[Federal Register Volume 60, Number 97 (Friday, May 19, 1995)] [Rules and Regulations] [Pages 26926-26967] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 95-12160] [[Page 26925]] _______________________________________________________________________ Part II Federal Trade Commission _______________________________________________________________________ 16 CFR Part 309 Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles; Final Rule Federal Register / Vol. 60, No. 97 / Friday, May 19, 1995 / Rules and Regulations [[Page 26926]] FEDERAL TRADE COMMISSION 16 CFR Part 309 RIN 3084-AA57 Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles AGENCY: Federal Trade Commission. ACTION: Final rule. ----------------------------------------------------------------------- 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 November 18, 1994, the Commission published a supplemental 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 its final labeling requirements, and explains why it has modified certain requirements from those proposed. EFFECTIVE DATE: Subpart A and Subpart B of 16 CFR Part 309 are effective on August 21, 1995. Subpart C of 16 CFR Part 309 is effective on November 20, 1995. The incorporation by reference of certain publications listed in subpart B of 16 CFR Part 309 is approved by the Director of the Federal Register as of August 21, 1995. The incorporation by reference of certain publications listed in subpart C of 16 CFR Part 309 is approved by the Director of the Federal Register as of November 20, 1995. FOR FURTHER INFORMATION CONTACT: Jeffrey E. Feinstein, Attorney, 202/ 326-2372, or Neil J. Blickman, Attorney, 202/326-3038, Division of Enforcement, Federal Trade Commission, Washington, DC 20580. SUPPLEMENTARY INFORMATION: Statement of Basis and Purpose 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 the dependence of the United States on oil imports; promote energy efficiency; reduce the use of petroleum-based fuels in motor vehicles; and provide new energy options. Other 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. 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 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 ``motor vehicle characteristics 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\42 U.S.C. 13231. 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. \10\42 U.S.C. 13231. 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 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 \11\15 U.S.C. 2821-2823. \12\Octane Posting and Certification, 16 CFR Part 306. \13\16 CFR 306.0(i)(2) (1994). In that proceeding, the Commission had no authority to extend the rule's requirements beyond liquid alternative fuels. 15 U.S.C. 2821 (Supp. IV 1993). \14\16 CFR 306.0(j)(2) (1994). The Fuel Rating Rule became effective October 25, 1993. 58 FR 41356, 41356, Aug. 3, 1993. --------------------------------------------------------------------------- II. Public Participation EPA 92 required the Commission, in formulating its labeling requirements, to ``obtain the views of affected industries, consumer organizations, Federal and State agencies, and others.''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 Transportation (``DOT'') [[Page 26927]] within eighteen months after October 24, 1992 (the statute's enactment date).16 To comply with those requirements, the Commission received information from the public relating to this proceeding from five 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, supplemental written comments filed after the Workshop, and written comments filed in response to a Supplemental Notice of Proposed Rulemaking (``SNPR'') published on November 18, 1994.19 All such information (i.e., the written comments and Workshop transcript) was placed on the public record of this proceeding. The discussion below includes information from all five sources, as well as documents placed on the public record by the Commission's staff.20 The Commission considered all these materials in developing this final labeling rule. \15\42 U.S.C. 13232(a). \16\Id. Commission staff consulted with staff from DOE, EPA, and DOT's National Highway Traffic Safety Administration while developing its initial and supplemental labeling proposals. \17\58 FR 64914. \18\59 FR 24014. \19\59 FR 59666. \20\Commission's Rulemaking Record No. R311002. Comments submitted in response to the SNPR are coded either ``I'' (indicating that they were filed by nongovernmental parties) or ``J'' (indicating that they were filed by governmental agencies). Written comments submitted in response to prior Federal Register notices are coded either ``D'' or ``E'' (in response to the ANPR) or ``G'' or ``H'' (in response to the NPR). Written requests to participate in the Workshop are coded ``A.'' The Workshop transcript is filed in category ``L.'' Information placed on the public record by Commission staff is coded ``B.'' In this notice, comments are cited by identifying the commenter (by abbreviation), the comment number, and the relevant page number(s), e.g., ``RFA, I-3, 1-3.'' Supplemental comments filed after the Workshop 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).21 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.22 \21\58 FR 64914, 64915. \22\59 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 on any issue of fact, law or policy that might have bearing upon the proposed labeling requirements. In response, the Commission received 37 written comments addressing the Commission's proposal. The comments responding to the NPR were summarized in the Commission's SNPR. 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.23 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. \23\59 FR 24014, 24020. --------------------------------------------------------------------------- Twenty-one interested parties timely submitted written requests to participate in the Workshop.24 Twenty of those parties filed written comments as required,25 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.26 The Workshop was held on July 20, 1994, at the Commission's headquarters and was conducted as announced in the NPR.27 \24\AAMA, 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. \25\The law firm Eckert Seamans Cherin & Mellott did not file a written comment. \26\Lois 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. \27\The 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 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.28 Eight participants elected to file such comments.29 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. \28\59 FR 24014, 24023. \29\AAMA, AGA/NGVC, Boston Edison, CAS, EMA, Flxible, NPGA, and RFA. --------------------------------------------------------------------------- E. Supplemental Notice of Proposed Rulemaking The Commission considered written comments on the public record, the Workshop transcript,30 and staff submissions in developing a revised labeling proposal, which was published in the Federal Register as the Commission's SNPR. The SNPR announced modifications to the Commission's initial labeling proposal and the specific language of a proposed labeling rule. The Commission invited interested persons to submit written [[Page 26928]] comments until December 19, 1994, addressing any issue they believed might bear upon the proposed rule. As described below, the Commission received 24 written comments in response to its SNPR from vehicle manufacturers,31 fuel producers,32 governmental entities,33 a consumer organization,34 organizations representing affected interests,35 and other interested individuals.36 \30\Two commenters endorsed the Commission's reliance on the Workshop transcript in its preparation of the SNPR. See API, I-15, cover letter at 3 (``We believe the issues expressed in the July [Workshop] were fairly addressed by the FTC in its [SNPR].''); RFA, I-3, 2 (``We believe that the changes reflected in the revised final rule were justified based on written comments and the information covered at the public workshop.''). \31\Ford Motor Company (``Ford''), I-4; Electro Automotive (``Electro Auto''), I-7; Toyota Motor Corporation (``Toyota''), I- 11; Chrysler Corporation (``Chrysler''), I-13. \32\Mobil Oil Corporation (``Mobil''), I-2; Unocal Corporation (``Unocal''), I-5; Commercial Electronics NGV Systems Division (``Comm Elec''), I-8; Boston Edison and Edison Electric Institute (submitted by Larson and Curry) (``Boston Edison/EEI''), I-14. \33\U.S. Department of Energy (``DOE''), J-1; City of Chicago, Illinois (``Chicago''), J-2; California Air Resources Board (``CARB''), J-3; U.S. Department of Energy, Energy Information Administration, Energy End Use and Integrated Statistics Division (``EIA/EEU-ISD''), J-4; U.S. Department of Transportation, National Highway Traffic Safety Administration (``DOT/NHTSA''), J-5. \34\Center for Auto Safety (``CAS''), I-12. \35\Renewable Fuels Association (submitted by Downstream Alternatives, Inc.) (``RFA''), I-3; Engine Manufacturers Association (submitted by Neal Gerber & Eisenberg) (``EMA''), I-6; Electric Transportation Coalition (submitted by Van Ness Feldman) (``ETC''), I-9; National Association of Fleet Administrators, Inc. (``NAFA''), I-10; American Petroleum Institute (``API''), I-15; American Automobile Manufacturers Association (``AAMA''), I-16; American Gas Association and Natural Gas Vehicle Coalition (``AGA/NGVC''), I-18; Natural Gas Vehicle Producers Association (``NGVPA''), I-19. \36\E. A. Mechtly, Ph.D., Engineering Educator, University of Illinois (``Mechtly''), I-1; Louis F. Sokol, CAMS, Metrification Consultant (``Sokol''), I-17. III. Labeling Requirements Proposed in the SNPR 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. During this proceeding, however, several commenters suggested regulatory options that are beyond the Commission's statutory authority because they involve matters other than labeling requirements, alternative fuels or AFVs, and cost and benefit information. For example, several commenters suggested that the Commission require AFV dealers to have copies of the DOE brochure available for consumer inspection and use.37 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).38 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.39 In the absence of a similar Congressional directive, the Commission believes that such a requirement may be beyond its authority under EPA 92.40 \37\ETC, 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. See also CAS, I-12, 1 (FTC should ``encourage availability'' of DOE brochure at AFV dealerships). 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. \38\40 CFR 600.401-77 to 600.407-77 (1993). \39\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).''). \40\The 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. In its comment, RFA wrote to ``encourage some formal review process'' of that brochure by industry. RFA, I-3, 2. --------------------------------------------------------------------------- For similar reasons, the Commission has also concluded that requiring any of the following may exceed its authority under EPA 92: (1) labeling for conventional fueled vehicles;41 (2) that information on AFV labels be provided to consumers (in a non-label format) at the time an AFV is offered for sale;42 (3) that ``all pertinent information'' (e.g., fuel hazards, tank capacity, refueling or recharging time, and cruising range) be disclosed in vehicle owners' manuals;43 and (4) that a ``simple card'' describing factors consumers should consider before acquiring an AFV be placed within new and used vehicles.44 \41\AGA/NGVC, G-6, 11 (requiring disclosures only for AFVs could unnecessarily raise consumer concerns about these products). \42\NAFA, I-10, 2; 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. \43\NACAA, 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. In any event, the Commission normally issues consumer education materials after new rules are issued, and that will be considered when this proceeding is completed. \44\AAMA, I-16, 6. --------------------------------------------------------------------------- B. Labeling Requirements for Alternative Fuels 1. Scope of the Labeling Requirements In the SNPR, the Commission proposed that the scope of its labeling requirements extend to three non-liquid alternative fuels: compressed natural gas (``CNG''), hydrogen gas (``hydrogen'') and electricity.45 One comment addressed this aspect of the Commission's proposal.46 For safety reasons, that comment recommended that the Commission limit the scope of the rule to alternative fuels that have been tested and approved for use by EPA.47 The Commission notes that EPA 92 specifically defines the term ``alternative fuel'' to include the three fuels at issue;48 and because they are readily available, DOE identifies them and encourages their use in its literature.49 Furthermore, other than emission certification procedures, EPA has no procedures for certifying fuels as being safe for use. \45\These are the only non-liquid fuels defined as ``alternative fuels'' in EPA 92. 42 U.S.C. 13211(2) (Supp. IV 1993). \46\Five other comments generally supported all aspects of the Commission's alternative fuels labeling proposal without addressing this specific issue. Boston Edison/EEI, I-14, 4; Chicago, J-2, 2-3; DOE, J-1, 2; EIA/EEU-ISD, J-4, 1; RFA, I-3, 2. In addition, comments on an earlier Commission proposal similarly supported limiting the scope of this proceeding to non-liquid alternative fuels. 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. \47\Chicago, J-2, 2-3. \48\42 U.S.C. 13211(2) (Supp. IV 1993). \49\U.S. Dep't of Energy, Taking An Alternative Route, B-33. The Commission's SNPR proposal was limited to non-liquid fuels because the Commission's Fuel Rating Rule contains labeling requirements for liquid alternative fuels. Further, the Commission proposed requirements for the non-liquid fuels that are similar to the Fuel Rating Rule's requirements for liquid alternative fuels. Although that rule serves a somewhat different purpose,50 the Commission believes that harmonizing labeling requirements, [[Page 26929]] when practicable, is appropriate. Thus, the Commission's SNPR proposal had the effect of imposing labeling requirements on non-liquid alternative fuels that are similar to those that currently exist for liquid alternative fuels. \50\The 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. Section 406(a)'s purpose is to provide consumers with appropriate cost and benefit information to enable them to make informed choices among alternative fuels and AFVs. 59 FR 59666. --------------------------------------------------------------------------- After considering the record, the Commission has determined that the scope of the rule shall be limited to the non-liquid alternative fuels CNG, hydrogen and electricity.51 This will result in equal, uniform, fuel-neutral labeling requirements for all alternative fuels that are currently used or contemplated for use as automotive fuels. Further, in accordance with section 406(a)'s directive to review the rule ``periodically to reflect the most recent available information,''52 the Commission will supplement the list of covered fuels if and when DOE designates new non-liquid fuels as alternative fuels.53 \51\See 59 FR 59666, 59669-59670 for a general description of the qualities of the alternative fuels covered by the final rule. \52\42 U.S.C. 13232(a) (Supp. IV 1993). \53\The Secretary of the Department of Energy has the responsibility to designate, by rule, new fuels as alternative fuels. 42 U.S.C. 13211(2) (Supp. IV 1993). --------------------------------------------------------------------------- 2. Label Disclosures for Non-liquid Alternative Fuels a. SNPR proposals. In the SNPR, the Commission proposed that retailers selling CNG, hydrogen and electricity to consumers 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).54 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. No comments were submitted regarding this facet of the SNPR proposal. The Commission, therefore, has determined to adopt these requirements in the final rule for the reasons stated in the SNPR.55 \54\See proposed rule Secs. 309.1(q) and 309.15, 59 FR 59666, 59704, 59706. \55\59 FR 59666, 59671-59672. --------------------------------------------------------------------------- With respect to CNG and hydrogen, the Commission also proposed requiring disclosure of the fuel's principal component and permitting disclosure of other components,56 expressed as minimum molecular percentages (``minimum mole percent'').57 These proposals are analogous to provisions in the Fuel Rating Rule pertaining to liquid alternative fuels.58 In the SNPR, the Commission tentatively concluded that its proposal to require disclosure of the minimum methane content of CNG would assist consumers in purchasing CNG that satisfies requirements specified by engine manufacturers to meet performance and emissions certification levels.59 The Commission also concluded that its proposal would be consistent with the Fuel Rating Rule's requirements for liquid alternative fuels,60 and would assist consumers in identifying the proper fuel for their vehicles. The Commission further noted that because CNG exists with too low a methane content to be used as a transportation fuel,61 requiring disclosure of the minimum methane content would help ensure that CNG that is not suitable for use as a transportation fuel is not inadvertently sold for that purpose. Although CNG sold as a transportation fuel must always meet minimum vehicle needs, information about minimum methane content could help assure consumers that the CNG they are purchasing will meet their engines' needs.62 \56\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. \57\Under the international system of units, ``the mole is the amount of substance of a system which 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 ``NIST Publication 330''), B-43, 4-5. \58\16 CFR 306.10(b)(1) and 306.10(f) (1994). \59\59 FR 59666, 59671. See AAMA (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. \60\59 FR 59666, 59671. See 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); 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). \61\See Flxible (Tr.), 74-77. \62\59 FR 59666, 59671. The Commission also recognized that electricity used for recharging electric vehicle (``EV'') batteries might need to be subject to different labeling disclosures.63 Accordingly, for electricity, the SNPR proposed requiring that labels on public electric vehicle fuel dispensing systems include the commonly used name of the fuel, kilowatt capacity, voltage, current (either AC or DC), amperage and type of charger (either conductive or inductive).64 In the SNPR, the Commission tentatively concluded that such disclosures were the minimum operating parameters that would be necessary to protect consumers operating the equipment, the vehicles whose batteries would be charged, as well as the charging equipment.65 \63\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. 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. \64\See proposed rule Secs. 309.1(q)(2) and 309.15, 59 FR 59666, 59704, 59706. \65\The specific bases for the Commission's SNPR proposal are discussed in more detail at 59 FR 59666, 59671-59672. --------------------------------------------------------------------------- Sixteen comments addressed the issues raised in the SNPR. Five comments generally supported the Commission's proposals in their entirety because if adopted, the proposals would provide appropriate and useful information to consumers attempting to make alternative fuel purchasing decisions.66 The remaining eleven comments are discussed in the following section and in section III(B)(3) infra. \66\Boston Edison/EEI, I-14, 4; Chicago, J-2, 2-3; DOE, J-1, 2; EIA/EEU-ISD, J-4, 1; RFA, I-3, 2. --------------------------------------------------------------------------- b. Comments on SNPR concerning CNG. Two comments questioned whether the Commission's SNPR proposal to require disclosure of the minimum methane content of CNG would be helpful to consumers in the absence of standards requiring a minimum methane content for CNG vehicle fuel.67 The Commission believes [[Page 26930]] that consensus standards specifying a minimum methane content for CNG as a vehicle fuel would be helpful, but recognizes that they do not presently exist. 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.68 \67\API, I-15, 2; Mobil, I-2, 3. \68\Although 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. --------------------------------------------------------------------------- Accordingly, the Commission has determined that the fuel rating for CNG and hydrogen must include the commonly used name of the fuel and the amount, expressed as a minimum molecular percentage, of the principal component of the fuel. The label also may include a disclosure of other components as minimum molecular percentages, if desired.69 This rating approach will provide consumers with information necessary to make informed fuel purchasing decisions. It also will provide fuel producers and marketers with the flexibility to develop and blend fuels appropriate for location and climate, consistent with United States Environmental Protection Agency and original equipment manufacturer requirements. The Commission's action, therefore, will assist in the development and use of non-liquid alternative fuels and alternative fueled vehicles. \69\See final rule Secs. 309.1(q)(1) and 309.15 infra. --------------------------------------------------------------------------- c. Comments on SNPR concerning electricity. The Commission proposed in the SNPR that the electric recharging station label disclose the voltage at which electrical power is supplied by the electric charging equipment, the maximum current in amperes that can be delivered, whether the charging equipment supplies alternating or direct current, whether the unit is a conductive charger (a plug on a cord) or an inductive charger (a paddle in a port system), and the kilowatt capacity of the charging equipment to tell consumers how quickly their vehicles can recharge. Three comments specifically related to these proposals. One comment questioned the need for a kilowatt capacity disclosure since consumers could derive it from the proposed voltage/ amperage disclosure for electricity dispensers. The comment also recommended that when two charging methods are available from the same electricity dispenser (e.g., 240 vac/40 amps and 120 vac/15 amps) the Commission should require that both methods be disclosed.70 \70\Toyota, I-11, 2. --------------------------------------------------------------------------- An explicit kilowatt capacity disclosure is an important dispenser parameter that is useful in assisting consumers to determine immediately how quickly their vehicles' batteries will recharge. Although the Commission acknowledges that kilowatt capacity can be calculated from the voltage/amperage disclosure, the kilowatt capacity disclosure obviates the need for engaging in mathematical calculations at the dispenser. The Commission has decided to address the issue of the availability of multiple charging methods from the same dispenser by requiring in the final rule that they both be disclosed, as recommended by the comment, but on separate labels on the dispenser.71 \71\See proposed rule Sec. 309.15, 59 FR 59666, 59706, and final rule Sec. 309.15 infra. --------------------------------------------------------------------------- Another comment recommended that the Commission's amperage disclosure on the label be expressed as an ``A'' instead of by the word ``amps,'' as proposed.72 The Commission has concluded, however, that use of the word ``amps'' on the label, because it is more descriptive than an ``A,'' may make consumers more familiar with the electricity refueling infrastructure and, therefore, be more useful in assisting consumers to locate the correct electricity dispenser. Finally, one comment suggested that the efficiency of electric vehicle chargers is a parameter that perhaps should eventually appear on charger labels once standardized test procedures are developed to determine efficiency.73 The Commission notes that electric vehicle chargers are not 100 percent efficient. Some energy is lost to heat in the process of converting the energy that is supplied to the charger to a form that is usable by the vehicle battery. The Commission will monitor the development of standardized test procedures to determine electric vehicle charger efficiency, and consider including this factor when more information becomes available. \72\Sokol, I-17, 1. \73\CARB, J-3, 1. Accordingly, after considering the comments on its SNPR proposal, the Commission has determined that labels on public electric vehicle fuel dispensing systems shall include the commonly used name of the fuel (e.g., electricity), kilowatt capacity, voltage, current (either AC or DC), amperage and type of charger (either conductive or inductive).74 Such disclosures will assist consumers in locating electric fuel dispensers that are compatible with their vehicles, and in determining how much time it will take for their vehicles' batteries to recharge. \74\See final rule Secs. 309.1(q)(2) and 309.15 infra. --------------------------------------------------------------------------- d. Summary. In summary, the requirements for CNG, hydrogen and electricity will 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 absent these requirements whether sellers would provide information regarding the precise composition of the fuels, or relevant parameters of the EV fuel dispenser. 3. Label Disclosures Considered but not Adopted in Final Rule In addition, the Commission concludes that other information on the fuel dispenser concerning alternative fuels is unlikely to be useful 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. Thus, providing consumers with other information designed to permit comparisons among various types of alternative fuels is best done prior to the time the vehicle is acquired. Further, excluding less important information avoids information overload. In contrast to vehicle purchases, 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.75 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.''76 Simplicity therefore is an even greater [[Page 26931]] consideration in the labeling of fuels than in the labeling of AFVs. \75\Federal Trade Commission, Study of a Uniform National Label for Devices That Dispense Automotive Fuels to Consumers (1993), at 29. \76\Id., at 29 n.152. --------------------------------------------------------------------------- In formulating its labeling requirements, the Commission 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, the Commission must consider the problems associated with developing and publishing such information on simple labels. Given this context, and after considering the comments, the Commission considered and rejected in the SNPR several alternative disclosures for dispenser labels suggested by various comments. The SNPR generated additional comments, however, as discussed below. An analysis of these comments has not persuaded the Commission to require any of the previously rejected disclosures. a. Octane rating. In the SNPR, the Commission rejected a proposal that it require the posting of octane ratings for non-liquid alternative fuels. Three comments were submitted in response to that tentative determination in the SNPR. To prevent commercial, heavy-duty vehicle and fleet operators from misfueling and experiencing related problems, EMA recommended that the Commission require the posting of octane ratings for all non-liquid alternative fuels.77 Due to the variability in the fuel quality of natural gas, Commercial Electronics recommended that the Commission require disclosure of CNG's octane rating.78 API, however, stated that the non-liquid alternative fuel dispenser labels should not include octane ratings.79 \77\EMA, I-6, 2-4. \78\Comm Elec, I-8, 2-7. \79\API, I-15, 1. After considering the comments submitted, the Commission has determined not to require the posting of octane ratings for CNG and hydrogen. To the extent that commercial fleet operators have their own fueling facilities, they can specify a required octane rating and insist in contracts with their suppliers that they determine such rating by an agreed method for the fuel purchased. Commercial operators might also obtain such information if, for example, it were posted voluntarily on fuel dispensers. Generally, however, as explained in the SNPR, the Commission concludes that octane ratings for alternative fuels are high enough to avoid engine knock problems in vehicles presently designed to use alternative fuels, and such ratings do not provide significant information relevant to vehicle performance of alternative fueled vehicles.80 In addition, the octane ratings of a given type of alternative fuel would not vary significantly.81 Further, 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 test method, such as an ASTM-approved test method for determining octane ratings of such fuels.82 \80\59 FR 59666, 59673. See AGA/NGVC, I-18, Attachment at 8 (The antiknock performance of natural gas is best for pure methane or methane/inert gas mixtures, and declines somewhat with increasing concentrations of non-methane hydrocarbons. This effect is not usually significant for the typical range of pipeline gas composition, but may become important [in the future] in high- compression engines burning unprocessed gas or propane-air mixtures). \81\AGA/NGVC, G-6, 5-6 (octane levels for natural gas are not likely to vary at different retailers); and Phillips 66/NPGA (Tr.), 49-50. \82\AGA/NGVC, I-18, Attachment at 8 (no standard octane testing methods exist for natural gas); Phillips 66/NPGA (Tr.), 49-50 (there are no standards for determining the octane ratings of CNG or hydrogen). --------------------------------------------------------------------------- There also 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 benefits of alternative fuels, the octane ratings of which exceed those of gasoline. Further, it might foster consumer misperceptions that higher octane necessarily signifies higher quality and better performance. 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. b. Comparative information based upon BTUs or gasoline-gallon- equivalents. In the SNPR, the Commission considered but rejected proposals that the Commission require the use of alternative fuel labels that either: (1) 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, or (2) identify the heating value or energy content of a fuel expressed in British thermal units (``BTUs''). In response to the SNPR, the two comments addressing this issue supported the Commission's position, recommending that the Commission not adopt a labeling approach that would require disclosure of comparative information based upon BTUs or gasoline-gallon-equivalents.83 Accordingly, for the reasons stated in the SNPR, the Commission is not requiring such disclosures on fuel dispenser labels.84 \83\API, I-15, 1; Mobil, I-2, 2 (In summary, comparative type cost data are not conducive to fuel labeling. Labels that provide consumer information already exist today in the form of pricing information that enables consumers to make choices and comparisons as required by section 406 of EPA 92. The National Conference on Weights and Measures is currently in the process of setting the measurement standard for alternative fuels. A uniform unit of measure, such as the gasoline equivalent gallon, will provide consumers additional economic information helpful in making informed purchasing decisions). \84\59 FR 59666, 59673-59674 (e.g., GGE disclosures are not conducive to keeping the fuel label simple, as required by EPA 92; this information is more an equipment metering issue that is more properly addressed by weights and measures organizations; the energy content of a fuel, as measured by its BTU rating, does not always accurately reflect actual fuel economy). --------------------------------------------------------------------------- c. Performance effects (cruising range). In the SNPR, the Commission considered and rejected a proposal that the Commission require fuel dispenser labels to advise consumers that the cruising range of a 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. In response to the SNPR, the one comment addressing this issue supported the Commission's position, opposing a requirement that dispenser labels include performance effects of the non-liquid alternative fuel.85 Accordingly, for the reasons stated in the SNPR, the Commission is not requiring disclosure of performance effects as an element of fuel dispenser labels.86 \85\API, I-15, 1. \86\59 FR 59666, 59674 (e.g., cruising range is not necessarily less when operating on an alternative fuel; 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 determined that information relating to cruising range would be appropriate on labels it is requiring for covered AFVs, as discussed in section III(C) infra. d. Compliance with material specifications. In the SNPR, the Commission rejected a proposal that it require that dispenser labels indicate whether the fuel meets the alternative fuel specifications defined by the California Air Resources Board in [[Page 26932]] 1993.87 In rejecting the proposal, the Commission stated, in part, that California's specifications were not developed by a consensus process, were developed for California's particular needs and, therefore, may not be practical for the rest of the country.88 In the SNPR, the Commission also rejected a proposal that CNG dispenser labels indicate whether the fuel meets the Society of Automotive Engineers' (``SAE'') ``recommended practice'' for CNG called J1616. In rejecting that proposal, the Commission stated that 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.89 \87\See Specifications for Compressed Natural Gas, Title 13, California Code of Regulations, section 2292.5 (1993), B-41; Specifications for Hydrogen, Title 13, California Code of Regulations, section 2292.7 (1993), B-42. \88\59 FR 59666, 59674. \89\Society of Automotive Engineers, ``Recommended Practice for Compressed Natural Gas Vehicle Fuel,'' SAE J1616, B-40, 16. --------------------------------------------------------------------------- Three comments responded to those determinations in the SNPR. These comments stated that inasmuch as consistent fuel quality is required to ensure proper vehicle operation, including emissions control, the Commission should require that dispenser labels indicate compliance or non-compliance with fuel quality specifications and refueling equipment standards, with specific references to each, when they are developed for CNG and hydrogen.90 A disclosure 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. However, the aforementioned comments appear to confirm 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. Therefore, the Commission has determined not to require that fuel dispenser labels guarantee the delivery of fuels meeting certain specifications. \90\AAMA, I-16, 7-8; EMA, I-6, 2-4; NGVPA, I-19, 1. --------------------------------------------------------------------------- The Commission, however, 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 type of standards development would include 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. The Commission will monitor the development of alternative fuel standards and consider including them as an element of the dispenser labels when more information becomes available. e. Environmental benefits (emissions). In the SNPR, the Commission considered and rejected a proposal that the Commission require fuel dispenser labels to generally advise consumers of the environmental benefits of alternative fuels.91 In response to the SNPR, the one comment addressing this issue supported the Commission's position.92 Accordingly, for the reasons stated in the SNPR, the Commission is not requiring that fuel dispenser labels indicate the environmental benefits of alternative fuels.93 \91\AMI, G-3, 2; Phillips 66/NPGA (Tr.), 51. \92\API, I-15, 1. \93\59 FR 59666, 59675 (e.g., a statement on a fuel dispenser label advising consumers of the environmental benefits of alternative fuels would not provide sufficient information to assist consumers in making choices and comparisons between fuels of the same type). --------------------------------------------------------------------------- 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 determined that information relating to emissions would be appropriate on the labels it is requiring for covered AFVs, as discussed in section III(C) infra. f. Pressure. In the SNPR, the Commission considered and rejected a proposal that the Commission require CNG dispenser labels to display the fueling pressure, either 2,400, 3,000 or 3,600 P.S.I. (pounds per square inch), and the nozzle type to indicate whether dispenser fueling pressure is compatible with CNG vehicle tank storage pressure.94 The two comments on the Commission's SNPR proposal addressing this issue recommended that the Commission require that CNG dispenser labels indicate the nozzle type and corresponding fill pressure of the CNG dispenser, to avoid consumer inconvenience at the CNG fueling site.95 \94\59 FR 59666, 59675. See Flxible (Supp.), G-12, 2; Thomas BB, G-10, 1; Phillips 66/NPGA (Tr.), 51; AGA/NGVC (Tr.), 103-104. \95\AAMA, I-16, 8; NGVPA, I-19, 1. --------------------------------------------------------------------------- The Commission agrees that fueling pressure is useful information. The industry, however, already has taken independent steps to address this issue. Specifically, the industry has developed standards for pressure coding dispenser/vehicle CNG connectors so that consumers will not be able to overfuel a low pressure vehicle from a high pressure dispenser.96 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.97 Accordingly, the Commission has determined that requiring the disclosure of fueling pressure and nozzle type on CNG dispenser labels is unnecessary at this time. \96\See ANSI/AGA NGV1-1994 American National Standard For Compressed Natural Gas Vehicle (NGV) Fueling Connection Devices, attached to AGA/NGVC's comment, G-6. \97\ANSI/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, B-48, 27-30. --------------------------------------------------------------------------- g. Safety warnings. In the SNPR, the Commission considered but rejected proposing safety warnings as an element of the alternative fuel labels.98 The one comment on the Commission's SNPR proposal addressing this issue recommended that the Commission require that non- liquid alternative fuel dispenser labels include information about the fuel's potential hazards and limitations on use.99 \98\59 FR 59666, 59675. \99\EMA, I-6, 3. --------------------------------------------------------------------------- The Commission notes that safety standards for operation of motor vehicle fuel-dispensing stations are covered by the Uniform Fire Code.100 Further, to [[Page 26933]] some extent, the fuel labeling requirements, particularly those for electric vehicle (``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 may find safety information about various fuels more pertinent when purchasing an AFV than when refueling. Thus, the Commission is not persuaded that including a safety warning statement on a fuel dispenser label would help consumers make reasonable fuel choices and comparisons. The Commission has determined that rather than require that safety disclosures appear on fuel dispenser labels, it will require a reference to DOE's consumer information brochure and DOT/NHTSA's Vehicle Safety Hotline on labels for covered AFVs, as discussed in section III(C) infra. The DOT/NHTSA Hotline acts as a clearinghouse and can refer consumers to other sources where, for example, information can be obtained about how to safely refuel CNG vehicles. Further, the Commission anticipates that a marketer's refueling instructions, whether appearing in an AFV owner's manual or on the fuel dispenser, will discuss or incorporate relevant safety measures. However, if in the future information demonstrates a need for the Commission to require safety-related disclosures on the dispenser labels, the Commission can revisit this issue. \100\For 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 UFC voting membership is a democratic code development organization that includes fire and building officials, design professionals, equipment manufacturers and trade organizations. The UFC's minimum requirements are primarily based on the requirements of NFPA 52, ``Standard for CNG Vehicular Fueling Systems,'' 1992 edition. The Uniform Fire Code Standards are a model code that establishes requirements for building and site fire protection, the safe storage and use of hazardous materials, and the fire safety and fire protection designs of the Uniform Building Code. Article 52 of the 1994 UFC 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. In the SNPR, the Commission considered but rejected proposing refueling instructions as an element of the fuel dispenser labels. No comments were submitted regarding this tentative determination. Therefore, for the reasons stated in the SNPR, the Commission has determined not to require such disclosures.101 \101\59 FR 59666, 59675 (e.g., this information can be expected to be provided voluntarily). --------------------------------------------------------------------------- i. Wobbe number. In the SNPR, the Commission considered but rejected proposing the Wobbe number as an element of the CNG dispenser label. The one comment addressing this issue recommended that the Commission require that CNG fuel dispenser labels include the fuel's Wobbe number, a measure of its air-fuel metering properties.102 Although AGA/NGVC recommended that the Commission require disclosure of the Wobbe number, it also pointed out that all gas pipelines and utilities monitor and control closely the Wobbe number of natural gas. For gas distributed in most of the United States, AGA/NGVC stated that the Wobbe number typically is maintained between 1320 and 1360, well within the range recommended for natural gas vehicle fuel by SAE J1616 (1300-1420).103 \102\AGA/NGVC, I-18, 8-11. \103\Id. AGA/NGVC had previously opposed a Wobbe number disclosure, stating it would be so difficult to explain that consumers would not find it useful (AGA/NGVC (Tr.), 43). --------------------------------------------------------------------------- After considering AGA/NGVC's comment, the Commission is not persuaded that the purported benefits to consumers of including the Wobbe number on CNG labels are sufficiently significant to justify requiring its disclosure. Depending on the fuel metering technology, variations in the Wobbe number may slightly affect engine performance and emissions. The effect of variations in the Wobbe number for gaseous-fueled vehicles is similar to the effect of variations in the fuel energy content of gasoline in conventional vehicles. Further, modern spark-ignition engines are able to compensate for reasonable variations in the Wobbe number, just as they compensate for variations in gasoline energy content due to refining differences or use of alcohol blends.104 Wobbe numbers for natural gas vehicle fuels also appear to be high enough to avoid engine problems in vehicles presently designed to use CNG. While the Wobbe number may be important to engine manufacturers and fuel producers as an important element of a fuel specification, it would not appear to provide consumers with significant additional information relevant to vehicle performance. Accordingly, the Commission has determined not to require disclosure of the Wobbe number on CNG dispenser labels. \104\AGA/NGVC, I-18, Attachment at 5. --------------------------------------------------------------------------- 4. Additional Requirements of Final Rule a. Label size and format. In the SNPR, 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.105 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.106 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.''107 \105\See proposed rule Sec. 309.17, 59 FR 59666, 59706-59707. Several comments received during this proceeding had recommended that labels for non-liquid alternative fuels follow the same size and format requirements as those for liquid alternative fuels under the Fuel Rating Rule. The reasons given for keeping the requirements the same were: to promote consistency, fairness and equity, and to keep information simple so that consumers can easily understand the labels (AGA/NGVC, G-6, 8; API, G-25, 4; Mobil, G-2, 4; NPGA, G-18, 4; RFA, G-5, 4; SIGMA, G-23, 1; Sun, G-1, 2; Thomas BB, G-10, 2). \106\16 CFR 306.12 (1994). \107\In the NPR, the Commission proposed and rejected the idea of consolidating the non-liquid alternative fuel labels with other mandatory labels (59 FR 24014, 24018). The one comment addressing this issue agreed that consolidation would appear to provide no benefit and would only lead to public confusion (TVA, H-5, 1). --------------------------------------------------------------------------- Two comments addressed this proposal. Both supported the Commission's proposal because it promoted consistency in the labeling of all alternative fuels.108 Accordingly, the Commission has determined to require 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.109 Further, to keep the labels uniform and simple, the Commission is not requiring any label consolidation. \108\API, I-15, 4; Mobil, I-2, 5. \109\See 59 FR 59666, 59676. See also final rule Sec. 309.17 infra. b. Substantiation, certification, and recordkeeping requirements. In the SNPR, to ensure the accuracy of the required dispenser labels, the Commission proposed substantiation, certification, and recordkeeping requirements for importers, producers, refiners and distributors of gaseous alternative fuels, and manufacturers and distributors of electric vehicle fuel dispensing systems. The Commission also proposed substantiation and recordkeeping requirements for retail sellers of the three non-liquid alternative vehicle fuels.110 The Commission based its SNPR proposal on its conclusion that the requirements are justified because they are rationally related to the establishment of ``uniform labeling requirements'' that provide important information to consumers.111 As described below, several comments addressed two aspects of the Commission's proposal. The comments related to who should bear the burden for substantiating the fuel rating for CNG, and whether a particular ASTM [[Page 26934]] test method for determining the minimum molecular percent of CNG should be required. Because there were no comments on the other facets of the substantiation, certification and recordkeeping provisions proposed in the SNPR, the Commission has determined to issue them as proposed. These requirements are explained below. \110\See proposed rule Secs. 309.10-309.16, 59 FR 59666, 59704- 59706. \111\See 59 FR 59666, 59676-59679. --------------------------------------------------------------------------- In the SNPR the Commission proposed, in part, that importers, producers and refiners of natural gas comply with the proposed rule's CNG fuel rating determination, certification and recordkeeping requirements, which includes determining and certifying the minimum percentage of methane in natural gas.112 The Commission based its proposal on its conclusion that it would be impractical, and probably more expensive to the consumer, to require retail sellers to test each delivery of a gaseous fuel. In making disclosures to consumers, retail sellers of alternative fuels, therefore, could rely on the accuracy of the information provided to them from gaseous fuel importers, producers, refiners and distributors. \112\See proposed rule Secs. 309.10, 309.11, 309.12, 59 FR 59666, 59704-59705. --------------------------------------------------------------------------- Three comments recommended that the Commission not impose such requirements on importers and producers of natural gas because the requirements would be overly burdensome, and do not reflect current industry practice in the distribution of natural gas.113 According to the comments, producers of natural gas currently adhere to a heating value specification as required by their customers (i.e., local natural gas distribution companies and/or natural gas utilities). Most producers currently do not test for or certify the methane content of the natural gas they sell. Furthermore, the comments state that this information would be of little value at the retail level because natural gas distributors (i.e., utilities) purchase natural gas from a multitude of producers, blend it together, test it, and distribute it for home and industry use, as well as for retail sale.114 \113\AGA/NGVC, I-18, 3-6; API, I-15, 1-5; Unocal, I-5, 2. \114\Id. --------------------------------------------------------------------------- Two of the comments recommended that the Commission require natural gas distributors/utilities to comply with the fuel rating determination, certification and recordkeeping requirements that the Commission proposed for natural gas importers and producers.115 On the other hand, AGA/NGVC recommended that the fuel rating determination and recordkeeping requirements be imposed only on CNG retailers since they market the fuel to consumers. AGA/NGVC contended that if a retailer cannot verify the fuel rating, it can insist in contracts with its suppliers that they determine the fuel rating. Thus, companies interested in profiting from selling natural gas to retailers will view the testing as the cost of doing business and will decide whether to perform the test. AGA/NGVC also stated, though, that in some cases local utilities will be heavily involved in the marketing and selling of natural gas transportation fuel. In those instances, AGA/NGVC recommends that the Commission require such distributors to determine and certify the fuel rating of the natural gas they supply.116 Unocal commented that the Commission should permit natural gas retailers to rely on their suppliers (distributors/utilities) for fuel rating certifications to substantiate the information displayed on the CNG dispenser labels.117 \115\API, I-15, 4; Unocal, I-5, 2. \116\AGA/NGVC, I-18, 4-6. \117\Unocal, I-5, 2. --------------------------------------------------------------------------- In response, the Commission notes that information about the methane content of natural gas would be useful to distributors who blend natural gas and transfer it as natural gas vehicle fuel, because they could use such information in determining and thereafter certifying its fuel rating.118 The Commission notes further that, in most cases, it is necessary to upgrade natural gas to pipeline specifications in a gas processing plant before injecting it into the transportation and distribution network. In order to assure consistent combustion behavior, major natural gas pipelines generally impose specifications on the composition of the gas they will accept for transport. These specifications typically limit the percentage of propane, butane, and higher hydrocarbons, and stipulate acceptable ranges for the heating value, and the Wobbe number.119 For example, water and hydrogen sulfide must be removed to prevent corrosion damage to the pipeline network, and excess amounts of higher hydrocarbons must be removed to prevent them from condensing under the high pressures in the gas transmission network. Thus, although natural gas producers may not have to adhere to a specific minimum methane pipeline specification, the methane content of the gas likely would fall within a fairly narrow range. \118\See proposed rule Sec. 309.13, 59 FR 59666, 59705. \119\AGA/NGVC, I-18, Attachment at 3-4. After considering the comments on its SNPR proposal, the Commission concludes that substantiation, certification, and recordkeeping requirements for importers, producers, refiners and distributors of gaseous alternative vehicle fuels, and manufacturers and distributors of electric vehicle fuel dispensing 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. The Commission is not persuaded that retail sellers of CNG are in a position to be held exclusively responsible for determining the accuracy of the fuel rating to be disclosed on the CNG dispenser labels. The Commission believes that the rule's requirements are consistent with current industry practice of conforming natural gas to minimum specifications for transport. But, the Commission believes that the comments from Unocal, API and AGA/NGVC could be addressed by further clarifying that the Commission's rule does not apply to producers of natural gas for residential, commercial and industrial purposes. Thus, the rule's fuel rating determination, certification and recordkeeping requirements apply to producers of natural gas only when transferred for use as a vehicle fuel. In this regard, the Commission expects that natural gas producers may wish to take reasonably prudent precautions to ensure that their customers understand the limited use for which the gas is being transferred, if they determine that the rule does not apply to them. (1) Substantiation. The Commission's rule requires labeling disclosures 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. In accordance with the Commission's advertising substantiation doctrine, which requires sellers to have a reasonable basis to support material, objective claims,120 the Commission is 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 molecular percent of the principal component that retailers must disclose on fuel dispenser [[Page 26935]] labels. The rule further states that importers and producers may use private facilities for fuel rating determinations. This would be important to producers who do not have testing equipment of their own.121 These requirements are consistent with the substantiation requirements of the Fuel Rating Rule,122 which were mandated by the Petroleum Marketing Practices Act.123 \120\See Thompson Medical Co., 104 F.T.C. 648, 839 (1984) (Appendix), aff'd, 791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479 U.S. 1086 (1987). \121\See final rule Sec. 309.10 infra. \122\16 CFR 306.5(b) (1994). \123\15 U.S.C. 2822. --------------------------------------------------------------------------- For the minimum molecular percent content of hydrogen (the principal component) in hydrogen gas, the Commission proposed requiring that the reasonable basis be tests conducted according to ASTM D 1946- 90. For the minimum molecular percent content of methane (the principal component) in CNG, the Commission proposed requiring that the reasonable basis be tests conducted according to ASTM D 1945-91. Three comments addressed the CNG testing issue. One comment supported requiring the use of ASTM D 1945-91.124 AGA/NGVC opposed requiring the use of a specific test method. Instead, that comment suggested that the Commission afford sellers of CNG the flexibility to demonstrate that they possessed a reasonable basis consisting of competent and reliable evidence for their determination of the minimum methane content of CNG.125 Commercial Electronics commented that other test methods are being developed to measure CNG fuel quality.126 \124\API, I-15, 4. \125\AGA/NGVC, I-18, 7 (affording such flexibility would avoid unnecessary future actions by the Commission to amend its rule each time a new test procedure is developed). \126\Comm Elec, I-8, 7. --------------------------------------------------------------------------- After considering the record, the Commission concludes that it is important that sellers base objective disclosures on uniform measurements when recognized and accepted test methods are available. The aforementioned ASTM documents include test procedures, developed through the ASTM consensus process, to determine the chemical composition of hydrogen and CNG, respectively, including the molecular percent of hydrogen in hydrogen gas and methane in CNG. Because ASTM has issued test procedures to measure the minimum molecular percent of the principal components of hydrogen and CNG, the Commission is requiring use of the ASTM test procedures to substantiate those disclosures.127 \127\The 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 is 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 molecular percent content of any other component that importers, producers, or refiners wish to certify, the rule does not specify the test procedure that must be used, but only that they have a reasonable basis, consisting of competent and reliable evidence, to substantiate the claim. The Commission's approach to requiring substantiation without specifying a particular test method for components other than the principal 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 molecular percent of various components of CNG and hydrogen, in addition to the methane content of CNG and the hydrogen content of hydrogen gas. Because the Commission has not specified additional components that might be disclosed, it has no basis on the record to specify test procedures that must be used to measure them. The Commission, therefore, will 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 that are included in those specifications.128 \128\See further references to California's specifications in section III(B)(3)(d) supra. --------------------------------------------------------------------------- The rule also does 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 fuel rating they determine and certify to others. Although the Commission has decided not to require that non-liquid alternative vehicle fuels conform to any specific material specification, the Commission's requirement that marketers disclose the principal component of each fuel should encourage the industry to develop uniform material specifications or standards for these fuels in consensus organizations to ensure the uniform quality of the fuels in the marketplace. The development of material specifications or standards for non-liquid (gaseous) alternative vehicle fuels should help facilitate acceptance of these fuels. Similarly, manufacturers of electric vehicle fuel dispenser systems are 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. For public electric vehicle fuel dispensing systems, the information the Commission requires to be disclosed can be determined using standard measuring devices or procedures. Therefore, accurate measurements made using standard electric industry procedures that are recognized as competent and reliable are sufficient to serve as the required reasonable basis. Distributors and retail sellers may be able to rely on the fuel rating certifications they receive, as discussed infra, so their substantiation burden will be minimal. Distributors and retailers need not make the actual determinations unless they alter the fuel before selling it.129 \129\See final rule Secs. 309.13(c), 309.15(c) infra. --------------------------------------------------------------------------- (2) Certification. The Commission is requiring that importers, producers, refiners, and distributors of non-liquid alternative fuels (other than electricity), and that manufacturers and distributors of electric vehicle fuel dispensing systems certify to others to whom they distribute the information that retailers must post on fuel dispensers.130 Importers, producers, and refiners of non-liquid alternative fuels (other than electricity) are required to certify to distributors their determination of the minimum molecular percent of the fuel's major component, and of any additional component they wish to disclose. Manufacturers of electric vehicle fuel dispensing systems are required to certify to distributors and/or retailers the information retailers are required to disclose on labels on fuel dispensers. Distributors of non-liquid alternative fuels (other than electricity) and of electric vehicle fuel dispensing [[Page 26936]] systems are required to certify to retailers consistent with the certification they received.131 \130\See final rule Secs. 309.11, 309.13 infra. \131\See final rule Sec. 309.13 infra. If distributors blend fuels, Sec. 309.13(c) of the rule requires 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 vehicle fuel (other than electricity) may make the certification in either of two ways: (a) By including 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 is transferred, the date of the transfer, the common name of the fuel and the minimum molecular percent of the fuel's major component, and of any additional component the importer, producer or refiner wishes to disclose. (b) By giving the person to whom the fuel is transferred a letter or written statement, including the date, the importer's, producer's or refiner's name, the name of the person to whom the fuel is transferred, the common name of the fuel, and the minimum molecular percent of the fuel's major component, and of any additional component the importer, producer or refiner wishes to disclose. The letter or written statement is effective until the importer, producer, or refiner transfers non- liquid alternative vehicle fuel with a lower percentage of the major component, or of any other component claimed. At that time, the importer, producer, or refiner will have to certify the new information about the fuel with a new notice.132 \132\See final rule Sec. 309.11 infra. --------------------------------------------------------------------------- Distributors of non-liquid alternative vehicle fuel (other than electricity) are required to make the certification in each transfer to anyone who is not a consumer. Distributors may make the required certification in either of two ways: (a) By using a delivery ticket or other paper with each transfer, as outlined for importers, producers and refiners in item (a), above. (b) By using a letter of certification, as outlined for importers, producers, and refiners in item (b), above.133 \133\See final rule Sec. 309.13 infra. --------------------------------------------------------------------------- Manufacturers of electric vehicle fuel dispensing systems are required to make the certification in each transfer of such systems to anyone who is not a consumer. Manufacturers may do so in either of two ways: (a) By including a delivery ticket or other paper with each transfer of an EV fuel dispensing system. It may be an invoice, bill of lading, bill of sale, delivery ticket, or any other written proof of transfer. It is 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) 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 is required to be located where it can be seen after installation of the EV fuel dispensing system. The marking or label is deemed ``legible,'' in terms of placement, if it is located in close proximity to the manufacturer's identification marking. This marking or label is required 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.134 \134\See final rule Sec. 309.11 infra. --------------------------------------------------------------------------- Distributors of electric vehicle fuel dispensing systems are required to make the certification in each transfer to anyone who is not a consumer. Distributors may do so in either of two ways: (a) By using a delivery ticket or other paper with each transfer, as outlined for manufacturers of electric vehicle fuel dispensing systems in item (a) above. (b) By 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) above.135 \135\See final rule Sec. 309.13 infra. --------------------------------------------------------------------------- These requirements are consistent with the certification requirements for sellers of liquid alternative fuels under the Fuel Rating Rule.136 \136\16 CFR 306.6, 306.8 (1994). --------------------------------------------------------------------------- (3) Recordkeeping. The Commission is requiring that importers, producers, and refiners of non-liquid alternative fuels (other than electricity) maintain records of the tests performed by or for them, or other data, that they rely upon as their required reasonable basis for their certifications.137 The Commission likewise is 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.138 The Commission also requires that distributors and retailers of non-liquid alternative fuels (other than 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 and retailers of electricity maintain records consisting of the certifications they receive from manufacturers or distributors of the systems.139 The rule requires that these records be kept for one year. These requirements are consistent with those for sellers of liquid alternative fuels under the Fuel Rating Rule.140 \137\See final rule Sec. 309.12 infra. \138\Id. \139\See final rule Secs. 309.14, 309.16 infra. \140\16 CFR 306.7, 306.9, 306.11 (1994). --------------------------------------------------------------------------- c. Effective date. Section 406(a) of EPA 92 requires the Commission to issue its final labeling rules within one year of the NPR's publication, but does not specify when the rules shall become effective. In the SNPR, the Commission proposed making the non-liquid alternative fuels labeling requirements effective 90 days after publication of a final rule in the Federal Register.141 In developing its SNPR proposal, the Commission considered how best to balance consumers' needs for comparative information with industry's need for a reasonable period of time to come into compliance.142 The one comment on this issue supported the proposed effective date.143 The Commission, therefore, has determined to make the non-liquid alternative fuels labeling requirements effective 90 days after publication of a final rule in the Federal Register.144 \141\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. \142\The Commission based the SNPR proposal on an analysis of several comments stating that the proposed 90-day time period gave sufficient time for covered parties to comply with the proposed requirements. One comment contended, however, that at least six months was necessary. 59 FR 59666, 59679. \143\Mobil, I-2, 6. \144\See 59 FR 59666, 59679. In contrast, the effective date for the AFV labeling requirements is 180 days after publication in the Federal Register. See discussion in section III(C)(5) infra. --------------------------------------------------------------------------- d. Periodic updating of labels. In the SNPR, the Commission proposed no [[Page 26937]] specific timetable for future reviews of the final labeling rules, although it recognized that section 406(a) of EPA 92 requires the Commission to update its labeling requirements ``periodically.'' The Commission determined not to specify a timetable after analyzing comments encouraging it to review the rule as consensus specifications are developed for alternative fuels, as new alternative fuels enter the marketplace and as technology develops.145 The Commission received no comments addressing this aspect of its SNPR proposal. \145\See discussion of comments of API, CEC, and TVA in the SNPR, 59 FR 59666, 59679. --------------------------------------------------------------------------- Based on other comments in this proceeding, and recognizing that it cannot predict when new relevant developments may occur, the Commission has determined not to establish a specific timetable for future reviews of the final rule. As required by section 406(a) of EPA 92, the Commission intends to conduct reviews to update the rule periodically, as needed, to take into consideration relevant developments, such as when DOE designates new non-liquid alternative fuels. The rule, however, will be reviewed at least once every ten years pursuant to the Commission's ongoing regulatory review project. C. Labeling Requirements for AFVs Twenty-one of the 24 comments received in response to the SNPR addressed some aspect of the Commission's proposed labeling requirements for AFVs. These comments addressed either the scope of the proposed labeling requirements (i.e., which vehicles would be covered by the labeling requirements) or the proposed rule's disclosures (i.e., what information would be required to be displayed on labels and how that information would be displayed).146 Those comments, and the Commission's modifications to the proposed rule in response to those comments, are discussed below. \146\Two of the three other comments were limited to encouraging metric disclosures on AFV labels. See Mechtly, I-1, Sokol, I-17, discussed infra section VI. The third comment was limited to the SNPR's proposal as it related to alternative fuels. Unocal, I-5. 1. Scope of the AFV Labeling Requirement In its SNPR, the Commission proposed that the scope of its AFV labeling requirements be based upon, or derived from, existing pertinent federal regulations. Eleven comments addressed this aspect of the AFV labeling requirements. Six other comments indicated general support for the Commission's labeling proposal, but did not address this specific issue.147 The remaining five addressed one or more issues pertaining to the scope of the AFV labeling requirements, as discussed below. \147\AGA/NGVC, I-18, 2, 3; Boston Edison/EEI, I-14, 4; Comm Elec, I-8, 8; EIA/EEU-ISD, J-4, 1; NAFA, I-10, 1, 2; RFA, I-3, 1-2. --------------------------------------------------------------------------- a. Covered AFVs. In the SNPR, the Commission considered whether its labeling requirements should apply to all AFVs, as that term is defined in EPA 92, or whether they should apply to only certain vehicles. As defined by that statute, an AFV is either ``a dedicated vehicle or a dual fueled vehicle.''148 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.149 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.150 As such, the statutory scope of an ``AFV'' is quite wide and includes tour buses, transit buses, heavy-duty commercial trucks, and large motor homes. \148\42 U.S.C. 13211(3) (Supp. IV 1993). \149\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). \150\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). --------------------------------------------------------------------------- After considering the practicality and appropriateness of including all AFVs within the scope of its labeling requirements, the Commission proposed in the SNPR to exclude AFVs with gross vehicle weight ratings (``GVWR''151) over 8,500 lbs. The SNPR included a definition of ``covered vehicles'' (i.e., in substance, AFVs under 8,500 lbs. GVWR), in the proposed rule.152 The Commission derived that definition from EPA 92's definition of the term ``light duty motor vehicles,'' a term given special significance by that statute.153 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].''154 The Clean Air Act155 in turn refers to existing EPA definitions of both vehicle classifications.156 Thus, the proposed definition of ``covered vehicle'' basically encompassed the same category of vehicle referenced in EPA 92's fleet acquisition requirements. \151\EPA 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''). \152\See proposed rule Sec. 309.1(f) (defining ``covered vehicle''), 59 FR 59666, 59703. 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). \153\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. In any event, it appears that the intent was to tailor the Federal fleet's acquisition requirement to certain AFVs. \154\42 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].''). \155\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''). \156\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. --------------------------------------------------------------------------- Three comments specifically addressed this issue. AAMA157 and EMA supported excluding AFVs over 8,500 lbs. GVWR from the scope of the AFV labeling requirements.158 However, these comments also suggested that one element of the SNPR's definition of ``covered vehicle'' be modified to exclude vehicles configured ``with special features enabling off-street or [[Page 26938]] off-highway operation and use.''159 It appears that this suggestion may have been based upon their belief that consumers considering such vehicles would not likely make choices and comparisons based upon simple labels. The City of Chicago, however, generally supported including all AFVs within the scope of the AFV labeling requirements without specifically addressing the Commission's proposal.160 \157\Three comments fully supported AAMA's comment. Chrysler, I- 13, 1; Ford, I-4, 2; NGVPA, I-19, 1. \158\AAMA, I-16, cover letter at 1; EMA, I-6, 1-2. \159\See proposed rule Sec. 309.1(f)(2)(iii), 59 FR 59666, 59703; AAMA, I-16, cover letter at 1; EMA, I-6, 2. \160\Chicago, J-2, 2. AAMA and Mobil also made the general observation that definitions in the AFV labeling requirements should be consistent with other regulatory plans. AAMA, I-16, 7 (``The definitions used in the regulation must be consistent with those used by other regulatory agencies.''); Mobil, I-2, 8 (``As long as the definition in this rule is coordinated with DOE, then this rulemaking will be consistent with forthcoming EPAct rules from DOE.''). AAMA further commented that ``common definitions would also be useful.'' AAMA, I-16, 7. It did not specify, however, how the FTC should determine where ``common definitions,'' as opposed to definitions used by other agencies, would be more appropriate. After considering the record, the Commission has determined to issue its SNPR proposal as to this subject with one modification. As noted previously, the Commission must issue uniform labeling requirements for AFVs only ``to the greatest extent practicable.''161 Labeling requirements for all such vehicles might help educate consumers about the general availability of AFVs of all sizes. However, the Commission has concluded 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.162 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 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. The Commission also notes that EPA's fuel economy requirements (disclosing fuel economy information in window stickers) do not apply to vehicles over 8,500 lbs. GVWR.163 As a result, the Commission has determined that, at the present time, AFVs over 8,500 lbs. GVWR will not be included within the scope of its AFV labeling requirements. \161\42 U.S.C. 13232(a) (Supp. IV 1993). \162\EMA, 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. See also AAMA, G-7, 3-4, (Tr.), 124 (purchasing decision ``will already have been made long before [purchaser] walks into the showroom and sees the label''); Flxible (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). 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. \163\EPA (Tr.), 122; 40 CFR 600.002-85(4)(iii) (1993). --------------------------------------------------------------------------- For similar reasons, the Commission has also determined that it should modify its definition of ``covered vehicle'' by excluding from its scope ``off-street'' or ``off-highway'' vehicles. Such vehicles would more likely be acquired for specialized commercial uses, instead of general commercial or individual use. The Commission also notes that EPA's fuel economy requirements (disclosing fuel economy information in window stickers) do not apply to such vehicles.164 As such, the Commission believes that consumers considering such vehicles would not likely make choices and comparisons based on the cost-benefit information contained in a simple label. Accordingly, such vehicles are excluded from the AFV labeling requirements. \164\See 40 CFR 600.002-85(4) (defining ``automobile''). --------------------------------------------------------------------------- b. AFV Manufacturers and Conversion Companies. Another facet of the proposal regarding covered AFVs involved conversions (i.e., existing conventional-fuel vehicles reconfigured to permit operation on alternative fuel) and what entity would be responsible for compliance. In developing the proposed rule, the Commission took particular note of recently-issued EPA regulations addressing this subject. Those regulations implemented a provision of the 1990 Clean Air Act Amendments (``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.165 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.166 After considering the advantages and disadvantages of assigning liability to either entity, 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. \165\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. \166\Fleet Standards Rule, 59 FR 50042, 50061. --------------------------------------------------------------------------- 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.167 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.168 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.169 \167\Fleet Standards Rule, 59 FR 50042, 50062. \168\Fleet Standards Rule, 59 FR 50042, 50061-50062. \169\Fleet 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. --------------------------------------------------------------------------- In considering the issue of AFV conversions, the Commission noted that section 406 does not address the issue of AFV conversions. The Commission's intent in considering this topic 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.''170 \170\B-3, inside front cover. --------------------------------------------------------------------------- The demand for AFVs is being driven, at least in part, by the acquisition requirements for centrally fueled fleets contained in the 1990 CAAA.171 Those requirements ``may be met through the conversion of existing or new gasoline or diesel-powered vehicles to clean-fuel vehicles.''172 Parties affected by those mandates, as well as others interested in achieving the clean-air benefits of driving AFVs, may have an incentive to [[Page 26939]] convert existing vehicles to alternative fuel. The Commission therefore believed that it should address this issue in this proceeding to the greatest extent practicable, and thereby help consumers compare different alternative fuels and conversion systems. \171\The CAAA's acquisition requirements are in addition to similar requirements, described infra section III(C)(1)(c), imposed by EPA 92. \172\42 U.S.C. 7587(a). Accordingly, in the SNPR, the Commission proposed that the entity responsible for complying with the labeling requirements for new covered vehicles173 would be the vehicle's ``manufacturer.'' The proposed rule defined ``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].''174 Under the proposed rule, manufacturers of new covered vehicles would be required to affix (or cause to be affixed) new vehicle labels on each such vehicle prior to its being offered for acquisition by consumers.175 If, however, an ``aftermarket conversion system'' (i.e., a conversion kit)176 is installed on a vehicle by a person other than the manufacturer prior to being acquired by a consumer, the manufacturer would be responsible for providing that person with the objective information regarding that vehicle required by the proposed rule.177 \173\AFV labeling requirements for used covered vehicles are discussed infra section III(C)(1)(d). \174\Proposed rule Sec. 309.1(r), 59 FR 59666, 59704. \175\Proposed rule Sec. 309.20(a)(1), 59 FR 59666, 59707. \176\See proposed rule Sec. 309.1(b) (defining ``aftermarket conversion system''), 59 FR 59666, 59707. This definition was derived from a recently-issued EPA definition of the same term. See 59 FR 48472, 48490, to be codified at 40 CFR 85.502(c). \177\See proposed rule Sec. 309.20(a)(2), 59 FR 59666, 59707. Specific data proposed to be disclosed on labels for new covered AFVs is discussed infra section III(C)(2)(a). --------------------------------------------------------------------------- The Commission's intent in formulating these definitions was to distinguish between two different categories of conversions based on whether a vehicle was converted to alternative fuel before or after it is delivered to the first consumer. Conversions performed before a vehicle is delivered to a first consumer bear similarities to OEM AFVs because in both circumstances the vehicles are configured to alternative fuel before delivery to the first consumer. In the SNPR, the Commission tentatively determined that consumers considering these converted AFVs would thus have equal need for comparative information as consumers considering other ``new'' vehicles.178 It therefore proposed to include such conversions within the scope of its AFV labeling requirements. \178\See AGA/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, the Commission proposed 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 those consumers would have already been educated about the costs and benefits of alternative fuels.179 The Commission based that proposal on its determination that consumers considering conversion of existing vehicles would not benefit from a ``labeling'' requirement, and that the circumstances surrounding such conversions may make such a requirement impractical or unnecessary.180 For example, the Commission understood that some consumers convert their vehicles themselves without utilizing the services of a conversion installation company. Further, 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,181 as consumers presumably already have evaluated alternative fuels in deciding to have their vehicle converted. Finally, 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.182 \179\AGA/NGVC (Supp.), G-6, 3-4, (Tr.), 231-232; ETC, G-24, 4. \180\DOE, E-10, 3-4 (``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.''). \181\Further, as noted, requiring disclosure other than in a labeling format may be beyond the scope of the Commission's authority under EPA 92. See supra section III(A). \182\EPA (Tr.), 220. --------------------------------------------------------------------------- In any event, the Commission noted that DOE has addressed conversions of existing vehicles in its consumer information brochure.183 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''),184 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.''185 Given the apparent impracticalities surrounding a requirement for aftermarket alternative-fuel conversions, and the availability of pertinent information in DOE's brochure, the Commission proposed excluding from its AFV labeling requirements situations where conventional fueled vehicles are converted to alternative fuel after being acquired by consumers.186 \183\EPA 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). \184\B-3, 16. \185\B-3, 23. \186\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''), 59 FR 59666, 59707. Four comments addressed this issue. AAMA and Mobil generally observed that definitions in the AFV labeling requirements should be consistent with other regulatory plans.187 Regarding the substance of the Commission's proposal, Electro Auto generally supported exempting aftermarket conversions while the City of Chicago opposed such an exemption because it believed that future buyers of AFVs should have access to the same information as buyers of original equipment.188 Comments previously filed 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.189 \187\AAMA, I-16, 7; Mobil, I-2, 8. \188\Chicago, J-2, 1, 2, 3; Electro Auto, I-7, 1. \189\See, e.g., Boston Edison (Supp.), G-26, 13; ETC, G-24, 4. --------------------------------------------------------------------------- After considering the record, the Commission has determined to adopt the SNPR proposal regarding which conversions are covered without modification. Because harmonizing regulatory approaches, when practicable, is appropriate and desirable, the Commission has based 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 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 will take steps to insure compliance with this revised labeling proposal by installers, such as developing oversight programs and entering into [[Page 26940]] indemnification agreements with installers to insure that accurate labels are posted as required. c. Acquisitions by consumers. In the SNPR, the Commission proposed that its labeling requirements apply to covered vehicles offered for ``acquisition'' to consumers.190 The intent of this proposal was to include purchases and long-term leasing arrangements within the scope of the AFV labeling requirements. The Commission also proposed 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.191 Responding to this aspect of the Commission's proposal, AAMA and Mobil generally observed that definitions in the AFV labeling requirements should be consistent with other regulatory plans.192 \190\See proposed rule Secs. 309.20(a)(1) (new covered vehicles), 309.21(a) (used covered vehicles), 59 FR 59666, 59707. \191\See proposed rule Sec. 309.1(d) (defining ``consumer''), 59 FR 59666, 59703. \192\AAMA, I-16, 7; Mobil, I-2, 8. --------------------------------------------------------------------------- After considering the record, the Commission has determined to issue its SNPR proposal as to this subject without modification. As to the definition of ``consumer,'' the proposed definition of this term was derived from section 302(e) of the 1990 Clean Air Act Amendments193 and EPA's regulation implementing that section, 40 CFR Sec. 88.302-94 (1993). The Commission believes that this definition properly includes within its scope all affected interests. \193\42 U.S.C. 7602(e) (defining ``person''). --------------------------------------------------------------------------- As to leasing arrangements, because Congressional mandates will require consumers to ``acquire'' AFVs,194 the Commission has determined that its AFV labeling requirements should include such arrangements to the greatest extent practicable to further EPA 92's legislative purpose. In determining what is practicable, the Commission believes that consumers entering into leasing arrangements may have different information needs depending upon the length of the arrangement. 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 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, but it seems unlikely that consumers entering into short-term leasing arrangements would make decisions based upon information disclosed in a label. 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. Accordingly, the Commission has determined that including short-term leasing arrangements in the final rule is not necessary. \194\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). --------------------------------------------------------------------------- The final rule defines an acquisition 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.195 This definition was derived from a recent EPA regulation implementing aspects of the 1990 Clean Air Act Amendments,196 which used the 120 day period as the dividing line between short and long-term leases. In the preamble announcing that regulation, EPA determined 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.197 The Commission finds that the 120 day period reflects a reasonable demarcation between short- and long-term rentals, and therefore has adopted EPA's determination. \195\See proposed rule Sec. 309.1(a) (defining ``acquisition''), 59 FR 59666, 59703. \196\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)). \197\58 FR 64679, 64689, 64690 (excluding leases under 120 days from Clean Fuel Fleet Program). --------------------------------------------------------------------------- d. Used AFVs. In the SNPR, the Commission tentatively determined that both new and used AFVs should be included within the scope of its labeling requirements, but that they should be subject to different requirements. The proposed rule defined the terms ``new covered vehicle'' and ``used covered vehicle'' and established labeling requirements as to each classification.198 Under the proposed rule, a new covered vehicle was defined as a covered vehicle which has not yet been acquired by a consumer,199 while a used covered vehicle was defined (in substance) as a covered vehicle which previously has been acquired by a consumer.200 The proposed rule also defined the terms ``new vehicle dealer''201 and ``used vehicle dealer.''202 \198\See proposed rule Secs. 309.20 (``Labeling requirements for new covered vehicles''), 309.21 (``Labeling requirements for used covered vehicles''), 59 FR 59666, 59707. \199\See proposed rule Sec. 309.1(t) (defining ``new covered vehicle''), 59 FR 59666, 59704. \200\See proposed rule Sec. 309.1(dd) (defining ``used covered vehicle''), 59 FR 59666, 59704. 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). \201\See proposed rule Sec. 309.1(u), 59 FR 59666, 59704. 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 final rule, the Commission similarly intends that individual consumers not be required to comply with the AFV labeling requirements. \202\See proposed rule Sec. 309.1(ee), 59 FR 59666, 59704. This definition was derived from the Commission's definition of ``dealer'' in its Used Car Rule, 16 CFR 455.1(d)(3) (1994). Because requiring the disclosure of comparative information on used AFVs was deemed problematic,203 the proposed rule established two labeling formats (i.e., new vehicle labels204 and used vehicle labels205) disclosing different types of information for new and used covered AFVs.206 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.207 Requiring disclosure of information based on the vehicle's condition when new could therefore create a risk of misleading consumers.208 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.209 However, this option would not surmount the more basic problem that objective information may no longer accurately reflect the vehicle's present condition [[Page 26941]] (and thus would not form a valid basis upon which to make reasonable choices and comparisons).210 \203\ETC, G-24, 4; RFA (Tr.), 217. \204\See proposed rule Sec. 309.1(v) (defining ``new vehicle labels''), 59 FR 59666, 59704. \205\See proposed rule Sec. 309.1(ff) (defining ``used vehicle labels''), 59 FR 59666, 59704. \206\See proposed rule Secs. 309.20(e) (new covered vehicles) and 309.21(e) (used covered vehicles), 59 FR 59666, 59707. \207\EPA (Tr.), 220. \208\Id. \209\Chicago, J-2, 2 (permanent labeling on all AFVs would help state and local governments enforce regulations pertaining to preferential parking and other transportation control measures). \210\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. --------------------------------------------------------------------------- Three comments addressed this issue. AAMA supported including used vehicles within the scope of the AFV labeling requirements.211 Electro Auto stated that they should be excluded.212 Mobil stated that definitions in the AFV labeling requirements should be consistent with other regulatory plans.213 \211\AAMA, I-16, 7. That comment, however, proposed a different format for used vehicle labels. \212\Electro Auto, I-7, 1. Electro Auto's objection may have been based on a misapprehension that labels for used AFVs would require disclosure of performance attributes specific to that vehicle. The SNPR did not propose such disclosures. \213\Mobil, I-2, 8 (``As long as the definition in this rule is coordinated with DOE, then this rulemaking will be consistent with forthcoming EPAct rules from DOE.''). --------------------------------------------------------------------------- After considering the record, the Commission determined to issue its SNPR proposal as to this subject without modification. The Commission notes that EPA 92's definition of AFV makes no distinction between new and used vehicles.214 In addition, the record indicated 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.215 At the Workshop, two participants 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.216 Thus, the Commission has concluded that including such vehicles within the scope of its AFV labeling requirements is appropriate. As described more fully below, labeling for used covered AFVs does not require, however, disclosure of objective performance data. \214\See 42 U.S.C. 13211(3) (Supp. IV 1993) (defining ``AFV''). \215\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. \216\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 wither 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. --------------------------------------------------------------------------- 2. Disclosures on AFV Labeling As discussed below, 21 of the 24 commenters addressed the substance of the Commission's proposed AFV labeling requirements (i.e., the information to be disclosed on AFV labels).217 Pursuant to EPA 92's mandate, the Commission developed this aspect of the final rule based on two sets of considerations. First, the Commission determined 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 SNPR that consumers would require disclosure of more comparative information when considering an AFV purchase than when refueling.218 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.219 Finally, the Commission concluded that, because DOE was required to prepare and distribute an information package for consumers, there was less need to attempt to present complex information in the constrained format of an AFV label. \217\Unocal, I-5, addressed the proposal for labeling of alternative fuels. Two other comments (Mechtly, I-1, and Sokol, I- 17) addressed metric issues. See section VI infra. \218\59 FR 59666, 59684. 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. \219\Chicago, J-2, 1 (AFV labeling requirement should target all consumers). After determining what would likely be appropriate, useful, and timely to consumers, the Commission analyzed the problems associated with developing and publishing such 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. It also considered whether appropriate technical standards existed to compare some factors, and whether providing the same information required on labels by other government agencies (in different formats) could confuse consumers. After evaluating those issues, the Commission proposed in the SNPR an AFV label disclosing a combination of information in a three-part format,220 concluding this would be most useful to consumers making choices and comparisons. 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. This final rule is the result of the Commission's analysis of all pertinent considerations, the rulemaking record and recent developments. As described in more detail below, the Commission continues to find that a combination of objective and descriptive information will best meet consumers' needs for comparative cost- benefit information. The Commission also concludes that this format will best address the problems associated with developing and publishing such information. \220\59 FR 24014, 24019-24020. --------------------------------------------------------------------------- a. Specific data disclosures. In the SNPR the Commission proposed that labels for new covered AFVs disclose two types of objective information particular to each AFV: cruising range and EPA certification level.221 Seven comments addressed the appropriateness of including objective information to consumers as to those factors. Boston Edison/EEI and DOE supported disclosures as to both factors.222 API stated that a disclosure for cruising range would be a useful measure for consumer comparisons.223 Mobil appeared to support requiring disclosure of cruising range, but stated that EPA certification levels were generally not relevant to EPA 92.224 Chrysler supported requiring disclosure of EPA certification levels, but appeared to oppose disclosure of vehicle cruising range.225 Ford stated that ``most of the information meeting [EPA 92's mandate] is already included on existing motor vehicle labels.''226 AAMA stated that it ``support[ed] the intent of the FTC proposal'' and that ``the specific information proposed is appropriate with respect to costs and benefits, so as to reasonably enable the consumer to make choices and comparisons.'''227 [[Page 26942]] The Commission's SNPR proposal as to both disclosures, and the comments addressing those issues, are described in more detail below. \221\Labels for used covered AFVs would not disclose objective information particular to each vehicle. See 59 FR 59666, 59688 n.312, 59690 n.358. \222\Boston Edison/EEI, I-14, 4, 5-6 (both are useful to consumers); DOE, J-1, 2. \223\API, I-15, 2. API's comment did not address the Commission's proposal to require disclosure of EPA certification level. \224\Mobil, I-2, cover letter at 3, 9-11. \225\Chrysler, I-13, 1. \226\Ford, I-4, 1. \227\AAMA, I-16, 1. AAMA did not, however, support the ``manner by which this information is [displayed].'' Id. For used covered vehicles, AAMA stated that labels should ``contain only the information necessary to indicate that the vehicle operates on alternative fuels and to list the fuels that can be used in the vehicle.'' AAMA, I-16, 1. As noted previously, three comments fully supported AAMA's comment. Chrysler, I-13, 1; Ford, I-4, 2; NGVPA, I- 19, 1. (1) Cruising range. In the SNPR, the Commission proposed that cruising range should be disclosed on labels for new covered AFVs.228 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).229 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.230 \228\The Commission did not propose requiring disclosure of this information on labels for used covered AFVs because that information could vary significantly with a vehicle's condition. Requiring disclosure of cruising range information on used vehicles could therefore mislead consumers. \229\See proposed rule Sec. 309.1(g) (defining ``dedicated''), 59 FR 59666, 59703. \230\See proposed rules Secs. 309.1(o) (defining ``estimated cruising range''), 309.20(e)(2)(i) (requiring disclosure of estimated cruising range for dedicated vehicles), 59 FR 59666, 59704, 59707. --------------------------------------------------------------------------- The second labeling format would be for dual-fueled covered AFVs (i.e., vehicles capable of being powered both by an alternative fuel and a conventional fuel).231 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.232 Because the disclosure would relate solely to the manufacturer's estimated (and not actual) cruising range, both label formats would include a statement advising consumers that their actual cruising range will vary with options, driving conditions, driving habits and the AFV's condition.233 \231\See proposed rule Sec. 309.1(i) (defining ``dual fueled''), 59 FR 59666, 59704. \232\See proposed rule Sec. 309.20(e)(2)(ii) (requiring disclosure of estimated cruising range for dual-fueled vehicles), 59 FR 59666, 59707. \233\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 SNPR Figures 4 and 5, 59 FR 59666, 59710-59711. --------------------------------------------------------------------------- Cruising range values would be expressed in whole numbers and calculated in one of three ways. For vehicles required to comply with EPA's fuel economy labeling provisions,234 cruising range values would be calculated by reference to the vehicle's estimated fuel economy rating.235 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.236 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.237 \234\See 40 CFR part 600 (1993) (``Fuel economy of motor vehicles''). \235\Numerous 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. \236\See proposed rule Sec. 309.22(a)(1)(i), 59 FR 59666, 59708. \237\See proposed rule Sec. 309.22(a)(1)(ii), 59 FR 59666, 59708. --------------------------------------------------------------------------- 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.238 During the transition to that next phase, the Commission therefore proposed a different approach for vehicles not yet required to comply with EPA's fuel- economy labeling provisions. For EVs, the Commission noted that the Society of Automotive Engineers (``SAE''), a consensus standard-setting organization, has issued a ``Recommended Practice'' establishing uniform procedures to calculate cruising range for EVs (``SAE J1634'').239 The Commission believed that reliance on uniform standards would facilitate comparability.240 Accordingly, the proposed rule requires that cruising range values for EV's be calculated in accordance with that standard.241 \238\59 FR 39638, 39639 (announcing fuel-economy test labeling requirements for methanol and CNG vehicles). One comment suggested that the Commission encourage EPA to develop further fuel economy regulations. ETC, I-9, 1. The Commission does not believe that is necessary because EPA is under a legal obligation to issue such regulations. \239\SAE's ``Electric Vehicle Energy Consumption and Range Test Procedure,'' J1634, was issued in May 1993. B-33. This procedure is based in part on EPA's pertinent test procedures. B-33, 1, 9-10. Boston Edison stated that fuel economy ``can be [calculated] in a manner that is procedurally identical to gasoline vehicles'' by relying on SAE J1634. Boston Edison (Supp.), G-26, 5. \240\59 FR 59666, 59688. \241\See proposed rules Secs. 309.22(a)(2) (for dedicated vehicles), 309.22(b)(2) (for dual-fueled vehicles), 59 FR 59666, 59708. --------------------------------------------------------------------------- For other vehicles not yet required to be labeled with EPA's fuel economy stickers, the Commission knew of no comparable consensus procedure that could yield cruising range values in the proposed ``minimum-maximum'' format. As a result, the Commission did not propose that manufacturers use a specific standard to determine cruising range. In similar situations (i.e., where the Commission has required the disclosure of specific information, but no consensus standards exist to measure such information), the Commission has required that manufacturers have a ``reasonable basis'' for such disclosures.242 Accordingly, for those vehicles, the Commission proposed that manufacturers be required to possess a reasonable basis, consisting of competent and reliable evidence, of the minimum and maximum number of miles the vehicle will travel between refuelings or rechargings.243 \242\See, e.g., Fuel Rating Rule, 16 CFR 306.5(b) (1994) (``To determine automotive fuel ratings for alternative liquid automotive fuels, you must possess a reasonable basis, consisting of competent and reliable evidence, for the percentage by volume of the principal component of the [fuel] that you must disclose.''); Care Labeling Rule, 16 CFR 423.6(c)(1)-(6) (1994) (``reasonable basis'' based on ``reliable evidence''); R-value Rule, 16 CFR 460.19(a) (1994) (``If you say or imply in your ads, labels, or other promotional materials that insulation can cut fuel bills or fuel use, you must have a reasonable basis for the claim.''). \243\See proposed rules Secs. 309.22(a)(3) (for dedicated vehicles), 309.22(b)(3) (for dual-fueled vehicles), 59 FR 59666, 50708. --------------------------------------------------------------------------- The SNPR also stated that during this transition (i.e., while EPA is developing fuel-economy labeling requirements), the Commission would consider whether any new consensus test methods for determining cruising range constitute a reasonable basis.244 The Commission expected that industry compliance with this AFV labeling rule, in conjunction with the need to avoid uncertainty about whether particular test methods or calculations constitute a reasonable basis, will encourage development of standardized test methods and specifications. This, in turn, could facilitate widespread acceptance of AFVs. \244\The Commission encourages DOE, as part of its ``technical assistance,'' to direct the development of such transition specifications. See 42 U.S.C. 13232(b) (Supp. IV 1993) (DOE ``shall provide technical assistance'' to the Commission and coordinate that assistance with its development of a consumer information brochure). Fourteen comments addressed requiring disclosure of cruising range as proposed in the SNPR. Five of the fourteen comments supported the Commission's proposal because of its usefulness to consumers in making [[Page 26943]] choices and comparisons.245 For example, survey data cited by Boston Edison/EEI ``indicated that the distance that an electric car can travel is the highest ranking concern of consumers.''246 Similarly, CAS supported requiring disclosure of this ``extremely useful'' information and NAFA stated that fleet managers ``have identified cruising range as one of the most important factors when making a decision to purchase AFVs.''