[Federal Register Volume 64, Number 40 (Tuesday, March 2, 1999)]
[Notices]
[Pages 10147-10151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5095]
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FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Submission for OMB
Review; Comment Request
AGENCY: Federal Trade Commission.
ACTION: Notice.
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SUMMARY: The Federal Trade Commission (FTC) has submitted to the Office
of Management and Budget (OMB) for review and clearance under the
Paperwork Reduction Act information collection requirements contained
in its Appliance Labeling Rule (``Rule''), promulgated pursuant to the
Energy Policy and Conservation Act of 1975 (``EPCA''). OMB
provisionally extended the expiration for clearance from September 30,
1998 to March 31, 1999. The FTC proposes that OMB extend its approval
for the Rule an additional three years from the prior expiration date
of September 30, 1998.
DATES: Comments must be submitted on or before April 1, 1999.
ADDRESSES: Send written comments to: Secretary, Federal Trade
Commission,
[[Page 10148]]
Room H-159, 600 Pennsylvania Ave., NW, Washington, D.C. 20580. All
comments should be identified as responding to this notice.
FOR FURTHER INFORMATION CONTACT: Requests for additional information or
copies of the proposed information requirements should be addressed to
James Mills, Attorney, Bureau of Consumer Protection, Division of
Enforcement, Room 4616, Federal Trade Commission, 601 Pennsylvania
Ave., NW, Washington, D.C. 20580 (202-326-3035).
SUPPLEMENTARY INFORMATION: The FTC has submitted a request to OMB to
extend the existing clearance to collect information associated with
the Appliance Labeling Rule. A Federal Register Notice with a 60-day
comment period soliciting comments on this collection of information
was published on December 29, 1998 (63 FR 71645). No comments were
received.
Description of the collection of information and proposed use: The
Rule requires manufacturers of major household appliances
(refrigerators, freezers, water heaters, clothes washers, dishwashers,
window air conditioners, furnaces, central air conditions, and heat
pumps) to disclose energy consumption and water usage data relating to
those appliances. The Rule establishes testing, reporting,
recordkeeping, and labeling requirements for these disclosures. The
Rule's testing and disclosure requirements enable consumers purchasing
appliances to compare the energy use of efficiency of competing models.
In addition, EPCA and the Rule require manufacturers to submit relevant
data to the Commission regarding energy or water usage in connection
with the products they manufacture. The Commission uses this data to
compile the ranges of comparability for covered appliances for
publication in the Federal Register. The Commission may use
submissions, along with required records for testing data, for
comparison purposes in enforcement actions involving alleged
misstatements on labels or in advertisements.
Estimated annual hours burden: Section 324 of EPCA and the
Commission's Rule impose burdens for testing (620,713 hours); reporting
(1,178 hours); recordkeeping (789 hours); labeling (91,735 hours); and
retail catalog disclosures (de minimis). The total burden for these
activities is 715,000 hours (rounded).
The following estimates of the time needed to comply with the
requirements of the Rule are based on census data, Department of Energy
figures and estimates, general knowledge of manufacturing practices,
and trade association advice and figures. Because the burden of
compliance falls almost entirely on manufacturers and importers (with a
de minimis burden relating to retailers), burden estimates are
calculated on the basis of the number of domestic manufacturers and/or
the number of units shipped domestically in the various product
categories.
A. Testing
Under the Rule, manufacturers of covered products must test each
basic model they produce to determine energy usage (or, in the case of
plumbing fixtures, water consumption). The burden imposed by this
requirement is determined by the number of basic models produced, the
average number of units tested per model, and the number of hours
required to conduct the applicable test. The figures for numbers of
basic models that staff received from the industry represent all of the
basic models in a given product category.
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. However, industry representatives
state that manufacturers generally test each model at least once a
year. Staff have conservatively assumed that this annual testing means
all basic models were either replaced or subject to design changes
during the year that necessitated testing under the Rule. The burden
estimates in this Notice, which assume annual testing for all models,
are accordingly conservative and likely are somewhat overstated to the
extent manufacturers are actually carrying out annual tests for reasons
unrelated to the Rule. The testing burden for the different categories
of products covered by the Rule is estimated as follows:
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Avg. number of Total annual
Category of manufacturer Number of units tested Hours per unit testing burden
basic models per model tested hours
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Refrigerators, Refrigerator-freezers, and 360 2 4 2,880
Freezers.......................................
Dishwashers..................................... 78 2 1 156
Clothes washers................................. 150 2 2 600
Water heaters................................... 650 2 24 31,200
Room air conditioners........................... 520 2 8 8,320
Furnaces........................................ 1,900 2 8 30,400
Central A/C..................................... 1,095 2 24 52,560
Heat pumps...................................... 831 2 72 119,664
Pool heaters.................................... 75 2 12 1,800
Fluorescent lamp ballasts....................... 975 4 3 11,700
Lamp products................................... 2,100 12 14 352,800
Plumbing fittings............................... 1,700 2 2 6,800
Plumbing fixtures............................... 22,000 1 .0833 1,833
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620,713
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B. Reporting
Reporting burden estimates are based on information from industry
representatives. Manufacturers of some products, such as appliances and
HVAC equipment (furnaces, boilers, central air conditioners, and heat
pumps), indicate that, for them, the reporting burden is best measured
by the estimated time required to report on each model manufactured,
while others, such as makers of fluorescent lamp ballasts and lamp
products, state that an estimated number of annual burden hours by
manufacturer is a more meaningful way to measure. The figures below
reflect these different methodologies as well as the varied burden hour
estimates provided to staff by manufacturers of the different product
categories that use the latter methodology.
[[Page 10149]]
Appliances, HVAC Equipment, and Pool Heaters
Staff estimate that the average reporting burden for these
manufacturers is approximately two minutes per basic model. Based on
this estimate, multiplied by a total of 5,659 basic models of these
products, the annual reporting burden for the appliance, HVAC
equipment, and pool heater industry is an estimated 188 hours (2
minutes x 5,659 models 60 minutes per hour).
Fluorescent Lamp Ballasts, Lamp Products, and Plumbing Fixtures
The total annual reporting burden for manufacturers of fluorescent
lamp ballasts, lamp products, and plumbing fixtures is based on the
estimated average annual burden for each category of manufacturers,
multiplied by the number of manufacturers in each respective category,
as shown below:
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Annual burden Total annual
Category of manufacturer hours per Number of reporting
manufacturer manufacturers burden hours
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Fluorescent lamp ballast........................................ 6 20 120
Lamp products................................................... 15 50 750
Plumbing fixtures............................................... 1 120 120
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Total Reporting Burden Hours
The total reporting burden for industries covered by the Rule is
1,178 hours annually (188+120+750+120).
C. Recordkeeping
EPCA and the Commission's Rule require manufacturers to keep
records of the test data generated in performing the tests to derive
information included on labels and required by the Rule. As in Section
B., above, burden is calculated by number of models for appliances,
HVAC equipment, and pool heaters, and by number of manufacturers for
fluorescent lamp ballasts, lamp products, and plumbing fixtures.
Appliances, HVAC Equipment, and Pool Heaters
The recordkeeping burden for manufacturers of appliances, HVAC
equipment, and pool heaters varies directly with the number of tests
performed. The total number of tests performed for these product
categories, based on the number of basic models within each category
and the average number of units tested per model, is 11,318. Staff
estimate total recordkeeping burden of approximately 189 hours for
these manufacturers, based on an estimated average of one minute per
record stored (whether in electronic or paper format), multiplied by
11,318 tests performed annually
(1 x 11,31860 minutes per hour).
Fluorescent Lamp Ballasts, Lamp Products, and Plumbing Fixtures
The total annual recordkeeping burden for manufacturers of
fluorescent lamp ballasts, lamp products, and plumbing fixtures is
based on the estimated average annual burden for each category of
manufacturers (derived from industry sources), multiplied by the number
of manufacturers in each respective category, as shown below:
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Annual burden Total annual
Category of manufacturer hours per Number of recordkeeping
manufacturer manufacturers burden hours
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Fluorescent lamp ballasts....................................... 2 20 40
Lamp products................................................... 10 50 500
Plumbing fixtures............................................... .5 120 60
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Total Recordkeeping Burden Hours
The total recordkeeping burden for industries covered by the Rule
is 789 hours annually (189+40+500+60).
D. Labeling
EPCA and the Rule require that manufacturers of covered products
provide certain information to consumers, through labels, fact sheets,
or permanent markings on the products. The burden imposed by this
requirement consists of (1) the time needed to prepare the information
to be provided, and (2) the time needed to provide it, in whatever
form, with the products. The applicable burden for each category of
products is described below:
Appliances, HVAC Equipment, and Pool Heaters
EPCA and the Rule specify the content, format, and specifications
for the required labels, so manufacturers need only add the energy
consumption figures derived from testing. In addition, most larger
companies use automation to generate labels, and the labels do not
change from year to year. Given these considerations, staff estimate
that the time to prepare labels for appliances, HVAC equipment, and
pool heaters is no more than four minutes per basic model. Thus, for
appliances, HVAC equipment, and pool heaters, the approximate annual
drafting burden involved in labeling is 377 hours per year [5,659 (all
basic models) x four minutes (drafting time per basic model
60 (minutes per hour)]
Industry representatives and trade associations have estimated that
it takes between 4 and 8 seconds to affix each label to each product.
Based on an average of six seconds per unit, the annual burden for
affixing labels to appliances, HVAC equipment, and pool heaters is
74,222 hours [six (seconds) x 44,533,465 (the number of total
products shipped in 1997) divided by 3,600 (seconds per hour)].
The Rule also requires that HVAC equipment manufacturers disclose
energy usage information on a separate fact sheet or in an approved
industry-prepared directory of products. Staff have estimated the
preparation of these fact sheets requires approximately 30 minutes per
basic model. Manufacturers producing at least 95 percent of the
affected equipment, however, are members of trade associations that
produce approved directories (in connection with their certification
programs independent of the Rule) that
[[Page 10150]]
satisfy the fact sheet requirement. Thus, the drafting burden for fact
sheets for HVAC equipment is approximately 96 hours annually [3,826
(all basic models) x .5 hours x .05 (proportion of equipment for
which fact sheets are required)].
The Rule allows manufacturers to prepare a compendium of fact
sheets for each retail establishment as long as there is a fact sheet
for each basic model sold. Assuming that six HVAC manufacturers (i.e.,
approximately 5% of HVAC manufacturers), produce fact sheets instead of
having required information shown in industry directories, and each
spends approximately 16 hours per year distributing the fact sheets to
retailers and in response to occasional consumer requests, the total
time attributable to this activity would also be approximately 96
hours.
The total annual labeling burden for appliances, HVAC equipment,
and pool heaters is 377 hours for preparation plus 74,222 hours for
affixing, or 74,599 hours. The total annual fact sheet burden is 96
hours for preparation and 96 hours for distribution, or 192 hours. The
total annual burden for labels and fact sheets for the appliance, HVAC,
and pool heater industries is, therefore, estimated to be 74,791 hours
(74, 599 x 192).
Fluorescent Lamp Ballasts
The statute and the Rule require that labels for fluorescent lamp
ballasts contain an ``E'' within a circle. Since manufacturers label
these ballasts in the ordinary course of business, the only impact of
the Rule is to require manufactures to reformat their labels to include
the ``E'' symbol. Thus the burden imposed by the Rule for labeling
fluorescent lamp ballasts is de minimis.
Lamp Products
The burden imposed for labeling of lamp products is also de
minimis, for similar reasons. The Rule requires certain disclosures on
packaging for lamp products. Since manufacturers were already
disclosing the substantive information required under the Rule prior to
its implementation, the practical effect of the Rule was to require
that manufactures redesign packaging materials to ensure they include
the disclosures in the manner and form prescribed by the Rule. Because
this effort is now complete, there is no ongoing labeling burden
imposed by the Rule for lamp products.
Plumbing Fixtures
The statute and the Rule require that manufacturers disclose the
water flow rate for plumbing fixtures. Manu-
facturers may accomplish this disclosure by attaching a label to the
product, through permanent markings imprinted on the product as part of
the manufacturing process, or by including the required information on
packaging material for the product. While some methods might impose
little or no additional incremental time burden and cost on the
manufacturer, other methods (such as affixing labels) could. Thus,
staff estimate an overall blended average burden associated with this
disclosure requirement of one second per unit sold. Staff also estimate
that there are approximately 9,000,000 covered fixtures and 52,000,000
fittings sold annually in the country. Therefore, the estimated annual
burden to label plumbing fixtures is 16,944 hours [61,000,000 (units)
x 1 (seconds) 3,600 (seconds per hour)].
Total Burden for Labeling
The total labeling burden for all industries covered by the Rule is
91,735 hours (74,791+16,944) annually.
E. Retail Sales Catalogs Disclosures
The Rule requires that sellers offering covered products through
retail sales catalogs (i.e., those publications from which a consumer
can actually order merchandise) disclose in the catalog energy (or
water) consumption for each covered product. Because this information
is supplied by the product manufacturers, the burden on the retailer
consists of incorporating the information into the catalog
presentation.
Staff estimate that there are approximately 100 sellers who offer
covered products through retail catalogs. While the Rule initially
imposed a burden on catalog sellers by requiring that they draft
disclosures and incorporate them into the layouts of their catalogs,
catalog sellers now have substantial experience with the Rule and its
requirements. Energy and water consumption information has obvious
relevance to consumers, so sellers are likely to disclose much of the
required information with or without the Rule. Accordingly, given the
small number of catalog sellers, their experience with incorporating
energy and water consumption data into their catalogs, and the
likelihood that many of the required disclosures would be made in the
ordinary course of business, staff believe that any burden the Rule
imposes on catalog sellers is de minimis.
Estimated annual cost burden: $16,479,000 ($13,351,000 in labor
costs and $3,128,000 in non-labor costs).
Labor Costs: Staff have derived labor costs by applying appropriate
estimated hourly cost figures to the burden hours described above. In
calculating the cost figures, staff have estimated that test procedures
are conducted by skilled technical personnel at an hourly rate of
$20.00, and that recordkeeping and reporting, as well as labeling,
marking, and preparation of fact sheets, are, on average, done by
clerical personnel at a rate of $10.00 per hour.
On this basis, the total annual labor costs for the five different
categories of burden under the Rule, as applied to all the products
covered by the Rule, is $13,351,000 (rounded), which is derived as
follows:
1. $12,414,260 for testing all products covered by the Rule, based
on 620,713 hours [620,713 x $20.00 per hour].
2. $11,780 for complying with the reporting requirements of the
Rule, based on 1,178 hours [1,178 x $10.00 per hour].
3. $7,890 for complying with the recordkeeping requirements of the
Rule, based on 789 hours [789 x $10.00 per hour].
4. $917,350 for complying with the labeling, marking, and fact
sheet requirements of the Rule, based on 91,735 hours [91,735 x $10.00
per hour].
5. De minimis for retail catalog disclosures, for the reasons
previously noted with respect to burden hours.
Capital or other non-labor costs: $3,127,500 ($2,500 for reporting
requirements and $3,125,000 for labeling requirements), rounded to
$3,128,000.
In considering how to estimate the capital or other non-labor costs
associated with compliance with the Rule, staff have examined the five
distinct burdens imposed by EPCA through the Rule--testing, reporting,
recordkeeping, labeling, and retail catalog disclosures--as they affect
the 11 groups of products that the Rule covers. Staff have concluded
that there are no current start-up costs associated with the Rule.
Manufacturers have in place the capital equipment necessary--especially
equipment to measure energy and/or water usage--to comply with the
Rule.
Manufacturers that submit required reports to the Commission
directly (rather than through trade associations) incur some nominal
costs for paper and postage. Staff estimates that these costs do not
exceed $2,500. Manufacturers must also incur the cost of procuring
labels and fact sheets used in compliance with the Rule. Based on
estimates of 44,533,465 units shipped
[[Page 10151]]
and 109,500 fact sheets prepared,\1\ at an average cost of seven cents
for each label or fact sheet, the total (rounded) labeling cost is
$3,125,000.
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\1\ The units shipped total is based on combined actual or
estimated industry figures for 1997 across all of the product
categories, except for fluorescent lamp ballasts, lamp products, and
plumbing fixtures. Staff has determined that, for those product
categories, there are little or no costs associated with the
labeling requirements. The fact sheet estimation is based on the
previously noted assumption that five percent of HVAC manufacturers
produce fact sheets on their own. Based on total HVAC units shipped
(8,759,907), five percent amounts to 437,995 HVAC units. Because
manufacturers generally list more than one unit on a fact sheet,
staff have estimated that manufacturers independently preparing them
will use one sheet for every four of these 437,995 units. Thus,
staff estimate that HVAC manufacturers produce approximately 109,500
fact sheets.
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Debra A. Valentine,
General Counsel.
[FR Doc. 99-5095 Filed 3-1-99; 8:45 am]
BILLING CODE 6750-01-M
