FTC Proposes to Allow Use of Energy Star Label on Home Appliances Covered by Agency's Appliance Labeling Rule

In a notice published today in the Federal Register, the Federal Trade Commission proposes allowing manufacturers of residential appliances covered by its Appliance Labeling Rule to place the logo of the joint Department of Energy (DOE)/Environmental Protection Agency (EPA) "ENERGY STAR" program on required EnergyGuides on certain appliances under specific conditions. The Commission also proposes a non-substantive amendment to the rule to include "Federal Trade Commission" on all EnergyGuide labels so consumers and others will be clear about the identity of the agency that enforces the rule.

The Appliance Labeling Rule, which was adopted in November 1979, requires manufacturers to disclose energy information about major household appliances to enable consumers to compare the energy use or efficiency of competing models. The rule applies to clothes washers, refrigerators, freezers, water heaters, dishwashers, window air conditioners, furnaces, central air conditioners, and heat pumps. The Rule requires manufacturers to disclose on the EnergyGuide the energy consumption or efficiency of the labeled appliance. The EnergyGuide also must contain a bar showing the highest and lowest energy consumption or efficiencies for all similar appliance models, so consumers can compare the energy use of the labeled model to other models they may be considering.

The ENERGY STAR program is a partnership among DOE, EPA, product manufacturers, national, regional and local retailers, utilities, state energy offices, industry trade associations and the financial community. The program's purpose is to increase consumer interest in purchasing highly efficient appliances and heating and cooling equipment (as well as other building products) through promotional programs (including national and regional advertising), lower interest financing, product labeling, sales training, and consumer education. The ENERGY STAR logo on appliances and heating and cooling equipment indicates significantly better energy performance than is required by DOE's energy conservation standards. Currently, program participants -- manufacturers and retailers -- can use the ENERGY STAR logo to identify qualifying products by putting the logo directly on the product with a separate label or by using it in promotional materials or advertising.

In the Federal Register notice, the Commission explains that permitting appliance manufacturers to place the ENERGY STAR logo directly on required EnergyGuide labels at the factory would be likely to reduce both the possibility of mislabeling and the cost that manufacturers would otherwise incur by having to monitor the placement of ENERGY STAR labels by retailers. EnergyGuides with the ENERGY STAR logo also would complement the rule's objective of providing consumers with energy efficiency and consumption information to consider when purchasing appliances.

The Commission is seeking comment on a number of issues about this proposal, including:

• What is the most cost-effective method (e.g., requiring that manufacturers print the ENERGY STAR logo on EnergyGuides) of assuring that the ENERGY STAR logo will appear on EnergyGuides?
• What would be the benefits of the proposed conditional exemption? Who would receive those benefits?
• Do the ENERGY STAR logo and its promotional materials convey accurate information to consumers, especially with regard to the overall cost over time of purchasing and operating appliances that qualify for the ENERGY STAR logo versus those that do not?

The Commission vote to publish the Federal Register notice was 4-0.

The proposal will be subject to public comment until January 11, 1999, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Comments should be identified as "Conditional exemption for ENERGY STAR, 16 CFR Part 305 -- Comment."

Copies of the full text of the Federal Register notice are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 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. R611004)