Analysis of Proposed Consent Order to Aid Public Comment

In the Matter of

ENERJET CORPORATION

The Federal Trade Commission has accepted, subject to final approval, an agreement for entry of a consent order from Enerjet Corporation ("Enerjet"). The agreement would settle a complaint by the Federal Trade Commission that Enerjet violated (1) the Rule Concerning Disclosures Regarding Energy Consumption and Water Use of Certain Home Appliances and Other Products Under the Energy Policy and Conservation Act ("Appliance Labeling Rule" or "Rule"), 16 C.F.R. Part 305, and (2) the Energy Policy and Conservation Act ("EPCA"), 42 U.S.C. § 6201 et seq.

The proposed consent order has been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement or make final the agreement's proposed order.

This matter concerns Enerjet's compliance with regulatory requirements relating to certain boilers that it manufactures. The administrative complaint alleges that Enerjet violated the Appliance Labeling Rule in several respects. First, the complaint alleges that Enerjet knowingly distributed certain oil-fired boilers that were not marked with labels displaying the information that the Rule requires. In particular, the complaint alleges, the labels Enerjet used did not display the name of the manufacturer, the annual fuel utilization efficiency rating of the boiler, the range of annual fuel utilization efficiency ratings for comparable products, an indication of where the labeled product falls within this range, and certain prescribed generic statements. Second, the complaint alleges that during 1997 Enerjet knowingly distributed boilers without furnishing a fact sheet concerning the boilers, and without supplying the required information in an approved industry directory. Third, the complaint alleges that Enerjet failed to submit a 1997 annual report concerning its boilers.

The complaint also alleges that Enerjet violated the EPCA by distributing brochures that do not accurately disclose the annual fuel utilization efficiency ratings of its boilers in accordance with the test procedure prescribed by the Secretary of the Department of Energy, but rather overstate the energy efficiency of the boilers.

The proposed consent order requires Enerjet to pay a $10,000 civil penalty for violating the Rule. It also prohibits Enerjet from making any representation about the energy use or efficiency of any product it manufactures that is subject to the Rule, or the cost of energy consumed by such product, unless the product has been tested in accordance with a test procedure prescribed by the Secretary of Energy and the representation fairly discloses the results of such testing.

The remainder of the proposed consent order contains provisions regarding recordkeeping, distribution of the order, notification of changes in corporate status, filing of a compliance report, and termination of the order.

The purpose of this analysis is to facilitate public comment on the proposed order, and it is not intended to constitute an official interpretation of the agreement or the proposed order or to modify their terms in any way.