    Notice
    Federal law allows this unit to be installed only in: AK, CO, CT, 
ID, IL, IA, IN, KS, MA, ME, MI, MN, MO, MT, ND, NE, NH, NJ, NY, OH, OR, 
PA, RI, SD, UT, VT, WA, WV, WI, and WY. Federal law prohibits 
installation of this unit in other states.
    (ii) A map appropriate for the model and accompanying text as 
illustrated in the sample label 7 in appendix L of this part.
    (iii) A statement that reads:
    Energy Efficiency Ratio 2 (EER2): The installed system's minimum 
EER2 is __.
    (14) For any single-package air conditioner with a minimum EER2 
below 10.6, the label must contain the following regional standards 
information:
    (i) A statement that reads:
    Notice
    Federal law allows this unit to be installed only in: AK, AL, AR, 
CO, CT, DC, DE, FL, GA, HI, ID, IL, IA, IN, KS, KY, LA, MA, ME, MD, MI, 
MN, MO, MS, MT, NC, ND, NE, NH, NJ, NY, OH, OK, OR, PA, RI, SC, SD, TN, 
TX, UT, VA, VT, WA, WV, WI, WY and U.S. territories. Federal law 
prohibits installation of this unit in other states.
    (ii) A map appropriate for the model and accompanying text as 
illustrated in the sample label 7 in appendix L of this part.
* * * * *

0
12. In Sec.  305.27, effective October 1, 2022, revise the section 
heading and paragraphs (a)(1)(i), (b)(1)(i) introductory text, and 
(b)(1)(i)(B) to read as follows:


Sec.  305.27  Paper catalogs and websites.

    (a) * * *
    (1) * * *
    (i) Products required to bear EnergyGuide or Lighting Facts labels. 
All websites advertising covered refrigerators, refrigerator-freezers, 
freezers, room air conditioners, portable air conditioners, clothes 
washers, dishwashers, ceiling fans, pool heaters, central air 
conditioners, heat pumps, furnaces, general service lamps, specialty 
consumer lamps (for products offered for sale after May 2, 2018), and 
televisions must display, for each model, a recognizable and legible 
image of the label required for that product by this part. The website 
may hyperlink to the image of the label using the sample EnergyGuide 
and Lighting Facts icons depicted in appendix L of this part. The 
website must hyperlink the image in a way that does not require 
consumers to save the hyperlinked image in order to view it.
* * * * *
    (b) * * *
    (1) * * * (i) Products required to bear EnergyGuide or Lighting 
Facts labels. All paper catalogs advertising covered products required 
by this part to bear EnergyGuide or Lighting Facts labels illustrated 
in appendix L of this part (refrigerators, refrigerator-freezers, 
freezers, room air conditioners, portable air conditioners, clothes 
washers, dishwashers, ceiling fans, pool heaters, central air 
conditioners, heat pumps, furnaces, general service fluorescent lamps, 
general service lamps, and televisions) must either display an image of 
the full label prepared in accordance with this part, or make a text 
disclosure as follows:
* * * * *
    (B) Room air conditioners, portable air conditioners, and water 
heaters. The capacity of the model determined in accordance with this 
part, the estimated annual operating cost determined in accordance with 
this part, and a disclosure stating ``Your operating costs will depend 
on your utility rates and use. The estimated operating cost is based on 
a [electricity, natural gas, propane, or oil] cost of [$ __per kWh, 
therm, or gallon]. For more information, visit www.ftc.gov/energy.''
* * * * *

0
13. Effective October 1, 2022, redesignate appendix E to part 305 as 
appendix E1 and add appendix E2 to part 305.
    The addition reads as follows:

[[Page 9284]]

Appendix E2 to Part 305--Portable Air Conditioners

                            Range Information
------------------------------------------------------------------------
                                                            Range of
                                                        estimated annual
                                                          energy costs
  Seasonally adjusted cooling capacity range  (Btu/h)    (dollars/year)
                                                       -----------------
                                                          Low      High
------------------------------------------------------------------------
Less than 6,000 Btu...................................      $48      $98
6,000 to 7,999 Btu....................................       87      120
8,000 or greater Btu..................................      104      135
------------------------------------------------------------------------


0
14. Effective October 1, 2022, revise appendix K2 to part 305 to read 
as follows:

Appendix K2 to Part 305--Representative Average Unit Energy Costs for 
Dishwasher, Room Air Conditioner, Portable Air Conditioner Labels

    This Table contains the representative unit energy costs that must 
be utilized to calculate estimated annual energy cost disclosures 
required under Sec. Sec.  305.16, 305.18 and 305.27 for dishwashers, 
room air conditioners, and portable air conditioners. This Table is 
based on information published by the U.S. Department of Energy in 
2017.

------------------------------------------------------------------------
                                                         As required by
        Type of energy          In commonly used terms      DOE test
                                                            procedure
------------------------------------------------------------------------
Electricity...................  [cent]13.00/kWh\1\....  $.1300/kWh.
Natural Gas...................  $1.05/therm \2\ or      $0.00001052/Btu.
                                 $10.86/MCF \3\.
No. 2 Heating Oil.............  $2.59/gallon \4\......  $0.00001883/Btu.
Propane.......................  $1.53/gallon \5\......  $0.00001672/Btu.
Kerosene......................  $3.01/gallon \6\......  $0.00002232/Btu.
------------------------------------------------------------------------
\1\ kWh stands for kilowatt hour. kWh = 3,412 Btu (British thermal
  units).
\2\ therm = 100,000 Btu.
\3\ MCF stands for 1,000 cubic feet. For the purposes of this table, one
  cubic foot of natural gas has an energy equivalence of 1,032 Btu.
\4\ For the purposes of this table, one gallon of No. 2 heating oil has
  an energy equivalence of 137,561 Btu.
\5\ For the purposes of this table, one gallon of liquid propane has an
  energy equivalence of 91,333 Btu.
\6\ For the purposes of this table, one gallon of kerosene has an energy
  equivalence of 135,000 Btu.


    By direction of the Commission, Commissioner Wilson dissenting.
April J. Tabor,
Acting Secretary.

    Editorial Note: The Office of the Federal Register received this 
document on December 23, 2020.

    Note: The following will not appear in the Code of Federal 
Regulations.

Dissenting Statement of Commissioner Christine S. Wilson

    Today's Commission action finalizes required changes to the Energy 
Labeling Rule, but fails to remove prescriptive aspects of the Rule 
that I believe are unnecessary and that could hinder important aspects 
of competition. For the reasons described below, I dissent.
    The current amendments were proposed in March 2020. At that time, 
and at my urging,\1\ the Commission also sought comment on the more 
prescriptive aspects of the Rule.\2\ I was pleased to receive many 
interesting and thoughtful comments submitted by stakeholders. For 
example, industry members explained that changes in the market and 
consumer behavior indicate that affixed labels with detailed 
information may have ceased to provide benefits to consumers.\3\ 
Industry members also proposed providing the labeling information 
online or through QR codes at brick-and-mortar locations.\4\ Making 
this information easier to access in the digital era could foster 
greater competition among appliance manufacturers and more informed 
purchasing decisions by consumers.
---------------------------------------------------------------------------

    \1\ See Dissenting Statement of Commissioner Christine S. Wilson 
on the Notice of Proposed Rulemaking: Energy Labeling Rule (Dec. 10, 
2018) (expressing my view that the Commission should seek comment on 
the prescriptive labeling requirements), https://www.ftc.gov/public-statements/2018/12/dissenting-statement-commissioner-christine-s-wilson-notice-proposed; See Dissenting Statement of Commissioner 
Christine S. Wilson on the Notice of Proposed Rulemaking: Energy 
Labeling Rule (Oct. 22, 2019) (urging the Commission to seek comment 
on the labeling requirements), https://www.ftc.gov/system/files/documents/public_statements/1551786/r611004_wilson_dissent_energy_labeling_rule.pdf.
    \2\ See Concurring Statement of Commissioner Christine S. Wilson 
on the Notice of Proposed Rulemaking: Energy Labeling Rule (Mar. 20, 
2020), https://www.ftc.gov/system/files/documents/public_statements/1569815/r611004_wilson_statement_energy_labeling.pdf.
    \3\ See, e.g., Air-Conditioning, Heating and Refrigeration 
Institute (AHRI) Comment (#33-09), available at: https://www.regulations.gov/document?D=FTC-2020-0033-0009; Association of 
Home Appliance Manufacturers (AHAM) Comment (#33-04), available at: 
https://www.regulations.gov/document?D=FTC-2020-0033-0004; Goodman 
Manufacturing Comment (#33-08), available at: https://www.regulations.gov/document?D=FTC-2020-0033-0008.
    \4\ Id.
---------------------------------------------------------------------------

    Rather than act on these comments or proposals, though, the 
Commission has chosen to finalize only the air conditioning proposals 
necessary to conform to Department of Energy changes. The Federal 
Register Notice approved by a majority of the Commission explains that 
revising other aspects of the labeling obligations imposed by the Rule 
will require further exploration. I see no reason for the Commission to 
forego that exploration now. We can both finalize these changes and ask 
stakeholders for additional input on how to improve the rest of the 
Rule.
    The FTC promulgated the Energy Labeling Rule in the 1970s, an era 
when the agency was engaged in prolific rulemaking.\5\ As I have noted 
previously,\6\ no area of commerce was too straightforward or mundane 
to escape the Commission's notice:
---------------------------------------------------------------------------

    \5\ See, e.g., Timothy J. Muris, Paper: Will the FTC's Success 
Continue?, George Mason Law & Economics No. 18 (Sept. 24, 2018) 
(discussing the successes and failures of the FTC's enforcement 
efforts including the aggressive rulemaking activities in the 
1970s), available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3254294; Timothy J. Muris, Rules Without 
Reason, AEI J. on Gov't and Society (Sept/Oct. 1982) (describing 
failed FTC rulemaking proceedings), available at: https://www.cato.org/sites/cato.org/files/serials/files/regulation/1982/9/v6n5-4.pdf; Teresa Schwartz, Regulating Unfair Practices Under The 
FTC Act: The Need For a Legal Standard of Unfairness, 11 Akron Law 
Rev. 1 (1978) (explaining that the judicial reversals of FTC 
regulations resulted from a failure to establish an adequate legal 
basis for the regulations), available at: https://ideaexchange.uakron.edu/akronlawreview/vol11/iss1/1/.
    \6\ See Concurring Statement of Commissioner Christine S. 
Wilson, Amplifier Rule (Dec. 17, 2020), https://www.ftc.gov/system/files/documents/public_statements/1585038/csw_amplifier_rule_stmt_11192020.pdf.
---------------------------------------------------------------------------

     The Rule on Misbranding and Deception as to Leather 
Content of

[[Page 9285]]

Waist Belts prescribed unlawful practices in connection with the sale 
of belts when not offered for sale as part of a garment. Among other 
things, the Rule prohibited the sale of belts that looked like leather, 
but that were made of split, ground, pulverized, or shredded leather or 
non-leather material, absent disclosures.\7\
---------------------------------------------------------------------------

    \7\ 16 CFR 405.4, https://www.ftc.gov/sites/default/files/documents/federal_register_notices/trade-regulation-rule-misbranding-and-deception-leather-content-waist-belts-16-cfr-part-405/960522traderegulationruleonmisbranding.pdf.
---------------------------------------------------------------------------

     The Guides for Shoe Content Labeling and Advertising 
required leather, split leather, and concealed insoles ``containing . . 
. non-leather material which are concealed from view, but which also 
contain other visible parts of leather,'' to bear a label clearly 
disclosing the presence of the non-leather innersole.\8\
---------------------------------------------------------------------------

    \8\ 16 CFR 231.3, https://www.ftc.gov/sites/default/files/documents/federal_register_notices/guides-luggage-and-related-products-industry-guides-shoe-content-labeling-and-advertising-and-guides/950918luggageandrelatedproducts.pdf.
---------------------------------------------------------------------------

     The Hosiery Guides established that the term ``long staple 
cotton'' used to describe hosiery ``is understood to mean cotton fiber 
which is not less than 1 \1/8\'' in length of staple'' and that the 
term ``lisle'' represents hosiery ``made of yarn composed of two or 
more ply of combed long staple cotton fiber.'' \9\
---------------------------------------------------------------------------

    \9\ 16 CFR 22.3, https://www.ftc.gov/sites/default/files/documents/federal_register_notices/guides-hosiery-industry-16-cfr-part-22/960202hosieryindustry.pdf.
---------------------------------------------------------------------------

    A federal statute mandated that the FTC promulgate the Energy 
Labeling Rule.\10\ The FTC must implement the will of Congress, but it 
need not adopt a prescriptive approach while doing so. Here, the FTC 
itself has chosen to specify the trim size dimensions for labels, 
including the precise width (between 5\1/4\'' to 5 \1/2\'') and length 
(between 7 \3/8\'' and 7 \5/8\''); the number of picas for the copy set 
(between 27 and 29); the type style (Arial) and setting; the weight of 
the paper stock on which the labels are printed (not less than 58 
pounds per 500 sheets or equivalent); and a suggested minimum peel 
adhesive capacity of 12 ounces per square inch.\11\ I urged the 
Commission take the opportunity to review these detailed labeling 
requirements in 2018, and again in 2019, when the Commission sought 
comment and revised other sections of this Rule.\12\
---------------------------------------------------------------------------

    \10\ Energy Policy and Conservation Act, 42 U.S.C. 6295.
    \11\ See 16 CFR Sec. Sec.  305.13 and 305.20
    \12\ Dissenting Statement of Commissioner Christine S. Wilson on 
the Notice of Proposed Rulemaking: Energy Labeling Rule (Dec. 10, 
2018), https://www.ftc.gov/public-statements/2018/12/dissenting-statement-commissioner-christine-s-wilson-notice-proposed; 
Dissenting Statement of Commissioner Christine S. Wilson on the 
Notice of Proposed Rulemaking: Energy Labeling Rule (Oct. 22, 2019), 
https://www.ftc.gov/system/files/documents/public_statements/1551786/r611004_wilson_dissent_energy_labeling_rule.pdf.
---------------------------------------------------------------------------

    The Commission last conducted a full review of the Energy Labeling 
Rule in 2015; under our 10-year regulatory schedule, the next review is 
scheduled for 2025. However, since 2015, the Commission has sought 
comment on provisions of this Rule at least three times, including the 
current proceeding, and has made numerous amendments.\13\ This 
piecemeal approach has clarified the Rule's requirements--and I 
appreciate FTC staff's efforts to keep this Rule clear and current--but 
the Commission can and should do more.
---------------------------------------------------------------------------

    \13\ See 81 FR 62861 (Sept. 12, 2016) (seeking comment on 
proposed amendments regarding portable air conditioners, ceiling 
fans, and electric water heaters); 84 FR 9261 (Mar. 14, 2019) 
(proposing amendments to organize the Rule's product descriptions); 
85 FR 20218 (Apr. 10, 2020) (seeking comment on proposed amendments 
regarding central and portable air conditioners).
---------------------------------------------------------------------------

    Specifically, the Commission should conduct a full review of the 
Rule to consider removing all dated and prescriptive provisions, and to 
consider the recent comments suggesting changes. Nothing prevents the 
Commission from conducting this review now--we do not have to wait 
until the 10-year anniversary. I urge the Commission to act on these 
comments, eliminate the more prescriptive aspects of the Rule, and 
maximize the positive impact of this Rule for consumers. If we are 
statutorily mandated to maintain this Rule, we should endeavor to make 
it beneficial for consumers and competition.

[FR Doc. 2020-28880 Filed 2-11-21; 8:45 am]
BILLING CODE 6750-01-P