FTC Files Comment with State Attorneys General About Green Guidelines for Electricity

The staff of the Federal Trade Commission on August 10 filed a comment with the National Association of Attorneys General (NAAG) about its discussion draft Green Guidelines for Electricity.

The FTC has a longstanding interest in regulation and competition in energy markets and monitors industry and legislative developments in the electric industry at the state and federal levels that will affect consumers' interests. The FTC's mission in this area includes ensuring truth in advertising, and to prevent and remedy unfair or deceptive trade practices.

The staff comment stresses the advantage of maintaining flexibility in the guidelines by using general principles, with examples, as opposed to specific standards. The comment generally supports the draft's use of the FTC's Guides for the Use of Environmental Marketing Claims as the starting point for developing guidelines tailored to electricity and suggests that research regarding consumer understanding of environmental claims for electricity would be helpful.

The comment also addresses the seven general issues related to environmental marketing claims for electricity, as to which NAAG specifically solicited comments. The comment observes:

• there is little need to depart from the FTC's Environmental Marketing Guides on the issues of making general environmental benefit claims and substantiating environmental claims concerning electricity;
• absent research on how consumers interpret the terms "green" and "clean," these terms should probably be treated as general environmental benefit claims;
• the term "renewable" should probably not be treated as a general environmental benefit claim;
• both historical data and future projections should be permitted for making and substantiating claims about fuel sources and emissions, and no specific substantiation methods should be prescribed; and
• it is unnecessary and counterproductive to set standards for price advertising for power marketed as having an environmental benefit.

The Commission vote to approve the staff comment was 4-0.

NOTE: The comment represents the views of staff members of the FTC's Bureau of Consumer Protection and not necessarily the views of the Commission or any individual Commissioner.

Copies of the full text of the comment are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC File No. V980020)