[Federal Register Volume 59, Number 222 (Friday, November 18, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-28278] [[Page Unknown]] [Federal Register: November 18, 1994] ======================================================================= ----------------------------------------------------------------------- FEDERAL TRADE COMMISSION 16 CFR Part 309 RIN 3084-AA57 Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles AGENCY: Federal Trade Commission. ACTION: Supplemental notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: Section 406(a) of the Energy Policy Act of 1992 (``EPA 92'') directs the Federal Trade Commission (``Commission'') to establish uniform labeling requirements, to the greatest extent practicable, for alternative fuels and alternative fueled vehicles. On May 9, 1994, the Commission published a notice of proposed rulemaking in the Federal Register announcing the substance of proposed labeling requirements and sought written comment on its proposal. In this notice the Commission announces modifications to that initial labeling proposal and the specific language of a proposed labeling rule. The Commission invites interested persons to submit written comments addressing any issue they believe may bear upon the proposed rule. DATES: Written comments must be submitted on or before December 19, 1994. ADDRESSES: Written comments should be sent to the Division of Enforcement, Federal Trade Commission, 601 Pennsylvania Avenue, NW., Washington, DC 20580, Attn: Jeffrey E. Feinstein, room S-4618. The Commission requests that original submissions be filed with six copies, if feasible. Submissions should be identified as ``16 CFR Part 309-- SNPR Comment.'' If submissions are made by facsimile transmission, please call 202/326-2372 to confirm receipt. FOR FURTHER INFORMATION CONTACT: Jeffrey E. Feinstein, Attorney, Division of Enforcement, Federal Trade Commission, Washington, DC 20580, telephone 202/326-2372. SUPPLEMENTARY INFORMATION: I. Introduction EPA 921 establishes a comprehensive national energy strategy designed to increase U.S. energy security and improve the economy in cost effective and environmentally beneficial ways.2 It seeks to reduce U.S. dependence on oil imports; promote energy efficiency; reduce the use of petroleum-based fuels in motor vehicles; and provide new energy options. Key programs in titles III, IV, V, and VI of EPA 92 promote the development of alternative fuels3 and alternative fueled vehicles (``AFVs'').4 --------------------------------------------------------------------------- \1\ Pub. L. 102-486, 106 Stat. 2776 (1992). \2\ H. Rep. No. 102-474(I), 102d Cong., 2d Sess. 132, reprinted in 1992 U.S.C.C.A.N. at 1954, 1955. \3\ ``Alternative fuels'' are defined as: ``[M]ethanol, denatured ethanol, and other alcohols; mixtures containing 85 percent or more (or such other percentage, but not less than 70 percent, as determined by the Secretary [of Energy], by rule, to provide for requirements relating to cold start, safety, or vehicle functions) by volume of methanol, denatured ethanol, and other alcohols with gasoline or other fuels; natural gas; liquefied petroleum gas; hydrogen; coal-derived liquid fuels; fuels (other than alcohol) derived from biological materials; electricity (including electricity from solar energy); and any other fuel the Secretary determines, by rule, is substantially not petroleum and would yield substantial energy security benefits and substantial environmental benefits[.]'' 42 U.S.C. 13211(2) (Supp. IV 1993). \4\ An ``alternative fueled vehicle'' is ``a dedicated vehicle or a dual fueled vehicle[.]'' 42 U.S.C. 13211(3). Each term is further defined in 42 U.S.C. 13211 (6) and (8). --------------------------------------------------------------------------- Two provisions in title IV of EPA 92 require that information on alternative fuels and AFVs be made available to ``consumers'' (a term not defined in EPA 92). In one provision, section 406(a) of EPA 92 directs the Commission to issue a rule establishing uniform labeling requirements, to the greatest extent practicable, for alternative fuels and alternative fueled vehicles.5 The Act does not specify what information should be displayed on these labels. Instead, it provides generally that the rule must require disclosure of ``appropriate,'' ``useful,'' and ``timely'' cost and benefit information on ``simple'' labels.6 The purpose of the labeling requirements is to enable consumers to make reasonable choices and comparisons. In formulating the rule, the Commission must consider the problems associated with developing and publishing the required information, taking into account lead time, costs, frequency of changes in costs and benefits that may occur, and other relevant factors. Where appropriate, the labels required by section 406(a) are to be consolidated with other labels providing information to consumers. EPA 92 requires the Commission to update its labeling requirements ``periodically to reflect the most recent available information.''7 --------------------------------------------------------------------------- \5\ Section 406(a) is codified at 42 U.S.C. 13232(a) (Supp. IV 1993). \6\ 42 U.S.C. 13232(a). \7\ Id. --------------------------------------------------------------------------- A second and complementary provision directs the Secretary of the Department of Energy (``DOE'') to develop an information package for consumers.8 Specifically, section 405 of EPA 92 requires DOE to produce and make available an information package for consumers to help them choose among alternative fuels and AFVs.9 DOE's information package must provide ``relevant and objective'' information addressing seven ``motor vehicle and fuel characteristics as compared to gasoline'' (including environmental performance, energy efficiency, domestic content, cost, maintenance requirements, reliability, and safety), information about the conversion of conventional motor vehicles to AFVs, and ``such other information as the Secretary [of DOE] determines is reasonable and necessary to help promote the use of alternative fuels in motor vehicles.''10 --------------------------------------------------------------------------- \8\ 42 U.S.C. 13231. DOE is also required to provide technical assistance to the Commission in developing labeling requirements, and coordinate such technical assistance with its development of a consumer information package. 42 U.S.C. 13232(b). \9\ Id. The information package required by this section was intended ``to enable [consumers] to understand and to help them choose among alternative fuels and AFVs.'' H. Rep. No. 102-474(I), 102d Cong., 2d Sess. 185, reprinted in 1992 U.S.C.C.A.N. at 1954, 2008. \1\0 42 U.S.C. 13232(b). EPA 92 also directs the DOE Secretary to create an additional public education program targeted specifically to the Federal government. Under that mandate, the DOE Secretary, ``in cooperation with the Administrator of General Services,'' must ``promote programs and educate officials and employees of Federal agencies on the merits of AFVs.'' 42 U.S.C. 13214(a). That section further requires that the DOE Secretary ``shall provide and disseminate information to Federal agencies on,'' inter alia, ``the range and performance capabilities of [AFVs].'' Id. --------------------------------------------------------------------------- This is the Commission's second rulemaking concerning labeling requirements for alternative fuels. In a separate proceeding also required by EPA 92,11 the Commission recently extended the requirements of its former Octane Rule12 (renamed the ``Fuel Rating Rule'') beyond gasoline to include liquid alternative fuels.13 As a result, retailers of such fuels are now required, among other things, to post labels identifying the commonly used name of the fuel and the amount, expressed as a minimum percentage by volume, of the fuel's principal component.14 --------------------------------------------------------------------------- \1\1 15 U.S.C. 2821-2823. \1\2 Octane Posting and Certification, 16 CFR Part 306. \1\3 16 CFR 306.0(i)(2) (1994). In that proceeding, the Commission had no authority to extend its requirements beyond liquid alternative fuels. 15 U.S.C. 2821 (Supp. IV 1993). \1\4 16 CFR 306.0(j)(2) (1994). The Fuel Rating Rule became effective October 25, 1993. 58 FR 41356, 41356, Aug. 3, 1993. --------------------------------------------------------------------------- The Commission seeks written comment on whether the proposed rule, as described in this supplemental notice, will accomplish the purposes of section 406(a). The Commission also seeks comment on whether some variation of this proposal, or other options or variations not proposed here, would be more appropriate. II. Public Participation EPA 92 requires the Commission, in formulating its labeling requirements, to obtain the views of affected industries, consumer organizations, Federal and State agencies, and all other interested parties.15 It also required the Commission to issue a Notice of Proposed Rulemaking (``NPR'') in consultation with DOE, the Administrator of the Environmental Protection Agency (``EPA''), and the Secretary of the Department of Transportation (``DOT'') within eighteen months of the statute's enactment date (i.e., October 24, 1992).16 To comply with those requirements, the Commission received information from the public relating to this proceeding from four sources: written comments filed in response to an Advanced Notice of Proposed Rulemaking (``ANPR'') published on December 10, 1993,17 written comments filed in response to an NPR published on May 9, 1994,18 testimony during a Public Workshop-Conference (``Workshop'') held on July 20, 1994, and supplemental comments filed after the Workshop. All such information (i.e., the comments and Workshop transcript) was placed on the public record of this proceeding. The discussion below includes information from all four sources, as well as documents placed on the public record by the Commission's staff.19 The Commission considered all these materials in developing this revised labeling proposal. --------------------------------------------------------------------------- \1\542 U.S.C. 13232(a). \1\6Id. During its development of this supplemental notice, Commission staff discussed the proposed labeling requirements with staff from DOE, EPA, and DOT's National Highway Traffic Safety Administration. \1\758 FR 64914. \1\859 FR 24014. \1\9Commission's Rulemaking Record No. R311002. Comments are coded either ``G'' (indicating that they were filed by nongovernmental parties) or ``H'' (indicating that they were filed by governmental agencies). The Workshop transcript is filed in category ``L.'' Information placed on the public record by Commission staff is coded ``B.'' In this SNPR, comments are cited by identifying the commenter, by name, the comment number, and the relevant page number(s), e.g., ``ETC, G-24, 1-3.'' Supplemental comments are designated as (Supp.), e.g., ``RFA (Supp.), G-5, 1.'' Discussion in the Workshop is cited by identifying the party, a reference to the transcript, and the relevant page number(s), e.g., ``EPA (Tr.), 184.'' Staff submissions are cited by identifying the document number, relevant page number(s), and document date, e.g., ``B-13, 3, Jan. 25, 1994.'' --------------------------------------------------------------------------- A. The Commission's ANPR In its ANPR, the Commission sought written comment on basic issues raised by section 406(a)'s mandate. Accordingly, it requested comment on issues relating to which fuels and vehicles should be covered by the labeling requirements (i.e., the proposed rule's scope), and what information should be required to be displayed on labels (i.e., the proposed rule's disclosures).20 The Commission also sought comment on how the labeling requirements should be updated, and the extent to which the labels should be consolidated with other labels providing information to consumers. In response, the Commission received 28 written comments addressing these issues. The comments were summarized in the Commission's NPR.21 --------------------------------------------------------------------------- \2\058 FR 64914, 64915. \2\159 FR 24015-24017. --------------------------------------------------------------------------- B. The Commission's NPR The Commission considered written comments responding to the ANPR in developing its initial labeling proposal, which was published in the Federal Register as the Commission's NPR. The NPR announced the substance of proposed labeling requirements and a proposed rule implementing section 406(a)'s mandate. In that NPR, the Commission invited interested persons to submit written comments until June 23, 1994, on any issue of fact, law or policy that might have bearing upon the proposed labeling requirements. As described below, 37 commenters (representing vehicle manufacturers,22 fuel producers,23 governmental entities,24 consumer organizations,25 and other interested organizations26) responded to the NPR. --------------------------------------------------------------------------- \2\2Chrysler Corporation, (``Chrysler''), G-13; The Flxible Corporation (``Flxible''), G-12; Ford Motor Company (``Ford''), G- 14; General Motors (``GM''), G-8; Thomas Built Buses, Inc. (``Thomas BB''), G-10. \2\3Boston Edison Company, (``Boston Edison''), G-26; Mobil Oil Corporation (``Mobil''), G-2; Phillips 66 Company, (``Phillips 66''), G-15; Sun Company, Inc. (``Sun''), G-1; Unocal Corporation (``Unocal''), G-9. \2\4California Energy Commission, (``CEC''), H-8; Montgomery County, Maryland, Office of Consumer Affairs (``MC-MD''), H-7; Nebraska Alternative Fuels Advisory Committee (``Nebraska EO''), H- 9; Tennessee Valley Corporation (``TVA''), H-5; Texas Railroad Commission (``Texas RRC''), H-3; U.S. Department of Energy (``DOE''); H-10; U.S. Department of Energy, Energy Information Administration, Energy End Use and Integrated Statistics Division (``EIA/EEU-ISD''), H-2; U.S. Department of Transportation, National Highway Traffic Safety Administration (``DOT/NHTSA''), H-1; U.S. Environmental Protection Agency (``EPA''), H-4. \2\5Center for Auto Safety (``CAS''), G-17; Greenpeace, Inc. (``Greenpeace''), G-27; Union of Concerned Scientists (``UCS''), G- 16. \2\6American Automobile Manufacturers Association (``AAMA''), G- 7; American Gas Association and Natural Gas Vehicles Coalition (``AGA/NGVC''), G-6; American Methanol Institute (``AMI''), G-4; American Petroleum Institute (``API''), G-25; Bill of Rights Association (``BOR''), G-4; Electric Transportation Coalition (``ETC''), G-24; Engine Manufacturers Association (``EMA''), G-21; National Association of Consumer Agency Administrators (``NACAA''), H-6; National Association of Fleet Administrators (``NAFA''), G-20; National Automobile Dealers Association (``NADA''), G-19; National Propane Gas Association (``NPGA''), G-18; Propane Consumers Coalition (``PCC''), G-22; Renewable Fuels Association (``RFA''), G- 5; Society of Independent Gasoline Marketers of America (``SIGMA''), G-23; Texas Automobile Dealers Association (``Texas ADA''), G-11. --------------------------------------------------------------------------- C. Public Workshop-Conference The Commission announced in the NPR that its staff would conduct a Workshop to afford staff and interested parties an opportunity to discuss issues raised in the rulemaking proceeding.27 The Workshop was not intended to achieve a consensus of opinion among participants or between participants and Commission staff with respect to any issue. Instead, its purpose was to examine publicly areas of significant controversy or divergent opinions that were raised in the written comments. Persons interested in participating in the Workshop were required to notify Commission staff by June 8, 1994, and file a written comment by the comment due date (i.e., June 23, 1994). --------------------------------------------------------------------------- \2\759 FR 24014, 24020. --------------------------------------------------------------------------- Twenty-one interested parties submitted written requests to participate in the Workshop.28 Twenty of those parties filed written comments as required,29 and all twenty were invited to participate. Two parties (Chrysler and Greenpeace) subsequently elected not to attend, and, as a result, individuals representing eighteen interested parties participated at the Workshop.30 The Workshop was held on July 20, 1994, at the Commission's headquarters and was conducted as announced in the NPR.31 --------------------------------------------------------------------------- \2\8AAMA, A-2 (on behalf of AAMA, Chrysler, Ford, and GM); AGA/ NGVC, A-8; AMI, A-10; API, A-12; Boston Edison, A-16; CAS, A-14; DOE, A-1; Eckert Seamans Cherin & Mellott, A-17 (on behalf of unidentified clients in the automotive industry); EMA, A-3 (request submitted by Neal Gerber & Eisenberg); ETC, A-11 (request submitted by Van Ness Feldman); EPA, A-9; Flxible, A-6; Greenpeace, A-18; NACAA, A-7; NAFA, A-13 (request submitted by Kent & O'Connor, Inc.); NPGA, A-5 (on behalf of NPGA and Phillips 66); RFA, A-4 (request submitted by Downstream Alternatives, Inc.); UCS, A-15. \2\9The law firm Eckert Seamans Cherin & Mellott did not file a written comment. \3\0Lois E. Bennett, GM; Timothy D. Davis, Columbia Gas (representing AGA/NGVC); Robert Graham and Peter Morman, CAS; Marcel L. Halberstadt, AAMA; Nancy L. Homeister, Ford; Evan W. Johnson, MC- MD (representing NACAA); Martin S. Karl, Boston Edison; Allen R. Larson, Esq., Larson and Curry (representing Boston Edison); Paul McArdle, DOE; Denise McCourt, API; Patrick O'Connor, Kent & O'Connor (representing NAFA); Larry D. Osgood, Phillips 66 Propane Company (representing NPGA); Robert E. Reynolds, Downstream Alternatives, Inc. (representing RFA); Glyn Short, AMI; Lisa A. Stegink, Esq., Neal Gerber & Eisenberg (representing EMA); Jaime C. Steve, UCS; Lance Watt, Flxible; Ellen S. Young, Esq., Van Ness Feldman (representing ETC); Kenneth L. Zerafa, EPA. Philip J. Harter, Esq., served as the Workshop's moderator. \3\1The NPR announced that the Workshop would take place over two days, but the participants concluded discussing the agenda staff had prepared in one day. As a result, the Workshop's second day was cancelled. (Tr.), 238. --------------------------------------------------------------------------- D. Post-Workshop Comments and SNPR In its NPR, the Commission announced that Workshop participants would be permitted one week to file supplemental written comments addressing concerns raised during the Workshop.32 Eight participants elected to file such comments.33 The Commission also announced that after reviewing written comments received in response to the NPR, the Workshop transcript, and the post-Workshop comments, it would publish an SNPR. The SNPR would propose the text of a labeling rule and allow the public an opportunity to comment on the revised labeling proposal. --------------------------------------------------------------------------- \3\259 FR 24014, 24023. \3\3AAMA, AGA/NGVC, Boston Edison, CAS, EMA, Flxible, NPGA, and RFA. --------------------------------------------------------------------------- III. Supplemental Proposed Labeling Rule A. Comment Suggestions Beyond Commission's Authority Under EPA 92 As noted previously, section 406(a) directs the Commission to establish labeling requirements for alternative fuels and AFVs disclosing cost and benefit information. Because this rulemaking proceeding is mandated by statute, the Commission's authority is limited to what is authorized by EPA 92. Several NPR commenters, however, suggested regulatory options that involve matters other than labeling requirements, alternative fuels or AFVs, and cost and benefit information (i.e., they involve matters beyond section 406(a)'s statutory language). To the extent that these commenters suggested labeling requirements beyond that authorized by section 406(a), the Commission has tentatively concluded that it has no authority to propose them. For example, several commenters suggested that the Commission require AFV dealers to have copies of the DOE brochure available for consumer inspection and use.34 These commenters believed that the Commission could model such a requirement on an existing EPA regulation directing automobile dealers to make available free copies of EPA's Gas Mileage Guide (a booklet comparing the fuel economy of similarly-sized new automobiles).35 The Commission believes, however, that such a requirement does not appear to be reasonably within section 406(a)'s scope, which is limited to uniform labeling requirements. In any event, the Commission notes that EPA's regulation was promulgated pursuant to a specific congressional directive that EPA require dealers to provide such information to consumers.36 In the absence of a similar congressional directive, the Commission believes that such a requirement may be beyond its authority under EPA 92.37 --------------------------------------------------------------------------- \3\4ETC, G-24, 6; NAFA, G-20, 3-5; NPGA (Tr.), 188-89. CAS suggested that the Commission require AFV dealers and conversion companies to provide copies of the DOE package to consumers, and that consumers acknowledge receipt by signing a designated sales document. CAS, G-17, 7; (Tr.), 174; (Supp.), G-17, 4. CAS also proposed that the AFV label advise consumers that a free copy of the DOE brochure is available from the dealer. CAS (Supp.), G-17, 4. ETC also suggested, however, that dealers would find it in their interest to have the DOE brochures available to consumers. ETC (Tr.), 168. \3\540 CFR 600.401-77 to 600.407-77 (1993). \3\6 See 15 U.S.C. 2006(b)(2) (``The EPA Administrator * * * shall prescribe rules requiring dealers to make available to prospective purchasers [fuel economy information] compiled by the EPA Administrator under paragraph (1).''). \3\7The Commission notes, however, that a DOE official at the Workshop stated that DOE would consider distributing copies of the information package to AFV dealerships. DOE (Tr.), 227-28. --------------------------------------------------------------------------- For similar reasons, the Commission has also tentatively concluded that requiring any of the following may exceed its authority under EPA 92: (1) Labeling for conventional fueled vehicles;38 (2) that information on AFV labels be provided to consumers at the time an AFV is offered for sale;39 and (3) that ``all pertinent information'' (e.g., fuel hazards, tank capacity, refueling or recharging time, and cruising range) be disclosed in vehicle owners' manuals.40 --------------------------------------------------------------------------- \3\8AGA/NGVC, G-6, 11 (requiring disclosures only for AFVs could unnecessarily raise consumer concerns about these products). \3\9NAFA, G-20, 2 (``For example, when a representative of a conversion company meets with a consumer to offer to convert a vehicle, the representative would provide the consumer with the appropriate information in a format similar to the vehicle label.''). NAFA based this suggestion on its concern that consumers would not always be able to inspect labels prior to acquisition. Id. \4\0NACAA, H-6, 2. The Commission also believes that one suggestion (that it develop an information bulletin discussing pertinent considerations), while not beyond its authority, may not be necessary because of DOE's mandate to complete the same task. CEC, H-8, 1-2, 6; NAFA, G-20, 3. Traditionally, however, the Commission issues consumer education materials after new rules are issued, and that will be considered when this proceeding is completed. --------------------------------------------------------------------------- B. Labeling Requirements for Alternative Fuels 1. Scope of the Labeling Requirements for Alternative Fuels a. Proposed scope of the rule. As noted previously, section 406(a) of EPA 92, in part, requires the Commission to establish uniform labeling requirements, to the greatest extent practicable, for alternative fuels. The NPR proposed fuel labeling requirements for three non-liquid fuels, compressed natural gas (``CNG''), gaseous hydrogen gas (``hydrogen'') and electricity.41 Section 406(a) also directs the Commission to consider labeling requirements for liquid ``alternative fuels.'' The Commission's Fuel Rating Rule, however, contains labeling requirements for liquid alternative fuels that are similar to the labeling requirements proposed in the SNPR for non- liquid alternative fuels. The Fuel Rating Rule's labeling requirements cover only liquid alternative fuels. Although that rule serves a somewhat different purpose,42 the Commission stated in the NPR that harmonizing labeling requirements, when practicable, is appropriate. The Commission's NPR proposal has the effect of imposing the same labeling requirements on both liquid and non-liquid alternative fuels. --------------------------------------------------------------------------- \4\1These are the only non-liquid fuels defined as ``alternative fuels'' in EPA 92. 42 U.S.C. 13211(2) (Supp. IV 1993). \4\2The purpose of the EPA 92 amendments to Title II of the Petroleum Marketing Practices Act, 15 U.S.C. 2821-2825, was to give purchasers information they need to choose the correct type or grade of fuel for their vehicles. 58 FR 41356. --------------------------------------------------------------------------- Nine commenters addressed the scope of the Commission's proposals in the NPR. All of the commenters supported limiting the scope of this proceeding to non-liquid alternative fuels because the Commission's proposal, if adopted, would impose equal, fuel-neutral labeling requirements on all alternative fuels.43 No commenters specifically recommended that the Commission include in this proceeding alternative fuels other than the three the Commission identified. --------------------------------------------------------------------------- \4\3API, G-25, 1-3 (supports expanding the Fuel Rating Rule's requirements to non-liquid alternative fuels to encourage a fuel- neutral regulatory scheme); CEC, H-8, 1-6 (supports proposal because it would result in consistent labeling of all alternative fuels); Mobil, G-2, 1-3 (supports proposal because it is consistent with Fuel Rating Rule); NAFA, G-20, 1 (endorses proposal because it would result in uniform labeling requirements for all alternative fuels); NPGA, G-18, 2-3 (extremely important all alternative fuels be subject to essentially identical requirements); Phillips 66, G-15, 1 (recommends Fuel Rating Rule's labeling requirements be extended to non-liquid alternative fuels); RFA (Supp.), G-5, 1 (supports extension of current labeling requirements for liquid alternative fuels under the Fuel Rating Rule to gaseous alternative fuels); SIGMA, G-23, 1 (generally supports the Commission's entire proposal with respect to fuel labeling, including its scope); Sun, G-1, 1 (favors proposal because it places equal labeling requirements on all competing fuels). --------------------------------------------------------------------------- Based on the comments received, and the existing similar requirements imposed by the Commission's Fuel Rating Rule for liquid alternative fuels, the Commission proposes limiting this proposed rule to the non-liquid alternative fuels CNG, hydrogen and electricity. The Commission's proposal, if adopted, would result in equal, uniform, fuel-neutral labeling requirements for all alternative fuels.44 In accordance with section 406(a)'s directive to review the rule ``periodically to reflect the most recent available information,''45 the Commission will supplement the list of covered fuels as DOE designates new non-liquid fuels as alternative fuels. --------------------------------------------------------------------------- \4\4See API, G-25, 1-3; CEC, H-8, 1-6; Mobil, G-2, 1-3; NAFA, G- 20, 1; NPGA, G-18, 2-3; Phillips 66, G-15, 1; RFA (Supp.), G-5, 1; SIGMA, G-23, 1; Sun, G-1, 1. \4\542 U.S.C. 13232(a) (Supp. IV 1993). --------------------------------------------------------------------------- b. Description of alternative fuels proposed to be covered in the final rule--(1) Compressed natural gas Natural gas is used as a vehicle fuel mainly in the form of CNG, although it also may be used as liquefied natural gas (``LNG''). CNG is used as an automotive fuel in spark ignition engines, and is stored at a pressure up to 220 atmospheres in heavy, rather bulky cylinders, which limits its storage capacity in a vehicle.46 --------------------------------------------------------------------------- \4\6``Automotive Fuels Handbook'' (1990), by Keith Owen and Trevor Coley, published by Society of Automotive Engineers, Inc. (``SAE''), B-34, 454. --------------------------------------------------------------------------- Natural gas consists mainly of methane, and is widely available in many parts of the world. Methane-rich gas also is made by the anaerobic decomposition of animal waste and vegetable matter (biogas). Gas composition is important to natural gas vehicle users because large amounts of non-methane hydrocarbons will enrich the fuel mixture, reduce the octane number, lead to increased hydrocarbon emissions, and increase the potential for engine knock. These variables require that engine parameters, such as air to fuel mixture and ignition timing, be adjusted on the basis of the composition of the local natural gas supply.47 Natural gas composition varies throughout the country, depending on original composition and processing. Pipeline quality natural gas is composed of several different gases, with methane typically accounting for 85 percent to 99 percent, with other hydrocarbons such as ethane, propane, some butanes, and nitrogen, helium, carbon dioxide, and trace amounts of hydrogen sulfide, water, and odorants making up the remainder.48 --------------------------------------------------------------------------- \4\7``Introduction to Alternative Fuel Vehicles,'' prepared by Science Applications International Corporation for Office of Alternative Fuels, Office of Transportation Technologies, Conservation and Renewable Energy, U.S. Department of Energy (March 2, 1992), NREL Contract No.: XF-1-11107-1, B-35, 17. \4\8Id., at 16. See also Standards for Emissions for Emissions From Natural Gas-Fueled, and Liquefied Petroleum Gas-Fueled Motor Vehicles and Motor Vehicle Engines, and Certification Procedures for Aftermarket Conversions (``Gaseous Fuels Rule''), 59 FR 48472, 48484 (1994) (given wide range of natural gas compositions currently available, EPA proposed very broad specifications for natural gas certification fuel, which included a range for methane content of 74 to 98.5 percent, as well as broad ranges for several other parameters); Society of Automotive Engineers, ``Recommended Practice for Compressed Natural Gas Vehicle Fuel,'' SAE J1616 (1994), B-40, 1 (natural gas is comprised chiefly of methane, generally 88 to 96 molecular (``mole'') percent); Automotive Fuels Handbook, B-34, 454 (composition of natural gas somewhat variable, depending on gas field or biological feedstocks from which it is produced; impurities include higher hydrocarbons, the heavier of which usually are removed as condensate, nitrogen, carbon dioxide, oxygen, and particularly in biogas, hydrogen sulfide); Compressed Natural Gas Measurement Issues, by C.F. Blazek, J.A. Kinast and P. Freeman, Institute of Gas Technology (1993), B-50, 5 (natural gas varies in composition by location and seasonally); Natural Gas as a Stationary Engine and Vehicular Fuel, by William E. Liss and William H. Thrasher, SAE Technical Paper 912364 (1991), B-51, 44 (natural gas exhibits widely varying composition which is controlled through processing and separation steps); Alternatives to Traditional Transportation Fuels An Overview, Energy Information Administration, DOE/EIA-0585/O (1994), B-52, 52 (the variability in the composition of natural gas can affect its performance as a transportation fuel); Variability of Natural Gas Composition in Select Major Metropolitan Areas of the United States, by W.E. Liss, W.H. Thrasher, G.F. Steinmetz, P. Chowdiah, and A. Attari, Gas Research Institute Report No. GRI-92/0123 (1992), B-53, 14 (indicating that the methane content of natural gas can vary from 74.5 percent to 98.1 percent). --------------------------------------------------------------------------- The heating value of CNG (i.e., its energy content) is significantly lower than that of gasoline.\49\ But, CNG has excellent octane properties so that vehicles can use high compression ratios when CNG is the sole fuel. This gives improved combustion efficiency.\50\ --------------------------------------------------------------------------- \49\Automotive Fuels Handbook, B-34, 454-55. \50\Id., at 455 (both research octane number and motor octane number about 120). See also Introduction to Alternative Fuel Vehicles, B-35, 19 (research octane rating is about 130). The fairly high research octane rating of natural gas makes it relatively resistant to engine knock. The anti-knock property is a result of the high ignition temperature, resistance to ``autoignition,'' and the relatively low flame speed of natural gas. Id. --------------------------------------------------------------------------- CNG refueling transfers natural gas under pressure and may be set up as either slow-fill or fast-fill. Slow-fill generally uses over- night refueling and requires less costly refueling station equipment than fast-fill. Fast-fill refueling time is only slightly longer than gasoline refueling time.\51\ --------------------------------------------------------------------------- \51\Introduction to Alternative Fuel Vehicles, B-35, 17. --------------------------------------------------------------------------- (2) Hydrogen gas. Hydrogen gas can be produced by electrolysis of water or from natural gas or coal.\52\ Hydrogen may be used in an internal combustion engine (``ICE'') as a gaseous fuel similar to natural gas, or in a fuel cell to power an electric motor.\53\ Because it has a very high flame speed and a wide ignitability range, it can be used at extremely lean air-fuel ratios in ICEs.\54\ The advantages of using hydrogen in a fuel cell rather than an ICE, on the other hand, are high efficiency and a vehicle that has zero emissions.\55\ By using either hydrogen or electricity in vehicles, the emissions occur at the generating facility and are thereby centralized and easier to control, maintain, and monitor.\56\ --------------------------------------------------------------------------- \52\Automotive Fuels Handbook, B-34, 458. \53\``Hydrogen-Fueled Vehicles Technology Assessment Report,'' for California Energy Commission, by Technology Transition Corporation, and Center for Electrochemical Systems and Hydrogen Research, Texas A&M University (by principal investigators Dr. David Swan, Assistant Director, Center for Electrochemical Systems and Hydrogen Research, and Debbi L. Smith, Manager, Resource Development and Special Projects, Technology Transition Corporation), B-36, 1. \54\Automotive Fuels Handbook, B-34, 458. \55\Hydrogen-Fueled Vehicles Technology Assessment Report, B-36, 1. \56\Id. --------------------------------------------------------------------------- Use of hydrogen gas as a fuel for commercial and private vehicles, however, remains largely a matter of research and development. Hydrogen has been used in the energy sector to enhance gasoline refining and to fuel rockets for space travel. The historic difficulty in using hydrogen as a vehicle fuel has been how to store it and the lack of a sufficient infrastructure to supply the hydrogen in relatively small volumes. At the present time, it is not clear what power system technology is most suitable for the use of hydrogen and how much the power system and fuel storage will add to the cost of vehicles.\57\ First, the weight of the storage tank on the vehicle would be very high if the fuel was used either in the liquid or compressed gaseous form. Second, hydrogen gas is highly explosive when mixed with air. The use of hydrides, such as iron-titanium, however, is a possible way of overcoming these drawbacks. Hydrogen is adsorbed by the hydride and can be released by the application of heat obtained from the vehicle's exhaust. Although this system would overcome many of the safety problems, the range of the vehicle would be restricted, filling would be slow, and the cost could be high.\58\ --------------------------------------------------------------------------- \57\Id. \58\Automotive Fuels Handbook, B-34, 458. --------------------------------------------------------------------------- (3) Electricity. Electric vehicles (``EVs'') are powered by electricity stored in a rechargeable battery pack. Current EVs use lead-acid batteries. Battery technology is an area of primary research for EVs, with the goal of improving vehicle power and range. Nickel- iron and sodium-sulfur batteries, for example, are expected to have commercial EV applications within the next decade.\59\ Use of electric vehicles currently is limited. Expansion of the use of EVs will depend to a large extent on the development of an infrastructure to supply the electricity to recharge the vehicle's batteries. --------------------------------------------------------------------------- \59\Introduction to Alternative Fuel Vehicles, B-35, 35. --------------------------------------------------------------------------- EVs may be produced with or without an on-board charging system. EVs with on-board charging systems may be able to recharge their batteries by connecting to a standard electrical dispensing outlet, or may be able to utilize separate charging equipment, depending on the on-board charging system. The voltage required for recharging EV batteries depends on the battery type. For G-vans, a 200/250-volt, single phase, 60 amperes (``amp''), power source is needed. This voltage range is compatible with the U.S. standard voltage: 208/240- volt, single phase, 60 amp.\60\ --------------------------------------------------------------------------- \60\Id., at 36. The G-van is a limited production, one-ton van produced by Conceptior Industries, which became available December 1, 1990. According to Introduction to Alternative Fuels at 34, the G-Van is the only EV certified to meet all U.S. Federal Motor Vehicle Safety Standards (``FMVSS''). --------------------------------------------------------------------------- Battery charging currently involves connecting the battery pack to an off-board charger by plugging a cable into a socket in the front of the vehicle.\61\ After fully charging the batteries, periodic refresher charges are made to maintain the batteries in a fully charged state. Fully discharged batteries can be recharged in approximately 8 to 10 hours, depending on ambient temperature. Batteries that are not fully discharged require less charging time. Because batteries may be damaged from leaving them in a discharged state, a regular charging routine is recommended. Vehicle range may be extended throughout the day by recharging the batteries at a site other than a regular recharging station. These ``opportunity charges'' require an on-board charger, which is not currently included on most EVs.\62\ --------------------------------------------------------------------------- \61\Standard equipment for a charging station include an off- board charger and circuit breaker. An AC kwh meter is recommended to monitor power consumption. Id., at 36. \62\Id., at 41. --------------------------------------------------------------------------- The Electric Power Research Institute (``EPRI'') has identified three methods of EV charging for development, depending on the range of power levels anticipated for charging EVs. Level 1 would allow recharging by plugging into the most common grounded electrical outlet. Level 2 would require special equipment dedicated to EV charging and connection to the electric power supply. Level 2 is expected to be the primary method for charging at both private and public facilities. Level 3 would allow recharge at commercial fast charge stations in about the same time it takes to refuel an internal combustion vehicle.\63\ --------------------------------------------------------------------------- \63\``Electric Vehicle Charging Systems: Executive Summary'' (undated draft), Electric Power Research Institute (``EPRI''), submitted to Neil Blickman, FTC, on August 30, 1994, by W.I. Whiddon & Associates, Inc., B-49, 1-2. --------------------------------------------------------------------------- Two methods of connecting an EV or recharging are under development, conductive and inductive. Conductive connections are the most widely used method of connecting electrical sources and loads. A conductive connection consists of contacts that join the electrical conductors at the interface, such as plugging a lamp cord into a standard electrical outlet. In an inductively coupled system, alternating current power is transferred magnetically or ``induced'' between a primary winding on the supply side to a secondary winding on the vehicle side of the interface. Thus, there is no direct contact through which electrical power flows.\64\ --------------------------------------------------------------------------- \64\Id., at 2. --------------------------------------------------------------------------- 2. Comments on Disclosures Proposed in NPR The Commission proposed in the NPR that retailers of non-liquid alternative fuels post standard labels identifying the commonly used names of those fuels on public fuel dispensers (including electrical dispensing units and recharging stations used to recharge EV batteries).\65\ The Commission also proposed requiring disclosure of the gaseous fuel's principal component and permitting disclosure of other components, expressed as minimum percentages.\66\ The Commission's proposal recognized that electricity used for recharging EV batteries might need to be subject to different labeling disclosures, and solicited comment on whether a different measure of content (e.g., requiring disclosure of voltage for electricity) would be more appropriate.\67\ --------------------------------------------------------------------------- \65\59 FR 24014, 24018. \66\Id. CNG vehicle fuel is composed primarily of methane with small percentages of ethane, propane, butane, nitrogen, helium, carbon dioxide and hydrogen sulfide. Hydrogen vehicle fuel is composed primarily of hydrogen, with very small percentages of water, oxygen, and nitrogen. See sections III.B.1.b (1) and (2) supra. \67\Unlike the other alternative fuels, the electricity used to recharge the batteries that power electric vehicles is not dispensed from a conventional fuel pump. It is dispensed from an electrical dispenser or recharging station and produces different physical effects depending on the type of dispenser or charging equipment through which it is dispensed. See section III.B.1.b(3) supra. Therefore, the Commission recognized that electricity used as a vehicle fuel might have to be rated in accordance with the characteristics of the specific electrical dispenser or recharging station. --------------------------------------------------------------------------- Under the proposal, the labels would be placed conspicuously in full view of consumers (i.e., ultimate purchasers) and as near as reasonably practical to the fuel's unit price disclosure. These proposals are analogous to provisions in the Fuel Rating Rule pertaining to liquid alternative fuels.\68\ The Commission proposed this simple labeling requirement for fuel dispensers after considering how it might best balance consumers' needs for useful and timely cost and benefit information with the problems associated with displaying such information in a simple label format. --------------------------------------------------------------------------- \68\16 CFR 306.10(b)(1), 306.10(f) (1994). --------------------------------------------------------------------------- Twenty-three commenters addressed the issues raised in the NPR. None opposed the Commission's proposals as a whole. Nine commenters generally supported the Commission's proposals in their entirety because, if adopted, they would be consistent with the Fuel Rating Rule's requirements for liquid alternative fuels, and they would assist consumers in identifying the proper fuel for their vehicles.\69\ Three commenters also supported the Commission's proposals by stating specifically that the fuel dispenser label should identify the fuel in a standardized format to direct consumers to the correct fuel dispensers.\70\ These and other suggested labeling disclosures are discussed in more detail in sections III.B.3 and 4 infra. --------------------------------------------------------------------------- \69\API, G-25, 1-3; EIA/EEU-ISD, H-2, 1; Mobil, G-2, 1-3; NAFA, G-20, 1; NPGA, G-18, 2-3; Phillips 66, G-15, 1; RFA, G-5, 2-3, (Supp.), G-5, 1; SIGMA, G-23, 1; Sun, G-1, 1-2. \70\DOE, H-10, 2-4; RFA, G-5, 2-3, (Tr.), 28, 38; Thomas BB, G- 10, 1. See also AAMA (Tr.), 37, 62 (fuel dispenser label should identify the fuel). --------------------------------------------------------------------------- 3. Label Disclosures Proposed for Final Rule Based on the comments received and the requirements of section 406(a) of EPA 92, for the fuel labeling requirement the Commission proposes that retailers of the non-liquid alternative fuels CNG, hydrogen and electricity post standard labels identifying the commonly used names of those fuels on public fuel dispensers (including electric dispensers used to recharge batteries in electric vehicles).\71\ The labels would be placed conspicuously in full view of consumers and as near as reasonably practical to the fuel's unit price. --------------------------------------------------------------------------- \71\See Secs. 309.1(q) and 309.15 of the text of the proposed rule in section XI infra. --------------------------------------------------------------------------- With respect to CNG and hydrogen, the Commission also proposes requiring disclosure of the fuel's principal component and permitting disclosure of other components, expressed as minimum molecular percentages (``minimum mole percent'').\72\ These proposals are analogous to provisions in the Fuel Rating Rule pertaining to liquid alternative fuels.\73\ Most of the commenters addressing these issues stated they supported such proposals because, if adopted, they would be consistent with the Fuel Rating Rule's requirements for liquid alternative fuels, and they would assist consumers in identifying the proper fuel for their vehicles. Therefore, all alternative fuels marketed to consumers would be subject to consistent requirements.\74\ --------------------------------------------------------------------------- \72\Id. See also section III.B.5.b(1) infra. The unit of the amount of a substance is defined under the international system of units to be the amount of substance of a system that contains as many elementary entities as there are atoms in 0.012 kilogram of carbon 12. When the mole is used, the elementary entities must be specified and may be atoms, molecules, ions, electrons, other particles, or specified groups of such particles. ``The International System of Units (SI),'' NIST Special Publication 330 (1991 edition), August 1991, U.S. Department of Commerce, National Institute of Standards and Technology (hereinafter cited as ``NIST Publication 330''), B-43, 4-5. \73\16 CFR 306.10(b)(1) and 306.10(f) (1994). \74\API, G-25, 1-3 (until a private voluntary, consensus standards organization develops specifications for alternative fuels, additional disclosure requirements are inappropriate; expand Fuel Rating Rule to cover non-liquid alternative fuels to encourage fuel-neutral regulatory scheme; and labeling of principal component may provide useful information to consumers); EIA/EEU-ISD, H-2, 1 (expressed general support for the proposed rule); Mobil, G-2, 1-3 (the proposed label is consistent with the Fuel Rating Rule, and no other disclosures should be required, but allowing disclosure of components other than the fuel's principal component, without restrictions, could result in consumer misinformation); NAFA, G-20, 1 (endorses a uniform labeling requirement for alternative fuels); NPGA, G-18, 2-3 (extremely important that all alternative fuels be subject to essentially identical requirements, and the Commission's proposal is sufficient under the statutory requirements), (Tr.) 48- 49 (issue is how to get the consumer to the correct pump, and in that respect, the orange labels for liquid alternative fuels do an effective job); Phillips 66, G-15, 1; RFA, G-5, 2-3 (the benefit of providing additional information beyond that proposed is not well established), (Tr.), 28, 31, 38, (Supp.), G-5, 1 (the current labeling requirements for alternative fuels under the Fuel Rating Rule are adequate and the same labeling requirements should be extended to gaseous fuels); SIGMA, G-23, 1 (supports the proposed requirements and urges the Commission to adopt the proposed rule without change); Sun, G-1, 1-2 (agrees with the Commission's proposal to extend the Fuel Rating Rule labeling requirements to non-liquid alternative fuels thereby placing equal regulatory requirements on all alternative fuels). --------------------------------------------------------------------------- As mentioned, the principal component of the vehicle fuel CNG is methane, and the principal component of hydrogen is hydrogen. Several commenters specifically concurred with the Commission's proposal to require disclosure of the minimum methane content of CNG to assist consumers in purchasing CNG that satisfies requirements specified by engine manufacturers to meet performance and emissions certification levels.75 The Commission also notes that commenters and other technical sources indicate that because natural gas composition varies throughout the country, its methane content can vary from 85 percent to 99 percent.76 Methane content is important because CNG with too low a methane content will not meet manufacturers' requirements for CNG vehicle engines. Because CNG exists with too low a methane content to be used as a vehicular fuel,77 requiring disclosure of the minimum methane content will help ensure that non-vehicular CNG is not inadvertently sold for vehicular purposes. Although CNG sold as a vehicle fuel should always meet minimum vehicle needs, information about minimum methane content can help assure consumers that the CNG they are purchasing will meet their engines' needs. The Commission's proposed labeling approach for CNG and hydrogen provides a basic measure of fuel quality and, used in conjunction with the owner's manual containing the vehicle manufacturer's fuel recommendations, it provides consumers with the information necessary to select the fuel on which their vehicle has been designed to perform.78 --------------------------------------------------------------------------- \7\5AAMA (Tr.), 37, 62 (label should identify the fuel), 81 (at this time a minimum methane content disclosure is appropriate); Flxible (Tr.), 74, (Supp.), G-12, 2 (dispensers for CNG should be labeled with the minimum methane content due to the requirements dictated by some engine manufacturers to meet performance and emissions certification levels); RFA, G-5, 3; Sun, G-1, 1. \7\6See note supra. \7\7See Flxible (Tr.), 74-77. \7\8Although at present CNG vehicles apparently are designed to run on the broad range of methane content in available vehicle CNG, in the future manufacturers may design vehicles favoring specific, higher methane contents. If so, producers and marketers will have the flexibility to develop and blend fuels appropriate for those specifications as well as perhaps location and climate, and retailers will have the flexibility to adjust fuel dispenser labels accordingly, if they chose to do so. --------------------------------------------------------------------------- With respect to public electric vehicle fuel dispensing systems, the commenters recommended that the Commission require disclosure of the minimum operating parameters that are necessary to protect the consumer operating the equipment, the vehicle whose batteries are being charged, as well as the charging equipment. Several commenters suggested these parameters include disclosure of the voltage at which electrical power is supplied by electric charging equipment.79 Two commenters suggested that the electric recharging station label include the maximum current in amperes that can be delivered,80 and two recommended that the label indicate whether the charging equipment supplies alternating or direct current.81 Another commenter stated that because there are two distinct charging technologies, the label should indicate whether the unit is a conductive charger (a plug on a cord) or an inductive charger (a paddle in a port system).82 Two commenters indicated that the label should disclose the kilowatt capacity of the charging equipment to tell consumers how quickly their vehicles could recharge.83 --------------------------------------------------------------------------- \7\9AAMA (Tr.), 91-92; Boston Edison, G-26, 5-6, (Tr.), 88-91, 93-95, 100; CEC, H-8, 1-6; DOE, H-10, 2-4; Mobile, G-2, 3. \8\0Mobil, G-2, 3; CEC, H-8, 1-6. \8\1Boston Edison (Tr.), 90; CEC, H-8, 1-6. \8\2Boston Edison (Tr.), 88. \8\3Boston Edison (Tr.), 90; RFA (Supp.), G-5, 1. --------------------------------------------------------------------------- The commenters indicated that the proposed disclosures would be useful in assisting consumers to locate electric fuel dispensers that are compatible with the consumers' vehicles, and to determine how quickly their vehicles' batteries would recharge. Accordingly, the Commission proposes requiring several brief disclosures on labels on public electric vehicle fuel dispensing systems (i.e, electric charging system equipment and electrical energy dispensing systems).84 The proposed rule would require that labels on public electric vehicle fuel dispenser systems include, in addition to the commonly used name of the fuel (e.g., electricity), kilowatt capacity, voltage, current (either AC or DC), amperes and type of charger (either conductive or inductive).85 --------------------------------------------------------------------------- \8\4See Sec. 309.1(j), (l), and (m) of the text of the proposed labeling rule in section XI infra. \8\5See Secs. 309.1(q)(2) and 309.15 of the text of the proposed rule in section XI infra. --------------------------------------------------------------------------- The proposed requirements for CNG, hydrogen and electricity thus would provide consumers with the most important pieces of information needed when refueling: Fuel type and composition (or, for electricity, other relevant parameters). Although in the absence of such requirements sellers could be expected to identify the fuels sold, they may not do so in a standardized format that assists consumers in identifying the proper fuel quickly. Furthermore, it is uncertain whether they would provide information regarding the precise composition of the fuels, or relevant parameters of the EV fuel dispenser. In addition, the Commission has concluded that other comparative information on the fuel dispenser, as discussed in section III.B.4 infra, is unlikely to be necessary in most instances. For consumers with dedicated AFVs (i.e., vehicles capable of operating on only one fuel), the selection process between competing fuels is concluded once an AFV is acquired. Consumers driving dual or flexible fueled vehicles (i.e., vehicles capable of being powered both by a conventional and an alternative fuel) will be limited to purchasing fuels meeting their engines' requirements (one being gasoline, with which consumers are already familiar and which is already labeled with pertinent information). Thus, providing consumers with other information comparing various types of alternative fuels is best done prior to the time the vehicle is acquired. Further, excluding other, less important information avoids information overload. In contrast to vehicle purchases, consumers' fuel purchases typically occur in a quick transaction. In a report to Congress assessing the need for a uniform national label on fuel pumps, the Commission noted that time constraints may affect how consumers read, understand, and use information.86 Indeed, ``studies show that less accurate information processing occurs under time constraints; test subjects focus on fewer pieces of information and unduly emphasize negative information.''87 Simplicity therefore is an even greater consideration in the labeling of fuels than in the labeling of AFVs. --------------------------------------------------------------------------- \8\6Federal Trade Commission, Study Of A Uniform National Label For Devices That Dispense Automotive Fuels to Consumers (1993), at 29. \8\7Id., at 29 n.152. --------------------------------------------------------------------------- 4. Label Disclosures Considered But Not Proposed for Final Rule In formulating its labeling proposals in this notice, the Commission, as required, sought to reconcile several competing concerns. As noted previously, EPA 92 directs the Commission to develop uniform labels disclosing appropriate cost and benefit information. However, in determining what information is appropriate, it must consider the problems associated with developing and publishing such information on simple labels. Given this context, and after considering the comments, the Commission has considered and rejected several alternative disclosures for dispenser labels suggested by the commenters. a. Octane rating. Four commenters addressed whether the Commission should require, or allow, posting of octane ratings for non-liquid alternative fuels. Nebraska EO recommended that the Commission require disclosure of an octane number for spark ignition or a cetane number for compression ignition fuels.88 NACAA supported requiring disclosure of octane rating if alternative fuels are available in different grades.89 AGA/NGVC did not recommend that the Commission require disclosure of octane rating, but suggested that the Commission clarify that fuel retailers have the option of disclosing a fuel's minimum octane rating as an ``other component.''90 AGA/NGVC stated that, although octane levels for natural gas are not likely to vary at different retailers, the octane rating of natural gas is a valuable component that allows manufacturers to optimize dedicated vehicles to run more efficiently. AGA/NGVC asserted, therefore, that providing consumers with octane information highlights the advantages of natural gas and gives them a basis for comparing its qualities with other fuels. NPGA, however, suggested that it would not be appropriate for the Commission to require the posting of octane ratings for CNG, hydrogen or electricity. NPGA commented that there are no standards for determining the octane ratings of these fuels, and presently these fuels are not being developed to be available in different grades at a station.91 --------------------------------------------------------------------------- \8\8Nebraska EO, H-9, 1. \8\9NACAA, H-6, 1-2. \9\0AGA/NGVC, G-6, 5-6. \9\1Phillips 66/NPGA (Tr.), 49-50. --------------------------------------------------------------------------- The Commission's Fuel Rating Rule requires disclosure on fuel pumps of gasoline's octane rating, which is a measure of how well the gasoline resists engine knocking. The octane rating needed to prevent knocking varies with the engine's compression ratio, and different engines may require gasoline with different octane ratings. The Fuel Rating Rule is designed to enable consumers to buy gasoline with an octane rating high enough to prevent engine knock, and to help consumers avoid ``octane overbuying'' or buying gasoline with an octane higher than needed to prevent engine knock. When it conducted the rulemaking proceeding to add pump posting requirements for liquid alternative fuels to the Fuel Rating Rule, the Commission noted that, unlike gasoline, the physical and chemical properties of each liquid alternative fuel may not vary substantially.92 The Commission also observed that it expected that engines designed for alternative fueled vehicles would be designed to use fixed-octane alternative fuels without engine knock. The Commission further stated that there might be practical problems in implementing a reliable octane certification and posting program for alternative liquid automotive fuels, because of the lack of a standardized, such as an ASTM-approved, test method for determining octane ratings of such fuels.93 Finally, the Commission expressed concern that the posting of high octane ratings associated with alternative liquid automotive fuels may contribute to the misperception that high-octane gasoline always is best for vehicles, and thereby aggravate existing gasoline octane overbuying.94 --------------------------------------------------------------------------- \9\258 FR 16464, 16469. \9\3Id. \9\4Id. at 16470. --------------------------------------------------------------------------- After considering the comments submitted in this proceeding, as well as the comments submitted in the liquid alternative fuel amendment proceeding (which the Commission finds are relevant to this proceeding),95 the Commission has determined not to propose requiring the posting of octane ratings for CNG and hydrogen. The Commission has concluded that, unlike octane ratings for gasoline, there appears to be little or no benefit to disclosing octane ratings for alternative fuels at this time. Octane ratings for alternative fuels are high enough to avoid engine knock problems in vehicles designed to use alternative fuels, and, such ratings do not provide information relevant to vehicle performance of alternative fueled vehicles. In addition, the octane ratings of a given type of alternative fuel would not vary significantly.96 --------------------------------------------------------------------------- \9\5See 58 FR 41356, 41361. \9\6Phillips 66/NPGA (Tr.), 49-50. --------------------------------------------------------------------------- In contrast, there are significant disadvantages to requiring octane posting and certification for alternative fuels. In particular, the Commission is reluctant to require a disclosure that might mislead consumers about the significance of the high octane ratings of alternative fuels, which exceed the octane ratings of gasoline. Such a disclosure also might cause consumers to believe that gasoline and alternative fuels are interchangeable, or that different alternative fuels are interchangeable with one another. Further, it also might foster consumer misperceptions that higher octane necessarily signifies higher quality and better performance.97 --------------------------------------------------------------------------- \9\7Id. --------------------------------------------------------------------------- b. Comparative information based upon BTUs or gasoline-gallon- equivalents. As an alternative to the Commission's proposal, three commenters, Unocal, PCC and DOE, suggested that the Commission require the use of alternative fuel labels that advise consumers of the price of an alternative fuel and the quantity of the alternative fuel dispensed in terms of gasoline-gallon-equivalent (``GGE'') units based on the energy contents of the alternative fuels.98 According to the commenters, such a disclosure would allow consumers to compare the cost of an alternative fuel to that of gasoline using a common energy unit. --------------------------------------------------------------------------- \9\8DOE, H-10, 2-4; PCC, G-22, 1, 3; Unocal, G-9, 2. --------------------------------------------------------------------------- However, seven commenters suggested that such comparative cost data is not conducive to fuel labeling and is more a dispenser equipment metering and fuel marketing issue.99 The commenters also indicated that Commission requirements to disclose comparative cost data in terms of the energy contents of alternative fuels may not be necessary if the weights and measures organizations accept, as a method of sale, measurement of alternative fuels in terms of gasoline-gallon- equivalents. --------------------------------------------------------------------------- \9\9AGA/NGVC, G-6, 3, 5-6, (Tr.), 44, 59; API, G-25, 1-3 (commercial information that enables the consumer to evaluate the costs of an alternative fuel purchase will be displayed on the dispenser); DOE (Tr.), 53 (GGE is more a metering issue); ETC (Tr.), 41; Mobil, G-2, 1-2; NACAA (Tr.), 39 (information relating to the sale of fuels by gasoline-gallon-equivalents is more a metering and marketing issue); RFA (Tr.), 57. --------------------------------------------------------------------------- Indeed, the Commission notes that the National Conference on Weights and Measures (``NCWM''), a consensus standards-writing organization for state and local regulatory agencies, at its recent annual meeting, adopted for national use the GGE as a method of sale for CNG sold as an engine fuel.100 According to the NCWM, the GGE is defined as 5.660 pounds of CNG. (Consumers would not purchase one gallon of CNG, but would receive 5.660 pounds of CNG with the approximate equivalent energy of a gallon of gasoline.). --------------------------------------------------------------------------- \1\00See Program and Committee Reports for the National Conference on Weights and Measures 79th Annual Meeting, July 17-21, 1994, B-37; and Brickencamp, Method of Sale for CNG Paves Way to Greater Public Acceptance, Nat. Gas Fuels, Sept. 1994, B-47, 47. --------------------------------------------------------------------------- CNG dispensers, therefore, will likely display three items of information: (1) Total sale price for the CNG in dollars, e.g., $3.75, (2) amount of CNG in GGE in this sale, e.g., 5.00, and (3) unit price per GGE in dollars/GGE, e.g., $0.749. A NCWM approved dispenser label also would state, ``1 Gasoline Gallon Equivalent is Equal to 5.66 lbs. of Natural Gas. This quantity of Natural Gas delivers approximately the same amount of energy to your vehicle as a typical gallon of gasoline.'' After considering the comments received, and the NCWM's recent action, the Commission has determined not to propose GGE disclosures. Such information is not conducive to keeping the fuel label simple as required by EPA 92. Further, NCWM's action indicates this information is more an equipment metering issue that is more properly addressed by weights and measures organizations. Commission required disclosures would be unnecessary and duplicative, especially in connection with the sale of CNG. Moreover, if national conversion factors for the GGE of other alternative fuels are defined in the future, then it is likely that weights and measures authorities will issue requirements to enable the sale of those fuels in energy equivalencies. Further, there is no evidence on the record to suggest that the Commission could define the GGE of fuels other than CNG at this time. On a related point, Boston Edison stated that comparisons based upon GGEs are less accurate than those based upon fuel neutral British thermal units (``Btus'').\101\ However, two commenters specifically opposed a requirement that fuel dispenser labels identify the heating value or energy content of a fuel expressed in Btus. AGA stated that a Btu disclosure would be practically meaningless to consumers,\102\ and NPGA stated that a Btu rating might be useful to consumers only when choosing a new vehicle or deciding whether to convert an existing vehicle to an alternative fuel, but not when refueling.\103\ --------------------------------------------------------------------------- \101\Boston Edison, G-26, 5-6. \102\AGA/NGVC (Tr.), 24. \103\Phillips 66/NPGA (Tr.), 50. --------------------------------------------------------------------------- After considering the record, the Commission has decided not to propose requiring that fuel dispenser labels identify the fuels' heating values. Instead of helping consumers make informed purchasing decisions, this option might instead confuse or mislead consumers. The energy content of a fuel, as measured by its Btu rating, is an imprecise gauge of that fuel's actual fuel economy. Driving range and fuel economy are the function of many variables (e.g., engine design, engine efficiency, driving habits), and not simply the energy content of a fuel. As a result, Btu ratings do not always accurately reflect actual fuel economy. In addition, because the heating values of the alternative fuels are less than the heating value of gasoline, labels based on heating values might encourage consumers to purchase gasoline, because such labels might suggest alternative fuels are less efficient than gasoline. Finally, the Commission notes that the BTU content of alternative fuels is largely determined by their chemical content. Thus, disclosure of the percentage content of the principal component provides the energy content information that consumers need to make fuel cost comparisons. For example, if a consumer knows the price per gallon of M-85 and the miles-per-gallon a vehicle can achieve on M-85, then he can calculate the fuel cost per mile. Similarly, if a consumer knows the price per cubic foot of CNG consisting of 90 percent methane and the miles-per-cubic foot achievable with that fuel, he can calculate the fuel cost per mile. c. Performance effects (cruising range). One commenter suggested that fuel dispenser labels advise consumers that the cruising range of the vehicle when running on an alternative fuel will be less than when the vehicle is running on gasoline due to the alternative fuel's lower energy content.\104\ However, two commenters stated that information relating to the vehicle's cruising range is not appropriate for a dispenser label.\105\ Phillips 66/NPGA further commented that cruising range is not necessarily less when operating on an alternative fuel, such as propane.\106\ --------------------------------------------------------------------------- \104\PCC, G-22, 1, 3. \105\AGA/NGVC (Tr.), 37; Phillips 66/NPGA (Tr.), 50-51. \106\Phillips 66/NPGA (Tr.), 50. --------------------------------------------------------------------------- After considering the comments, the Commission has determined that a general statement on a fuel dispenser label relating to cruising range would not provide sufficient comparative information to consumers to enable them to make reasonable purchasing choices and comparisons between fuels of the same type. However, the Commission recognizes that information relating to cruising range would be useful to consumers when choosing a vehicle or deciding whether to convert an existing vehicle to an alternative fuel. Therefore, the Commission has tentatively determined that information relating to cruising range would be appropriate on labels it is proposing for covered AFVs, as discussed in section III.C infra. d. Meets material specifications. Several commenters pointed out the need for fuel specifications for all alternative fuels.\107\ To expedite the establishment of such national specifications, AMI recommended that the fuel dispenser labels guarantee delivery of alternative fuels meeting specifications defined by the California Air Resources Board in 1993,\108\ until national standards are in place. AMI stated that without specifications, neither emission benefits nor engine performance can be reliably determined, to the ultimate detriment of the consumer.\109\ Another commenter, however, specifically stated that California's fuel specifications may not be practical for the rest of the country.\110\ --------------------------------------------------------------------------- \107\AAMA (Tr.), 29; AMI, G-3, 1; API, G-25, 1-3, (Tr.), 28, 77; EMA, G-21, 8-9, (Supp.), 1-2; Flxible (Tr.), 76; NAFA (Tr.), 74; RFA (Tr.), 38; Thomas BB, G-10, 1. \108\See Specifications for Compressed Natural Gas, Title 13, California Code of Regulations, Sec. 2292.5 (1993), B-41; Specifications for Hydrogen, Title 13, California Code of Regulations, section 2292.7 (1993), B-42. \109\AMI, G-3, 1. \110\AAMA (Tr.), 29. --------------------------------------------------------------------------- During its rulemaking proceeding to establish automotive fuel ratings for the liquid alternative fuels, the Commission also considered this type of labeling approach, and whether it would be feasible to assist consumers in making choices and comparisons between alternative fuels.\111\ Most commenters in that proceeding supported a fuel labeling approach based on specifications, but only if it was based on consensus fuel standards or specifications. Under this approach, disclosure of a particular fuel descriptor would indicate that the fuel meets technical material specifications established by a recognized standards-setting organization. Standards established under a consensus process would have the advantage of being developed with input from and approval of engine manufacturers, fuel suppliers, users, and regulators. The use of label descriptors based on standard specifications would benefit consumers because they could determine easily whether alternative fuels marketed under the descriptors were compatible with the original vehicle equipment manufacturer's requirements. In addition, this approach would allow an alternative liquid automotive fuel supplier to improve the fuel beyond the minimum specifications and promote the improved fuel over those of its competitors. --------------------------------------------------------------------------- \111\58 FR 41356, 41364, 41365. In the Alternative Fuel Rule proceeding, several commenters also opposed Commission adoption of alternative fuel specifications developed by the California Air Resources Board, because they were not developed by a consensus process, were technically flawed, and were developed for California's particular needs and, therefore, could be overly restrictive for other parts of the country. Id. --------------------------------------------------------------------------- As anticipated by the Commission, however, the primary objection in the liquid alternative fuels proceeding to this option was that neither the American Society for Testing and Materials (``ASTM'') nor any other consensus standards-setting organization had developed and adopted specifications and standards for most of the alternative automotive fuels (the exception being liquefied petroleum gas for which ASTM has developed a standard). One commenter in the current proceeding specifically noted that ASTM has not developed a standard for CNG.\112\ But, another commenter stated that the Society of Automotive Engineers has established a ``recommended practice'' for CNG called J1616.\113\ Recommended practice SAE J1616 was issued as a guide to address the composition of natural gas used as an automotive fuel, not as a standard for CNG. The guide states it anticipates that a CNG standard will evolve, but emphasizes that experience and more technical knowledge are needed.\114\ --------------------------------------------------------------------------- \112\API (Tr.), 77. \113\AGA/NGVC (Tr.), 24. \114\Society of Automotive Engineers, ``Recommended Practice for Compressed Natural Gas Vehicle Fuel,'' SAE J1616, B-40, 16. --------------------------------------------------------------------------- Disclosure of a fuel descriptor based on accepted and approved fuel specifications and standards could provide meaningful comparative information to consumers relating to the quality of the fuel they are purchasing. After considering the comments in this proceeding, however, and in light of the conclusions reached by the Commission in the liquid alternative fuel proceeding, the Commission finds that adequate, generally accepted standards and specifications suitable for nationwide use do not presently exist for most alternative fuels, and specifically do not exist for CNG or hydrogen. Further, the Commission has an insufficient record and basis on which to adopt California's standards for alternative vehicle fuels. Therefore, the Commission has determined not to propose that fuel dispenser labels guarantee the delivery of fuels meeting California's specifications. The Commission continues to favor the development of specifications and standards that define alternative fuels by a consensus standards- setting organization, such as ASTM, or by a government agency with appropriate engineering and technical expertise to set such specifications and standards for nationwide use. This would permit participation by affected parties such as alternative fuel producers and providers, engine manufacturers, regulators, consumers, and organizations or government agencies with pertinent technical expertise. It also would provide a mechanism for evaluating proposed test methods and procedures necessary to determine compliance with the standards. e. Environmental benefits (emissions). AMI suggested that the fuel dispenser label indicate the environmental benefits of alternative fuels.115 Specifically, AMI suggested that the Commission require disclosure of a generic statement on alternative fuel labels such as: ``Use of this fuel can result in significant reductions in exhaust pollutants compared with an equivalent gasoline powered vehicle.'' Phillips 66/NPGA commented, however, that such a statement would not particularly assist consumers in making a fuel purchasing decision at the dispenser.116 --------------------------------------------------------------------------- \1\15 AMI, G-3, 2. \1\16Phillips 66/NPGA (Tr.), 51. --------------------------------------------------------------------------- After considering the comments, the Commission has determined that including such a generic statement on the fuel dispenser label would not provide sufficient information to assist consumers in making choices and comparisons. However, the Commission recognizes that information relating to emissions and the environmental benefits of alternative fuels would be useful to consumers when choosing an alternatively fueled vehicle or deciding whether to convert an existing vehicle to an alternative fuel. Therefore, the Commission has tentatively determined that information relating to emissions would be appropriate on the labels it is proposing for covered AFVs, as discussed in section III.C infra. f. Pressure. For safety reasons, two commenters recommended that CNG fuel dispensers display the fueling pressure, either 2,400, 3,000 or 3,600 P.S.I. (pounds per square inch) so that dispenser fueling pressure is compatible with CNG vehicle tank storage pressure.117 For example, fueling a 2,400 P.S.I. vehicle tank from a 3,600 P.S.I. fueling dispenser could result in severe damage to a fueling system, as well as personal injury if an explosion occurred. Two commenters, however, indicated that fueling pressure is a safety issue that has been addressed by the industry in designing dispensers. Therefore, this information is unnecessary on a CNG dispenser label.118 --------------------------------------------------------------------------- \1\17Flxible (Supp.), G-12, 2; Thomas BB, G-10, 1. \1\18Phillips 66/NPGA (Tr.), 51; AGA/NGVC (Tr.), 103-104. --------------------------------------------------------------------------- In developing this proposal, the Commission considered whether including fueling pressure on CNG dispenser labels would provide timely comparative information to consumers in light of the independent steps the industry has taken to address this issue. The commenters indicated that the industry has developed pressure coded standard dispenser/ vehicle CNG connectors so that consumers will not be able to overfuel a low pressure vehicle from a high pressure dispenser.119 Further, the use of standard CNG vehicle fueling connectors complying with the ANSI/AGA NGV1 specification is required at public dispensing points by National Fire Protection Association safety standard 52 (``NFPA 52''), which is a fire code adopted by most, if not all, states.120 Accordingly, the Commission has determined that a proposal requiring the disclosure of fueling pressure on CNG dispenser labels is unnecessary at this time. Further, the proposed rule would require that labels for new and used covered AFVs include standard statements informing consumers that they can obtain vehicle safety information by calling the toll-free telephone number for DOT/NHTSA's Auto Safety Hotline, as discussed in section III.C infra. --------------------------------------------------------------------------- \1\19See ANSI/AGA NGV1-1994 American National Standard For Compressed Natural Gas Vehicle (NGV) Fueling Connection Devices, attached to AGA/NGVC's comment, G-6. \1\20ANSI/NFPA 52 Compressed Natural Gas (CNG) Vehicular Fuel Systems, 1992, B-39. See also Stookey, An Analysis of the 1994 Uniform Fire Code Requirements for CNG Fuel Stations, Nat. Gas Fuels, June 1994, at 27-30, B-48. --------------------------------------------------------------------------- g. Safety warnings. Several commenters focused on safety issues.121 NACAA stated, for example, that the labels should note any hazards or cautions to prevent damage to automotive engines.122 Nebraska EO commented that labels should include a cautionary note that this and all fuels are hazardous.123 --------------------------------------------------------------------------- \1\21E.g., Thomas BB, G-10, 1. \1\22NACAA, H-6, 1-2. \1\23Nebraska EO, H-9, 1. --------------------------------------------------------------------------- The Commission has considered whether including a safety warning statement on a fuel dispenser label would help consumers make reasonable fuel choices and comparisons. The Commission notes, however, that safety standards for operation of motor vehicle fuel-dispensing stations are covered by the Uniform Fire Code.124 Further, to some extent, the proposed fuel labeling requirements, particularly those for EV public dispenser systems, implicitly consider safety issues for refueling by directing consumers to the proper fuel dispenser. Beyond this (and fire code requirements that are already in place), consumers considering the purchase of AFVs may find safety information more pertinent when purchasing an AFV. Accordingly, the Commission has determined that rather than propose that safety disclosures appear on fuel dispenser labels, it will propose requiring a reference to DOE's consumer information brochure and NHTSA's Vehicle Safety Hotline on labels for covered AFVs, as discussed in section III.C infra. Consequently, the Commission anticipates that a marketer's refueling instructions, whether appearing in an AFV owner's manual or on the fuel dispenser, would discuss or incorporate relevant safety measures. However, if in the future information becomes available demonstrating a need for the Commission to require safety-related disclosures on the dispenser labels, the Commission can consider it during its periodic review of the Rule. --------------------------------------------------------------------------- \1\24For example, in July 1993, the voting membership of the Uniform Fire Code (``UFC'') and Uniform Fire Code Standards adopted new regulations for the design, construction and operation of CNG motor vehicle fuel-dispensing stations. The minimum requirements are primarily based on the requirements of NFPA 52, ``Standard for CNG Vehicular Fueling Systems,'' 1992 edition. The Uniform Fire Code (which is a democratic code development organization whose membership includes fire and building officials, design professionals, equipment manufacturers and trade organizations) and the Uniform Fire Code Standards are a model code that provides minimum design requirements for building and site fire protection, the safe storage and use of hazardous materials, general fire and life safety requirements and maintenance requirements for the fire safety and fire protection designs of the Uniform Building Code. Article 52 of the 1994 Uniform Fire Code addresses the design, construction, commissioning and operation of all motor vehicle fuel- dispensing stations. See Stookey, An Analysis of the 1994 Uniform Fire Code Requirements for CNG Fuel Stations, Nat. Gas Fuels, June 1994, B-48, 27. --------------------------------------------------------------------------- h. Refueling instructions. One commenter recommended that fuel dispenser labels include appropriate refueling instructions.125 As a marketing issue, however, alternative fuel marketers will want to display refueling instructions for consumers on alternative fuel dispensers prominently, as is done now on gasoline dispensers. Thus, the Commission believes that it is unnecessary to include refueling instructions on fuel dispenser labels. Such instructions may vary by fuel and may exceed the constraints of a simple label format. Accordingly, the Commission has determined not to propose requiring that refueling instructions appear on fuel dispenser labels for the non-liquid alternative fuels. --------------------------------------------------------------------------- \1\25Thomas BB, G-10, 1. --------------------------------------------------------------------------- i. Wobbe number. Two commenters stated that for CNG, two primary factors that describe the general characteristics of natural gas are the methane content and the Wobbe number.126 According to RFA, the Wobbe number is a measure of the fuel energy flow rate through a fixed orifice under given inlet conditions. RFA states that a change in Wobbe number of the gas will have a direct correlation to changes in engine performance due to variations in the air/fuel ratio of orifice based metering systems of vehicles.127 In addition, EMA stated that the Wobbe number is an indicator of the fuel's heating value.128 Although neither commenter recommended that the Commission require disclosure of the Wobbe number on CNG dispenser labels, their comments suggested that the Commission should at least consider it as an option. One commenter specifically opposed a Wobbe number disclosure, stating it would be so difficult to explain that consumers would not find it useful.129 --------------------------------------------------------------------------- \1\26EMA (Supp.), G-21, 1-2; RFA, G-5, 3. \1\27RFA, G-5, 3. \1\28EMA (Supp.), G-21, 1-2. \1\29AGA/NGVC (Tr.), 43. --------------------------------------------------------------------------- After considering the comments, the Commission believes that the purported benefits to consumers of including the Wobbe number on CNG labels are speculative and do not exceed the costs to industry. If, as has been suggested, the Wobbe number is an indicator of heating value, then it should be correlated with methane content and thus indicated indirectly by disclosure of the percentage content of methane. Further, while the Wobbe index may be important to engine manufacturers and fuel producers as an important element of a fuel specification, CNG labels based on a Wobbe number could be confusing or misleading to consumers attempting to determine the relationship between the Wobbe number and actual engine performance. Accordingly, the Commission has determined not to propose requiring disclosure of the Wobbe number on CNG dispenser labels. 5. Additional Proposals for Final Rule a. Label size and format. In the NPR, the Commission proposed that labels for non-liquid alternative fuels follow the same standardized size and format requirements as those for liquid alternative fuels under the Fuel Rating Rule,130 and sought comment on this proposal.131 Nine commenters addressed questions concerning the size and format of alternative fuel labels, and none opposed the proposals. --------------------------------------------------------------------------- \1\30 Labels required by the Fuel Rating Rule are 3 inches wide by 2\1/2\ inches long, with process black type on an orange background. 16 CFR 306.12 (1994). \1\3159 FR 24014, 24021. --------------------------------------------------------------------------- Seven commenters stated that non-liquid alternative fuels should follow the same size and format requirements as liquid alternative fuels under the Fuel Rating Rule.132 The reasons given for keeping the requirements the same were: promoting consistency,133 keeping information simple so that consumers can easily understand the labels,134 and fairness and equity.135 SIGMA stated simply that it supported the proposed requirements and urged the Commission to adopt the proposed rule without change.136 --------------------------------------------------------------------------- \1\32AGA/NGVC, G-6, 8; API, G-25, 4 (provided that content requirements for non-liquid alternative fuels are similar to those for liquid alternative fuels in the Fuel Rating Rule, similar size and format labels are appropriate, consistent, and should be recognizable to consumers); Mobil, G-2, 4; NPGA, G-18, 4; RFA, G-5, 4; Sun, G-1, 2; Thomas BB, G-10, 2 (does not understand why non- liquid fuels should be treated differently than liquid fuels). AGA/ NGVC and API did not state reasons for their comments. \1\33Mobil, G-2, 4; RFA, G-5, 4. \1\34Sun, G-1, 2. \1\35NPGA, G-19, 4. \1\36SIGMA, G-23, 1. --------------------------------------------------------------------------- Although section 406(a) does not specify size and format standards for alternative fuel labels, it directs the Commission ``to establish uniform labeling requirements, to the greatest extent practicable.'' It also specifies that ``[r]equired labeling under the rule shall be simple and, where appropriate, consolidated with other labels providing information to the consumer.'' In the NPR, the Commission proposed that the non-liquid alternative fuel labels not be consolidated with other mandatory labels or require otherwise duplicative disclosures.137 Only one commenter addressed this issue, stating that consolidation would appear to provide no benefit and would only lead to public confusion.138 After considering the comments, the Commission proposes that non-liquid alternative fuels labels follow the same standardized size and format requirements of the Fuel Rating Rule.139 Further, to keep the labels uniform and simple, the Commission does not propose requiring any label consolidation. --------------------------------------------------------------------------- \1\3759 FR 24014, 24018. \1\38TVA, H-5. \1\39See section 309.17 of the text of the proposed labeling rule in section XI infra. --------------------------------------------------------------------------- b. Substantiation, certification, and recordkeeping requirements. An objective product claim carries with it a representation that the seller possessed and relied upon a reasonable basis for that claim.140 When a seller does not expressly or impliedly state a certain level of support for a representation, the Commission assumes that consumers expect the seller to have a reasonable basis for the claim.141 Further, ``a firm's failure to possess and rely upon a reasonable basis for objective claims constitutes an unfair and deceptive act or practice in violation of Section 5 of the Federal Trade Commission Act.''142 The fuel dispenser labeling rule the Commission proposes would require that sellers possess adequate substantiation to ensure that the information on the labels is accurate and reliable, and, as required by section 406(a) of EPA 92, that the information can ``reasonably enable the consumer to make choices and comparisons.'' --------------------------------------------------------------------------- \1\40Thompson Medical Co., 104 F.T.C. 648, 813 (1984), aff'd, 791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479 U.S. 1086 (1987). \1\41FTC Policy Statement Regarding Advertising Substantiation, 104 F.T.C. 839, 840. See Thompson Medical, 104 F.T.C. 786, 813. \1\42FTC Policy Statement Regarding Advertising Substantiation, 104 F.T.C. 839. --------------------------------------------------------------------------- When products are sold in units, packaged or unpackaged, ``labeling'' normally is accomplished by disclosing information on the product packaging, on a label attached directly to the product, or marked directly on the product.143 Most often, though not always, such labeling disclosures are added to the product or product packaging by the party producing the product. Items sold in bulk (such as gasoline or alternative fuels), on the other hand, cannot be labeled on individual or multiple unit packaging to ensure that the ultimate consumer sees the labeled information. The only practical method of ensuring that labeling information for such products reaches the consumer is to label the bulk product dispenser at the point of retail sale. --------------------------------------------------------------------------- \1\43See, e.g., Rule Concerning Disclosures of Information about Energy Consumption and Water Use for Certain Home Appliances and Other Products Required under the Energy Policy & Conservation Act (``Appliance Labeling Rule''), 16 CFR Part 305 (1994); Trade Regulation Rule Concerning the Labeling and Advertising of Home Insulation (``R-value Rule''), 16 CFR Part 460 (1994). --------------------------------------------------------------------------- From a practical standpoint, retail sellers of alternative fuels are not in a position to determine the accuracy of the information to be disclosed about the specific fuel. It would be impractical, and probably more expensive to the consumer, to require retail sellers to test each delivery of a gaseous fuel or to test the electric vehicle fuel dispenser systems they use to determine the accuracy of the information they must disclose on labels on fuel dispensers. In making disclosures to consumers, retail sellers of alternative fuels, therefore, must rely on the accuracy of the information provided to them from gaseous fuel importers, producers, refiners and distributors, or from manufacturers and distributors of electric vehicle fuel dispenser systems. The Commission believes that substantiation, certification, and recordkeeping requirements for importers, producers, refiners and distributors of gaseous alternative fuels, and manufacturers of electric vehicle fuel dispenser systems, and substantiation and recordkeeping requirements for retail sellers of non-liquid alternative vehicle fuels (including electricity) are necessary to ensure that the information posted on labels on retail fuel dispensers is accurate.144 The Commission, therefore, proposes to include substantiation, certification, and recordkeeping requirements in the rule, similar to such requirements in the Fuel Rating Rule for sellers of liquid alternative fuels. --------------------------------------------------------------------------- \1\44The Commission stated in the NPR that it believed that harmonizing labeling requirements for non-liquid and liquid alternative fuels, when practicable, would be appropriate. However, the Commission stated that it believed that requiring retailers to post consistent with ratings certified to them and to maintain records, as is required for liquid alternative fuels in the Fuel Rating Rule, would be beyond the scope of the Commission's mandate under section 406(a) of EPA 92 (59 FR 24014, 24018 n. 133). Upon further consideration, and in light of the discussion in the text supra, the Commission reconsidered that position and has determined to propose requiring substantiation, certification, and recordkeeping requirements for non-liquid alternative fuels like those for liquid alternative fuels in the Fuel Rating Rule. The Commission believes that the proposed requirements are justified because they are rationally related to the establishment of ``uniform labeling requirements'' that provide important information to consumers. Interested parties are invited to address the proposed requirements in their written comments in response to this SNPR. --------------------------------------------------------------------------- (1) Substantiation. The Commission's labeling proposals would require labeling disclosures only of the type of non-liquid alternative vehicle fuel (including electricity), and of the minimum molecular percent (a more accurate description than volume of the content of a gas) of the principal component of each gaseous alternative vehicle fuel and of specific, limited information about the output of the electric vehicle fuel dispenser system. Under the Commission's advertising substantiation doctrine, which requires sellers to have a reasonable basis to support material, objective claims, the Commission proposes requiring that importers, producers, and refiners of non- liquid alternative vehicle fuel (other than electricity) have a reasonable basis, consisting of competent and reliable evidence, that substantiates the minimum mole percent of the principal component that retailers must disclose on fuel dispenser labels. For the minimum mole percent content of methane (the principal component) in CNG, the Commission proposes requiring that the reasonable basis be tests conducted according to ASTM D 1945-81.145 For the minimum mole percent content of hydrogen (the principal component) in hydrogen gas, the Commission proposes requiring that the reasonable basis be tests conducted according to ASTM D 1946-90.146 These ASTM documents include test procedures, developed through the ASTM consensus process, to determine the chemical composition of CNG and hydrogen, respectively, including the mole percent of methane in CNG and of hydrogen in hydrogen gas.147 --------------------------------------------------------------------------- \1\45See note infra. \1\46Id. \1\47The Fuel Rating Rule did not require that specific ASTM test methods be used to satisfy the Rule's reasonable basis standard for liquid alternative fuels because existing ASTM test methods were undergoing verification review to determine whether they would be appropriate for use in establishing standards for the liquid alternative fuels. Further, the Commission was informed that other test methods were being developed that might serve equally well as part of a liquid alternative fuel standard. On the other hand, the Commission understands that the ASTM test methods it proposes requiring as a reasonable basis for determining the minimum molecular percentages of the principal components of CNG and hydrogen have been ASTM test methods for many years and have been recognized as competent and reliable procedures. Further, the Commission understands that no other test methods that could be used to make these determinations have been proposed to the California Air Resources Board or are under development by any standards- setting organizations. If additional test methods are developed in the future, the Commission will consider whether to include them among the required test methods. --------------------------------------------------------------------------- For the minimum mole percent content of any other component that importers, producers, or refiners wish to certify, the proposed rule would not specify the test procedure they must use, but only that they have a reasonable basis, consisting of competent and reliable evidence, to substantiate the claim. The proposed rule would not require that importers, producers, or refiners meet particular material specifications or standards for the common name they use to describe the non-liquid alternative vehicle fuel (other than electricity) they distribute, but that they have a reasonable basis, consisting of competent and reliable evidence, to substantiate the common name or identifier they use. Similarly, manufacturers of electric vehicle fuel dispenser systems would be required to have a reasonable basis, consisting of competent and reliable evidence, to substantiate the information retail sellers must post on labels on the electric vehicle fuel dispensers. Distributors and retail sellers could rely on the certifications they receive, as discussed in section III.B.5.2 infra, so their burden would be minimal. Distributors and retailers would not need to make the actual determinations unless they alter the fuel they receive before reselling it.148 --------------------------------------------------------------------------- \1\48See Secs. 309.13(c) and 309.15(c) of the text of the proposed rule in section XI infra. --------------------------------------------------------------------------- For public electric vehicle fuel dispenser systems, the information the Commission proposes requiring to be disclosed can be measured using standard measuring devices or procedures. Therefore, accurate measurements made using standard electric industry procedures that are recognized as competent and reliable would be sufficient to serve as the required reasonable basis. Currently, there is not sufficient record evidence for imposing specific, nationwide, minimum material standards or specifications for the composition of CNG or hydrogen gas.149 Neither ASTM nor any other standards-setting entity has developed and adopted consensus material specifications for these non-liquid (gaseous) alternative fuels. Nor do federal specifications currently exist. As previously discussed, the state of California has issued minimum material specifications for both CNG and hydrogen gas sold in California.150 These specifications require determination of the minimum mole percent composition of the principal component of these gaseous alternative fuels according to the specific ASTM test procedures that the Commission proposes to require as substantiation for the proposed disclosures.151 Although the Commission could require that non-liquid alternative fuels meet the California minimum material specifications, there is insufficient evidence on the record for doing so. Further, in the absence of more extensive information, which may not yet exist, mandating that non-liquid (gaseous) alternative fuels meet any particular minimum material standards specifications could have unforeseen adverse anti-competitive, environmental, or vehicle performance effects.152 However, because it is important that sellers base objective disclosures on uniform measurements when recognized and accepted uniform measurement procedures are available, and because ASTM has issued test procedures to measure the minimum mole percent of the principle components of CNG and hydrogen, the Commission has determined to propose requiring use of the ASTM test procedures to substantiate those disclosures. --------------------------------------------------------------------------- \1\49See AMI, G-3, 1; CEC, H-8, 6 (not aware of any existing, adequate and generally accepted standards for disclosures for alternative fuels). \1\50See note supra. \1\51The ASTM test procedures referenced in the California specifications are: (1) for measuring the mole percent of methane in CNG--ASTM D 1945-81; (2) for measuring the mole percent of hydrogen in hydrogen gas--ASTM D 2650-88. Id. According to ASTM representatives, ASTM D 1945-91 (placed on the record as document number B-54) has superseded ASTM D 1945-81 and ASTM D 1946-90 (placed on the record as document number B-55) has superseded ASTM D 2650-88. The California specifications also cite specific test procedures for measuring the mole percent of other components of CNG and hydrogen. The California specifications state that other test procedures may be used following a determination by the Executive Officer of the California Air Resources Board that they produce results equivalent to the results obtained with the referenced test procedures. \1\52An analysis of the California material specifications also indicates that, to ensure fuel quality and proper automobile performance, disclosing minimum percentage of the principal component of the fuel would be important and helpful. --------------------------------------------------------------------------- The Commission's approach to requiring substantiation testing, without specifying a particular test method, for components other than the principle component allows sellers to rely on existing industry test procedures if they are reasonable and yield accurate results. For example, the California specifications list specific ASTM procedures to be used to determine the mole percent of various components of CNG and hydrogen, in addition to the methane content of CNG and the hydrogen content of hydrogen gas. The Commission proposes to accept, but not require, use of the ASTM test procedures cited in the California specifications as the required reasonable basis for voluntary disclosure of additional components of CNG and hydrogen. Although the Commission has decided not to propose requiring that non-liquid alternative fuels conform to any specific material specification, the Commission's proposed requirement that marketers disclose the principal component of each fuel should encourage the industry to develop uniform material specifications or standards in consensus organizations for these fuels to ensure the uniform quality of the fuels in the marketplace. The development of material specifications or standards for non-liquid (gaseous) alternative fuels should help facilitate acceptance of these fuels. The proposed requirements are consistent with the substantiation requirements for sellers of liquid alternative fuels under the Fuel Rating Rule.153 --------------------------------------------------------------------------- \1\53 16 CFR 306.5(b) (1994). --------------------------------------------------------------------------- (2) Certification. The Commission proposes requiring that importers, producers, refiners, and distributors of non-liquid alternative fuels (other than electricity), and that manufacturers of electric vehicle fuel dispensing systems certify to others to whom they distribute the information that retailers must post on fuel dispensers.154 Importers, producers, and refiners of non-liquid alternative fuels (other than electricity) would be required to certify to distributors consistent with their determination of the minimum mole percent of the fuel's major component, and of any additional component they wish to disclose. Manufacturers of electric vehicle fuel dispensing systems would be required to certify to distributors and/or retailers the information retailers would be required to disclose on labels on fuel dispensers. Distributors of non-liquid alternative fuels (other than electricity) and of electric vehicle fuel dispensing systems would be required to certify to retailers consistent with the certification they received.155 --------------------------------------------------------------------------- \1\54See sections 309.10 and 309.11 of the text of the proposed labeling rule in section XI infra. \1\55See section 309.13 of the text of the proposed labeling rule in section XI infra. If distributors blend fuels, Sec. 309.13(c) of the proposed rule would require them to substantiate the minimum percentage of the principal component according to the requirements of Sec. 309.10, and certify that information to their non-consumer customers. --------------------------------------------------------------------------- Importers, producers, and refiners of non-liquid alternative fuel (other than electricity) could make the certification in either of two ways: (a) Include with each transfer a delivery ticket or other paper (such as, an invoice, bill of lading, bill of sale, terminal ticket, delivery ticket or any other written proof of transfer). The delivery ticket or other paper must contain at least the importer's, producer's, or refiner's name, the name of the person to whom the non-liquid alternative fuel (other than electricity) is transferred, the date of the transfer, the common name of the fuel and the minimum mole percent of the fuel's major component, and of any additional component the producer or importer wishes to disclose. (b) Give the person to whom the fuel is transferred a letter or written statement, including the date, the producer's or importer's name, the name of the person to whom the fuel is transferred, the common name of the fuel, and the minimum mole percent of the fuel's major component, and of any additional component the producer or importer wishes to disclose. The letter or written statement would be effective until the importer, producer, or refiner transfers non-liquid alternative vehicle fuel (other than electricity) with a lower percentage of the major component, or of any other component claimed. At that time, the importer, producer, or refiner would have to certify the new information about the fuel with a new notice. Distributors of non-liquid alternative fuel (other than electricity) would be required to make the certification in each transfer to anyone who is not a consumer. Distributors could make the required certification by: (a) Using a delivery ticket or other paper with each transfer, as outlined for importers and producers in item (a), above, or by using a letter of certification, as outlined for importers, producers, and refiners in item (b), above. (b) Using either a letter or a delivery ticket or other paper when transferring to a common carrier. When distributors receive non-liquid alternative vehicle fuel (other than electricity) from a common carrier, the distributors also must receive from the common carrier a certification of information required to be disclosed on the label on the retail fuel dispenser, either by letter or on a delivery ticket or other paper. Manufacturers of electric vehicle fuel dispensing systems would be required to make the certification in each transfer of such systems. Manufacturers could do so in either of two ways: (a) Manufacturers could make the required certification by including a delivery ticket or other paper with each transfer of an EV fuel dispensing system. It could be an invoice, bill of lading, bill of sale, terminal ticket, delivery ticket, or any other written proof of transfer. It would be required to contain at least the manufacturer's name, the name of the person to whom the EV fuel dispensing system is transferred, the date of the transfer, the model number or other identifier of the EV fuel dispensing system, and the information required to be disclosed on the retail fuel dispenser label. (b) Manufacturers could make the required certification by placing clearly and conspicuously on the EV fuel dispensing system a permanent legible marking or permanently attached label that discloses the manufacturer's name, the model number or other identifier of the EV fuel dispensing system, and the information required to be disclosed on the retail fuel dispenser label. Such marking or label would have to be located where it can be seen after installation of the EV fuel dispensing system. The marking or label would be deemed ``legible,'' in terms of placement, if it is located in close proximity to the manufacturer's identification marking. This marking or label would have to be in addition to, and not as a substitute for, the label required to be posted on the public EV fuel dispenser at the point of retail sale. Distributors of electric vehicle fuel dispensing systems would be required to make the certification in each transfer. Distributors could do so in either of two ways: (a) Using a delivery ticket or other paper with each transfer, as outlined for manufacturers of electric vehicle fuel dispensing systems in item (a) supra. (b) Using the permanent marking or label permanently attached to the system by the manufacturer, as outlined for manufacturers of electric vehicle fuel dispensing systems in item (b) supra. The proposed requirements are consistent with the certification requirements for sellers of liquid alternative fuels under the Fuel Rating Rule.\156\ --------------------------------------------------------------------------- \156\16 CFR 306.6, 306.8 (1994). --------------------------------------------------------------------------- (3) Recordkeeping. The Commission proposes requiring that importers, producers, and refiners of non-liquid alternative fuels (other than electricity) maintain records of the tests performed by or for them that they rely upon as their required reasonable basis for their certifications.\157\ The Commission likewise proposes requiring that manufacturers of electric vehicle fuel dispensing systems maintain records of the tests or measurements performed by or for them, or of other data or records, that they rely upon as their required reasonable basis for their certifications.\158\ The Commission also proposes requiring that distributors and retailers of non-liquid alternative fuels (including electricity) maintain records consisting of the certifications they receive from importers, producers, refiners, or distributors of non-liquid alternative fuels (other than electricity), and that distributors of electric vehicle fuel dispensing systems maintain records consisting of the certification they receive from manufacturers or distributors of the systems.\159\ Like the Fuel Rating Rule, the proposed rule would require that these records be kept for one year. --------------------------------------------------------------------------- \157\See Sec. 309.12 of the text of the proposed labeling rule in section XI infra. \158\Id. \159\See Secs. 309.14 and 309.16 of the text of the proposed labeling rule in section XI infra. --------------------------------------------------------------------------- The proposed requirements are consistent with the recordkeeping requirements for sellers of liquid alternative fuels under the Fuel Rating Rule.\160\ --------------------------------------------------------------------------- \160\16 CFR 306.7, 306.9, 306.11 (1994). --------------------------------------------------------------------------- c. Effective date. In the NPR, the Commission proposed requiring that the non-liquid alternative fuels labeling requirements become effective 90 days after publication of a final rule in the Federal Register, and sought comment on that proposal.\161\ Nine commenters addressed this issue either directly or by implication.\162\ --------------------------------------------------------------------------- \161\59 FR 24014, 24017, 24021. \162\SIGMA, G-23, 1 (supported all the Commission's proposals and urged the Commission to adopt the proposed rule without change); AGA/NGVC, G-6, 8 (expressed no opinion on proposed time period, but stated it would check with members that own fuel stations to ascertain if the compliance period would be too short); Phillips 66, G-15, 2 (Phillips 66 did not respond directly to the time period for the rule to become effective, but referred to separate comments submitted by NPGA and API, which stated different opinions; Phillips 66 did not specify which comment it supported on this issue.). --------------------------------------------------------------------------- Four commenters stated that the proposed time period gave sufficient time for covered parties to comply with the proposed requirements.\163\ NPGA stated that the 90-day period was not sufficient. It suggested a period of at least six months after publication of the final rule would be necessary because information must be collected from various fuel suppliers or wholesalers, the information must be placed in a format that meets standards established by the regulations, and layouts must be prepared in label form and distributed for use.\164\ Thomas BB questioned the sufficiency of 90 days, but stated that it would depend on the content of the final rule.\165\ --------------------------------------------------------------------------- \163\API, G-25, 4 (90 days is sufficient, provided the effective date, size, and format requirements for them are similar to those contained in the Fuel Rating Rule for liquid fuels); Flxible, G-12, 2 (90 days is sufficient if the requirements for commercial vehicles are made according to the proposals in the ANPR; if the requirements were different, they would have to be reviewed to determine how long it would take to comply); Mobil, G-2, 4 (provided effective date and labeling requirements are consistent with the Fuel Rating Rule for liquid alternative fuels, there should not be a problem with implementation); RFA, G-5, 4 (90 days is sufficient because the number of outlets affected is small and labels would be printed in small quantities on a local basis or provided to retailers and their fuel suppliers). \164\NPGA, G-18, (comment) 4. \165\Thomas BB, G-10, 2 (will take considerably longer to establish national standards for some fuels). --------------------------------------------------------------------------- Section 406(a) of EPA 92 requires the Commission to issue the final labeling rules within one year of publication of the notice of proposed rulemaking, but does not specify when the rules shall become effective. In developing this proposal, the Commission has considered how best to balance consumers' needs for comparative information with industry's need for a reasonable period of time to come into compliance. After considering the comments, the Commission believes that the proposed effective date (i.e., 90 days after publication in the Federal Register) is reasonable.\166\ --------------------------------------------------------------------------- \166\The effective date of the final amendments adding liquid alternative fuels to the Fuel Rating Rule was less than 90 days after publication of the final rules in the Federal Register. The final rules were published on August 3, 1993. They became effective on October 25, 1993, as required by EPA 92. 58 FR 41356. --------------------------------------------------------------------------- d. Periodic updating of labels. In the NPR, the Commission did not propose a specific timetable for future reviews of the final labeling rules. The Commission, however, explained that section 406(a) of EPA 92 requires the Commission to update its labeling requirements ``periodically.'' Three commenters addressed the need to update the final rules periodically. API encouraged the Commission to review the rule, particularly after private, voluntary consensus standards organizations develop fuel specifications for alternative fuels. API also encouraged the Commission to consider reviewing the rule as new alternative fuels enter the marketplace. API did not suggest a specific timetable for periodic reviews.\167\ CEC suggested that the Commission may have to update its labeling requirements as electric vehicle technology advances, but likewise did not recommend a specific timetable.\168\ TVA commented that the Commission should update labeling disclosures only when necessary to reflect practical developments in technology. It also stated that a new label should indicate that it supersedes the previous label.\169\ --------------------------------------------------------------------------- \167\API, G-25, 9. \168\CEC, H-8, 5-6. \169\TVA, H-5, 1. --------------------------------------------------------------------------- As required by section 406(a) of EPA 92, the Commission intends to conduct reviews to update the rule periodically to take into consideration relevant developments, such as when DOE designates new non-liquid alternative fuels. In addition, the Commission's ongoing regulatory review process schedules all rules and guides for review at least once during every ten-year period. Because the Commission cannot predict when new relevant developments may occur, the Commission is not otherwise proposing a specific timetable for future reviews in the final rule. C. Labeling Requirements for AFVs 1. Scope of the AFV Labeling Requirement In its NPR, the Commission proposed that original equipment manufacturers (``OEMs'') and AFV conversion companies affix, and AFV dealers maintain, standard labels on new AFVs sold or offered for sale to consumers.170 The Commission further proposed that the term ``consumer,'' which is not defined in EPA 92, be defined as a person (i.e., an individual, corporation, or any other business organization) purchasing a new AFV from a dealer or AFV conversion company.171 These proposed requirements were derived in part from existing regulations regarding posting of EPA fuel-economy labels172 and were intended to exclude two sales categories (i.e., used AFV sales and special orders directly from manufacturers) from the scope of the Commission's AFV labeling requirement.173 --------------------------------------------------------------------------- \1\7059 FR 24014, 24018. \1\71Id. at 24018 n.138. \1\72 Id. at 24018 n.136. See 40 CFR 600.306-86(a) (1993). \1\73 59 FR 24014, 24018 n.138. --------------------------------------------------------------------------- Nineteen commenters addressed the proposed scope of the AFV labeling requirements. Two of the nineteen indicated general support for the Commission's labeling proposal but did not address this specific issue.174 One other commenter supported the Commission's definition of the term ``consumer'' as proposed.175 The remaining sixteen addressed one or more issues pertaining to this aspect of the Commission's proposal, as discussed below. --------------------------------------------------------------------------- \1\74EIA/EEU-ISD, H-2, 1; Texas RRC, H-3, 1. \1\75AGA/NGVC stated that the Commission's proposed definition was ``a reasonable interpretation of the statute'' because industry ``can target and educate specialty markets and their consumers.'' AGA/NGVC, G-6, 11-12. In its supplemental written comment, AGA/NGVC addressed the issue of aftermarket conversions. See infra note 196 and accompanying text. --------------------------------------------------------------------------- a. Covered AFVs. Several commenters addressed whether the Commission's labeling requirements should apply to all AFVs, as that term is defined in EPA 92. As defined by that statute, an AFV is either ``a dedicated vehicle or a dual fueled vehicle.''176 As further defined, a ``dedicated vehicle'' means an automobile (or other self- propelled vehicle), designed for transporting persons or property on a street or highway, that operates solely on alternative fuel.177 Similarly, a ``dual fueled vehicle'' is an automobile (or other self- propelled vehicle), designed for transporting persons or property on a street or highway, that is capable of operating on alternative fuel and on gasoline or diesel fuel.178 As such, the statutory definition of an ``AFV'' includes tour buses, transit buses, heavy-duty commercial trucks, and large motor homes. --------------------------------------------------------------------------- \1\76 42 U.S.C. 13211(3) (Supp. IV 1993). \1\77 See 42 U.S.C. 13211(6) (Supp. IV 1993) (a ``dedicated vehicle'' is either a ``dedicated automobile,'' as defined in 15 U.S.C. 2013(h)(1)(C) (Supp. IV 1993), or a ``motor vehicle,'' as defined in 42 U.S.C. 7550(2), other than an automobile, that operates solely on alternative fuel). \1\78 See 42 U.S.C. 13211(8) (Supp. IV 1993) (a ``dual fueled vehicle'' is either a ``dual fueled automobile,'' as defined in 15 U.S.C. 2013(h)(1)(D) (Supp. IV 1993), or a ``motor vehicle,'' as defined in 42 U.S.C. 7550(2), other than an automobile, that is capable of operating on alternative fuel and on gasoline or diesel fuel). --------------------------------------------------------------------------- Regarding the AFVs covered by the Commission's labeling requirements, four commenters indicated that the labeling requirements should apply to all AFVs, so that consumers of those vehicles have access to the same information.179 Nine commenters, however, suggested that the Rule's scope could reasonably be limited in a manner consistent with EPA 92's mandate and purpose. For example, several commenters supported the Commission's proposal to limit the Rule's scope to AFVs obtained from dealers or AFV conversion companies (i.e., not directly from the manufacturer as a special order). Those commenters stated that consumers making special orders would likely have sufficient knowledge of available fuel alternatives and would need more detailed and vehicle-specific information than could be provided on a standardized label.180 They also stated that specially ordered AFVs were typically manufactured after the order had been placed, so that the consumer would not actually see the vehicle until delivery.181 Requiring the posting of cost-benefit labels on such vehicles thus would not help consumers. --------------------------------------------------------------------------- \1\79Boston Edison (Supp.), G-26, 13; NACAA (Tr.), 132; NAFA (Tr.), 123, 134; TVA, H-5, 1. \1\80CEC, H-8, 11; ETC, G-24, 5; Nebraska EO, H-9, 1. Flxible stated that the Rule's scope should be limited to vehicles operated by the general public. Flxible, G-12, 2. \1\81GM (Tr.), 127-128 (``[P]utting a label on a vehicle after it's been built is already a done deal because all those decisions had to be made at the ordering.''). --------------------------------------------------------------------------- Other commenters suggested a different approach. Those commenters stated that the Commission's AFV labeling requirements should exclude from its scope AFVs with gross vehicle weight ratings (``GVWR'')182 over 8,500 lbs. (i.e., medium and heavy duty AFVs). EMA stated that AFVs over 8,500 lbs. GVWR should be excluded because consumers considering such vehicles make decisions based on extensive evaluations of more factors and information than a simple label could provide.183 Flxible stated that consumers considering heavier commercial vehicles have usually reviewed published data on features, compared specific vehicle types, and studied life-cycle cost studies before placing orders. They thus have no need for ``consumer'' labeling.184 AAMA stated that those vehicles are typically manufactured after their purchase by commercial vehicle buyers who are well informed about pertinent costs and benefits.185 EPA also noted that its fuel economy requirements (disclosing fuel economy information in window stickers) do not apply to vehicles over 8,500 lbs. GVWR.186 --------------------------------------------------------------------------- \1\82EPA defines GVWR as a vehicle's actual weight (including all standard and optional equipment and fuel) plus 300 pounds. See 40 CFR 86.082-2 (1993) (defining ``GVWR,'' ``loaded vehicle weight,'' and ``vehicle curb weight.''). \1\83EMA, G-21, 2, 3-4, 7, (Tr.), 123. EMA cited examples where the considerations relevant to ordering a heavy-duty AFV were summarized in an OEM's 25-page sales brochure and a 400-page truck data book. EMA (Supp.), G-21, 2-3. \1\84Flxible (Supp.), G-12, 1-3 (window stickers should be for vehicles purchased for personal use and from dealer lots, i.e., under 8,500 lbs. GVWR), (Tr.), 134 (rule should be limited to passenger-type vehicles). \1\85AAMA, G-7, 3-4, (Tr.), 124 (purchasing decision ``will already have been made long before [purchaser] walks into the showroom and sees the label.''). Chrysler and Ford supported AAMA's position that these vehicles should be excluded from the scope of the Commission's AFV labeling requirements. Chrysler, G-13, 1; Ford, G-14, 1. \1\86EPA (Tr.), 122; 40 CFR 600.002-85(4)(iii) (1993). --------------------------------------------------------------------------- As noted previously, the Commission must issue uniform labeling requirements only ``to the greatest extent practicable.''187 In developing this revised proposal the Commission has considered the practicality and appropriateness of including all AFVs within the scope of its labeling requirements. Including all such vehicles might help educate consumers about the general availability of AFVs of all sizes. However, the record appears to indicate that consumers considering vehicles over 8,500 lbs. GVWR would not likely make choices and comparisons based on the cost-benefit information contained in a simple label. The Commission also considered including all AFVs (regardless of weight) and developing different label formats tailored to the apparently different needs of light and heavy-duty AFV consumers. This also did not appear to be practical because heavier vehicles are typically custom ordered. While these evaluations may change in the future, for now at least it seems likely that for consumers considering such vehicles, disclosures in a labeling format may not be appropriate, useful, or timely. As a result, the Commission has tentatively determined that, at the present time, AFVs over 8,500 lbs. GVWR will not be included within the scope of its AFV labeling requirements. --------------------------------------------------------------------------- \1\8742 U.S.C. 13232(a) (Supp. IV 1993). --------------------------------------------------------------------------- To implement this tentative determination, the Commission proposes to include a definition of ``covered vehicles'' (i.e., in substance, AFVs under 8,500 lbs. GVWR), in the proposed rule.188 The Commission derived this definition from EPA 92's definition of the term ``light duty motor vehicles,'' a term given special significance by that statute.189 EPA 92's definition of that term references two vehicle classifications used by the Clean Air Act (light duty trucks or light duty vehicles) ``of less than or equal to 8,500 pounds [GVWR].''190 The Clean Air Act191 in turn refers to existing EPA definitions of both vehicle classifications.192 Thus, the proposed definition of ``covered vehicle'' basically encompasses the same category of vehicle referenced in EPA 92's fleet acquisition requirements. --------------------------------------------------------------------------- \1\88See proposed rule section 309.1(f) (defining ``covered vehicle''). The term ``covered vehicle'' was derived from the Energy Policy and Conservation Act's (``EPCA'') use of the term ``covered product.'' See 42 U.S.C. 6291(a)(2), 6292(a) (statute's scope defined in terms of enumerated consumer products); 16 CFR 305.2, 305.3 (1994) (same for Commission's Appliance Labeling Rule implementing EPCA). \1\89 Three of EPA 92's five ``major'' alternative-fuel provisions impose minimum vehicle-acquisition requirements on designated entities (i.e., the Federal government; alternative fuel providers; and other non-Federal fleets). H. Rep. No. 102-474(I), 102d Cong., 2d Sess. 137, reprinted in 1992 U.S.C.C.A.N. 1954, 1960. For alternative fuel providers and other non-Federal fleets, the vehicles covered by those mandates are ``light duty motor vehicles.'' See 42 U.S.C. 13251 (Supp. IV 1993) (mandatory acquisition requirement for alternative fuel providers); 42 U.S.C. 13257 (Supp. IV 1993) (contingent acquisition requirement for other non-Federal fleet operators). The Federal fleet is required to acquire ``light duty [AFVs],'' a term not defined in EPA 92, instead of ``light duty motor vehicles.'' See 42 U.S.C. 13212 (Supp. IV 1993) (mandatory acquisition requirement for Federal government). Neither the statute nor its legislative history suggests that those terms have different meanings and the discrepancy may have been inadvertent. The Commission need not resolve the matter, however, because it seems clear that the intent was to tailor the Federal fleet's acquisition requirement to a certain category of AFVs. \1\9042 U.S.C. 13211(11) (Supp. IV 1993) (``The term `light duty motor vehicle' means a light duty truck or light duty vehicle, as such terms are defined under section 216(7) of the Clean Air Act (42 U.S.C. 7550(7)), of less than or equal to 8,500 pounds [GVWR].''). \1\91 42 U.S.C. 7550(7) (the terms ``light duty truck'' and ``light duty vehicle'' have the meaning provided in regulations promulgated by the [EPA] Administrator and in effect as of the enactment of the Clean Air Act Amendments of 1990.''). \1\92 A light duty truck is defined as ``[a]ny motor vehicle rated at 8,500 pounds GVWR or less which as (sic) a vehicle curb weight of 6,000 pounds or less and which has a basic vehicle frontal area of 45 square feet or less, which is (1) Designed primarily for purposes of transportation of property or is a derivation of such a vehicle, or (2) Designed primarily for transportation of persons and has a capacity of more than 12 persons, or (3) Available with special features enabling off-street or off-highway operation and use.'' 40 CFR 86.082-2 (1993). A light duty vehicle is defined as ``a passenger car or passenger car derivative capable of seating 12 passengers or less.'' Id. --------------------------------------------------------------------------- b. AFV manufacturers and conversion companies. As noted previously, in its NPR the Commission proposed that its AFV labeling requirements apply to AFV manufacturers and conversion companies.193 The Commission did not further specify, however, the extent to which such entities would be required to comply with its labeling proposal. In response, several commenters addressed the circumstances under which either entity should be included within the scope of the AFV labeling requirements. As to AFV manufacturers, the commenters agreed that all vehicles designed and assembled by OEMs to operate on alternative fuel should be included within the scope of the Commission's AFV labeling requirements.194 --------------------------------------------------------------------------- \1\9359 FR 24014, 24018. A conversion company reconfigures the fuel system of an existing vehicle to permit operation on alternative fuel. \1\94See, e.g., Boston Edison (Supp.), G-26, 13; ETC, G-24, 4. --------------------------------------------------------------------------- As to conversion companies, however, some commenters suggested that the labeling requirements distinguish between two different categories of conversions: whether the vehicle is converted to alternative fuel before or after it is delivered to the first consumer. For example, AGA/NGVC and ETC stated that conversions performed before the vehicle is delivered to a first consumer should be included within the scope of the AFV labeling requirement.195 These conversions bear similarities to OEM AFVs because in both circumstances the vehicles are configured to alternative fuel before delivery to the first consumer. Consumers considering these converted AFVs would thus have equal need for comparative information as consumers considering other ``new'' vehicles. --------------------------------------------------------------------------- \1\95AGA/NGVC (Supp.), G-6 (``We agree with the FTC and others that vehicles that are converted prior to being delivered to the first time buyer should be labeled in the same fashion as other `new' vehicles.''); ETC, G-24, 4 (``All vehicles that are considered `new' vehicles, regardless of whether they are sold by an original equipment manufacturer or a converter or upfitter, should be subject to the labeling requirement.''). Commenters responding to the Commission's ANPR were in similar agreement. See 59 FR 24014, 24016 nn. 53, 54 and accompanying text. --------------------------------------------------------------------------- As to the second category, those commenters stated that companies performing conversions after the vehicle is delivered to a consumer (so called ``aftermarket conversions'') should be excluded from the AFV labeling requirements because consumers would have already been educated about the costs and benefits of alternative fuels.196 Four other commenters addressed this category. Three stated that aftermarket conversions should be covered because the labeling requirements should apply to all AFVs.197 NPGA stated that aftermarket conversions should be treated in a separate rulemaking proceeding because ``circumstances surrounding the majority of aftermarket conversions * * * are so different from the vehicles equipped by [OEMs] to operate on an alternative fuel.''198 --------------------------------------------------------------------------- \1\96 AGA/NGVC (Supp.), G-6, 3-4, (Tr.), 231-232; ETC, G-24, 4. \1\97 Boston Edison (Supp.), G-26, 13; NAFA (Tr.), 130 (the same information available from manufacturers should be available from conversion companies); TVA, H-5, 1. \1\98 NPGA, G-18 (Supp.), 2. --------------------------------------------------------------------------- The intent of the Commission's proposal (as it applied to AFV conversion companies) was to address what the Commission understood was a significant segment of the AFV industry. DOE has noted that: ``Because of the limited availability and selection of [OEM] vehicles, conversions are providing a transition to the time when automakers produce more [AFVs] for public sale.''199 As a result, ``[t]he demand for vehicles meeting the [clean-fuel] standards will presumably grow, thus increasing the conversion market share for companies capable of producing large numbers of high-quality converted vehicles.''200 Among the factors creating such a demand are acquisition requirements for centrally fueled fleets contained in the 1990 Clean Air Act Amendments (``CAAA'').201 Those requirements ``may be met through the conversion of existing or new gasoline or diesel-powered vehicles to clean-fuel vehicles * * * ''202 Interests affected by those mandates, as well as others interested in achieving the clean-air benefits of driving AFVs, may therefore find an incentive to convert existing vehicles to alternative fuel. The Commission therefore believes that it should address this issue in this proceeding to the greatest extent practicable. --------------------------------------------------------------------------- \1\99 B-3, inside front cover. \2\00 58 FR 32474, 32494, June 10, 1993. \2\01 The CAAA's acquisition requirements are in addition to similar requirements, described infra section III(C)(1)(c), imposed by EPA 92. \2\02 42 U.S.C. 7587(a). --------------------------------------------------------------------------- As noted, AGA/NGVC and ETC suggested that vehicles converted to alternative fuel after being acquired by consumers should be excluded from the AFV labeling requirements because consumers considering conversion of existing vehicles would not benefit from a ``labeling'' requirement. Accordingly, in developing this revised proposal the Commission has considered the practicality and appropriateness of including this category within the scope of its AFV labeling requirements. The Commission notes that section 406 does not address the issue of AFV conversions, and that including such vehicles could help consumers compare different alternative fuels and conversion systems. However, the Commission believes that the circumstances surrounding such conversions may make such a requirement impractical or unnecessary.203 For example, the Commission understands that some consumers convert their vehicles themselves without utilizing the services of a conversion installation company. Further, consumers relying on conversion companies to perform the necessary reconfiguration will presumably be evaluating which alternative fuel to which their vehicle should be converted. In those circumstances, consumers would not likely make such decisions based on information contained in a simple label. Companies performing conversions, at a consumer's request, would have nothing to label until the consumer had already decided to do a conversion, and labeling the vehicle post- conversion would not be helpful. Further, as noted, requiring disclosure other than in a labeling format may be beyond the scope of the Commission's authority under EPA 92.204 The Commission also finds that requiring conversion companies to disclose objective information as to comparative factors will likely be problematic because such information can vary with the vehicle's condition.205 --------------------------------------------------------------------------- \2\03 In comments responding to the Commission's ANPR, DOE noted that: ``It would be more difficult, and perhaps unnecessary, for in- use vehicles (already owned and operated) that are converted to use alternative fuels during their vehicle life to meet the AFV labeling requirements.'' DOE, E-10, 3-4. \2\04 See supra section III(A). \2\05 See infra text accompanying notes 235 and 236. --------------------------------------------------------------------------- In any event, the Commission notes that DOE has addressed conversions of existing vehicles in its consumer information brochure.206 Some of the information contained in that brochure is general (e.g., electric vehicle conversions ``are available in larger metropolitan areas. Contact OEM dealer for qualified converter and warranty information''),207 while some is more specific and objective. For example, the brochure notes that converting an existing conventional-fueled vehicle to CNG ``costs about $2,700 to $5,000 per vehicle.''208 Given the apparent impracticalities surrounding a requirement for aftermarket alternative-fuel conversions, and the availability of pertinent information in DOE's brochure, the Commission intends to exclude from its AFV labeling requirements situations where conventional fueled vehicles are converted to alternative fuel after being acquired by consumers. The proposed rule thus imposes no requirements on conversion companies to label such vehicles.209 --------------------------------------------------------------------------- \2\06EPA 92 requires that DOE's information package ``include information with respect to the conversion of conventional motor vehicles to [AFVs].'' 42 U.S.C. 13231 (Supp. IV 1993). \2\07B-3, 16. \2\08B-3, 23. \2\09 See proposed rule Sec. 309.20(a)(2) (limiting labeling requirements for new covered vehicles to conversion systems installed ``prior to such vehicle's being acquired by a consumer''). --------------------------------------------------------------------------- The Commission also has considered whether vehicles converted to alternative fuel prior to their acquisition by consumers (e.g., after a gasoline powered vehicle has been fully assembled) should be included within the scope of the AFV labeling requirements. As noted, section 406(a) does not expressly exclude such vehicles from its scope and the Commission is aware of no reason why such vehicles should be so excluded. Accordingly, the Commission proposes to include such vehicles within the scope of its AFV labeling requirements. The Commission has determined, however, that its treatment of the entity responsible for such a labeling requirement (i.e., the AFV conversion company) needs further refinement. In developing this revised labeling proposal, the Commission took particular note of EPA regulations addressing this subject issued after publication of the Commission's NPR. Those regulations implemented a provision of the 1990 CAAA deeming that ``person[s] who convert conventional vehicles to clean-fuel vehicles'' are ``manufacturers,'' and thus responsible for complying with some or all of EPA's certification, production, line testing, in-use testing, warranty, and recall requirements.\210\ --------------------------------------------------------------------------- \210\42 U.S.C. 7587(c); Emission Standards for Clean-Fuel Vehicles and Engines, Requirements for Clean-Fuel Vehicle Conversions, and California Pilot Test Program (``Fleet Standards Rule''), 59 FR 50042, 50061-50062, Sept. 30, 1994. --------------------------------------------------------------------------- In the preamble announcing those regulations, EPA noted that two entities could be considered the ``person who converts'': the person who installs the conversion kit (i.e., the hardware converting the vehicle to alternative fuel), or the person who manufactures the conversion kit.211 After considering the advantages and disadvantages of assigning liability to either entity, however, EPA concluded that assigning liability strictly to either entity was not appropriate. Instead, it determined it should assign liability based on which party was in the best position to be familiar with pertinent vehicle-performance characteristics. Interpreting its own regulations, EPA determined that the entity best suited to comply with these requirements was the entity (kit installer, manufacturer, or other) who had applied for and received a certificate of conformity that the vehicle meets appropriate EPA emission standards.212 Based on public comment received during that proceeding, EPA anticipated that in most cases the kit manufacturer would be the certifying party because this entity would be in the best position to perform the required certification testing.213 Accordingly, EPA further expected that its regulations would encourage certifiers to develop oversight programs and enter into indemnification agreements with installers to insure that installations were performed properly.214 --------------------------------------------------------------------------- \2\11 Fleet Standards Rule, 59 FR 50042, 50061. \2\12Fleet Standards Rule, 59 FR 50042, 50062. Implementing that determination will provide that: ``The clean-fuel vehicle aftermarket conversion certifier shall be considered a manufacturer for purposes of Clean Air Act sections 206 and 207 and related enforcement provisions, and must accept liability for in-use performance of the (sic) all vehicles produced under the certificate of conformity as outlined in 40 CFR part 85.'' Fleet Standards Rule, 59 FR 50042, 50081, to be codified at 40 CFR 88.306-94(d). \2\13Fleet Standards Rule, 59 FR 50042, 50061-50062. \2\14Fleet Standards Rule, 59 FR 50042, 50061-50062, 50064. Given the nature of their liability, EPA noted that ``[k]it manufacturers would be wholly within their rights to require such indemnification agreements before allowing installers to install their kit.'' Fleet Standards Rule, 59 FR 50042, 50062. --------------------------------------------------------------------------- Because harmonizing regulatory approaches, when practicable, is appropriate and desirable, the Commission is basing its approach to determining which entities are responsible for complying with its AFV labeling requirements on EPA's regulations addressing the same issue. The Commission has determined that it is appropriate to designate the certifier as being responsible for compliance with these requirements because that entity will be in the best position to know the vehicle's performance attributes. The Commission also expects that certifiers would take similar steps to insure compliance with this revised labeling proposal, such as developing oversight programs and entering into indemnification agreements with installers to insure that accurate labels were posted as required. Under the Commission's revised AFV labeling proposal, the entity responsible for complying with its labeling requirements for new covered vehicles\215\ is the ``manufacturer.'' The proposed rule defines ``manufacturer'' as ``the person who obtains a certificate of conformity that the vehicle complies with the standards and requirements of [EPA's emission and clean-fuel vehicle regulations].''\216\ Under the proposed rule, manufacturers of new covered vehicles are required to affix (or cause to be affixed) new vehicle labels on each such vehicle prior to its being offered for acquisition by consumers.\217\ If, however, an ``aftermarket conversion system'' (i.e., a conversion kit)\218\ is installed on a vehicle by a person other than the manufacturer prior to being acquired by a consumer, the manufacturer is responsible for providing that person with the objective information regarding that vehicle required by the proposed rule.\219\ --------------------------------------------------------------------------- \215\The Commission's revised proposal as to used covered vehicles is discussed infra section III(C)(1)(d). \216\Proposed rule Sec. 309.1(r). \217\Proposed rule Sec. 309.20(a)(1). \218\See proposed rule Sec. 309.1(b) (defining ``aftermarket conversion system''). This definition was derived from a recently- issued EPA definition of the same term. See Gaseous Fuels Rule, 59 FR 48472, 48490, to be codified at 40 CFR 85.502(c). \219\See proposed rule Sec. 309.20(a)(2). Specific data proposed to be disclosed on labels for new covered AFVs is discussed infra section III(C)(2)(a). --------------------------------------------------------------------------- c. Acquisitions by consumers. As noted previously, the Commission's AFV labeling requirements are to assist ``consumers,'' and one aspect of the Commission's NPR proposal defined that term as a purchase by an individual, corporation, or other business organization.\220\ Several commenters stated that the proposed definition incorrectly limited the Rule's scope. For example, the Commission's proposal had the effect of excluding leasing arrangements from its scope. NAFA noted that EPA 92 and the Clean Air Act both impose AFV ``acquisition'' mandates on certain designated entities and suggested that the Commission's AFV labeling requirements track those requirements.\221\ Other commenters addressing this issue agreed that the Commission should broaden the Rule's scope to encompass purchases and leases.\222\ The proposed definition also had the effect of excluding purchases by government agencies. API stated that this definition should be modified to include federal, state, and local governments as consumers.\223\ --------------------------------------------------------------------------- \220\59 FR 24014, 24018. \221\NAFA (Tr.), 133. For example, EPA 92 requires that, ``The Federal Government shall acquire at least 5,000 light duty [AFVs] in fiscal year 1993.'' 42 U.S.C. 13212(a)(1)(A) (Supp. IV 1993). \222\DOE (Tr.), 135; ETC (Tr.), 135; NACAA (Tr.), 135; RFA, G-5, 5. \223\API, G-25, 8. --------------------------------------------------------------------------- As to leasing arrangements, the commenters indicated that interest in AFVs could be motivated in large part by congressional mandates. Because consumers will be required to ``acquire'' AFVs, the Commission has determined that its AFV labeling requirements should include such arrangements to the greatest extent practicable, and to modify its definition of consumer to further EPA 92's legislative purpose. In determining what is practicable, the Commission notes that consumers entering into leasing arrangements have different information needs. For example, consumers entering into long-term leasing arrangements often do so for commercial purposes, and make leasing choices based on evaluating factors pertinent to a commercial acquisition. These persons likely would need the same vehicle information as purchasers and should be covered by the proposed rule. Consumers entering into short-term arrangements (e.g., weekend rentals to the general public for non-commercial purposes) may or may not have similar or equal need for pertinent information. In any event, they may not view the vehicle until after it has been leased. As a result, the labels would not help consumers make choices and comparisons. Based on its belief that consumers entering into short-term leasing arrangements will not make decisions based upon information disclosed in a label, the Commission thus has tentatively determined that including short- term leasing arrangements in the proposed rule is not necessary. As to including governmental entities within the scope of the term ``consumer,'' the Commission notes that EPA 92 imposes mandatory acquisition requirements on the Federal fleet.\224\ As such, Federal fleet operators will likely have equal need for comparative information as other entities required to acquire AFVs. The Commission has tentatively determined, therefore, that neither the Federal government nor other governmental agencies should be excluded from the scope of its AFV labeling requirements. --------------------------------------------------------------------------- \224\See 42 U.S.C. 13212 (Supp. IV 1993). --------------------------------------------------------------------------- To implement these tentative determinations, the proposed rule's labeling requirements apply to covered vehicles ``offered for acquisition by consumers.''\225\ The intent of one aspect of this proposal is to include purchases and long-term leasing arrangements within the scope of the AFV labeling requirements. Accordingly, an acquisition is defined in the proposed rule as including either of the following: (1) Acquiring the beneficial title to a covered vehicle; or (2) acquiring a covered vehicle for transportation purposes pursuant to a contract or similar arrangement for a period of 120 days or more.\226\ --------------------------------------------------------------------------- \225\See proposed rule Secs. 309.20(a)(1) (new covered vehicles), 309.21(a) (used covered vehicles). \226\See proposed rule Sec. 309.1(a) (defining ``acquisition''). --------------------------------------------------------------------------- This definition was derived from a recent EPA regulation implementing aspects of the 1990 Clean Air Act Amendments,\227\ which used the 120 day period as the dividing line between short and long- term leases. In the preamble announcing that regulation, EPA announced its determination that the 120 day period is slightly longer than a calendar season and that leases of less than that period were therefore short-term and temporary.\228\ The Commission agrees that the 120 day period reflects a reasonable demarcation between short and long term rentals. --------------------------------------------------------------------------- \227\Clean Fuel Fleet Program; Definitions and General Provisions, 58 FR 64679, 64689-64690, Dec. 9, 1993 (defining the phrase ``owned or operated, leased or otherwise controlled by such person'' as used in section 241(5) of the 1990 Clean Air Act Amendments, 42 U.S.C. 7581(5)). \228\58 FR 64679, 64689, 64690 (excluding leases under 120 days from Clean Fuel Fleet Program). --------------------------------------------------------------------------- The Commission also proposes to define the term ``consumer'' to include individuals, corporations, partnerships, associations, States, municipalities, political subdivisions of States, and agencies, departments, or instrumentalities of the United States.\229\ The proposed definition of this term was derived from section 302(e) of the 1990 Clean Air Act Amendments\230\ and EPA's regulation implementing that section, 40 CFR 88.302-94 (1993). --------------------------------------------------------------------------- \229\See proposed rule Sec. 309.1(d) (defining ``consumer''). \230\42 U.S.C. 7602(e) (defining ``person''). --------------------------------------------------------------------------- d. Used AFVs. One commenter suggested that used AFVs should be excluded from the Commission's labeling requirements because section 406(a) was primarily concerned with new AFVs.\231\ The remaining six commenters addressing this issue agreed that a consumer contemplating the acquisition of a used AFV would have the same need for comparative information as a consumer considering a new AFV, and thus used AFVs should be covered within the AFV labeling requirements.\232\ At the Workshop, representatives for AMI and NAFA also stated that used AFVs should be included in this proceeding at the present time because used AFVs are (or will soon be) offered for sale to consumers.\233\ Two of these commenters recognized, however, that requiring used vehicle dealers to make objective disclosures regarding a used AFV's performance could be problematic.\234\ --------------------------------------------------------------------------- \231\NACAA (Tr.), 221. \232\AMI (Tr.), 136, 218; Boston Edison, G-26, 10; ETC, G-24, 4; NAFA, G-20, 5, (Tr.), 222; PCC, G-22, 2; RFA, G-5, 5, (Tr.), 217. \233\See AMI (Tr.), 218 (``[T]his is a real problem now. There are nearly 10,000 [flexible] fuel vehicles in California alone, and * * * several hundred are being offered for sale now to private consumers.''). See also NAFA (Tr.), 222: ``I think one of the things you have to be concerned about looking down the road with alternative fuels is that if there is not a resale market for these vehicles, the program will whither and die * * * So we don't have a procedure to provide information to that second purchaser. And they have questions about alternative fuels. And they don't know how to go about getting a brochure like this * * * If you don't create the resale market, then the first market doesn't really develop.'' \234\ETC, G-24, 4; RFA (Tr.), 217. --------------------------------------------------------------------------- For example, because some cost-benefit information is included on temporary window stickers (e.g., EPA's fuel economy rating) or in vehicle owner's manuals, a used AFV dealer may not always possess such information. In any event, some comparative information (e.g., EPA's fuel economy rating) could vary significantly with the vehicle's condition.235 Requiring disclosure of information based on the vehicle's condition when new could therefore be misleading to consumers.236 To remedy this problem, EPA and ETC suggested that used AFV labeling disclose general descriptive information and not address objective performance factors.237 --------------------------------------------------------------------------- \2\35 EPA (Tr.), 220. \2\36 Id. \2\37 EPA (Tr.), 220; ETC, G-24, 4 (labels required by Commission's Used Car Rule, 16 CFR Part 455, could incorporate specific information about AFVs). --------------------------------------------------------------------------- EPA 92's definition of AFV makes no distinction between new and used vehicles.238 In developing the NPR the Commission believed that the market for such vehicles had not reached the volume where uniform labeling requirements were necessary. Accordingly, the Commission excluded such vehicles from the scope of its AFV labeling requirement and intended to review this issue as part of its periodic review of the labeling rule. The comments indicated, however, that consumers would likely have the same need for information, and would consider the same factors, whether they were contemplating a new or used AFV acquisition. Thus, after considering the record, the Commission has concluded that including such vehicles within the scope of its AFV labeling requirements is appropriate at this time. --------------------------------------------------------------------------- \2\38 See 42 U.S.C. 13211(3) (Supp. IV 1993) (defining ``AFV''). --------------------------------------------------------------------------- However, the comments also indicated that requiring disclosure of comparative information about used AFVs may not be practicable. To address one problem inherent in such a disclosure (i.e., the unavailability of pertinent information), the Commission has considered requiring that disclosures be displayed on permanent vehicle labeling. However, this option would not surmount the more basic problem that objective information may no longer accurately reflect the vehicle's present condition (and thus would not form a valid basis upon which to make reasonable choices and comparisons).239 Accordingly, the Commission believes that requiring disclosure of information that may be inaccurate or invalid creates a risk of misleading consumers. --------------------------------------------------------------------------- \2\39 While consumers may expect that used vehicles will have different performance attributes than new cars, if the Commission required disclosure of specific data on standard labels (based on the vehicle's condition when new), it might create the impression with some consumers that these disclosures may still be valid. --------------------------------------------------------------------------- The Commission has thus tentatively determined that both new and used AFVs should be included within the scope of its labeling requirements, but that they be given different treatment. The proposed rule defines the terms ``new covered vehicle'' and ``used covered vehicle'' and establishes labeling requirements as to each classification.240 Under the proposed rule, a new covered vehicle means a covered vehicle which has not yet been acquired by a consumer,241 while a used covered vehicle means (in substance) a covered vehicle which previously has been acquired by a consumer.242 The proposed rule also defines the terms ``new vehicle dealer''243 and ``used vehicle dealer.''244 As described more fully below, the proposed rule addresses the problem of requiring disclosure of comparative information on used AFVs by establishing different labeling formats (i.e., new vehicle labels245 and used vehicle labels246) disclosing different types of information for new and used covered AFVs.247 --------------------------------------------------------------------------- \2\40 See proposed rule Secs. 309.20 (``Labeling requirements for new covered vehicles''), 309.21 (``Labeling requirements for used covered vehicles''). \2\41 See proposed rule Sec. 309.1(t) (defining ``new covered vehicle''). \2\42 See proposed rule Sec. 309.1(dd) (defining ``used covered vehicle''). This definition was derived from the Commission's definition of the term ``used vehicle'' in its Used Car Rule, 16 CFR 455.1(d)(2) (1994). \2\43 See proposed rule Sec. 309.1(u). This definition was derived from EPA's definition of the term ``dealer,'' the entity responsible for maintaining fuel economy labels on new automobiles. See 40 CFR 600.002-93(a)(18) (1993) (defining ``dealer''). Under EPA's regulations, consumers selling used automobiles are not required to post or maintain fuel economy labels. In this proposal, the Commission similarly intends that individual consumers not be required to comply with the AFV labeling requirements. \2\44 See proposed rule Sec. 309.1(ee). This definition was derived from the Commission's definition of ``dealer'' in its Used Car Rule, 16 CFR 455.1(d)(3) (1994). \2\45 See proposed rule Sec. 309.1(v) (defining ``new vehicle labels''). \2\46 See proposed rule Sec. 309.1(ff) (defining ``used vehicle labels''). \2\47 See infra section III(C)(2) (a) and (c), and proposed rule Secs. 309.20(e) (new covered vehicles) and 309.21(e) (used covered vehicles). --------------------------------------------------------------------------- 2. Disclosures on AFV Labeling As discussed below, 34 of the 37 commenters addressed the substance of the Commission's proposed AFV labeling requirements (i.e., the information to be disclosed on AFV labels).248 In developing the NPR's proposed requirements, the Commission was guided by two sets of considerations. The first concerned problems associated with developing and publishing cost-benefit information. For example, the Commission considered the extent to which balanced, accurate information for pertinent comparative factors could be conveyed on the ``simple'' label envisioned by Congress.249 It also considered whether appropriate technical standards existed to compare some factors, and whether providing the same information required in labels by other government agencies (in different formats) could confuse consumers. --------------------------------------------------------------------------- \2\48 Three commenters (BOR, Greenpeace, and SIGMA) did not address disclosures on AFV labels. \2\49 59 FR 24014, 24019. --------------------------------------------------------------------------- The second set of considerations pertained to the type of information consumers would find most appropriate, useful, and timely in making AFV choices and comparisons. For example, the Commission stated in the NPR that consumers would require disclosure of far greater comparative information when considering an AFV purchase then when refueling.250 As a result, the Commission proposed that AFV labels disclose more comprehensive cost-benefit information to consumers than labels for alternative fuels. The Commission also stated that because few consumers have extensive experience with AFVs, its labeling proposal should be designed to be useful to a general consumer audience. Finally, there was less need for the Commission to attempt to present complex information in the constrained format of an AFV label because DOE was required to prepare and distribute an information package for consumers. --------------------------------------------------------------------------- \2\50Id. All nine commenters addressing that issue supported the Commission's assessment. AAMA (Tr.), 37-38; AMI, G-3, 1; Boston Edison (Tr.), 84; CEC, H-8, 1; ETC (Tr.), 42; NAFA (Tr.), 53; NPGA (Tr.), 50, 51; RFA, G-5, 4; Sun, G-1, 2. --------------------------------------------------------------------------- After evaluating those considerations, the Commission tentatively determined that an AFV label disclosing a combination of information would be most useful to consumers making choices and comparisons. The specific label format proposed in the NPR disclosed a combination of information in a three-part format.251 The first part would disclose objective information pertaining to each particular AFV, while the second and third parts would disclose information pertaining to AFVs in general. --------------------------------------------------------------------------- \2\51 59 FR 24014, 24019-24020. --------------------------------------------------------------------------- The Commission re-evaluated all those considerations while developing this revised AFV labeling proposal. Of great significance in the development of this proposal was DOE's issuance of the first annual edition of its required information package in July 1993. That 32-page brochure, titled ``Taking an Alternative Route: Alternative Fuels Fueling The Future,'' was expressly designed to meet the needs of a targeted consumer audience: fleet owners and managers.252 While the brochure includes information specifically of interest to that group, it also includes general information about the most readily available alternative fuels: Electricity, ethanol, methanol, CNG, and propane. For each featured fuel, the brochure offers information regarding the same ten categories: fuel description (i.e., how the fuel is produced and its general composition for transportation purposes), domestic content, fueling (i.e., how AFVs powered by the fuel are refueled or recharged), fuel availability, vehicle experience and availability, operational performance (e.g., range, acceleration, and cruising speed), maintenance and reliability, safety, costs (e.g., fuel and conversion costs), and resources for further information (e.g., trade associations and the DOE Alternative Fuels Hotline).253 The brochure also includes a glossary of relevant terms.254 --------------------------------------------------------------------------- \2\52 Commission staff placed a copy of DOE's brochure on the public record of this proceeding. For example, the brochure describes mandates and incentives pertinent to fleet operators contained in EPA 92 and the 1990 Clean Air Act Amendments. B-3, 1, 3-15, 26-32. \2\53 B-3, 16-25. CAS notes that environmental and consumer organizations are not included as sources to contact for more information. CAS (Supp.), G-17, 6. \2\54 B-3, inside cover. --------------------------------------------------------------------------- The DOE brochure does not offer specific data regarding environmental performance. Instead, a standard statement (``Produces less air toxics and ozone-forming emissions than gasoline'') is included in a graphic for each of the five featured fuels. The brochure also advises consumers generally that manufacturers are responsible for certifying their vehicles to federal emission standards, that manufacturers seeking to produce and certify AFVs as clean-fuel vehicles must meet specified clean-fuel emission standards, and that AFV conversion companies face similar certification requirements.255 --------------------------------------------------------------------------- \2\55 B-3, 13. --------------------------------------------------------------------------- Of additional significance was EPA's promulgation of new regulations pertaining to alternative fuels and AFVs. For example, on May 27, 1994, EPA issued certification procedures for aftermarket conversion equipment (i.e., hardware allowing a vehicle to operate completely or in part on a fuel other than the fuel for which it was originally designed and manufactured) and emission standards and test procedures for the certification of certain CNG and LPG fueled vehicles.256 On June 14, 1994, EPA also issued emission standards for certain clean-fuel vehicles and other conversion regulations.257 --------------------------------------------------------------------------- \2\56Gaseous Fuels Rule, 59 FR 48472, Sept. 21, 1994. \2\57Fleet Standards Rule, 59 FR 50042, Sept. 30, 1994. --------------------------------------------------------------------------- This revised proposal is the result of the Commission's analysis of all pertinent considerations, the rulemaking record (including written comments and Workshop statements) and recent developments. As described in more detail below, the Commission continues to believe that a combination of objective and descriptive information will best meet consumers' needs for comparative cost-benefit information. The Commission also believes that this format will best address the problems associated with developing and publishing such information. a. Specific data disclosures--(1) Fuel tank capacity/cruising range. After considering disclosure of numerous objective factors, the Commission proposed in the NPR that one type of specific data--fuel tank capacity--be calculated and displayed on AFV labels.258 Fuel tank capacity would be expressed in gallons for AFVs powered by liquid alternative fuels, and the Commission sought comment on how it should be disclosed for gaseous and electric powered AFVs. The Commission suggested that consumers could use fuel tank capacity to estimate cruising range, a ``principal piece of cost-benefit information.''259 --------------------------------------------------------------------------- \2\5859 FR 24014, 24020. \2\59Id. For AFV's with EPA fuel economy labels, consumers could estimate cruising range by multiplying fuel tank capacity by the posted miles-per-gallon rating for that vehicle. Id. at 24020 n.153. --------------------------------------------------------------------------- Twenty-seven commenters addressed one or more aspects of this proposal.260 Of those twenty-seven, three stated how fuel tank capacity should be expressed or displayed but did not otherwise support or oppose disclosure of this information.261 Fifteen other commenters supported the Commission's proposal in whole or in part. Ten of those fifteen indicated that fuel tank capacity could be useful if it was expressed in equivalent units (i.e., which accounted for the fact that alternative fuels have different energy contents).262 Eight of those ten commenters noted that consumers could use that information to determine cruising range.263 Five other commenters stated that both fuel tank capacity and cruising range should be disclosed on AFV labels.264 --------------------------------------------------------------------------- \2\60Eight other commenters (BOR, G-4; Greenpeace, G-27; MC-MD, G-23; NACAA, H-6; NHTSA, H-1; SIGMA, G-23; Texas ADA, G-11; Thomas BB, G-10) did not address any aspect of this issue. Two others indicated general support for the Commission's labeling proposal without addressing this specific issue. EIA/EEU-ISD, H-2, 1; Texas RRC, H-3, 1. \2\61EPA, H-4, 2 (fuel tank capacity should be expressed in same units that will be used in retail sales ``if [the Commission] decides in the final rule to include'' that measure) (emphasis added); NADA, G-19, 2 (fuel tank capacity ``could easily be incorporated into'' EPA fuel economy labels). TVA stated that AFV labels for electric vehicles should disclose electrical capacity, recharging voltage, recharging architecture, and connection configuration. TVA, H-5, 1. TVA did not otherwise define or explain the significance of the third and fourth factors. \2\62AAMA, G-7, 2; AGA/NGVC, G-6, 10; API, G-26, 5-6; Chrysler, G-13, 1 (supporting AAMA); Ford, G-14, 1, 2 (supporting AAMA); GM, G-8, 1, 4, 5 (supporting AAMA generally, but suggesting that battery capacity for EVs be expressed in kilowatt-hours, ``the accepted standard unit of measurement for electricity.''); Mobil, G-2, 5; Nebraska EO, H-9, 1; Sun, G-1, 2; Unocal, G-9, 2. \2\63AAMA, G-7, 2; AGA/NGVC, G-6, 10; API, G-26, 5-6; Chrysler, G-13, 1 (supporting AAMA); Ford, G-14, 1, 2 (supporting AAMA); GM, G-8, 1 (supporting AAMA); Sun, G-1, 2; Unocal, G-9, 2. Two of those commenters also said that for electric vehicles, range, and not battery capacity, should be disclosed to consumers. Mobil, G-2, 5; Sun, G-1, 2. \2\64AMI, G-3, 1; CEC, H-8, 9; DOE, H-10, 4, (Tr.), 146; Phillips 66, G-15, 1; UCS (Tr.), 143. --------------------------------------------------------------------------- Nine commenters opposed the proposal to require disclosure of fuel tank capacity. ETC stated that an electric vehicle's (EV) battery capacity is only one of a ``wide number of factors'' affecting cruising range and thus by itself is a poor indicator of that factor.265 EMA and Flxible stated that disclosures as to either fuel tank capacity or range were not feasible for heavy-duty vehicles because such vehicles are often custom-ordered to meet a customer's specifications.266 NPGA supported disclosing fuel economy (expressed as miles/gallon) because ``most consumers will more readily understand'' that information.267 Five other commenters stated that cruising range should be disclosed instead of fuel tank capacity.268 --------------------------------------------------------------------------- \2\65ETC, G-24, 1. \2\66EMA, G-21, 5-6, (Supp.), 4; Flxible (Supp.), G-12, 3. \2\67NPGA, G-18, 3. NPGA further stated that fuel tank capacity ``might be valid useful information'' when a vehicle's fuel economy was ``relatively close in value'' when operating on either an alternative fuel or gasoline. Id. DOE's information brochure indicates that propane is the only alternative fuel with such properties. See B-3, 25 (``Range is almost equivalent to that of comparable gasoline vehicle.''). At the Workshop, NPGA's representative supported disclosing cruising range on AFV labels. NPGA (Tr.), 51. \2\68Boston Edison (Supp.), G-26, 8-9, 11-12; CAS, G-17, G-17, 2, (Tr.), 138, (Supp.), 1; NAFA, G-20, 2-3; PCC, G-27, 2; RFA, G-5, 4, (Supp.), 1. --------------------------------------------------------------------------- As noted previously, the Commission must require disclosure of appropriate cost-benefit information to help consumers make choices and comparisons. Given that mandate, the Commission has considered whether the record supports its prior belief that information about fuel tank capacity (however expressed) would help consumers make meaningful choices and comparisons. As the Commission indicated in its NPR, it considered disclosure of fuel tank capacity important not for its own significance, but as a way of helping consumers calculate cruising range.269 Commenters responding to the NPR noted that cruising range is an objective piece of cost-benefit information upon which consumers can make choices and comparisons.270 It is also one of the most important facts consumers need regarding whether and which AFV to acquire; as AAMA noted: ``This information (i.e., range) is vital for the consumer when deciding between various alternative fuels * * *.''271 Because cruising ranges for AFVs can differ significantly from cruising ranges for conventional fuel vehicles, with which consumers are most familiar, consumers also have a practical need for this information.272 --------------------------------------------------------------------------- \2\6959 FR 24014, 24020. \2\70CAS (Tr.), 156 (range gives consumers ``the ability to compare in the showroom a very visible number that you can go from car to car to car and compare.''); (Supp.), G-17, 1. \2\71AAMA, G-7, 2. See also AMI (Tr.), 141 (range is one of the most important factors); NAFA (Tr.), 147 (same); Boston Edison (Supp.), G-26, 9; (Tr.), 142 (range is most important concern of people considering EV purchase). \2\72RFA (Tr.), 153, (Supp.), G-5, 2 (``[G]iven the sparsity and distance between alternative fuel refueling stations, vehicle owners need to be aware of approximate range.''). --------------------------------------------------------------------------- After reviewing the record, however, the Commission has decided not to propose disclosure of fuel tank capacity as a surrogate for cruising range. The Commission notes that while fuel tank capacity has the advantage of being able to be expressed with precision,273 its usefulness to consumers might be undermined by several factors. First, fuel tank capacity by itself is a poor indicator of cruising range because (1) alternative fuels have different energy contents per unit of measure and (2) engines are not equally efficient. Therefore, vehicles with equivalent-sized fuel tanks could achieve different cruising ranges.274 --------------------------------------------------------------------------- \2\73GM (Tr.), 140; UCS (Tr.), 143. \2\74Boston Edison (Supp.), G-26, 11-12 (fuel tank capacity is not relevant, does not provide consumers with meaningful comparisons, and is misleading); ETC (Tr.), 150 (fuel tank capacity alone ``is not going to give you a good basis for being able to * * * figure out what you really need to know, which is how far you're going [to] go''); Mobil, G-2, 5; Nebraska EO, H-9, 1. --------------------------------------------------------------------------- Second, attempts to account for energy-content differences by expressing each tank's capacity in equivalent units (e.g., so-called ``gasoline equivalent gallons'') could be similarly problematic because consensus methods for making such conversions or comparisons have not yet been developed or promulgated for all alternative fuels.275 For example, DOE is required to determine a ``petroleum equivalency factor'' for various classes of electric vehicles.276 Such a factor would permit comparisons between the fuel economies of conventional and electric powered vehicles.277 Similarly, DOT has not yet established fuel equivalency factors for ``gaseous fuels other than natural gas'' (i.e., liquefied natural gas, liquefied petroleum gas, and hydrogen), as required by EPA 92.278 --------------------------------------------------------------------------- \2\75At the Workshop, AAMA appeared to acknowledge the difficulties inherent in such an approach. Discussing a label format it suggested the Commission should consider, its representative stated that, ``We had originally put language referring to gasoline equivalent gallons, but recognizing the problems with some nonliquid fuels, we're leaving that open at present.'' AAMA (Tr.), 165-66. \2\7615 U.S.C. 2003(a)(3) (A), (C); 49 FR 5336, 5337, Feb. 4, 1994. \2\77Id. DOE proposed to promulgate new equivalency factors in an NPR published Feb. 4, 1994, to update those last published in 1987. 59 FR 5336. \2\7815 U.S.C. 2013(c) (Supp. IV 1993). --------------------------------------------------------------------------- The Commission also notes that while two consensus standards for comparing CNG and gasoline have been developed, they appear to be based on different measures. The National Conference on Weights and Measures, a consensus standards-writing organization for state and local regulatory agencies, recently adopted a proposal defining CNG in terms of mass (i.e., either kilograms or pounds).279 EPA's fuel economy calculations, however, are based on volumetric calculations which measure CNG in terms of cubic feet.280 At the Workshop, AGA/NGVC's representative stated that these two measures ``are largely apples and oranges.''281 That representative noted, however, that both measurements yielded results which were ``very, very close.''282 --------------------------------------------------------------------------- \2\79National Conference on Weights and Measures, S.1.2.2, Units of Measure for Natural Gas When Sold as an Engine Fuel (adopted July 1994). \2\80EPA (Tr.), 112; NPGA (Tr.), 158. \2\81AGA/NGVC (Tr.), 111; see also NPGA (Tr.), 158 (``And so they're not going to be equal no matter what you do.''). \2\82AGA/NGVC (Tr.), 112; see also NPGA (Tr.), 159 (``I don't think right now they're off far enough to upset the whole apple cart. In the future it may need some refinement.''). --------------------------------------------------------------------------- Third, several commenters supporting disclosure of fuel tank capacity stated that consumers could use that information, along with EPA's fuel economy estimates, to determine approximate cruising range.283 However, AFVs powered by certain fuels are not yet required to post fuel economy labels. As a result, consumers considering AFVs not covered by EPA's labeling program will not be able to use fuel tank capacity to calculate cruising range. --------------------------------------------------------------------------- \2\83See, e.g., Ford, G-14, 1-2, (Tr.), 145. --------------------------------------------------------------------------- Other commenters expressed opposition to disclosing cruising ranges on AFV labels. In supplemental written comments filed after the Workshop, AAMA noted that although cruising range ``may be useful information for a consumer when purchasing an AFV,'' it preferred that such information not be disclosed on AFV labels.284 First, AAMA stated that disclosing cruising range for AFVs ``did not provide an adequate comparison for all vehicles'' because gasoline and diesel vehicles do not require disclosure of that information.285 Second, AAMA stated that disclosing this information could mislead consumers because no established test exists to measure it (making comparisons difficult)286 and it is difficult to estimate.287 For example, cruising range depends on vehicle options, driving conditions, personal driving habits, and vehicle conditions, all of which ``can dramatically affect the actual driving range.''288 As a result, disclosure of cruising range would be impractical because the information would be subject to too many caveats.289 --------------------------------------------------------------------------- \2\84AAMA (Supp.), G-7, 1, 3. See also GM (Tr.), 139-40 (``I think range is an important factor, but how do you actually show that number that's meaningful that's real.''). \2\85AAMA (Supp.), G-7, 3. \2\86Ford (Tr.), 147; GM (Tr.), 139-40. \2\87For heavy duty vehicles, EMA and Flxible noted that cruising range was difficult to estimate because individual models could have different fuel tank capacities, customer usage, load, and other options. EMA (Supp.), G-21, 4; Flxible (Supp.), G-12, 3. \2\88AAMA (Supp.), G-7, 3. \2\89Ford (Tr.), 144-45. --------------------------------------------------------------------------- Specific fuels also raise problems unique to those fuels (i.e., an electric vehicle's range ``may vary significantly'' according to air temperature,290 a CNG powered AFV's according to refueling pressure and fuel temperature,291 and a dual fueled AFV's cruising range ``will vary according to which fuel is in the tank.'').292 GM added that other factors yet to be determined may also affect cruising range.293 As a result, disclosing cruising range could be misleading because consumers will not likely get that actual range while driving.294 --------------------------------------------------------------------------- \2\90AAMA (Supp.), G-7, 4; Ford (Tr.), 144. \2\91AAMA (Supp.), G-7, 4. \2\92Id. \2\93GM (Tr.), 150-51 (``There are a lot of factors there that aren't clearly understood * * * And it just seems at this point in the juncture of the technology that * * * when you get into range with the emerging technology they're not really understanding all the factors that impact that yet.''). \2\94AAMA (Supp.), G-7, 4. --------------------------------------------------------------------------- The Commission notes, however, that the absence of cruising range information on conventional fueled vehicles will not preclude comparisons to AFVs as to that factor.295 For example, DOE's information package addresses cruising range for four of the five featured fuels (ethanol, methanol, CNG, and propane) in terms of a comparable gasoline-powered vehicle.296 The Commission also expects that requiring disclosure as to this factor could encourage affected manufacturers and dealers to provide additional information to meet consumers' expectations and needs.297 --------------------------------------------------------------------------- \2\95As noted previously, the Commission believes that it has no authority to require labeling for vehicles powered by gasoline or diesel fuel. See supra text accompanying note 38. \2\96B-3, 19, 21, 23, 25. \2\97See AGA/NGVC, G-6, 12 (``[F]uel retailers, vehicle manufacturers and trade associations can target and educate specialty markets and their consumers.''). In response to the Commission's ANPR, Boston Edison also stated that ``over time, market forces will create incentives for sellers to identify and respond to consumer demands for information, much as gasoline sellers supplement the information that they are required to provide under the Commission's Octane Rule.'' Boston Edison, D-11, 13. --------------------------------------------------------------------------- Second, the other identified problems do not preclude an accurate, understandable, and comparable disclosure as to cruising range. The proposed label format could specifically identify the cruising range disclosure as being a ``manufacturer's estimate,'' and advise consumers that actual cruising range ``will vary with options, driving conditions, driving habits and the vehicle's condition.'' Consumers could be further cautioned that the labels are for comparison purposes and ``may not reflect actual driving range.'' A disclosure displayed in this format is not likely to pose problems to consumers accustomed to estimates.298 As a Workshop participant stated, some consumers may also have a particular need for such information. \2\98AMI (Tr.), 155 (consumers understand that ``basic information'' on the label is not going to be precise). --------------------------------------------------------------------------- [B]ut personally if I was leaving on a 50 or 60-mile trip and my cruising range could be as low as 30, I'd like to know that. So I think I would like to know the low end of it even if there is a broad, you know, number that's not very well defined. I think it's still beneficial to know what the minimum, certainly the minimums are, because you have to be able to make it to the next fueling point.299 --------------------------------------------------------------------------- \2\99RFA (Tr.), 149. See also RFA (Supp.), G-5, 2 (``the fact that a number of variables affect range ``does not preclude posting an estimated minimum and maximum range''). The Commission also notes that cruising range appears to be a prominent component of marketing and advertising claims promoting the use of AFVs, as demonstrated by the frequency which that factor is cited in consumer announcements. For example, Chrysler, GM and Ford have all made cruising range claims regarding their EVs in congressional testimony,300 promotional material301 and product specification sheets.302 Chrysler and GM also address cruising range in owner's manuals for the 1994 Dodge Spirit303 and 1993 Chevrolet Lumina.304 Peugeot has made similar claims in its promotional material.305 Companies converting cars to run on electricity306 and electricity utilities307 are also making cruising range claims for EVs. Similar claims are also being made for AFVs powered in whole or in part by CNG,308 hydrogen,309 LPG,310 and methanol.311 As such, it appears that a disclosure about cruising range may be feasible even given certain constraints. --------------------------------------------------------------------------- \3\00For example, at a May 11, 1993, congressional hearing, representatives from Chrysler, Ford, and GM all made cruising range claims for their EVs. See Status of Domestic Electric Vehicle Development, 103d Cong., 1st Sess. (1993) (statement of Doran K. Samples, Program Management Executive of the Electric Minivan Project, Chrysler, at 52, 56; Roberta J. Nichols, Electric Vehicle External Strategy Manager, Ford, at 60, 64, 66; and Kenneth R. Baker, Vice President, GM, at 76). \3\01See GM, Progress Report, B-5, front, Spring/Summer 1993 (GM's Impact 4 EV has ``a driving range of 70 miles in the city and 90 miles in normal highway driving.''); GM, GM's ``Impact'' Show Car and New Pre-Production Electric Vehicle Lead the 104th Tournament of Roses, B-6, at 2, Dec. 29, 1992 (``The Impact and the pre-production car * * * have a useful range of 100 miles* * *''); GM, General Motors Electric Vehicles Fit Most Drivers' Lifestyles, B-7, at 1, Oct. 20, 1992 (``GM's ``Impact'' prototype has a highway range of 100 miles.''). \3\02Chrysler 1994 Dodge Caravan/Plymouth Voyager, B-8, back, May 7, 1993; Chrysler 1994 Dodge Caravan/Plymouth Voyager, B-9, back, Aug. 31, 1992; Ford Ecostar, B-10, back panel, undated; GM Impact 3, B-11, back, undated; GM Impact, B-12, back, undated (``It has a practical range of 80 miles per charge.''). \3\03AAMA (Supp.), G-7, 1994 Dodge Spirit Owner's Manual at 105 (``Cruising Range: M-85 produces less energy when burned than gasoline. Therefore, cruising ranges and miles per gallon (MPG) will be considerably less when using M-85. Cruising ranges will increase as the content of gasoline in the fuel tank increases.''). \3\04AAMA (Supp.), G-17, 1993 Chevrolet Lumina Owner's Manual-- Ethanol Supplement, at 4 (``When using an E-85 mixture of fuel, your Lumina has a range of 250-300 miles (400-480 km).''); 1992 Chevrolet Lumina Owner's Manual--Methanol Supplement, at 5 (``When using an M- 85 mixture of fuel, your Lumina has a range of 200-250 miles (320- 400 km).''). \3\05PSA Peugeot Citroen, Electric Vehicles, B-13, at 3-5, 1992 (Peugeot 106 has range of 90-160 km; Citela has range of 210 km @ 40 kph; 110 km city * * * car continuously displays remaining range); Peugeot 405 Station Wagon has battery range of 72 km at 40 kph and highway range of 750 km at 100 kph). \3\06Dreisbach ElectroMotive, Inc., API Demi Motorola Saturn, B- 14, front, undated (range from 140 to 518 miles depending on battery configuration); Electro Automotive, Electro Automotive Makes Electric Cars Easy With The Voltsrabbit(tm) Kit, B-15, front, undated (range: 60-80 miles); Solar Car Corporation, Specifications for Chevy S-10 and GMC S-15 Pickup Truck (converted to run on electricity), B-16, front, Aug. 1, 1992 (``Normal Daily Range--50 to 80 miles, depending on terrain, speed and driving conditions.''). \3\07Arizona Public Service Company, Electric Vehicle Program, B-17, at first upper panel, undated (``Today's batteries give Evs a range of 30 to 100 miles on a single charge.''); Electric Power Research Institute, Electric Vehicle Infrastructure: How Far Will My Electric Vehicle Take Me?, B-18, front, 1992 (``[T]oday's EV models * * * offer a driving range of 60 to 100 miles* * *.''); Virginia Power, The Electric Vehicle: Clean, Quiet and Efficient (CO 923-VA/ EE 93084), B-19, front, undated (Solectria Force has range of 70-90 miles); Potomac Electric Power Company, Questions and Answers About the Solectria Force, B-20, front, Dec. 1992 (Solectria Force has driving range of ``60 miles if the batteries are fully charged* * * The effective range of the Force using current off-the-shelf battery technology is approximately 35 to 40 miles on a charge.''). \3\08Blue Bird Body Company, Product Specifications for NGV School Buses (models TC/2000 FE and TC/2000 RE), B-21, at 3, 1992 (``Vehicle range--300 miles with 6 tanks, 150 miles with 3 tanks''); Ford, Crown Victoria dedicated CNG, B-22, front, March 3, 1993 (``The driving range for these demonstration units is approximately 200 miles.''). \3\09Mazda, Mazda Takes Action To Address Global Environmental Concerns, B-23, at 3, July 27, 1993 (``With a full tank of hydrogen, the Mazda HR-X has a range of up to 125 miles.''). \3\10Clean Fuels Task Force of Western Liquid Gas Association, LPG: An Alternate Clean Air Motor Fuel With Significant Environmental and Economic Advantages, B-24, 7, May 1992 (``LPG offers the best range per gallon of the four non-gasoline clean fuels.''); NPGA, LP-Gas Is Moving America's Fleets, B-25, 6, 1991 (chart comparing driving ranges for ``identical vehicles, optimized for their specific fuel.''). \3\11Ford, Taurus passenger car FFV (using gasoline or M85), B- 26, front, March 4, 1993 (``Highway driving range is approximately 350 miles when using M85.''); Ford, Ford Announces Production of 1993 Taurus FFV, B-27, at 1, Dec. 16, 1992 (``By increasing the size of the fuel tank to 20.7 gallons, the driving range of the Taurus FFV when fueled with M85 is similar to a non-FFV Taurus.''); Ford, Econoline van and Club Wagon FFV (using gasoline and M85), B-28, front, March 4, 1993 (``The highway driving range is approximately 400 miles when using M85.''). --------------------------------------------------------------------------- After considering this information, the Commission has determined that no matter how displayed (e.g., with cruising range or other objective measure), fuel tank capacity does not appear to be the most useful way to help consumers make comparisons. Instead, because of its possibly paramount importance to consumers, the Commission has tentatively determined that cruising range itself should be disclosed on labels for new covered AFVs.312 Under the Commission's revised proposal, cruising range would be displayed on AFV labels in two formats. The first labeling format would be for dedicated covered AFVs (i.e., covered AFVs designed to operate solely on alternative fuel).313 Labels for these vehicles would disclose the manufacturer's ``estimated cruising range'' for that vehicle (i.e., the manufacturer's reasonable estimate of the number of miles a covered vehicle will travel between refueling or recharging), expressed as a lower estimate and an upper estimate.314 Figure 4 at the end of this SNPR illustrates a sample disclosure for these vehicles. --------------------------------------------------------------------------- \3\12The Commission does not propose requiring disclosure of this information on labels for used covered AFVs. As noted previously, comparative information could vary significantly with a vehicle's condition. Requiring disclosure of such information on used vehicles could therefore be misleading to consumers. See supra section III(C)(1)(d). \3\13See proposed rule Sec. 309.1(g) (defining ``dedicated''). \3\14See proposed rule Secs. 309.1(o) (defining ``estimated cruising range''), 309.20(f)(2)(i) (requiring disclosure of estimated cruising range for dedicated vehicles). --------------------------------------------------------------------------- The second labeling format would be for dual-fueled covered AFVs (i.e., capable of operating on alternative fuel and capable of operating on gasoline or diesel fuel).315 Labels for these vehicles would disclose two sets of values: the manufacturer's reasonable estimate of (a) the minimum and maximum number of miles the vehicle will travel between refuelings or rechargings when operated exclusively on alternative fuel, and (b) the minimum and maximum number of miles the vehicle will travel between refuelings or rechargings when operated exclusively on conventional fuel.316 Figure 5 at the end of this SNPR illustrates a sample disclosure for these vehicles. --------------------------------------------------------------------------- \3\15See proposed rule Sec. 309.1(i) (defining ``dual fueled''). \3\16See proposed rule Sec. 309.20(f)(2)(ii) (requiring disclosure of estimated cruising range for dual-fueled vehicles). --------------------------------------------------------------------------- Cruising range values would be expressed in whole integers. Because the disclosure would relate solely to the manufacturer's estimated (and not actual) cruising range, the labels would include a statement advising consumers that their actual cruising range will vary with options, driving conditions, driving habits and the AFV's condition.317 --------------------------------------------------------------------------- \3\17 EPA's fuel economy labels contain a similar statement. See 40 CFR 600.307-86(a)(3)(ii)(A) (1993) (``Actual mileage will vary with options, driving conditions, driving habits, and [vehicle's/ truck's] condition.''). See Figures 4 and 5 at the end of this SNPR. --------------------------------------------------------------------------- Under the Commission's revised proposal, manufacturers would calculate cruising range values in one of three ways. For vehicles required to comply with EPA's fuel-economy labeling provisions,318 cruising range values would be calculated by reference to the vehicle's estimated fuel-economy rating.319 For example, the lower range value would be determined by multiplying the vehicle's estimated city fuel-economy by its fuel tank or battery capacity, then rounding to the next lower integer value.320 Conversely, the upper range value would be determined by multiplying the vehicle's estimated highway fuel-economy by its fuel tank capacity, then rounding to the next higher integer value.321 --------------------------------------------------------------------------- \3\18See 40 CFR part 600 (1993) (``Fuel economy of motor vehicles''). \3\19Numerous commenters suggested that cruising range values could be so calculated. See, e.g., AAMA (Supp.), G-7, 3 (``Combining MPG with tank capacity can give the customer a reasonable estimation of driving range.''); AMI (Tr.), 141; CAS (Supp.), G-17, 1-2; EPA (Tr.), 144; RFA (Tr.), 148. \3\20See proposed rule Sec. 309.22(a)(1)(i). \3\21See proposed rule Sec. 309.22(a)(1)(ii). --------------------------------------------------------------------------- As noted previously, EPA is required to include AFVs powered by all alternative fuels within its fuel-economy labeling program, but has not yet announced a timetable for doing so.