Rule Concerning Disclosures Regarding Energy Consumption and Water Use of Certain Home Appliances and Other Products Required Under the energy Policy and Conservation Act (``Appliance Labeling Rule'')

Federal RegisterSep 28, 1994

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Text

SUMMARY: The Federal Trade Commission (``Commission'') adds pool

heaters, instantaneous water heaters, and heat pump water heaters to

the list of products covered by the Commission's Appliance Labeling

Rule (``Rule''). This action is being taken because amendments to the

Energy Policy and Conservation Act (``EPCA'') added pool heaters to the

list of covered products for which the Commission must consider

labeling requirements, and because the Department of Energy (``DOE'')

promulgated final test procedures for the two types of water heaters at

issue that triggered an obligation under EPCA for the Commission to

consider labeling requirements for them.

EFFECTIVE DATE: December 29, 1994.

FOR FURTHER INFORMATION CONTACT: James Mills, Attorney, 202-326-3035,

Division of Enforcement, Federal Trade Commission, Washington, DC

20580.

SUPPLEMENTARY INFORMATION:

I. Introduction

A. Statutory Authority for Labeling Pool Heaters, Instantaneous Water

Heaters, and Heat Pump Water Heaters

The National Appliance Energy Conservation Act (``NAECA 87'')\1\

amended EPCA\2\ by, among other things, adding pool heaters (which

include spa and hot tub heaters and heaters for similar applications--

for convenience, the Commission will refer to these products as ``pool

heaters'') to the list of appliances for which DOE must establish

minimum efficiency standards and testing procedures. EPCA requires the

Commission to consider labeling requirements for any covered products

for which DOE has prescribed a final test procedure.\3\

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\1\Pub. L. 100-12, 101 Stat. 103 (1987).

\2\Pub. L. 94-183, 89 Stat. 871, 42 U.S.C. 6291 et seq. (Dec.

22, 1975).

\3\42 U.S.C. 6294(b)(1)(B).

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NAECA 87 also amended EPCA by adding definitions, in section

321,\4\ for some of the products enumerated as ``covered products'' in

section 322,\5\ including a definition for water heaters that

subdivided the category into three subcategories--storage-type units,

instantaneous units, and heat pump units.\6\ In 1989, DOE amended its

definition for water heaters to be consistent with the NAECA 87

amendments,\7\ and, in 1990, refined its test procedure for water

heaters so it would apply to some (but not all) of the different kinds

of instantaneous water heaters and heat pump water heaters that are

currently being produced, as well as to storage-type units.\8\

Previously, DOE's definition (and test procedure) for water heaters

applied only to conventional storage-type heaters. The Commission's

current labeling Rule, like the previous version of the DOE rule,

defines water heaters only as storage-type units.\9\ Thus, these other

products did not come within the Rule's definition of water heater.

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\4\42 U.S.C. 6291.

\5\42 U.S.C. 6292.

\6\42 U.S.C. 6291 (27).

\7\54 FR 6062, 6075 (Feb. 7, 1989).

\8\55 FR 42162, 42169-77 (Oct. 17, 1990).

\9\16 CFR 305.3(d).

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EPCA provides that, after DOE prescribes a final test procedure

applicable to a product category covered under EPCA,\10\ the Commission

must initiate a proceeding to consider labeling requirements for that

category. Because of DOE's publication of a final test procedure for

pool heaters, the Commission commenced a proceeding to consider

labeling rules for pool heaters. Further, because DOE amended its

definition for water heaters in section 430.2 of Subpart A (General

Provisions) of its rules,\11\ to include instantaneous water heaters

and heat pump water heaters, and amended Appendix E to Subpart B of

Part 430--the test procedure for these products--so the energy usage of

most of these new products can be determined, the Commission also

initiated a proceeding to consider requiring labeling for these water

heaters.

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\10\42 U.S.C. 6293(b) gives DOE the authority (1) to prescribe

test procedures for new products, and (2) to amend existing test

procedures if amended test procedures would more accurately or fully

measure energy consumption.

\11\The applicable DOE rules are codified at 10 CFR Part 430

(1994). The language in Sec. 305.3 of the Commission's Rule

(``Description of covered products to which this part applies) is

based on the definitions in Sec. 430.2 of Subpart A of DOE's rules.

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B. Regulatory History

On February 9, 1993, the Commission published a Notice of Proposed

Rulemaking (``NPR'') in the Federal Register soliciting comment on a

proposal to require EnergyGuide labels on pool heaters, instantaneous

water heaters, and heat pump water heaters.\12\ As required by

EPCA,\13\ this rulemaking was conducted pursuant to section 553 of the

Administrative Procedure Act (``APA'').\14\ Section 553(b)(3) of the

APA provides the Commission with the option of publishing the substance

of a proposed rule instead of specific proposed rule language. The

Commission exercised this option and sought comment on the substance of

the proposed amendments to the Rule, except for specific definitions

for each of the proposed new product categories.

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\12\58 FR 7852.

\13\42 U.S.C. 6306(a)(1).

\14\5 U.S.C. 553.

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In accordance with EPCA,\15\ the NPR afforded interested persons

the opportunity to present their views in writing and orally at a

public hearing. The Presiding Officer did not receive any requests for

an oral presentation, so no hearing was held. During the comment

period, which extended from February 9 through April 26, 1993, the

Commission received eight comments.\16\ These comments are from two

appliance manufacturers, one appliance industry trade association, two

public utilities, one utility trade association, one state energy

office, and one public interest group.\17\ Part II, below, discusses

the issues on which comments were sought, the comments received, and

the amendments the Commission is adopting today in response to them.

The amended Rule sections appear in ``Text of Amendments.''

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\15\42 U.S.C. 6306(a)(1).

\16\The comments are found on the Public Record at the FTC in

Washington, D.C. under Rulemaking Record Number R611004 (Appliance

Labeling Rule). They are grouped under Category E (Pool and Water

Heater Proceeding--Industry Comments) and Category EE (Pool and

Water Heater Proceeding--Comments from Other Sources). Other

material submitted to the Public Record in this proceeding can be

found under Category A (Public Notices and Petitions).

\17\The commenters were: Thermo-Dynamics Boiler Company

(``Thermo''), E-1; Paloma Industries, Inc. (``Paloma''), E-2; The

Gas Appliance Manufacturers Association (``GAMA''), E-3; Washington

Gas, EE-1; The California Energy Commission (``CEC''), EE-2; The

American Council for an Energy Efficient Economy (``ACEEE''), EE-3;

The American Gas Association (``AGA''), EE-4; Arkansas Louisiana Gas

Company (``ALG''), EE-5.

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In the NPR, the Commission initially concluded that the provisions

of the Regulatory Flexibility Act relating to an initial Regulatory

Flexibility Act analysis were not applicable to the proceeding and that

a regulatory analysis was not necessary because the amendments, if

promulgated, would not have a significant economic impact on a

substantial number of small entities. The NPR sought comment, however,

on the effects of the proposed amendments on small businesses to assist

the Commission in determining whether a final Regulatory Flexibility

Act analysis was necessary.\18\ The Commission also initially concluded

that, although the proposed amendments would expand the Rule's existing

recordkeeping and reporting requirements to include manufacturers of

products not covered before, the effect would be de minimis because so

few companies would be affected and the resulting increase in burden

hours would be so small. The Commission decided, therefore, not to ask

the Office of Management and Budget to adjust the clearance for the

Rule under the Paperwork Reduction Act. To substantiate the accuracy of

its reporting burden estimate, however, the Commission requested

comment on the extent of the reporting burden associated with these

amendments.\19\ Parts III and IV, below, discuss the comments on these

issues and the Commission's final determinations with respect to the

requirements of the Regulatory Flexibility Act and the Paperwork

Reduction Act, respectively.

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\18\See 58 FR 7855.

\19\Id.

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II. Discussion of Comments and Disposition of Issues

As discussed in more detail in Parts II.A and B, below, the NPR

proposed definitions for each of the three product categories that are

based on EPCA and/or Part 430 of the Code of Federal Regulations

(``CFR''), which is the section of CFR in which DOE's test procedures

are codified. In addition, the NPR solicited comment with respect to

each category regarding: the feasibility of labeling the product; the

appropriateness of the proposed definition; what energy usage

descriptor to require on the labels; what sub-categories, if any, to

establish for purposes of ranges of comparability; and, what format to

require for the labels.\20\

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\20\As is discussed in the sections below on each category, the

NPR also solicited comment on some issues that were specific to one

category only.

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A. Pool Heaters

1. Feasibility of Labeling

The Commission is required to prescribe a labeling rule for the

categories of products listed in EPCA,\21\ which now include pool

heaters, unless it determines that labeling the product is ``not

technologically or economically feasible.''\22\ The NPR asked for

comment on this issue, emphasizing that the question was whether

labeling pool heaters would be economically or technologically

infeasible (as distinct from testing, which manufacturers and importers

must do in order to comply with DOE's minimum efficiency standards

program).\23\

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\21\42 U.S.C. 6294(a)(1) and (b)(5); 42 U.S.C. 6292(a).

\22\42 U.S.C. 6294(a)(1). During the original rulemaking, the

Commission determined that clothes dryers, television sets, kitchen

ranges and ovens, humidifiers and dehumidifiers, and home heating

equipment other than furnaces should be exempted from the

requirements of the Rule on this basis and, in some cases, because

labeling them would not assist consumers in making purchasing

decisions. 44 FR 66466, 66467-69 (Nov. 19, 1979). This second

criterion for exemption provided by EPCA relates only to a few

products. Pool heaters are not among them. 42 U.S.C. 6294(a)(2).

\23\See 10 CFR 430.62.

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Three comments addressed this issue. CEC stated that labeling these

products is both economically and technologically feasible and that the

value to consumers of the label information greatly outweighs the

labeling cost to industry. CEC pointed out that manufacturers currently

provide energy efficiency information on pool heaters to DOE and CEC,

but not to the purchaser.\24\ ACEEE and ALG also supported labeling

requirements for pool heaters without elaboration.\25\ The record does

not indicate that labeling of pool heaters would be technologically or

economically infeasible. Accordingly, the Commission has determined to

amend the Rule to include labeling requirements for the pool heater

category.

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\24\CEC, EE-2, 2.

\25\ACEEE, EE-3, 1; ALG, EE-5, 1.

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2. Definition for ``Pool Heater''

The NPR explained that the EPCA/DOE definition of pool heaters is

not limited to products of any particular fuel type.\26\ The DOE test,

however, covers only gas- and oil-fired products.\27\ Although the

majority of pool heaters are currently gas-fired (with some oil-fired),

electric resistance and heat pump pool heaters are also being

manufactured. Because the DOE test covers only gas- and oil-fired pool

heaters, the NPR proposed amending the Rule to cover only these two

types of products. The Rule's coverage is necessarily limited by the

definitions and test procedures in Subpart B of DOE's rules (i.e., in

the absence of a DOE test procedure for determining energy usage,

compliance with the Rule is impossible). The NPR proposed, therefore,

adopting the EPCA/DOE definition of ``pool heater'' along with a

proviso stating that the Rule's scope is limited to those products

within the definition for which there is a DOE-prescribed test for

measuring energy usage.

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\26\See 58 FR 7853. Section 321(a)(25) of EPCA (42 U.S.C.

6291(a)(25)) defines ``pool heater'' as follows: ``The term `pool

heater' means an appliance designed for heating nonpotable water

contained at atmospheric pressure, including heating water in

swimming pools, spas, hot tubs and similar applications.''

\27\Although DOE uses the EPCA definition of pool heater in its

regulations at 10 CFR 430.2, and in its test procedure for pool

heaters (Appendix P to Part 430 of 10 CFR), the procedure pertains

only to gas- and oil-fired heaters.

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Two comments addressed the proposed definition. ACEEE stated that

the Commission's adoption of the definition in section 430.2 of DOE's

rule with the proposed proviso would be acceptable.\28\ CEC agreed that

the Rule should be amended to include the language in section 430.2,

but opposed the addition of the proviso, stating that DOE has

developed, but not yet published, an all-inclusive test method, and

that the American Society of Heating, Refrigerating and Air-

Conditioning Engineers (``ASHRAE'') has appointed a committee to

develop a test for gas, oil, electric, and heat pump pool heaters.\29\

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\28\ACEEE, EE-3, 1.

\29\CEC, EE-2, 2, 4.

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The Commission has determined to amend the Rule to include the

definition of pool heaters as that term is defined in EPCA and by DOE

(in section 430.2 of Subpart A). The definition is followed by a

proviso stating that the Rule's application is limited to those

products for which there is a DOE-prescribed test. See section 305.3(o)

in ``Text of Amendments,'' below. The Commission recognizes, as CEC

pointed out, that there may eventually be a test procedure for all

types of these products. However, the Commission's authority here to

require labels is limited to products for which DOE has published final

test procedures. If DOE amends the test procedure to include electric

resistance and/or heat pump pool heaters, the Commission will then

initiate a rulemaking proceeding to consider whether the Rule should be

amended to cover those products.

3. Energy Usage Descriptor

EPCA requires that labels on covered products disclose estimated

annual operating cost, as determined by DOE test procedures, unless DOE

determines that disclosure of estimated annual operating costs is not

technologically feasible, or the Commission determines that such

disclosure is not likely to assist consumers in making purchasing

decisions or is not economically feasible. In this event, the

Commission shall require disclosure of a different useful measure of

energy consumption, again determined in accordance with DOE test

procedures.30 Labels also must disclose the range of estimated

annual operating costs, or the alternate measure of energy consumption

required for those covered products.31

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\3\042 U.S.C. 6294(c). For most product categories, the Rule

originally required that estimated annual operating costs in

dollars, and related information, be disclosed on labels and in

retail sales catalogues. The Commission recently amended the Rule,

however, to require an energy consumption figure (KWH per year for

electrically-fueled products, therms per year for gas-fueled

products, and gallons per year for oil- and propane-fired products)

for the products that originally had to bear labels disclosing

estimated annual operating cost. See 59 FR 34014 (July 1, 1994).

\3\142 U.S.C. 6294(c)(1)(B).

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A disclosure of estimated annual operating cost is not appropriate,

however, for all product categories. For example, three product

categories (room air conditioners, furnaces, central air conditioners)

have usage cycles that depend on disparate climate conditions across

the United States. In past rulemaking proceedings, the Commission has

determined for these products that ``average'' energy cost would not be

likely to assist consumers in making purchasing decisions. Therefore,

the required disclosure on labels for these products is an energy

efficiency rating (``EER'').32 The corresponding cost information

also must be disclosed on the label for room air conditioners, and on

fact sheets or in an industry directory for furnaces and central air

conditioners.

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\3\2See 44 FR 66466, 66470 (Nov. 19, 1979; furnaces and room air

conditioners); 52 FR 46888, 46889 (Dec. 10, 1987; central air

conditioners). When promulgating the test procedures, DOE, as

required by EPCA, developed two measures of energy consumption for

each appliance category: (1) Estimated dollar cost of operation, and

(2) the energy factor, a measure of the useful output of an

appliance's services divided by the energy input. For climate

control equipment, under the Commission's Rule, the energy factor

must be an energy efficiency rating. The acronyms used in the DOE

tests and by the industry (``EER'' for room air conditioners,

``SEER'' for central air conditioners and the cooling function of

heat pumps, ``AFUE'' for furnaces, and ``HSPF'' for the heating

function of heat pumps) must be used in advertising and on fact

sheets and labels.

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The energy efficiency measurement in EPCA that applies to pool

heaters is ``thermal efficiency.''33 This measurement is also the

energy usage descriptor that is derived from the DOE test

procedure.34 The current DOE test has no methodology for deriving

estimated annual operating cost or any energy usage measurement other

than thermal efficiency. To obtain information about what possible

current or future disclosures may be appropriate for labels on pool

heaters, the NPR solicited comment on whether the measure of energy

consumption to be disclosed on pool heater labels should be thermal

efficiency, without additional cost information, or whether it should

be some other disclosure. Because DOE might amend its test procedure to

include a way to measure annual energy consumption (and, therefore,

cost), the NPR also asked whether it would be technically or

economically feasible to disclose estimated annual operating cost, and

whether operating cost information would be likely to assist consumers

in making purchasing decisions.35

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\3\342 U.S.C. 6291(a)(26). ``The term `thermal efficiency of

pool heaters' means a measure of the heat in the water delivered at

the heater outlet divided by the heat input of the pool heater as

measured under test conditions specified in section 2.8.1 of the

American National Standard for Gas Fired Pool Heaters, Z21.56-1986,

or as may be prescribed by the Secretary [of DOE].'' The thermal

efficiency rating is expressed as a percent.

\3\4See Appendix P to Part 430 of 10 CFR.

\3\5On August 23, 1993, DOE proposed amending Appendix P to Part

430 of 10 CFR (the pool heater test procedure) to include procedures

to measure annual energy consumption. An annual energy consumption

figure would enable manufacturers to calculate estimated annual

operating cost. See 58 FR 44538 at 44571. See also 59 FR 10464,

10519 (March 4, 1994).

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There was little agreement on these issues among the four comments

that addressed them. Washington Gas stated that estimated annual

operating cost is difficult to measure because the usage of pool

heaters varies from region to region and depends on consumers'

preferences. It recommended requiring a disclosure of hourly energy

consumption along with thermal efficiency for comparison with other

heaters.36 CEC recommended requiring a disclosure of both thermal

efficiency and estimated annual operating cost. AGA and ALG favored the

disclosure of estimated annual operating cost.\37\ Both expressed

concern that thermal efficiency alone could mislead consumers because

the different costs of operation between fuels would not appear on the

label.38

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\36\Washington Gas, EE-1, 1.

\37\CEC, EE-2, 3.

\38\AGA, EE-4, 2-4; ALG, EE-5, 1.

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As noted above, the DOE test for pool heaters does not currently

contain a final procedure for measuring estimated annual operating cost

for these products, so the Commission cannot now require disclosure of

operating cost. In the absence of such a procedure, the Commission

determines that the most useful information available for consumers is

thermal efficiency. Accordingly, the Commission amends the Rule to

require that thermal efficiency be disclosed as the energy usage

descriptor for these products. See sections 305.2(i) and

305.11(a)(5)(ii)(C)-(E) and (G) of ``Text of Amendments,'' below. If,

and when, DOE amends its test procedure to contain provisions for the

determination of estimated annual operating cost, the Commission might

consider amending the Rule to require the disclosure of estimated

annual operating cost.

4. Sub-Categories for Ranges of Comparability

Under the Rule, each required label on a covered appliance must

show, in addition to the energy usage of the appliance itself, a range,

or scale, indicating the range of energy costs or efficiencies for all

models of a size or capacity comparable to the labeled model. To

accomplish this, the Rule contains appendices that list sub-categories

for each product category divided by fuel type and capacity

groupings.39

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\3\9For example, water heaters are divided into four sub-

categories by fuel--natural gas, propane, electric, and oil. Each of

these sub-categories is further divided into increments of capacity

expressed in first hour ratings. Thus, a label on a gas-fired water

heater with a first hour rating of 37 gallons will disclose the

range of energy usage of all gas-fired water heaters with first hour

ratings of between 35 and 40 gallons.

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NAECA 87 established a minimum efficiency standard for pool

heaters, but it did not create any size or capacity sub-category beyond

``pool heaters.''40 The DOE standard also does not create sub-

categories.41 The NPR solicited information on whether, for

purposes of ranges of comparability under the Commission's Rule, there

should be one category encompassing both fuel types, or two categories,

one for each of the two fuel types--oil-fired and gas-fired models--for

which there is currently an applicable DOE test procedure.

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\4\0See 42 U.S.C. 6295(e)(2).

\4\1See 10 CFR 430.32(k).

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One comment addressed this question. CEC suggested that gas- and

oil-fired pool heaters are sufficiently similar to be included in one

group.42 The Commission agrees that gas- and oil-fired pool

heaters are similar from a minimum efficiency standards perspective

(the standard is the same for both--a thermal efficiency of no less

than 78%). However, since 1980, the Commission has grouped products by

different fuel types for purposes of the ranges of comparability. The

Commission finds that this is the clearest and most informative way of

presenting the ranges to consumers. Accordingly, the Commission amends

the Rule to include separate ranges of comparability for gas-fired and

oil-fired pool heaters. See revised Appendices J1 and J2 in ``Text of

Amendments,'' below.

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\4\2CEC, EE-2, 2-3.

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5. Label Format

The Commission recognizes that pool heaters are sometimes not seen

by consumers before purchase. They are often purchased as the result of

a pool installation professional's recommendation and are ordered from

industry brochures or specification sheets. The NPR, therefore,

solicited comment on whether amendments requiring labels for pool

heaters should require a ``conventional'' product-specific label

approach for these products or another labeling format.

``Conventional'' product-specific labels contain all the required

energy use information and are used for refrigerators, refrigerator-

freezers and freezers, water heaters, dishwashers, clothes washers, and

room air conditioners.43 The NPR also asked for comment on whether

it would be more useful to require that pool heaters be labeled with a

label like the one required for central air conditioners. For these

products, the Commission requires a product-specific label, but with

only some of the required energy usage information. Other required

information must be disclosed on separate fact sheets or in an

industry-produced directory.44

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\4\3See 16 CFR 305.11(a)(5). The required information includes:

the name of the manufacturer, the model number and capacity of the

product, the energy consumption of the product, the appropriate

range of energy usage for similarly sized products, a statement that

the information is based on U.S. government tests, and a statement

disclosing cost of operation based on a national average utility

rate.

\4\416 CFR 305.11(a)(5)(iii) and (c). The label on the product

discloses the energy efficiency of the labeled unit and the range of

efficiencies for all similar products, and it directs consumers to

ask for further information on fact sheets or in directories. The

fact sheets and directories must disclose information on cost of

operation. In recent amendments to the Rule the Commission also

adopted this disclosure approach for furnaces. See 58 FR 34014,

34016 (July 1, 1994).

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Two comments addressed the issue of label type and format. CEC

favored a conventional label for pool heaters.45 ACEEE suggested a

simplified label with a requirement for disclosure of comprehensive

information on a fact sheet, in an industry directory, or in marketing

materials.46 As discussed in Part II.A.3, above, the only measure

of energy usage that can be derived through the current DOE test for

these products is thermal efficiency. Therefore, requiring

manufacturers to disclose ``other information'' through other formats

would be inappropriate. Moreover, without a method for determining

estimated annual operating cost, the Commission cannot require the

``Operating Cost Statement'' that is standard on ``conventional''

labels. Consequently, the Commission is amending the Rule to require

that labels for pool heaters disclose the thermal efficiency of the

product in the format of the ``conventional'' label for room air

conditioners, but without the ``Operating Cost Statement.'' See the

Sample Label for pool heaters in ``Text of Amendments,'' below.

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\4\5CEC, EE-2, 3.

\4\6ACEEE, EE-3, 1.

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B. Instantaneous Water Heaters and Heat Pump Water Heaters

Instantaneous water heaters heat water as it is needed, rather than

heating it in a tank and keeping it hot while storing it. An advantage

to this approach to water heating is that there is no standby loss with

the associated increased cost and loss of efficiency.47

Instantaneous water heaters can heat water by means of oil, natural

gas, or electric resistance, although there are few, if any, oil-fired

instantaneous water heaters in production. The DOE test procedure

presently contains test methodologies only for gas- and oil-fired

models and not for electric.48

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\4\7Standby loss refers to the energy that is used to keep water

hot in the storage tank of a storage type water heater while hot

water is not being used.

\4\8See 10 CFR Part 430, Subpart B, Appendix E. If DOE were to

prescribe a test procedure for electric instantaneous water heaters,

the Commission would initiate a rulemaking proceeding to consider

labeling them.

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Heat pump water heaters are similar to small room air conditioners.

They extract heat from the air around them but, instead of exhausting

it to the outside, they use the heat to increase the temperature of the

water in a conventional storage tank. They exhaust the resulting cool

air into the surrounding area.

1. Feasibility of Labeling

The NPR asked whether labeling (as distinct from testing)

instantaneous and heat pump water heaters would be economically or

technologically infeasible.49 Five comments addressed this issue.

Washington Gas recommended deferring consideration of labeling heat

pump water heaters until more information is available on the effects

that the climate conditioning of the space around the heat pump water

heater have on the product's energy consumption.50 The other four

comments favored requiring EnergyGuide labels on both types of water

heaters.51 GAMA repeated its consistent position that labeling of

all water heaters, including instantaneous water heaters and heat pump

water heaters, is not technologically infeasible, but is of little

benefit to consumers because water heaters are not usually purchased

off a showroom floor. GAMA acknowledged, however, that if the

requirement to label storage water heaters is to continue, then

instantaneous water heaters and heat pump water heaters also should be

labeled.52 CEC, ACEEE, and ALG all favored a labeling requirement

for both types of water heaters without qualification.53

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\4\9See 58 FR 7856.

\5\0Washington Gas, EE-1, 1. Because the DOE test is conducted

in a controlled environment that requires a constant temperature for

the space in which the heat pump water heater operates, this

consideration, while relevant to the issue of the product's energy

usage in actual service, is not relevant to the values that will

appear on the EnergyGuide labels, which are for comparing the energy

usage of competing products, not disclosing actual energy usage in

the home.

\5\1GAMA, E-3, 2, 3; CEC, EE-2, 4, 6; ACEEE, EE-3, 2; ALG, EE-5,

\5\2GAMA, E-3, 2, 3. In its recent review of the Rule, the

Commission considered and rejected GAMA's suggestion to repeal

labeling of water heaters. See 58 FR 34014, 24 (July 1, 1994).

\5\3CEC, EE-2, 4, 6; ACEEE, EE-3, 2; ALG, EE-5, 1. CEC said,

``Labeling of [instantaneous water heaters and heat pump water

heaters] is both economically and technologically feasible. It has

been done for storage water heaters for many years. It is only fair

for it to be required for other types of water heaters.''

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The record does not indicate that labeling for these products is

technologically or economically infeasible. Most comments instead

favored treating these water heaters like the type already covered by

the Rule. Accordingly, the Commission amends the Rule to require

EnergyGuide labels for instantaneous water heaters and heat pump water

heaters. See section 305.3(d) of ``Text of Amendments,'' below.

2. Revised Definition of ``Water Heater,'' Including Definitions for

Instantaneous Water Heaters and Heat Pump Water Heaters

The NPR proposed amending the Rule to include the definitions for

instantaneous water heater and heat pump water heater that appear in

section 430.2 of DOE's rule, but with a proviso, like the one proposed

for pool heaters, stating that the Rule's requirements are limited to

those products for which there are DOE-prescribed test

procedures.54 The definition in section 430.2 of DOE's rule is

supplemented in the test procedure portions of DOE's rule (Appendix E

to Subpart B of 10 CFR Part 430). In the NPR, the Commission reasoned

that the proposed approach would allow the Commission to avoid

repeating the definition limitations in DOE's Appendix E to Subpart B,

as well as limitations inherent in the way the test procedure itself is

written (for example, by the fact that the DOE test procedure presently

does not contain a procedure for measuring the energy usage of electric

instantaneous water heaters.)55

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\5\4See 58 FR 7853-54. The proposed definition would replace the

definition of ``water heater'' currently in the Commission's Rule at

16 CFR 305.3(d)(1-3).

\5\558 FR 7854.

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Five comments addressed the proposed definition. ACEEE stated that

the Commission's adoption of the definition in section 430.2 of DOE's

rule with the proposed proviso would be acceptable.56 GAMA also

favored adopting the section 430.2 definition and proviso.57 CEC

stated that the Rule should be amended to include the language in

section 430.2, but opposed the addition of the proviso, stating that

DOE has developed, but not yet published, an all-inclusive test

method.58 Paloma requested the Commission to adopt the definition

for gas instantaneous water heaters from Appendix E rather than from

section 430.2, because the Appendix E definition limits the size of the

products to be covered.59 Washington Gas stated that instantaneous

water heaters are used with and without a storage tank, and that the

minimum flow rate of an instantaneous water heater should be defined if

it is to be used without a storage tank.60

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\5\6ACEEE, EE-3, 2.

\5\7GAMA, E-3, 1.

\5\8CEC, EE-2, 2, 4. The referenced proposed test method was

announced by DOE on August 23, 1993, at 58 FR 44538, 44547-48,

44571, along with proposed modifications to the test procedures for

furnaces and vented home heating equipment. DOE sought comment on a

new ``annual efficiency'' energy descriptor, which would be in

addition to the current thermal efficiency descriptor and which

would measure pilot light usage and electrical consumption. DOE also

sought comment on procedures that would facilitate an estimation of

annual operating cost for pool heaters (see also note 35). These

proposed modifications to the DOE test procedure for pool heaters

were referenced in a subsequent DOE proposal to amend the minimum

efficiency standard for pool heaters. 59 FR 10464, 10519-21 (March

4, 1994).

\5\9Paloma, E-2, 1.

\6\0Washington Gas, EE-1, 1. Because instantaneous water heaters

are not tested under the DOE test procedure with a storage tank, the

Rule will not address this issue.

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As with pool heaters, the Commission finds that the EPCA/DOE

definition for these products appropriately describes the product to be

covered by the labeling requirements. Therefore, the Commission amends

the Rule to include the definition of water heaters as they are defined

in EPCA and by DOE (in Sec. 430.2 of Subpart A). The definition is

followed by a proviso stating that the Rule's application is limited to

those products for which there is a DOE-prescribed test. See section

305.3(d) in ``Text of Amendments,'' below.

As with pool heaters, the Commission believes that a proviso of

this type is more efficient than repeating, in the Rule's product

definition, the further exceptions and limitations in the Appendix E

definitions and/or the test procedure.61 Products not covered by

the DOE test because of the limitations in the Appendix E definitions

cannot be tested. To comply with the Commission's Rule, a manufacturer

must be able to measure a product's energy usage in accordance with the

appropriate DOE test procedure.62 Identifying specific limitations

to the general definition in the Commission's Rule based on section

430.2 of DOE's rule is not necessary because manufacturers are on

notice that water heaters excluded from DOE test coverage do not have

to be labeled under the Commission's Rule.

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\6\1Again, because the definitions that create the further

limitations in the test procedures are revised by DOE more often

than the Sec. 430.2 definitions, the Commission definitions may

become obsolete and the Commission would have to amend the Rule

frequently to comport with any DOE revisions.

\6\2See 42 U.S.C. 324(c)(1)(A).

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3. Energy Usage Descriptor

The NPR asked whether the energy usage of instantaneous and heat

pump water heaters should be expressed as an estimated annual operating

cost, as it was at that time for conventional water heaters, or whether

their energy usage should be expressed as an energy factor. The NPR

also asked whether it would be technically or economically feasible to

disclose estimated annual operating cost, or whether operating cost

would not be likely to assist consumers in making purchasing

decisions.63

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\6\358 FR 7856. Since the NPR was published, the Commission, in

a recent proceeding involving comprehensive amendments to the Rule,

amended the disclosure requirements for water heaters from a

disclosure of estimated annual operating cost and a cost grid to a

disclosure of estimated annual energy consumption with an

``operating cost disclosure statement.'' See 58 FR 34014, 34022-23

(July 1, 1994).

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Six comments addressed the issue of which energy usage descriptor

to require on labels for these two types of water heaters. Paloma,

commenting only on instantaneous water heaters, recommended that the

Rule require the disclosure of an energy factor for gas instantaneous

water heaters.64 Washington Gas suggested the disclosure of

estimated annual operating cost for both types of water heaters, but

with special considerations that are not contemplated by the DOE test

procedure.65

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\6\4Paloma, E-2, 3-4. Paloma explained that its gas-fired

instantaneous water heaters could be operated with a continuously-

burning pilot or with the consumer igniting the pilot each time hot

water is required. Paloma requested that the Rule allow for

disclosure on labels of the product's energy factor when the pilot

is left on and when the pilot burns continuously. According to DOE

engineering staff, the DOE water heater test is set up to provide

only one measurement of energy usage--the energy usage of the

product when it is set up to operate. For the test to measure energy

usage of a water heater in both of two possible modes of operation,

DOE would have to consider an amendment proceeding. The Commission's

Rule can only require disclosure of DOE-test-derived information.

Therefore, the Commission does not have the discretion to adopt

Paloma's suggestion.

\6\5Washington Gas, EE-1, 1. Stating that instantaneous water

heaters are used with and without a storage tank, Washington Gas

recommended requiring disclosure of the estimated annual operating

cost for these products for use with and without a storage tank.

Because the DOE test for instantaneous water heaters is not

conducted with storage tanks, however, the Commission cannot require

this type of disclosure. See note 60, above. Washington Gas also

suggested that the estimated annual operating cost of heat pump

water heaters be adjusted according to the change in the energy

consumed in conditioning the space around the product. Again,

because the DOE test is conducted in a constant environment and does

not allow for this type of measurement, the Commission does not have

the discretion to adopt this suggestion. See note 50, above.

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The four other comments addressed both categories. GAMA and ACEEE

stated that the same descriptor should be required for instantaneous

water heaters and heat pump water heaters that is required for storage

water heaters.\66\ AGA commented that, if pool heaters, instantaneous

water heaters, and heat pump water heaters are to be labeled, the

required disclosure should be the estimated annual operating cost.\67\

CEC recommended that the Commission require energy factor, annual

energy consumption, and annual cost of operation disclosures. CEC

stated that the energy factor is needed because this is the measure

upon which utility incentive programs are based, and that annual energy

consumption and annual cost of operation are needed ``to fulfill FTC's

Congressional mandate.''\68\

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\66\GAMA, E-3, 2, 3-4. At the time the NPR was published, energy

usage descriptor for water heaters was estimated annual operating

cost. The NPR proposed the disclosure of either estimated annual

operating cost or energy factor for instantaeous water heaters.

GAMA, therefore, envisioned the choice as between energy factor and

estimated annual operating cost. ACEEE, EE-3, 2, 3. ACEEE assumed

that heat pump water heaters would be disclosing estimated annual

operating cost in this case, but did not make this assumption for

instantaneous water heaters. As of December 28, 1994, however, the

required disclosure of energy usage for water heaters will be the

estimated annual energy consumption with an ``operating cost

disclosure statement.'' See Note 63, above.

\67\AGA, EE-4, 2-4.

\68\CEC, EE-2, 5, 7.

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The Commission agrees with GAMA and ACEEE that the energy usage of

instantaneous and heat pump water heaters should be expressed with the

same descriptor (estimated annual energy consumption) that is used to

disclose the energy usage of the storage-type water heaters currently

covered by the Rule. This permits consumers to compare the energy usage

of the various types of water heaters that could fulfill their needs.

Accordingly, today's amendments will incorporate instantaneous water

heaters and heat pump water heaters into the existing requirements to

disclose estimated annual energy consumption. See section 305.3(d) of

``Text of Amendments,'' below.

4. Sub-categories for Ranges of Comparability

The NPR solicited comment about whether to include instantaneous

water heaters in the three existing water heater ranges (one range each

for electric, gas [including propane] and oil water heaters), or to

establish a separate range category. The current ranges of

comparability for water heaters are categorized on the basis of first-

hour rating.\69\ Under the DOE test, there is a method for calculating

the equivalent of a first-hour rating for instantaneous water heaters.

Therefore, these products could be included in the existing ranges and

could be considered with conventional water heaters for range purposes.

Because they have no storage tanks, however, and are different from

conventional water heaters, the NPR sought public comment on whether a

separate category would be more helpful to consumers than including

these products in the existing water heater ranges.

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\69\The DOE test defines ``First Hour Rating'' as the amount of

hot water the water heater can supply in one hour of operation. See

10 CFR part 430, subpart B, Appendix E, 1.5.

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The DOE test also contains a provision by which a first-hour rating

for heat pump water heaters can be calculated. Like instantaneous water

heaters, therefore, heat pump water heaters could be included in the

conventional water heater ranges. The NPR sought comment on whether it

would be more helpful to consumers to include heat pump water heaters

with conventional water heaters or to create a separate range category

for them.

Four commenters addressed the issue of range subcategories for

these products. Paloma contended that gas instantaneous water heaters

are so different from storage-type water heaters that they should be in

a separate range category.\70\ GAMA and ACEEE stated, without

elaboration, that instantaneous water heaters should be in the same

range category as conventional storage water heaters.\71\ ACEEE thought

that heat pump water heaters should be in the same range category as

storage-type water heaters, but GAMA and CEC disagreed, recommending

that they be in a separate range category.\72\

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\70\Paloma, E-2, 4.

\71\GAMA, E-3, 2; ACEEE, EE-3, 2.

\72\ACEEE, EE-3, 3; GAMA, E-3, 3-4; CEC, EE-2, 7.

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The Commission is creating separate sub-categories for each of

these two types of water heaters, rather than including them in the

existing ranges of comparability for water heaters. As noted in the

comments, the technology of instantaneous and heat pump water heaters

is different from that of storage-type water heaters. In addition, it

is not likely that homeowners would substitute these new types of

products ``one-to-one'' for conventional, storage-type units.\73\ The

Commission has determined that it would be helpful for consumers

looking for alternatives to conventional storage-type water heaters to

have products using different technologies grouped separately.

Accordingly, the Commission has determined to amend the Rule to create

three new range sub-categories--one each for gas instantaneous water

heaters (natural gas and propane), oil instantaneous water heaters, and

heat pump water heaters. See Appendices D4-D6 in ``Text of

Amendments,'' below.

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\73\For example, heat pump water heaters do not recover (reheat

water after being drained of heated water) as quickly as comparably-

sized storage-type models, and instantaneous water heaters are more

limited than comparable storage-type models as to how much hot water

they can provide per unit of time (e.g., gallons per minute).

Moreover, an instantaneous water heater which would (be gas-fired)

that would be large enough to serve a small house would be

disproportionately expensive to purchase when compared to comparable

storage-type models. Thus, it is not likely that homeowners would

substitute these new types of products ``one-to-one'' for

conventional, storage-type units. This approach to ranges of

comparability for the newly covered water heaters is consistent with

the separate range groupings the Commission currently uses for home

heating equipment; i.e., forced-air furnaces and boilers are

separate sub-categories within the furnace category. See 59 FR

34014, 34042-49 (July 1, 1904).

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5. Label Size and Format for Instantaneous Water Heaters

The NPR noted that, because the physical size of gas-fired

instantaneous water heaters (they are often no larger than one to three

cubic feet) is usually significantly smaller than most storage-type

water heaters, the currently required 5 and \5/16\ inches by 7 and \3/

8\ inches label could be too large to fit on some of the smaller

models.\74\ There is also the possibility that the surface temperature

of the products could affect label adhesion. The NPR requested comment

on whether the EnergyGuide label currently required for water heaters

is appropriate for instantaneous water heaters and, if not, what would

be better.\75\

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\74\Gas-fired instantaneous water heaters are usually larger

than electric models, and some larger models could be used for

whole-house applications in small houses. Electric instantaneous

water heaters (for which labeling rules were not proposed in the

NPR) are usually small and for limited point-of-use, as for a

particular sink or shower.

\75\58 FR 7854.

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Four comments responded to this request. Paloma contended that

labeling on the front jacket of instantaneous water heaters is

impossible because of the room taken up by other required labels and

is, therefore, technologically infeasible. Paloma also contended that,

because of the product's surface temperature, a paper label would be

inappropriate. Paloma concluded that, under the circumstances, an

aluminum label with special adhesive would be necessary, which would be

an economic burden. Paloma recommended, therefore, a tag-type

label.\76\ GAMA and CEC stated that the conventional label that is

currently required would be appropriate for most models. Both commented

that the issue of surface temperature is irrelevant because

EnergyGuides are required on products only until they are sold, which

would be before the water heater was fired for the first time. GAMA

recommended allowing a hang-tag type label, as did Washington Gas.\77\

---------------------------------------------------------------------------

\76\Paloma, E-2, 2.

\77\GAMA, E-3, 2 (GAMA also recommended allowing the option of

hang-tags for heat pump water heaters); CEC, EE-2, 5; Washington

Gas, EE-1, 1.

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The Commission agrees with the comments that both conventional

label types (i.e., paper, rather than aluminum) and hang-tag type

labels will be appropriate for instantaneous water heaters. Hang-tags

may be preferable in some instances, such as when the instantaneous

heater is too small to accommodate conventional labels. Section

305.11(a)(7) of the Rule currently allows for the use of hang-tags as

long as they are affixed in such a way that they will be prominent to a

consumer examining the product. Therefore, the Rule permits

manufacturers of instantaneous and heat pump water heaters to exercise

the hang-tag option.

6. Disclosure of Tank Size on Label for Heat Pump Water Heaters

Heat pump water heaters are marketed in two ways. They can be sold

as an integral unit that includes the heat pump and the storage tank,

or they can be sold without a tank and hooked up with an existing water

heater with the conventional heating system shut off. For those

instances in which the heat pump water heater is sold without a tank,

the DOE test calls for measurement of energy use with the heat pump

water heater connected to a 47-gallon capacity storage tank. Thus, even

when no tank is to be sold with the heat pump water heater,

manufacturers will be able to determine the energy use figure to put on

the label for comparative shopping purposes. The product's efficiency,

however, could be affected by the size of the tank with which it is

coupled. The NPR solicited comment, therefore, on whether the label

should include a statement that determination of the heat pump water

heater's efficiency is based on use with a 47-gallon tank and that its

efficiency in the home may vary according to the size of the storage

tank to which it is connected.

Two comments addressed this issue. CEC stated that the statement

that the efficiency of heat pump water heaters could be affected by the

size of the tank with which it is coupled is only necessary in the case

where the manufacturer does not supply the tank. CEC recommended that,

in this case, the label should identify the size of the tank assumed

for purposes of determining the energy factor.\78\ GAMA stated that the

standby loss of the tank, not its size, is what is relevant. Thus, heat

pump water heater labels should not state that the efficiency of the

water heater could be affected by the size of the tank with which it is

coupled. GAMA also contended that, given the limited ranges of sizes

and standby losses of tanks coupled with heat pump water heaters, such

a statement on the EnergyGuide would not be worthwhile from a consumer

benefit standpoint.\79\

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\78\CEC, EE-2, 7.

\79\GAMA. E-3, 3.

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The Commission agrees with GAMA that the effect on energy

consumption will not be significant enough to require a disclosure on

the EnergyGuide label. Thus, the Commission has determined not to

require the statement described above concerning tank size.

III. Regulatory Flexibility Act

In the NPR, the Commission concluded that the provisions of the

Regulatory Flexibility Act relating to an initial Regulatory

Flexibility Act analysis are not applicable because the Commission has

determined that the amendments ``will not have a significant economic

impact on a substantial number of small entities.''\80\ In the NPR, the

Commission initially concluded that not many companies produce pool and

spa heaters. The Commission stated that it had learned that most

producers are not ``small entities'' as that term is defined in section

601 of the Regulatory Flexibility Act and in the regulations of the

Small Business Administration, found in 13 CFR 121.\81\ The Commission

also stated that the market for heat pump water heaters is small, and

that only a few companies, two of which are large entities, produce

these products at present.\82\ The Commission noted that most

instantaneous water heaters are produced abroad, and are imported by a

very small number of small-sized importing firms.\83\

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\80\U.S.C. 603-605.

\81\See 58 FR 7855.

\82\Id.

\83\Id.

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Because it appeared to the Commission that the amendments were not

likely to have a significant impact on a substantial number of small

entities within the meaning of the Regulatory Flexibility Act and the

rules implementing it, the Commission concluded that a regulatory

analysis was not necessary. The Commission, however, requested

information in the NPR about the impact of the amendments on small

entities to determine whether a final regulatory analysis was

necessary.\84\

---------------------------------------------------------------------------

\84\Id.

---------------------------------------------------------------------------

No comments provided information about the effect of the amendments

on small entities. Two comments, however, provided information on the

numbers of entities involved in the manufacture or importation of pool

heaters, instantaneous water heaters, and heat pump water heaters.\85\

According to these comments, there are six companies that produce pool

heaters, twelve that either manufacture (at least three are foreign) or

import instantaneous water heaters, and four that produce heat pump

water heaters. Two of these companies make products in more than one

category, so there are 20 companies in all. The Commission has

determined that four of these 20 entities are ``small,'' as defined in

the Small Business Administration's Size Standards.\86\ Of the other

16, the Commission has determined that seven are not ``small.'' The

Commission has not been able to determine the size of the remaining

nine.\87\

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\85\GAMA, E-3, Appendices; CEC, EE-2, 3-4, 6, 7.

\86\13 CFR 121.601.

\87\To estimate the size of the companies, the Commission's

staff researched the companies in standard reference materials, such

as Dun and Bradstreet Information Services, Dun and Bradstreet

Million Dollar Directory, Series A-F, G-O, P-Z (1993); Dun and

Bradstreet, The Dun and Bradstreet Reference Book of American

Business, Vol. 1-4 (July-Aug. 1993); National Register Publishing,

1993 Directory of Corporate Alliance, Vol. 4 Who Owns Whom

International and Private Companies (1993); and conducted informal

inquiries with staff of the California Energy Commission.

---------------------------------------------------------------------------

The Commission has no reason to believe that the amendments will

have a substantial impact on a significant number of small entities. In

light of this, the Commission concludes that the preparation of a final

regulatory flexibility analysis is not necessary. Accordingly, the

Commission certifies, under Section 605 of the Regulatory Flexibility

Act,\88\ that the amendments announced today will not have a

significant impact on a substantial number of small entities.

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\88\5 U.S.C. 605(b).

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IV. Paperwork Reduction Act

The Rule contains reporting and recordkeeping requirements that

constitute ``recordkeeping'' requirements as defined by 5 CFR

1320.7(c), the regulation that implements the Paperwork Reduction Act

(``PRA'').\89\ The NPR stated that the proposed amendments would expand

the Rule's existing recordkeeping and reporting requirements to include

manufacturers of products not previously covered. The NPR noted,

however, that manufacturers would not have to maintain records beyond

what they must already do in the ordinary course of business to comply

with the reporting and recordkeeping requirements of DOE's minimum

efficiency standards program. In addition, although the affected

companies would have to report annually to the Commission the energy

usage of the covered products they manufacture or import, the

Commission estimated that no more than 50 companies would be affected,

and that it would take each company fewer than 10 hours to comply.

Because the resulting increase in burden hours would be de minimis, the

NPR stated that the Commission would not request that the Office of

Management and Budget (``OMB'') adjust the existing clearance for the

Rule under the Paperwork Reduction Act. To substantiate the accuracy of

the Commission's reporting burden estimate, however, the NPR requested

comment on the extent of the reporting burden associated with these

amendments.

---------------------------------------------------------------------------

\89\44 U.S.C. 3501-3520.

---------------------------------------------------------------------------

The only comment in response to this request was from CEC. CEC

stated that manufacturers currently provide details of all models they

sell to CEC, and that CEC is prepared to act as third-party certifier

to the Commission at no charge to manufacturers. CEC therefore

contended that manufacturers would not have to incur additional time or

cost in reporting to the Commission.\90\

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\90\CEC, EE-2, 4, 6, 7. The comments also indicate that the

number of companies affected by the amendments is far fewer that the

50 the Commission initially estimated would be affected. See Part

III, above.

---------------------------------------------------------------------------

Since the NPR was published, the Commission initiated a proceeding

to determine the manner and form of labeling plumbing products to

disclose their water usage.\91\ In the section of the Federal Register

notice in that proceeding discussing the applicability of the Paperwork

Reduction Act to the proposed amendments, the Commission stated that

the recordkeeping and reporting requirements of the Rule and the

proposed amendments were being submitted to OMB and referred to a

Notice of Application to OMB under the Paperwork Reduction Act that

accompanied the notice.

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\91\58 FR 26715 (May 5, 1993).

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In the referenced Notice of Application, the Commission requested

OMB clearance for the plumbing products amendments and for the

amendments proposed in the NPR in the instant proceeding as well. This

clearance request was published in the Federal Register for

comment.\92\ This notice stated that the Commission estimated in the

NPR that no more than 50 companies would be affected. Further, whatever

amendments the Commission adopted would increase the information

collection burden by no more than 500 hours. Adding this figure to the

estimated additional burden resulting from the plumbing products

amendments, the Commission estimated that the total increase in the

information collection burden of the Appliance Labeling Rule would be

1,000 hours.

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\92\58 FR 26786 (May 5, 1993).

---------------------------------------------------------------------------

Neither the Commission nor OMB received comments on the

application. On July 1, 1993, OMB approved the request and assigned

control number 3084-0068 to the information requirements.

List of Subjects in 16 CFR Part 305

Advertising, Energy conservation, Household appliances, Labeling,

Reporting and recordkeeping requirements.

For the reasons set forth in the preamble, 16 CFR is amended as

follows:

PART 305--RULE CONCERNING DISCLOSURES REGARDING ENERGY CONSUMPTION

AND WATER USE OF CERTAIN HOME APPLIANCES AND OTHER PRODUCTS

REQUIRED UNDER THE ENERGY POLICY AND CONSERVATION ACT (``APPLIANCE

LABELING RULE'')

1. The authority citation for Part 305 continues to read as

follows:

Authority: 42 U.S.C. 6294.

2. Section 305.2(i) is revised to read as follows:

Sec. 305.2 Definitions.

* * * * *

(i) Energy efficiency rating means the following product-specific

energy usage descriptors: annual fuel utilization efficiency (AFUE) for

furnaces; energy efficiency ratio (EER) for room air conditioners;

seasonal energy efficiency ratio (SEER) for the cooling function of

central air conditioners and heat pumps; heating seasonal performance

factor (HSPF) for the heating function of heat pumps; and, thermal

efficiency (TE) for pool heaters, as these descriptors are determined

in accordance with tests prescribed under section 323 of the Act (42

U.S.C. 6293). These product-specific energy usage descriptors shall be

used in satisfying all the requirements of this part.

* * * * *

3. In Sec. 305.3, paragraph (d) is revised and paragraph (o) is

added, to read as follows:

Sec. 305.3 Description of covered products to which this part applies.

* * * * *

(d)(1) Water heater means a product which utilizes oil, gas, or

electricity to heat potable water for use outside the heater upon

demand, including--

(i) Storage type units which heat and store water at a

thermostatically controlled temperature, including gas storage water

heaters with an input of 75,000 Btu per hour or less, oil storage water

heaters with an input of 105,000 Btu per hour or less, and electric

storage water heaters with an input of 12 kilowatts or less;

(ii) Instantaneous type units which heat water but contain no more

than one gallon of water per 4,000 Btu per hour of input, including gas

instantaneous water heaters with an input of 200,000 Btu per hour or

less, oil instantaneous water heaters with an input of 210,000 Btu per

hour or less, and electric instantaneous water heaters with an input of

12 kilowatts or less; and

(iii) Heat pump type units, with a maximum current rating of 24

amperes at a voltage no greater than 250 volts, which are products

designed to transfer thermal energy from one temperature level to a

higher temperature level for the purpose of heating water, including

all ancillary equipment such as fans, storage tanks, pumps, or controls

necessary for the device to perform its function.

(2) The requirements of this Part are limited to those water

heaters for which the Department of Energy has adopted and published

test procedures for measuring energy usage.

* * * * *

(o) Pool heater means an appliance designed for heating nonpotable

water contained at atmospheric pressure, including heating water in

swimming pools, spas, hot tubs and similar applications. The

requirements of this part are limited to those pool heaters for which

the Department of Energy has adopted and published test procedures for

measuring energy usage.

* * * * *

4. In Sec. 305.4, paragraphs (e)(2) and (3) are revised to read as

follows:

Sec. 305.4 Prohibited acts.

* * * * *

(e) * * *

(2) Any covered product, other than central air conditioners, pulse

combustion and condensing furnaces, fluorescent lamp ballasts,

showerheads, faucets, water closets, urinals, pool heaters,

instantaneous water heaters, or heat pump water heaters, if the

manufacture of the product was completed prior to May 19, 1980. Any

central air conditioner or any pulse combustion or condensing furnace

if its manufacture was completed prior to June 7, 1988. Any fluorescent

lamp ballast if its manufacture was completed prior to January 1, 1990.

Any showerhead, faucet, water closet, or urinal if its manufacture was

completed prior to October 25, 1994. Any pool heater, instantaneous

water heater, or heat pump water heater if its manufacture was

completed prior to December 29, 1994.

(3) Any catalog or point-of-sale printed material distributed prior

to May 19, 1980, pertaining to any covered products, other than central

air conditioners, pulse combustion and condensing furnaces, fluorescent

lamp ballasts, showerheads, faucets, water closets, urinals, pool

heaters, instantaneous water heaters, or heat pump water heaters; any

catalog or point-of-sale printed material distributed prior to June 7,

1988, pertaining to any central air conditioners or pulse combustion or

condensing furnaces; any catalog or point-of-sale printed material

distributed prior to January 1, 1990, pertaining to any fluorescent

lamp ballasts; any catalog or point-of-sale printed material

distributed prior to October 25, 1994, pertaining to any showerheads,

faucets, water closets, or urinals; and, any catalog or point-of-sale

printed material distributed prior to December 29, 1994, pertaining to

any pool heaters, instantaneous water heaters, or heat pump water

heaters; except that any representations respecting the energy

consumption, energy efficiency, or water use of any covered product or

other consumer appliance product, or the cost of energy consumed or

water used by such product, are subject to the requirements of

paragraph (d) of this section.

* * * * *

5. In Sec. 305.5, paragraph (a)(9) is redesignated as (a)(10), and

a new paragraph (a)(9) is added, to read as follows:

Sec. 305.5 Determinations of estimated annual energy consumption,

estimated annual operating cost, and energy efficiency rating, and of

water use rate.

(a) * * *

(9) Pool heaters--Sec. 430.22(p).

* * * * *

6. In Sec. 305.7, paragraphs (e) through (j) are redesignated as

(f) through (k), and a new paragraph (e) is added, to read as follows:

Sec. 305.7 Determinations of capacity.

* * * * *

(e) Pool heaters. The capacity shall be the heating capacity in

Btu's per hour, rounded to the nearest 1,000 Btu's per hour, as

determined according to Appendix P to 10 CFR Part 430, Subpart B.

* * * * *

7. In Sec. 305.8, paragraphs (a)(1) and (b) are revised to read as

follows:

Sec. 305.8 Submission of data.

(a)(1) Each manufacturer of a covered product (except manufacturers

of fluorescent lamp ballasts, showerheads, faucets, water closets, or

urinals) shall submit annually to the Commission a report listing the

estimated annual energy consumption (for refrigerators, refrigerator-

freezers, freezers, clothes washers, dishwashers, and water heaters) or

the energy efficiency rating (for room air conditioners, central air

conditioners, heat pumps, furnaces, and pool heaters) for each basic

model in current production, determined according to Sec. 305.5 and

statistically verified according to Sec. 305.6. The report must also

list, for each basic model in current production: the model numbers for

each basic model; the total energy consumption, determined in

accordance with Sec. 305.5, used to calculate the estimated annual

energy consumption or energy efficiency rating; the number of tests

performed; and, its capacity, determined in accordance with Sec. 305.7.

For those models that use more than one energy source or more than one

cycle, each separate amount of energy consumption or energy cost,

measured in accordance with Sec. 305.5, shall be listed in the report.

Appendix K illustrates a suggested reporting format. Starting serial

numbers or other numbers identifying the date of manufacture of covered

products shall be submitted whenever a new basic model is introduced on

the market.

* * * * *

(b) All data required by Sec. 305.8(a), except serial numbers,

shall be submitted to the Commission annually, on or before the

following dates:

------------------------------------------------------------------------

Deadline for

Products data

submission

------------------------------------------------------------------------

Refrigerators............................................. Aug. 1.

Refrigerator-freezers..................................... Aug. 1.

Freezers.................................................. Aug. 1.

Central air conditioners.................................. July 1.

Heat pumps................................................ July 1.

Dishwashers............................................... June 1.

Water heaters............................................. May 1.

Pool heaters.............................................. May 1.

Room air conditioners..................................... May 1.

Furnaces.................................................. May 1.

Clothes washers........................................... Mar. 1.

Fluorescent lamp ballasts................................. Mar. 1.

Showerheads............................................... Mar. 1.

Faucets................................................... Mar. 1.

Water closets............................................. Mar. 1.

Urinals................................................... Mar. 1.

------------------------------------------------------------------------

All revisions to such data (both additions to and deletions from

preceding data) shall be submitted to the Commission as part of the

next annual report period.

* * * * *

8. In Sec. 305.11(a)(5)(ii), the heading and paragraphs

(a)(5)(ii)(C) through (a)(5)(ii)(G) are revised to read as follows:

Sec. 305.11 Labeling for covered products.

(a) * * *

(5) * * *

(ii) Labels for furnaces and pool heaters.

* * * * *

thermal efficiency for pool heaters are determined in accordance with

Sec. 305.5.

(D) Each furnace and pool heater label shall contain a generic

range consisting of the lowest and highest annual fuel utilization

efficiencies (for furnaces) or thermal efficiencies (for pool heaters)

for all furnaces or pool heaters that utilize the same energy source.

(E) Placement of the labeled product on the scale shall be

proportionate to the lowest and highest annual fuel utilization

efficiency ratings or thermal efficiency ratings forming the scale.

(F) The following statement shall appear on furnace labels beneath

the range(s) in bold print:

Federal law requires the seller or installer of this appliance

to make available a fact sheet or directory giving further

information regarding the efficiency and operating cost of this

equipment. Ask for this information.

(G) A statement that the annual fuel utilization efficiency ratings

or thermal efficiency ratings are based on U.S. Government standard

tests is required on all labels.

* * * * *

9. Section 305.14(a)(3) is revised to read as follows:

Sec. 305.14 Catalogs.

(a) * * *

(3) The energy efficiency rating for room air conditioners, central

air conditioners, furnaces, and pool heaters.

* * * * *

10. The headings for Appendices D1 through D3 are revised and new

Appendices D4 through D6 are added, to read as follows:

Appendix D1 to Part 305--Water Heaters--Gas

* * * * *

Appendix D2 to Part 305--Water Heaters--Electric

* * * * *

Appendix D3 to Part 305--Water Heaters--Oil

* * * * *

APPENDIX D4 TO PART 305--WATER HEATERS--INSTANTANEOUS--GAS

Range Information:

------------------------------------------------------------------------

Capacity Range of estimated annual energy

--------------------------------- consumption (Therms/yr. and Gallons/

yr.)

---------------------------------------

Natural gas therms/ Propane gallons/

First hour rating Yr. Yr.

---------------------------------------

Low High Low High

------------------------------------------------------------------------

Less than 21.................... ........ ........ ........ ........

21 to 24........................ ........ ........ ........ ........

25 to 29........................ ........ ........ ........ ........

30 to 34........................ ........ ........ ........ ........

35 to 40........................ ........ ........ ........ ........

41 to 47........................ ........ ........ ........ ........

48 to 55........................ ........ ........ ........ ........

56 to 64........................ ........ ........ ........ ........

65 to 74........................ ........ ........ ........ ........

75 to 86........................ ........ ........ ........ ........

87 to 99........................ ........ ........ ........ ........

100 to 114...................... ........ ........ ........ ........

115 to 131...................... ........ ........ ........ ........

Over 131........................ ........ ........ ........ ........

------------------------------------------------------------------------

Appendix D5 to Part 305--Water Heaters--Instantaneous--Oil

Range Information:

------------------------------------------------------------------------

Capacity Range of estimated

----------------------------------------------------- annual energy

consumption

(Gallons/yr.)

First hour rating -------------------

Low High

------------------------------------------------------------------------

Less than 21........................................ ........ ........

21 to 24............................................ ........ ........

25 to 29............................................ ........ ........

30 to 34............................................ ........ ........

35 to 40............................................ ........ ........

41 to 47............................................ ........ ........

48 to 55............................................ ........ ........

56 to 64............................................ ........ ........

65 to 74............................................ ........ ........

75 to 86............................................ ........ ........

87 to 99............................................ ........ ........

100 to 114.......................................... ........ ........

115 to 131.......................................... ........ ........

Over 131............................................ ........ ........

------------------------------------------------------------------------

Appendix D6 to Part 305--Water Heaters--Heat Pump

Range Information:

------------------------------------------------------------------------

Capacity Range of estimated

----------------------------------------------------- annual energy

consumption (kWh/