Labeling Requirements for Alternative Fuels and Alternative Fueled Vehicles
Federal RegisterNov 18, 1994
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FEDERAL TRADE COMMISSION
16 CFR Part 309
RIN 3084-AA57
Labeling Requirements for Alternative Fuels and Alternative
Fueled Vehicles
AGENCY: Federal Trade Commission.
ACTION: Supplemental notice of proposed rulemaking.
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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 May 9, 1994, the
Commission published a 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 modifications to that initial labeling proposal and the
specific language of a proposed labeling rule. The Commission invites
interested persons to submit written comments addressing any issue they
believe may bear upon the proposed rule.
DATES: Written comments must be submitted on or before December 19,
1994.
ADDRESSES: Written comments should be sent to the Division of
Enforcement, Federal Trade Commission, 601 Pennsylvania Avenue, NW.,
Washington, DC 20580, Attn: Jeffrey E. Feinstein, room S-4618. The
Commission requests that original submissions be filed with six copies,
if feasible. Submissions should be identified as ``16 CFR Part 309--
SNPR Comment.'' If submissions are made by facsimile transmission,
please call 202/326-2372 to confirm receipt.
FOR FURTHER INFORMATION CONTACT: Jeffrey E. Feinstein, Attorney,
Division of Enforcement, Federal Trade Commission, Washington, DC
20580, telephone 202/326-2372.
SUPPLEMENTARY INFORMATION:
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 U.S. dependence on oil imports; promote energy efficiency;
reduce the use of petroleum-based fuels in motor vehicles; and provide
new energy options. Key programs in titles III, IV, V, and VI of EPA 92
promote the development of alternative fuels3 and alternative
fueled vehicles (``AFVs'').4
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\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).
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Two provisions in title IV of EPA 92 require that information on
alternative fuels and AFVs be made available to ``consumers'' (a term
not defined in EPA 92). 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
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\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.
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A second and complementary provision directs the Secretary of the
Department 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
seven ``motor vehicle 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
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\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\ Id. 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.
\1\0 42 U.S.C. 13232(b). 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.
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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 recently 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
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\1\1 15 U.S.C. 2821-2823.
\1\2 Octane Posting and Certification, 16 CFR Part 306.
\1\3 16 CFR 306.0(i)(2) (1994). In that proceeding, the
Commission had no authority to extend its requirements beyond liquid
alternative fuels. 15 U.S.C. 2821 (Supp. IV 1993).
\1\4 16 CFR 306.0(j)(2) (1994). The Fuel Rating Rule became
effective October 25, 1993. 58 FR 41356, 41356, Aug. 3, 1993.
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The Commission seeks written comment on whether the proposed rule,
as described in this supplemental notice, will accomplish the purposes
of section 406(a). The Commission also seeks comment on whether some
variation of this proposal, or other options or variations not proposed
here, would be more appropriate.
II. Public Participation
EPA 92 requires the Commission, in formulating its labeling
requirements, to obtain the views of affected industries, consumer
organizations, Federal and State agencies, and all other interested
parties.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 the Department of Transportation (``DOT'') within eighteen
months of the statute's enactment date (i.e., October 24, 1992).16
To comply with those requirements, the Commission received information
from the public relating to this proceeding from four 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, and supplemental comments filed after the Workshop. All such
information (i.e., the comments and Workshop transcript) was placed on
the public record of this proceeding. The discussion below includes
information from all four sources, as well as documents placed on the
public record by the Commission's staff.19 The Commission
considered all these materials in developing this revised labeling
proposal.
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\1\542 U.S.C. 13232(a).
\1\6Id. During its development of this supplemental notice,
Commission staff discussed the proposed labeling requirements with
staff from DOE, EPA, and DOT's National Highway Traffic Safety
Administration.
\1\758 FR 64914.
\1\859 FR 24014.
\1\9Commission's Rulemaking Record No. R311002. Comments are
coded either ``G'' (indicating that they were filed by
nongovernmental parties) or ``H'' (indicating that they were filed
by governmental agencies). The Workshop transcript is filed in
category ``L.'' Information placed on the public record by
Commission staff is coded ``B.'' In this SNPR, comments are cited by
identifying the commenter, by name, the comment number, and the
relevant page number(s), e.g., ``ETC, G-24, 1-3.'' Supplemental
comments 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.''
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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).20 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.21
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\2\058 FR 64914, 64915.
\2\159 FR 24015-24017.
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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 until June 23,
1994, on any issue of fact, law or policy that might have bearing upon
the proposed labeling requirements. As described below, 37 commenters
(representing vehicle manufacturers,22 fuel producers,23
governmental entities,24 consumer organizations,25 and other
interested organizations26) responded to the NPR.
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\2\2Chrysler Corporation, (``Chrysler''), G-13; The Flxible
Corporation (``Flxible''), G-12; Ford Motor Company (``Ford''), G-
14; General Motors (``GM''), G-8; Thomas Built Buses, Inc. (``Thomas
BB''), G-10.
\2\3Boston Edison Company, (``Boston Edison''), G-26; Mobil Oil
Corporation (``Mobil''), G-2; Phillips 66 Company, (``Phillips
66''), G-15; Sun Company, Inc. (``Sun''), G-1; Unocal Corporation
(``Unocal''), G-9.
\2\4California Energy Commission, (``CEC''), H-8; Montgomery
County, Maryland, Office of Consumer Affairs (``MC-MD''), H-7;
Nebraska Alternative Fuels Advisory Committee (``Nebraska EO''), H-
9; Tennessee Valley Corporation (``TVA''), H-5; Texas Railroad
Commission (``Texas RRC''), H-3; U.S. Department of Energy
(``DOE''); H-10; U.S. Department of Energy, Energy Information
Administration, Energy End Use and Integrated Statistics Division
(``EIA/EEU-ISD''), H-2; U.S. Department of Transportation, National
Highway Traffic Safety Administration (``DOT/NHTSA''), H-1; U.S.
Environmental Protection Agency (``EPA''), H-4.
\2\5Center for Auto Safety (``CAS''), G-17; Greenpeace, Inc.
(``Greenpeace''), G-27; Union of Concerned Scientists (``UCS''), G-
16.
\2\6American Automobile Manufacturers Association (``AAMA''), G-
7; American Gas Association and Natural Gas Vehicles Coalition
(``AGA/NGVC''), G-6; American Methanol Institute (``AMI''), G-4;
American Petroleum Institute (``API''), G-25; Bill of Rights
Association (``BOR''), G-4; Electric Transportation Coalition
(``ETC''), G-24; Engine Manufacturers Association (``EMA''), G-21;
National Association of Consumer Agency Administrators (``NACAA''),
H-6; National Association of Fleet Administrators (``NAFA''), G-20;
National Automobile Dealers Association (``NADA''), G-19; National
Propane Gas Association (``NPGA''), G-18; Propane Consumers
Coalition (``PCC''), G-22; Renewable Fuels Association (``RFA''), G-
5; Society of Independent Gasoline Marketers of America (``SIGMA''),
G-23; Texas Automobile Dealers Association (``Texas ADA''), G-11.
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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.27 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. Persons interested in participating in the Workshop were
required to notify Commission staff by June 8, 1994, and file a written
comment by the comment due date (i.e., June 23, 1994).
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\2\759 FR 24014, 24020.
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Twenty-one interested parties submitted written requests to
participate in the Workshop.28 Twenty of those parties filed
written comments as required,29 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.30 The Workshop
was held on July 20, 1994, at the Commission's headquarters and was
conducted as announced in the NPR.31
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\2\8AAMA, 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.
\2\9The law firm Eckert Seamans Cherin & Mellott did not file a
written comment.
\3\0Lois 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.
\3\1The 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.
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D. Post-Workshop Comments and SNPR
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.32 Eight
participants elected to file such comments.33 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.
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\3\259 FR 24014, 24023.
\3\3AAMA, AGA/NGVC, Boston Edison, CAS, EMA, Flxible, NPGA, and
RFA.
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III. Supplemental Proposed Labeling Rule
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. Several NPR commenters,
however, suggested regulatory options that involve matters other than
labeling requirements, alternative fuels or AFVs, and cost and benefit
information (i.e., they involve matters beyond section 406(a)'s
statutory language). To the extent that these commenters suggested
labeling requirements beyond that authorized by section 406(a), the
Commission has tentatively concluded that it has no authority to
propose them.
For example, several commenters suggested that the Commission
require AFV dealers to have copies of the DOE brochure available for
consumer inspection and use.34 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).35 The Commission believes, however, that 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.36 In the absence of a similar
congressional directive, the Commission believes that such a
requirement may be beyond its authority under EPA 92.37
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\3\4ETC, 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. 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.
\3\540 CFR 600.401-77 to 600.407-77 (1993).
\3\6 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).'').
\3\7The 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.
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For similar reasons, the Commission has also tentatively concluded
that requiring any of the following may exceed its authority under EPA
92: (1) Labeling for conventional fueled vehicles;38 (2) that
information on AFV labels be provided to consumers at the time an AFV
is offered for sale;39 and (3) that ``all pertinent information''
(e.g., fuel hazards, tank capacity, refueling or recharging time, and
cruising range) be disclosed in vehicle owners' manuals.40
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\3\8AGA/NGVC, G-6, 11 (requiring disclosures only for AFVs could
unnecessarily raise consumer concerns about these products).
\3\9NAFA, 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.
\4\0NACAA, 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. Traditionally, however, the
Commission issues consumer education materials after new rules are
issued, and that will be considered when this proceeding is
completed.
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B. Labeling Requirements for Alternative Fuels
1. Scope of the Labeling Requirements for Alternative Fuels
a. Proposed scope of the rule. As noted previously, section 406(a)
of EPA 92, in part, requires the Commission to establish uniform
labeling requirements, to the greatest extent practicable, for
alternative fuels. The NPR proposed fuel labeling requirements for
three non-liquid fuels, compressed natural gas (``CNG''), gaseous
hydrogen gas (``hydrogen'') and electricity.41 Section 406(a) also
directs the Commission to consider labeling requirements for liquid
``alternative fuels.'' The Commission's Fuel Rating Rule, however,
contains labeling requirements for liquid alternative fuels that are
similar to the labeling requirements proposed in the SNPR for non-
liquid alternative fuels. The Fuel Rating Rule's labeling requirements
cover only liquid alternative fuels. Although that rule serves a
somewhat different purpose,42 the Commission stated in the NPR
that harmonizing labeling requirements, when practicable, is
appropriate. The Commission's NPR proposal has the effect of imposing
the same labeling requirements on both liquid and non-liquid
alternative fuels.
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\4\1These are the only non-liquid fuels defined as ``alternative
fuels'' in EPA 92. 42 U.S.C. 13211(2) (Supp. IV 1993).
\4\2The 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.
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Nine commenters addressed the scope of the Commission's proposals
in the NPR. All of the commenters supported limiting the scope of this
proceeding to non-liquid alternative fuels because the Commission's
proposal, if adopted, would impose equal, fuel-neutral labeling
requirements on all alternative fuels.43 No commenters
specifically recommended that the Commission include in this proceeding
alternative fuels other than the three the Commission identified.
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\4\3API, G-25, 1-3 (supports expanding the Fuel Rating Rule's
requirements to non-liquid alternative fuels to encourage a fuel-
neutral regulatory scheme); CEC, H-8, 1-6 (supports proposal because
it would result in consistent labeling of all alternative fuels);
Mobil, G-2, 1-3 (supports proposal because it is consistent with
Fuel Rating Rule); NAFA, G-20, 1 (endorses proposal because it would
result in uniform labeling requirements for all alternative fuels);
NPGA, G-18, 2-3 (extremely important all alternative fuels be
subject to essentially identical requirements); Phillips 66, G-15, 1
(recommends Fuel Rating Rule's labeling requirements be extended to
non-liquid alternative fuels); RFA (Supp.), G-5, 1 (supports
extension of current labeling requirements for liquid alternative
fuels under the Fuel Rating Rule to gaseous alternative fuels);
SIGMA, G-23, 1 (generally supports the Commission's entire proposal
with respect to fuel labeling, including its scope); Sun, G-1, 1
(favors proposal because it places equal labeling requirements on
all competing fuels).
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Based on the comments received, and the existing similar
requirements imposed by the Commission's Fuel Rating Rule for liquid
alternative fuels, the Commission proposes limiting this proposed rule
to the non-liquid alternative fuels CNG, hydrogen and electricity. The
Commission's proposal, if adopted, would result in equal, uniform,
fuel-neutral labeling requirements for all alternative fuels.44 In
accordance with section 406(a)'s directive to review the rule
``periodically to reflect the most recent available
information,''45 the Commission will supplement the list of
covered fuels as DOE designates new non-liquid fuels as alternative
fuels.
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\4\4See 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.
\4\542 U.S.C. 13232(a) (Supp. IV 1993).
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b. Description of alternative fuels proposed to be covered in the
final rule--(1) Compressed natural gas
Natural gas is used as a vehicle fuel mainly in the form of CNG,
although it also may be used as liquefied natural gas (``LNG''). CNG is
used as an automotive fuel in spark ignition engines, and is stored at
a pressure up to 220 atmospheres in heavy, rather bulky cylinders,
which limits its storage capacity in a vehicle.46
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\4\6``Automotive Fuels Handbook'' (1990), by Keith Owen and
Trevor Coley, published by Society of Automotive Engineers, Inc.
(``SAE''), B-34, 454.
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Natural gas consists mainly of methane, and is widely available in
many parts of the world. Methane-rich gas also is made by the anaerobic
decomposition of animal waste and vegetable matter (biogas). Gas
composition is important to natural gas vehicle users because large
amounts of non-methane hydrocarbons will enrich the fuel mixture,
reduce the octane number, lead to increased hydrocarbon emissions, and
increase the potential for engine knock. These variables require that
engine parameters, such as air to fuel mixture and ignition timing, be
adjusted on the basis of the composition of the local natural gas
supply.47 Natural gas composition varies throughout the country,
depending on original composition and processing. Pipeline quality
natural gas is composed of several different gases, with methane
typically accounting for 85 percent to 99 percent, with other
hydrocarbons such as ethane, propane, some butanes, and nitrogen,
helium, carbon dioxide, and trace amounts of hydrogen sulfide, water,
and odorants making up the remainder.48
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\4\7``Introduction to Alternative Fuel Vehicles,'' prepared by
Science Applications International Corporation for Office of
Alternative Fuels, Office of Transportation Technologies,
Conservation and Renewable Energy, U.S. Department of Energy (March
2, 1992), NREL Contract No.: XF-1-11107-1, B-35, 17.
\4\8Id., at 16. See also Standards for Emissions for Emissions
From Natural Gas-Fueled, and Liquefied Petroleum Gas-Fueled Motor
Vehicles and Motor Vehicle Engines, and Certification Procedures for
Aftermarket Conversions (``Gaseous Fuels Rule''), 59 FR 48472, 48484
(1994) (given wide range of natural gas compositions currently
available, EPA proposed very broad specifications for natural gas
certification fuel, which included a range for methane content of 74
to 98.5 percent, as well as broad ranges for several other
parameters); Society of Automotive Engineers, ``Recommended Practice
for Compressed Natural Gas Vehicle Fuel,'' SAE J1616 (1994), B-40, 1
(natural gas is comprised chiefly of methane, generally 88 to 96
molecular (``mole'') percent); Automotive Fuels Handbook, B-34, 454
(composition of natural gas somewhat variable, depending on gas
field or biological feedstocks from which it is produced; impurities
include higher hydrocarbons, the heavier of which usually are
removed as condensate, nitrogen, carbon dioxide, oxygen, and
particularly in biogas, hydrogen sulfide); Compressed Natural Gas
Measurement Issues, by C.F. Blazek, J.A. Kinast and P. Freeman,
Institute of Gas Technology (1993), B-50, 5 (natural gas varies in
composition by location and seasonally); Natural Gas as a Stationary
Engine and Vehicular Fuel, by William E. Liss and William H.
Thrasher, SAE Technical Paper 912364 (1991), B-51, 44 (natural gas
exhibits widely varying composition which is controlled through
processing and separation steps); Alternatives to Traditional
Transportation Fuels An Overview, Energy Information Administration,
DOE/EIA-0585/O (1994), B-52, 52 (the variability in the composition
of natural gas can affect its performance as a transportation fuel);
Variability of Natural Gas Composition in Select Major Metropolitan
Areas of the United States, by W.E. Liss, W.H. Thrasher, G.F.
Steinmetz, P. Chowdiah, and A. Attari, Gas Research Institute Report
No. GRI-92/0123 (1992), B-53, 14 (indicating that the methane
content of natural gas can vary from 74.5 percent to 98.1 percent).
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The heating value of CNG (i.e., its energy content) is
significantly lower than that of gasoline.\49\ But, CNG has excellent
octane properties so that vehicles can use high compression ratios when
CNG is the sole fuel. This gives improved combustion efficiency.\50\
---------------------------------------------------------------------------
\49\Automotive Fuels Handbook, B-34, 454-55.
\50\Id., at 455 (both research octane number and motor octane
number about 120). See also Introduction to Alternative Fuel
Vehicles, B-35, 19 (research octane rating is about 130). The fairly
high research octane rating of natural gas makes it relatively
resistant to engine knock. The anti-knock property is a result of
the high ignition temperature, resistance to ``autoignition,'' and
the relatively low flame speed of natural gas. Id.
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CNG refueling transfers natural gas under pressure and may be set
up as either slow-fill or fast-fill. Slow-fill generally uses over-
night refueling and requires less costly refueling station equipment
than fast-fill. Fast-fill refueling time is only slightly longer than
gasoline refueling time.\51\
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\51\Introduction to Alternative Fuel Vehicles, B-35, 17.
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(2) Hydrogen gas. Hydrogen gas can be produced by electrolysis of
water or from natural gas or coal.\52\ Hydrogen may be used in an
internal combustion engine (``ICE'') as a gaseous fuel similar to
natural gas, or in a fuel cell to power an electric motor.\53\ Because
it has a very high flame speed and a wide ignitability range, it can be
used at extremely lean air-fuel ratios in ICEs.\54\ The advantages of
using hydrogen in a fuel cell rather than an ICE, on the other hand,
are high efficiency and a vehicle that has zero emissions.\55\ By using
either hydrogen or electricity in vehicles, the emissions occur at the
generating facility and are thereby centralized and easier to control,
maintain, and monitor.\56\
---------------------------------------------------------------------------
\52\Automotive Fuels Handbook, B-34, 458.
\53\``Hydrogen-Fueled Vehicles Technology Assessment Report,''
for California Energy Commission, by Technology Transition
Corporation, and Center for Electrochemical Systems and Hydrogen
Research, Texas A&M University (by principal investigators Dr. David
Swan, Assistant Director, Center for Electrochemical Systems and
Hydrogen Research, and Debbi L. Smith, Manager, Resource Development
and Special Projects, Technology Transition Corporation), B-36, 1.
\54\Automotive Fuels Handbook, B-34, 458.
\55\Hydrogen-Fueled Vehicles Technology Assessment Report, B-36,
1.
\56\Id.
---------------------------------------------------------------------------
Use of hydrogen gas as a fuel for commercial and private vehicles,
however, remains largely a matter of research and development. Hydrogen
has been used in the energy sector to enhance gasoline refining and to
fuel rockets for space travel. The historic difficulty in using
hydrogen as a vehicle fuel has been how to store it and the lack of a
sufficient infrastructure to supply the hydrogen in relatively small
volumes.
At the present time, it is not clear what power system technology
is most suitable for the use of hydrogen and how much the power system
and fuel storage will add to the cost of vehicles.\57\ First, the
weight of the storage tank on the vehicle would be very high if the
fuel was used either in the liquid or compressed gaseous form. Second,
hydrogen gas is highly explosive when mixed with air. The use of
hydrides, such as iron-titanium, however, is a possible way of
overcoming these drawbacks. Hydrogen is adsorbed by the hydride and can
be released by the application of heat obtained from the vehicle's
exhaust. Although this system would overcome many of the safety
problems, the range of the vehicle would be restricted, filling would
be slow, and the cost could be high.\58\
---------------------------------------------------------------------------
\57\Id.
\58\Automotive Fuels Handbook, B-34, 458.
---------------------------------------------------------------------------
(3) Electricity. Electric vehicles (``EVs'') are powered by
electricity stored in a rechargeable battery pack. Current EVs use
lead-acid batteries. Battery technology is an area of primary research
for EVs, with the goal of improving vehicle power and range. Nickel-
iron and sodium-sulfur batteries, for example, are expected to have
commercial EV applications within the next decade.\59\ Use of electric
vehicles currently is limited. Expansion of the use of EVs will depend
to a large extent on the development of an infrastructure to supply the
electricity to recharge the vehicle's batteries.
---------------------------------------------------------------------------
\59\Introduction to Alternative Fuel Vehicles, B-35, 35.
---------------------------------------------------------------------------
EVs may be produced with or without an on-board charging system.
EVs with on-board charging systems may be able to recharge their
batteries by connecting to a standard electrical dispensing outlet, or
may be able to utilize separate charging equipment, depending on the
on-board charging system. The voltage required for recharging EV
batteries depends on the battery type. For G-vans, a 200/250-volt,
single phase, 60 amperes (``amp''), power source is needed. This
voltage range is compatible with the U.S. standard voltage: 208/240-
volt, single phase, 60 amp.\60\
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\60\Id., at 36. The G-van is a limited production, one-ton van
produced by Conceptior Industries, which became available December
1, 1990. According to Introduction to Alternative Fuels at 34, the
G-Van is the only EV certified to meet all U.S. Federal Motor
Vehicle Safety Standards (``FMVSS'').
---------------------------------------------------------------------------
Battery charging currently involves connecting the battery pack to
an off-board charger by plugging a cable into a socket in the front of
the vehicle.\61\ After fully charging the batteries, periodic refresher
charges are made to maintain the batteries in a fully charged state.
Fully discharged batteries can be recharged in approximately 8 to 10
hours, depending on ambient temperature. Batteries that are not fully
discharged require less charging time. Because batteries may be damaged
from leaving them in a discharged state, a regular charging routine is
recommended. Vehicle range may be extended throughout the day by
recharging the batteries at a site other than a regular recharging
station. These ``opportunity charges'' require an on-board charger,
which is not currently included on most EVs.\62\
---------------------------------------------------------------------------
\61\Standard equipment for a charging station include an off-
board charger and circuit breaker. An AC kwh meter is recommended to
monitor power consumption. Id., at 36.
\62\Id., at 41.
---------------------------------------------------------------------------
The Electric Power Research Institute (``EPRI'') has identified
three methods of EV charging for development, depending on the range of
power levels anticipated for charging EVs. Level 1 would allow
recharging by plugging into the most common grounded electrical outlet.
Level 2 would require special equipment dedicated to EV charging and
connection to the electric power supply. Level 2 is expected to be the
primary method for charging at both private and public facilities.
Level 3 would allow recharge at commercial fast charge stations in
about the same time it takes to refuel an internal combustion
vehicle.\63\
---------------------------------------------------------------------------
\63\``Electric Vehicle Charging Systems: Executive Summary''
(undated draft), Electric Power Research Institute (``EPRI''),
submitted to Neil Blickman, FTC, on August 30, 1994, by W.I. Whiddon
& Associates, Inc., B-49, 1-2.
---------------------------------------------------------------------------
Two methods of connecting an EV or recharging are under
development, conductive and inductive. Conductive connections are the
most widely used method of connecting electrical sources and loads. A
conductive connection consists of contacts that join the electrical
conductors at the interface, such as plugging a lamp cord into a
standard electrical outlet. In an inductively coupled system,
alternating current power is transferred magnetically or ``induced''
between a primary winding on the supply side to a secondary winding on
the vehicle side of the interface. Thus, there is no direct contact
through which electrical power flows.\64\
---------------------------------------------------------------------------
\64\Id., at 2.
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2. Comments on Disclosures Proposed in NPR
The Commission proposed in the NPR that retailers of non-liquid
alternative fuels post standard labels identifying the commonly used
names of those fuels on public fuel dispensers (including electrical
dispensing units and recharging stations used to recharge EV
batteries).\65\ The Commission also proposed requiring disclosure of
the gaseous fuel's principal component and permitting disclosure of
other components, expressed as minimum percentages.\66\ The
Commission's proposal recognized that electricity used for recharging
EV batteries might need to be subject to different labeling
disclosures, and solicited comment on whether a different measure of
content (e.g., requiring disclosure of voltage for electricity) would
be more appropriate.\67\
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\65\59 FR 24014, 24018.
\66\Id. 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. See sections III.B.1.b (1) and (2)
supra.
\67\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. See section III.B.1.b(3) supra.
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.
---------------------------------------------------------------------------
Under the proposal, 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. These
proposals are analogous to provisions in the Fuel Rating Rule
pertaining to liquid alternative fuels.\68\ The Commission proposed
this simple labeling requirement for fuel dispensers after considering
how it might best balance consumers' needs for useful and timely cost
and benefit information with the problems associated with displaying
such information in a simple label format.
---------------------------------------------------------------------------
\68\16 CFR 306.10(b)(1), 306.10(f) (1994).
---------------------------------------------------------------------------
Twenty-three commenters addressed the issues raised in the NPR.
None opposed the Commission's proposals as a whole. Nine commenters
generally supported the Commission's proposals in their entirety
because, if adopted, they would be consistent with the Fuel Rating
Rule's requirements for liquid alternative fuels, and they would assist
consumers in identifying the proper fuel for their vehicles.\69\ Three
commenters also supported the Commission's proposals by stating
specifically that the fuel dispenser label should identify the fuel in
a standardized format to direct consumers to the correct fuel
dispensers.\70\ These and other suggested labeling disclosures are
discussed in more detail in sections III.B.3 and 4 infra.
---------------------------------------------------------------------------
\69\API, G-25, 1-3; EIA/EEU-ISD, H-2, 1; Mobil, G-2, 1-3; NAFA,
G-20, 1; NPGA, G-18, 2-3; Phillips 66, G-15, 1; RFA, G-5, 2-3,
(Supp.), G-5, 1; SIGMA, G-23, 1; Sun, G-1, 1-2.
\70\DOE, H-10, 2-4; RFA, G-5, 2-3, (Tr.), 28, 38; Thomas BB, G-
10, 1. See also AAMA (Tr.), 37, 62 (fuel dispenser label should
identify the fuel).
---------------------------------------------------------------------------
3. Label Disclosures Proposed for Final Rule
Based on the comments received and the requirements of section
406(a) of EPA 92, for the fuel labeling requirement the Commission
proposes that retailers of the non-liquid alternative fuels CNG,
hydrogen and electricity 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).\71\ The
labels would be placed conspicuously in full view of consumers and as
near as reasonably practical to the fuel's unit price.
---------------------------------------------------------------------------
\71\See Secs. 309.1(q) and 309.15 of the text of the proposed
rule in section XI infra.
---------------------------------------------------------------------------
With respect to CNG and hydrogen, the Commission also proposes
requiring disclosure of the fuel's principal component and permitting
disclosure of other components, expressed as minimum molecular
percentages (``minimum mole percent'').\72\ These proposals are
analogous to provisions in the Fuel Rating Rule pertaining to liquid
alternative fuels.\73\ Most of the commenters addressing these issues
stated they supported such proposals because, if adopted, they would be
consistent with the Fuel Rating Rule's requirements for liquid
alternative fuels, and they would assist consumers in identifying the
proper fuel for their vehicles. Therefore, all alternative fuels
marketed to consumers would be subject to consistent requirements.\74\
---------------------------------------------------------------------------
\72\Id. See also section III.B.5.b(1) infra. The unit of the
amount of a substance is defined under the international system of
units to be the amount of substance of a system that 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 cited as ``NIST
Publication 330''), B-43, 4-5.
\73\16 CFR 306.10(b)(1) and 306.10(f) (1994).
\74\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, but allowing disclosure of
components other than the fuel's principal component, without
restrictions, could result in consumer misinformation); 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).
---------------------------------------------------------------------------
As mentioned, the principal component of the vehicle fuel CNG is
methane, and the principal component of hydrogen is hydrogen. Several
commenters specifically concurred with the Commission's proposal to
require disclosure of the minimum methane content of CNG to assist
consumers in purchasing CNG that satisfies requirements specified by
engine manufacturers to meet performance and emissions certification
levels.75 The Commission also notes that commenters and other
technical sources indicate that because natural gas composition varies
throughout the country, its methane content can vary from 85 percent to
99 percent.76 Methane content is important because CNG with too
low a methane content will not meet manufacturers' requirements for CNG
vehicle engines. Because CNG exists with too low a methane content to
be used as a vehicular fuel,77 requiring disclosure of the minimum
methane content will help ensure that non-vehicular CNG is not
inadvertently sold for vehicular purposes. Although CNG sold as a
vehicle fuel should always meet minimum vehicle needs, information
about minimum methane content can help assure consumers that the CNG
they are purchasing will meet their engines' needs. 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.78
---------------------------------------------------------------------------
\7\5AAMA (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.
\7\6See note supra.
\7\7See Flxible (Tr.), 74-77.
\7\8Although 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. If so, producers and marketers will have
the flexibility to develop and blend fuels appropriate for those
specifications as well as perhaps location and climate, and
retailers will have the flexibility to adjust fuel dispenser labels
accordingly, if they chose to do so.
---------------------------------------------------------------------------
With respect to public electric vehicle fuel dispensing systems,
the commenters recommended that the Commission require disclosure of
the minimum operating parameters that are necessary to protect the
consumer operating the equipment, the vehicle whose batteries are being
charged, as well as the charging equipment. Several commenters
suggested these parameters include disclosure of the voltage at which
electrical power is supplied by electric charging equipment.79 Two
commenters suggested that the electric recharging station label include
the maximum current in amperes that can be delivered,80 and two
recommended that the label indicate whether the charging equipment
supplies alternating or direct current.81 Another commenter stated
that because there are two distinct charging technologies, the label
should indicate whether the unit is a conductive charger (a plug on a
cord) or an inductive charger (a paddle in a port system).82 Two
commenters indicated that the label should disclose the kilowatt
capacity of the charging equipment to tell consumers how quickly their
vehicles could recharge.83
---------------------------------------------------------------------------
\7\9AAMA (Tr.), 91-92; Boston Edison, G-26, 5-6, (Tr.), 88-91,
93-95, 100; CEC, H-8, 1-6; DOE, H-10, 2-4; Mobile, G-2, 3.
\8\0Mobil, G-2, 3; CEC, H-8, 1-6.
\8\1Boston Edison (Tr.), 90; CEC, H-8, 1-6.
\8\2Boston Edison (Tr.), 88.
\8\3Boston Edison (Tr.), 90; RFA (Supp.), G-5, 1.
---------------------------------------------------------------------------
The commenters indicated that the proposed disclosures would be
useful in assisting consumers to locate electric fuel dispensers that
are compatible with the consumers' vehicles, and to determine how
quickly their vehicles' batteries would recharge. Accordingly, the
Commission proposes requiring several brief disclosures on labels on
public electric vehicle fuel dispensing systems (i.e, electric charging
system equipment and electrical energy dispensing systems).84 The
proposed rule would require that labels on public electric vehicle fuel
dispenser systems include, in addition to the commonly used name of the
fuel (e.g., electricity), kilowatt capacity, voltage, current (either
AC or DC), amperes and type of charger (either conductive or
inductive).85
---------------------------------------------------------------------------
\8\4See Sec. 309.1(j), (l), and (m) of the text of the proposed
labeling rule in section XI infra.
\8\5See Secs. 309.1(q)(2) and 309.15 of the text of the proposed
rule in section XI infra.
---------------------------------------------------------------------------
The proposed requirements for CNG, hydrogen and electricity thus
would 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
whether they would provide information regarding the precise
composition of the fuels, or relevant parameters of the EV fuel
dispenser.
In addition, the Commission has concluded that other comparative
information on the fuel dispenser, as discussed in section III.B.4
infra, is unlikely to be necessary 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 (one being gasoline, with which consumers are
already familiar and which is already labeled with pertinent
information). Thus, providing consumers with other information
comparing various types of alternative fuels is best done prior to the
time the vehicle is acquired.
Further, excluding other, less important information avoids
information overload. In contrast to vehicle purchases, consumers' 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.86 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.''87 Simplicity therefore is
an even greater consideration in the labeling of fuels than in the
labeling of AFVs.
---------------------------------------------------------------------------
\8\6Federal Trade Commission, Study Of A Uniform National Label
For Devices That Dispense Automotive Fuels to Consumers (1993), at
29.
\8\7Id., at 29 n.152.
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4. Label Disclosures Considered But Not Proposed for Final Rule
In formulating its labeling proposals in this notice, the
Commission, as required, 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, it must
consider the problems associated with developing and publishing such
information on simple labels. Given this context, and after considering
the comments, the Commission has considered and rejected several
alternative disclosures for dispenser labels suggested by the
commenters.
a. Octane rating. Four commenters addressed whether the Commission
should require, or allow, posting of octane ratings for non-liquid
alternative fuels. Nebraska EO recommended that the Commission require
disclosure of an octane number for spark ignition or a cetane number
for compression ignition fuels.88 NACAA supported requiring
disclosure of octane rating if alternative fuels are available in
different grades.89 AGA/NGVC did not recommend that the Commission
require disclosure of octane rating, but suggested that the Commission
clarify that fuel retailers have the option of disclosing a fuel's
minimum octane rating as an ``other component.''90 AGA/NGVC stated
that, although octane levels for natural gas are not likely to vary at
different retailers, the octane rating of natural gas is a valuable
component that allows manufacturers to optimize dedicated vehicles to
run more efficiently. AGA/NGVC asserted, therefore, that providing
consumers with octane information highlights the advantages of natural
gas and gives them a basis for comparing its qualities with other
fuels. NPGA, however, suggested that it would not be appropriate for
the Commission to require the posting of octane ratings for CNG,
hydrogen or electricity. NPGA commented that there are no standards for
determining the octane ratings of these fuels, and presently these
fuels are not being developed to be available in different grades at a
station.91
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\8\8Nebraska EO, H-9, 1.
\8\9NACAA, H-6, 1-2.
\9\0AGA/NGVC, G-6, 5-6.
\9\1Phillips 66/NPGA (Tr.), 49-50.
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The Commission's Fuel Rating Rule requires disclosure on fuel pumps
of gasoline's octane rating, which is a measure of how well the
gasoline resists engine knocking. The octane rating needed to prevent
knocking varies with the engine's compression ratio, and different
engines may require gasoline with different octane ratings. The Fuel
Rating Rule is designed to enable consumers to buy gasoline with an
octane rating high enough to prevent engine knock, and to help
consumers avoid ``octane overbuying'' or buying gasoline with an octane
higher than needed to prevent engine knock.
When it conducted the rulemaking proceeding to add pump posting
requirements for liquid alternative fuels to the Fuel Rating Rule, the
Commission noted that, unlike gasoline, the physical and chemical
properties of each liquid alternative fuel may not vary
substantially.92 The Commission also observed that it expected
that engines designed for alternative fueled vehicles would be designed
to use fixed-octane alternative fuels without engine knock. The
Commission further stated that 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, such as an ASTM-approved, test method for determining
octane ratings of such fuels.93 Finally, the Commission expressed
concern that the posting of high octane ratings associated with
alternative liquid automotive fuels may contribute to the misperception
that high-octane gasoline always is best for vehicles, and thereby
aggravate existing gasoline octane overbuying.94
---------------------------------------------------------------------------
\9\258 FR 16464, 16469.
\9\3Id.
\9\4Id. at 16470.
---------------------------------------------------------------------------
After considering the comments submitted in this proceeding, as
well as the comments submitted in the liquid alternative fuel amendment
proceeding (which the Commission finds are relevant to this
proceeding),95 the Commission has determined not to propose
requiring the posting of octane ratings for CNG and hydrogen. The
Commission has concluded that, unlike octane ratings for gasoline,
there appears to be little or no benefit to disclosing octane ratings
for alternative fuels at this time. Octane ratings for alternative
fuels are high enough to avoid engine knock problems in vehicles
designed to use alternative fuels, and, such ratings do not provide
information relevant to vehicle performance of alternative fueled
vehicles. In addition, the octane ratings of a given type of
alternative fuel would not vary significantly.96
---------------------------------------------------------------------------
\9\5See 58 FR 41356, 41361.
\9\6Phillips 66/NPGA (Tr.), 49-50.
---------------------------------------------------------------------------
In contrast, there 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 significance of the high octane ratings of
alternative fuels, which exceed the octane ratings of gasoline. 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. Further, it also might
foster consumer misperceptions that higher octane necessarily signifies
higher quality and better performance.97
---------------------------------------------------------------------------
\9\7Id.
---------------------------------------------------------------------------
b. Comparative information based upon BTUs or gasoline-gallon-
equivalents. As an alternative to the Commission's proposal, three
commenters, Unocal, PCC and DOE, suggested that the Commission require
the use of alternative fuel labels that 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.98 According to
the commenters, such a disclosure would allow consumers to compare the
cost of an alternative fuel to that of gasoline using a common energy
unit.
---------------------------------------------------------------------------
\9\8DOE, H-10, 2-4; PCC, G-22, 1, 3; Unocal, G-9, 2.
---------------------------------------------------------------------------
However, seven commenters suggested that such comparative cost data
is not conducive to fuel labeling and is more a dispenser equipment
metering and fuel marketing issue.99 The commenters also indicated
that Commission requirements to disclose comparative cost data in terms
of the energy contents of alternative fuels may not be necessary if the
weights and measures organizations accept, as a method of sale,
measurement of alternative fuels in terms of gasoline-gallon-
equivalents.
---------------------------------------------------------------------------
\9\9AGA/NGVC, G-6, 3, 5-6, (Tr.), 44, 59; API, G-25, 1-3
(commercial information that enables the consumer to evaluate the
costs of an alternative fuel purchase will be displayed on the
dispenser); DOE (Tr.), 53 (GGE is more a metering issue); ETC (Tr.),
41; Mobil, G-2, 1-2; NACAA (Tr.), 39 (information relating to the
sale of fuels by gasoline-gallon-equivalents is more a metering and
marketing issue); RFA (Tr.), 57.
---------------------------------------------------------------------------
Indeed, the Commission notes that the National Conference on
Weights and Measures (``NCWM''), a consensus standards-writing
organization for state and local regulatory agencies, at its recent
annual meeting, adopted for national use the GGE as a method of sale
for CNG sold as an engine fuel.100 According to the NCWM, the GGE
is defined as 5.660 pounds of CNG. (Consumers would not purchase one
gallon of CNG, but would receive 5.660 pounds of CNG with the
approximate equivalent energy of a gallon of gasoline.).
---------------------------------------------------------------------------
\1\00See Program and Committee Reports for the National
Conference on Weights and Measures 79th Annual Meeting, July 17-21,
1994, B-37; and Brickencamp, Method of Sale for CNG Paves Way to
Greater Public Acceptance, Nat. Gas Fuels, Sept. 1994, B-47, 47.
---------------------------------------------------------------------------
CNG dispensers, therefore, will likely display three items of
information: (1) Total sale price for the CNG in dollars, e.g., $3.75,
(2) amount of CNG in GGE in this sale, e.g., 5.00, and (3) unit price
per GGE in dollars/GGE, e.g., $0.749. A NCWM approved dispenser label
also would state, ``1 Gasoline Gallon Equivalent is Equal to 5.66 lbs.
of Natural Gas. This quantity of Natural Gas delivers approximately the
same amount of energy to your vehicle as a typical gallon of
gasoline.''
After considering the comments received, and the NCWM's recent
action, the Commission has determined not to propose GGE disclosures.
Such information is not conducive to keeping the fuel label simple as
required by EPA 92. Further, NCWM's action indicates this information
is more an equipment metering issue that is more properly addressed by
weights and measures organizations. Commission required disclosures
would be unnecessary and duplicative, especially in connection with the
sale of CNG. Moreover, if national conversion factors for the GGE of
other alternative fuels are defined in the future, then it is likely
that weights and measures authorities will issue requirements to enable
the sale of those fuels in energy equivalencies. Further, there is no
evidence on the record to suggest that the Commission could define the
GGE of fuels other than CNG at this time.
On a related point, Boston Edison stated that comparisons based
upon GGEs are less accurate than those based upon fuel neutral British
thermal units (``Btus'').\101\ However, two commenters specifically
opposed a requirement that fuel dispenser labels identify the heating
value or energy content of a fuel expressed in Btus. AGA stated that a
Btu disclosure would be practically meaningless to consumers,\102\ and
NPGA stated that a Btu rating might be useful to consumers only when
choosing a new vehicle or deciding whether to convert an existing
vehicle to an alternative fuel, but not when refueling.\103\
---------------------------------------------------------------------------
\101\Boston Edison, G-26, 5-6.
\102\AGA/NGVC (Tr.), 24.
\103\Phillips 66/NPGA (Tr.), 50.
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After considering the record, the Commission has decided not to
propose requiring that fuel dispenser labels identify the fuels'
heating values. Instead of helping consumers make informed purchasing
decisions, this option might instead confuse or mislead consumers. The
energy content of a fuel, as measured by its Btu rating, is an
imprecise gauge of that fuel's actual fuel economy. Driving range and
fuel economy are the function of many variables (e.g., engine design,
engine efficiency, driving habits), and not simply the energy content
of a fuel. As a result, Btu ratings do not always accurately reflect
actual fuel economy. In addition, because the heating values of the
alternative fuels are less than the heating value of gasoline, labels
based on heating values might encourage consumers to purchase gasoline,
because such labels might suggest alternative fuels are less efficient
than gasoline.
Finally, the Commission notes that the BTU content of alternative
fuels is largely determined by their chemical content. Thus, disclosure
of the percentage content of the principal component provides the
energy content information that consumers need to make fuel cost
comparisons. For example, if a consumer knows the price per gallon of
M-85 and the miles-per-gallon a vehicle can achieve on M-85, then he
can calculate the fuel cost per mile. Similarly, if a consumer knows
the price per cubic foot of CNG consisting of 90 percent methane and
the miles-per-cubic foot achievable with that fuel, he can calculate
the fuel cost per mile.
c. Performance effects (cruising range). One commenter suggested
that fuel dispenser labels advise consumers that the cruising range of
the 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.\104\ However, two commenters stated that information
relating to the vehicle's cruising range is not appropriate for a
dispenser label.\105\ Phillips 66/NPGA further commented that cruising
range is not necessarily less when operating on an alternative fuel,
such as propane.\106\
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\104\PCC, G-22, 1, 3.
\105\AGA/NGVC (Tr.), 37; Phillips 66/NPGA (Tr.), 50-51.
\106\Phillips 66/NPGA (Tr.), 50.
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After considering the comments, the Commission has determined that
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
tentatively determined that information relating to cruising range
would be appropriate on labels it is proposing for covered AFVs, as
discussed in section III.C infra.
d. Meets material specifications. Several commenters pointed out
the need for fuel specifications for all alternative fuels.\107\ To
expedite the establishment of such national specifications, AMI
recommended that the fuel dispenser labels guarantee delivery of
alternative fuels meeting specifications defined by the California Air
Resources Board in 1993,\108\ until national standards are in place.
AMI stated that without specifications, neither emission benefits nor
engine performance can be reliably determined, to the ultimate
detriment of the consumer.\109\ Another commenter, however,
specifically stated that California's fuel specifications may not be
practical for the rest of the country.\110\
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\107\AAMA (Tr.), 29; AMI, G-3, 1; API, G-25, 1-3, (Tr.), 28, 77;
EMA, G-21, 8-9, (Supp.), 1-2; Flxible (Tr.), 76; NAFA (Tr.), 74; RFA
(Tr.), 38; Thomas BB, G-10, 1.
\108\See Specifications for Compressed Natural Gas, Title 13,
California Code of Regulations, Sec. 2292.5 (1993), B-41;
Specifications for Hydrogen, Title 13, California Code of
Regulations, section 2292.7 (1993), B-42.
\109\AMI, G-3, 1.
\110\AAMA (Tr.), 29.
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During its rulemaking proceeding to establish automotive fuel
ratings for the liquid alternative fuels, the Commission also
considered this type of labeling approach, and whether it would be
feasible to assist consumers in making choices and comparisons between
alternative fuels.\111\ Most commenters in that proceeding supported a
fuel labeling approach based on specifications, but only if it was
based on consensus fuel standards or specifications. Under this
approach, disclosure of a particular fuel descriptor would indicate
that the fuel meets technical material specifications established by a
recognized standards-setting organization. Standards established under
a consensus process would have the advantage of being developed with
input from and approval of engine manufacturers, fuel suppliers, users,
and regulators. The use of label descriptors based on standard
specifications would benefit consumers because they could determine
easily whether alternative fuels marketed under the descriptors were
compatible with the original vehicle equipment manufacturer's
requirements. In addition, this approach would allow an alternative
liquid automotive fuel supplier to improve the fuel beyond the minimum
specifications and promote the improved fuel over those of its
competitors.
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\111\58 FR 41356, 41364, 41365. In the Alternative Fuel Rule
proceeding, several commenters also opposed Commission adoption of
alternative fuel specifications developed by the California Air
Resources Board, because they were not developed by a consensus
process, were technically flawed, and were developed for
California's particular needs and, therefore, could be overly
restrictive for other parts of the country. Id.
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As anticipated by the Commission, however, the primary objection in
the liquid alternative fuels proceeding to this option was that neither
the American Society for Testing and Materials (``ASTM'') nor any other
consensus standards-setting organization had developed and adopted
specifications and standards for most of the alternative automotive
fuels (the exception being liquefied petroleum gas for which ASTM has
developed a standard). One commenter in the current proceeding
specifically noted that ASTM has not developed a standard for CNG.\112\
But, another commenter stated that the Society of Automotive Engineers
has established a ``recommended practice'' for CNG called J1616.\113\
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.\114\
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\112\API (Tr.), 77.
\113\AGA/NGVC (Tr.), 24.
\114\Society of Automotive Engineers, ``Recommended Practice for
Compressed Natural Gas Vehicle Fuel,'' SAE J1616, B-40, 16.
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Disclosure of a fuel descriptor 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. After considering the comments in this proceeding, however,
and in light of the conclusions reached by the Commission in the liquid
alternative fuel proceeding, the Commission finds 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. Further, the Commission has an
insufficient record and basis on which to adopt California's standards
for alternative vehicle fuels. Therefore, the Commission has determined
not to propose that fuel dispenser labels guarantee the delivery of
fuels meeting California's specifications.
The Commission 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 would permit
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.
e. Environmental benefits (emissions). AMI suggested that the fuel
dispenser label indicate the environmental benefits of alternative
fuels.115 Specifically, AMI suggested that the Commission require
disclosure of a generic statement on alternative fuel labels such as:
``Use of this fuel can result in significant reductions in exhaust
pollutants compared with an equivalent gasoline powered vehicle.''
Phillips 66/NPGA commented, however, that such a statement would not
particularly assist consumers in making a fuel purchasing decision at
the dispenser.116
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\1\15 AMI, G-3, 2.
\1\16Phillips 66/NPGA (Tr.), 51.
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After considering the comments, the Commission has determined that
including such a generic statement on the fuel dispenser label would
not provide sufficient information to assist consumers in making
choices and comparisons. 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
tentatively determined that information relating to emissions would be
appropriate on the labels it is proposing for covered AFVs, as
discussed in section III.C infra.
f. Pressure. For safety reasons, two commenters recommended that
CNG fuel dispensers display the fueling pressure, either 2,400, 3,000
or 3,600 P.S.I. (pounds per square inch) so that dispenser fueling
pressure is compatible with CNG vehicle tank storage pressure.117
For example, fueling a 2,400 P.S.I. vehicle tank from a 3,600 P.S.I.
fueling dispenser could result in severe damage to a fueling system, as
well as personal injury if an explosion occurred. Two commenters,
however, indicated that fueling pressure is a safety issue that has
been addressed by the industry in designing dispensers. Therefore, this
information is unnecessary on a CNG dispenser label.118
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\1\17Flxible (Supp.), G-12, 2; Thomas BB, G-10, 1.
\1\18Phillips 66/NPGA (Tr.), 51; AGA/NGVC (Tr.), 103-104.
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In developing this proposal, the Commission considered whether
including fueling pressure on CNG dispenser labels would provide timely
comparative information to consumers in light of the independent steps
the industry has taken to address this issue. The commenters indicated
that the industry has developed pressure coded standard dispenser/
vehicle CNG connectors so that consumers will not be able to overfuel a
low pressure vehicle from a high pressure dispenser.119 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.120
Accordingly, the Commission has determined that a proposal requiring
the disclosure of fueling pressure on CNG dispenser labels is
unnecessary at this time. Further, the proposed rule would require that
labels for new and used covered AFVs include standard statements
informing consumers that they can obtain vehicle safety information by
calling the toll-free telephone number for DOT/NHTSA's Auto Safety
Hotline, as discussed in section III.C infra.
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\1\19See ANSI/AGA NGV1-1994 American National Standard For
Compressed Natural Gas Vehicle (NGV) Fueling Connection Devices,
attached to AGA/NGVC's comment, G-6.
\1\20ANSI/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, at 27-30, B-48.
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g. Safety warnings. Several commenters focused on safety
issues.121 NACAA stated, for example, that the labels should note
any hazards or cautions to prevent damage to automotive
engines.122 Nebraska EO commented that labels should include a
cautionary note that this and all fuels are hazardous.123
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\1\21E.g., Thomas BB, G-10, 1.
\1\22NACAA, H-6, 1-2.
\1\23Nebraska EO, H-9, 1.
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The Commission has considered whether including a safety warning
statement on a fuel dispenser label would help consumers make
reasonable fuel choices and comparisons. The Commission notes, however,
that safety standards for operation of motor vehicle fuel-dispensing
stations are covered by the Uniform Fire Code.124 Further, to some
extent, the proposed fuel labeling requirements, particularly those for
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
considering the purchase of AFVs may find safety information more
pertinent when purchasing an AFV. Accordingly, the Commission has
determined that rather than propose that safety disclosures appear on
fuel dispenser labels, it will propose requiring a reference to DOE's
consumer information brochure and NHTSA's Vehicle Safety Hotline on
labels for covered AFVs, as discussed in section III.C infra.
Consequently, the Commission anticipates that a marketer's refueling
instructions, whether appearing in an AFV owner's manual or on the fuel
dispenser, would discuss or incorporate relevant safety measures.
However, if in the future information becomes available demonstrating a
need for the Commission to require safety-related disclosures on the
dispenser labels, the Commission can consider it during its periodic
review of the Rule.
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\1\24For 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 minimum requirements are
primarily based on the requirements of NFPA 52, ``Standard for CNG
Vehicular Fueling Systems,'' 1992 edition. The Uniform Fire Code
(which is a democratic code development organization whose
membership includes fire and building officials, design
professionals, equipment manufacturers and trade organizations) and
the Uniform Fire Code Standards are a model code that provides
minimum design requirements for building and site fire protection,
the safe storage and use of hazardous materials, general fire and
life safety requirements and maintenance requirements for the fire
safety and fire protection designs of the Uniform Building Code.
Article 52 of the 1994 Uniform Fire Code 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.
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h. Refueling instructions. One commenter recommended that fuel
dispenser labels include appropriate refueling instructions.125 As
a marketing issue, however, alternative fuel marketers will want to
display refueling instructions for consumers on alternative fuel
dispensers prominently, as is done now on gasoline dispensers. Thus,
the Commission believes that it is unnecessary to include refueling
instructions on fuel dispenser labels. Such instructions may vary by
fuel and may exceed the constraints of a simple label format.
Accordingly, the Commission has determined not to propose requiring
that refueling instructions appear on fuel dispenser labels for the
non-liquid alternative fuels.
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\1\25Thomas BB, G-10, 1.
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i. Wobbe number. Two commenters stated that for CNG, two primary
factors that describe the general characteristics of natural gas are
the methane content and the Wobbe number.126 According to RFA, the
Wobbe number is a measure of the fuel energy flow rate through a fixed
orifice under given inlet conditions. RFA states that a change in Wobbe
number of the gas will have a direct correlation to changes in engine
performance due to variations in the air/fuel ratio of orifice based
metering systems of vehicles.127 In addition, EMA stated that the
Wobbe number is an indicator of the fuel's heating value.128
Although neither commenter recommended that the Commission require
disclosure of the Wobbe number on CNG dispenser labels, their comments
suggested that the Commission should at least consider it as an option.
One commenter specifically opposed a Wobbe number disclosure, stating
it would be so difficult to explain that consumers would not find it
useful.129
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\1\26EMA (Supp.), G-21, 1-2; RFA, G-5, 3.
\1\27RFA, G-5, 3.
\1\28EMA (Supp.), G-21, 1-2.
\1\29AGA/NGVC (Tr.), 43.
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After considering the comments, the Commission believes that the
purported benefits to consumers of including the Wobbe number on CNG
labels are speculative and do not exceed the costs to industry. If, as
has been suggested, the Wobbe number is an indicator of heating value,
then it should be correlated with methane content and thus indicated
indirectly by disclosure of the percentage content of methane. Further,
while the Wobbe index may be important to engine manufacturers and fuel
producers as an important element of a fuel specification, CNG labels
based on a Wobbe number could be confusing or misleading to consumers
attempting to determine the relationship between the Wobbe number and
actual engine performance. Accordingly, the Commission has determined
not to propose requiring disclosure of the Wobbe number on CNG
dispenser labels.
5. Additional Proposals for Final Rule
a. Label size and format. In the NPR, 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,130 and sought comment on this
proposal.131 Nine commenters addressed questions concerning the
size and format of alternative fuel labels, and none opposed the
proposals.
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\1\30 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. 16 CFR 306.12 (1994).
\1\3159 FR 24014, 24021.
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Seven commenters stated that non-liquid alternative fuels should
follow the same size and format requirements as liquid alternative
fuels under the Fuel Rating Rule.132 The reasons given for keeping
the requirements the same were: promoting consistency,133 keeping
information simple so that consumers can easily understand the
labels,134 and fairness and equity.135 SIGMA stated simply
that it supported the proposed requirements and urged the Commission to
adopt the proposed rule without change.136
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\1\32AGA/NGVC, G-6, 8; API, G-25, 4 (provided that content
requirements for non-liquid alternative fuels are similar to those
for liquid alternative fuels in the Fuel Rating Rule, similar size
and format labels are appropriate, consistent, and should be
recognizable to consumers); Mobil, G-2, 4; NPGA, G-18, 4; RFA, G-5,
4; Sun, G-1, 2; Thomas BB, G-10, 2 (does not understand why non-
liquid fuels should be treated differently than liquid fuels). AGA/
NGVC and API did not state reasons for their comments.
\1\33Mobil, G-2, 4; RFA, G-5, 4.
\1\34Sun, G-1, 2.
\1\35NPGA, G-19, 4.
\1\36SIGMA, G-23, 1.
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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.'' In the NPR, the Commission proposed that
the non-liquid alternative fuel labels not be consolidated with other
mandatory labels or require otherwise duplicative disclosures.137
Only one commenter addressed this issue, stating that consolidation
would appear to provide no benefit and would only lead to public
confusion.138 After considering the comments, the Commission
proposes that non-liquid alternative fuels labels follow the same
standardized size and format requirements of the Fuel Rating
Rule.139 Further, to keep the labels uniform and simple, the
Commission does not propose requiring any label consolidation.
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\1\3759 FR 24014, 24018.
\1\38TVA, H-5.
\1\39See section 309.17 of the text of the proposed labeling
rule in section XI infra.
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b. Substantiation, certification, and recordkeeping requirements.
An objective product claim carries with it a representation that the
seller possessed and relied upon a reasonable basis for that
claim.140 When a seller does not expressly or impliedly state a
certain level of support for a representation, the Commission assumes
that consumers expect the seller to have a reasonable basis for the
claim.141 Further, ``a firm's failure to possess and rely upon a
reasonable basis for objective claims constitutes an unfair and
deceptive act or practice in violation of Section 5 of the Federal
Trade Commission Act.''142 The fuel dispenser labeling rule the
Commission proposes would require that sellers possess adequate
substantiation to ensure that the information on the labels is accurate
and reliable, and, as required by section 406(a) of EPA 92, that the
information can ``reasonably enable the consumer to make choices and
comparisons.''
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\1\40Thompson Medical Co., 104 F.T.C. 648, 813 (1984), aff'd,
791 F.2d 189 (D.C. Cir. 1986), cert. denied, 479 U.S. 1086 (1987).
\1\41FTC Policy Statement Regarding Advertising Substantiation,
104 F.T.C. 839, 840. See Thompson Medical, 104 F.T.C. 786, 813.
\1\42FTC Policy Statement Regarding Advertising Substantiation,
104 F.T.C. 839.
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When products are sold in units, packaged or unpackaged,
``labeling'' normally is accomplished by disclosing information on the
product packaging, on a label attached directly to the product, or
marked directly on the product.143 Most often, though not always,
such labeling disclosures are added to the product or product packaging
by the party producing the product. Items sold in bulk (such as
gasoline or alternative fuels), on the other hand, cannot be labeled on
individual or multiple unit packaging to ensure that the ultimate
consumer sees the labeled information. The only practical method of
ensuring that labeling information for such products reaches the
consumer is to label the bulk product dispenser at the point of retail
sale.
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\1\43See, e.g., Rule Concerning Disclosures of Information about
Energy Consumption and Water Use for Certain Home Appliances and
Other Products Required under the Energy Policy & Conservation Act
(``Appliance Labeling Rule''), 16 CFR Part 305 (1994); Trade
Regulation Rule Concerning the Labeling and Advertising of Home
Insulation (``R-value Rule''), 16 CFR Part 460 (1994).
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From a practical standpoint, retail sellers of alternative fuels
are not in a position to determine the accuracy of the information to
be disclosed about the specific fuel. It would be impractical, and
probably more expensive to the consumer, to require retail sellers to
test each delivery of a gaseous fuel or to test the electric vehicle
fuel dispenser systems they use to determine the accuracy of the
information they must disclose on labels on fuel dispensers. In making
disclosures to consumers, retail sellers of alternative fuels,
therefore, must rely on the accuracy of the information provided to
them from gaseous fuel importers, producers, refiners and distributors,
or from manufacturers and distributors of electric vehicle fuel
dispenser systems.
The Commission believes that substantiation, certification, and
recordkeeping requirements for importers, producers, refiners and
distributors of gaseous alternative fuels, and manufacturers of
electric vehicle fuel dispenser 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.144 The Commission, therefore, proposes to include
substantiation, certification, and recordkeeping requirements in the
rule, similar to such requirements in the Fuel Rating Rule for sellers
of liquid alternative fuels.
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\1\44The Commission stated in the NPR that it believed that
harmonizing labeling requirements for non-liquid and liquid
alternative fuels, when practicable, would be appropriate. However,
the Commission stated that it believed that requiring retailers to
post consistent with ratings certified to them and to maintain
records, as is required for liquid alternative fuels in the Fuel
Rating Rule, would be beyond the scope of the Commission's mandate
under section 406(a) of EPA 92 (59 FR 24014, 24018 n. 133). Upon
further consideration, and in light of the discussion in the text
supra, the Commission reconsidered that position and has determined
to propose requiring substantiation, certification, and
recordkeeping requirements for non-liquid alternative fuels like
those for liquid alternative fuels in the Fuel Rating Rule. The
Commission believes that the proposed requirements are justified
because they are rationally related to the establishment of
``uniform labeling requirements'' that provide important information
to consumers. Interested parties are invited to address the proposed
requirements in their written comments in response to this SNPR.
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(1) Substantiation. The Commission's labeling proposals would
require labeling disclosures only 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. Under the Commission's
advertising substantiation doctrine, which requires sellers to have a
reasonable basis to support material, objective claims, the Commission
proposes 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 mole percent of the principal component that
retailers must disclose on fuel dispenser labels. For the minimum mole
percent content of methane (the principal component) in CNG, the
Commission proposes requiring that the reasonable basis be tests
conducted according to ASTM D 1945-81.145 For the minimum mole
percent content of hydrogen (the principal component) in hydrogen gas,
the Commission proposes requiring that the reasonable basis be tests
conducted according to ASTM D 1946-90.146 These ASTM documents
include test procedures, developed through the ASTM consensus process,
to determine the chemical composition of CNG and hydrogen,
respectively, including the mole percent of methane in CNG and of
hydrogen in hydrogen gas.147
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\1\45See note infra.
\1\46Id.
\1\47The 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 proposes
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 mole percent content of any other component that
importers, producers, or refiners wish to certify, the proposed rule
would not specify the test procedure they must use, but only that they
have a reasonable basis, consisting of competent and reliable evidence,
to substantiate the claim. The proposed rule would 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 common name or
identifier they use. Similarly, manufacturers of electric vehicle fuel
dispenser systems would be 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.
Distributors and retail sellers could rely on the certifications
they receive, as discussed in section III.B.5.2 infra, so their burden
would be minimal. Distributors and retailers would not need to make the
actual determinations unless they alter the fuel they receive before
reselling it.148
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\1\48See Secs. 309.13(c) and 309.15(c) of the text of the
proposed rule in section XI infra.
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For public electric vehicle fuel dispenser systems, the information
the Commission proposes requiring to be disclosed can be measured using
standard measuring devices or procedures. Therefore, accurate
measurements made using standard electric industry procedures that are
recognized as competent and reliable would be sufficient to serve as
the required reasonable basis.
Currently, there is not sufficient record evidence for imposing
specific, nationwide, minimum material standards or specifications for
the composition of CNG or hydrogen gas.149 Neither ASTM nor any
other standards-setting entity has developed and adopted consensus
material specifications for these non-liquid (gaseous) alternative
fuels. Nor do federal specifications currently exist. As previously
discussed, the state of California has issued minimum material
specifications for both CNG and hydrogen gas sold in
California.150 These specifications require determination of the
minimum mole percent composition of the principal component of these
gaseous alternative fuels according to the specific ASTM test
procedures that the Commission proposes to require as substantiation
for the proposed disclosures.151 Although the Commission could
require that non-liquid alternative fuels meet the California minimum
material specifications, there is insufficient evidence on the record
for doing so. Further, in the absence of more extensive information,
which may not yet exist, mandating that non-liquid (gaseous)
alternative fuels meet any particular minimum material standards
specifications could have unforeseen adverse anti-competitive,
environmental, or vehicle performance effects.152 However, because
it is important that sellers base objective disclosures on uniform
measurements when recognized and accepted uniform measurement
procedures are available, and because ASTM has issued test procedures
to measure the minimum mole percent of the principle components of CNG
and hydrogen, the Commission has determined to propose requiring use of
the ASTM test procedures to substantiate those disclosures.
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\1\49See AMI, G-3, 1; CEC, H-8, 6 (not aware of any existing,
adequate and generally accepted standards for disclosures for
alternative fuels).
\1\50See note supra.
\1\51The ASTM test procedures referenced in the California
specifications are: (1) for measuring the mole percent of methane in
CNG--ASTM D 1945-81; (2) for measuring the mole percent of hydrogen
in hydrogen gas--ASTM D 2650-88. Id. According to ASTM
representatives, ASTM D 1945-91 (placed on the record as document
number B-54) has superseded ASTM D 1945-81 and ASTM D 1946-90
(placed on the record as document number B-55) has superseded ASTM D
2650-88. The California specifications also cite specific test
procedures for measuring the mole percent of other components of CNG
and hydrogen. The California specifications state that other test
procedures may be used following a determination by the Executive
Officer of the California Air Resources Board that they produce
results equivalent to the results obtained with the referenced test
procedures.
\1\52An analysis of the California material specifications also
indicates that, to ensure fuel quality and proper automobile
performance, disclosing minimum percentage of the principal
component of the fuel would be important and helpful.
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The Commission's approach to requiring substantiation testing,
without specifying a particular test method, for components other than
the principle 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 mole percent of various components of CNG and
hydrogen, in addition to the methane content of CNG and the hydrogen
content of hydrogen gas. The Commission proposes to 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.
Although the Commission has decided not to propose requiring that
non-liquid alternative fuels conform to any specific material
specification, the Commission's proposed requirement that marketers
disclose the principal component of each fuel should encourage the
industry to develop uniform material specifications or standards in
consensus organizations for these fuels to ensure the uniform quality
of the fuels in the marketplace. The development of material
specifications or standards for non-liquid (gaseous) alternative fuels
should help facilitate acceptance of these fuels.
The proposed requirements are consistent with the substantiation
requirements for sellers of liquid alternative fuels under the Fuel
Rating Rule.153
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\1\53 16 CFR 306.5(b) (1994).
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(2) Certification. The Commission proposes requiring that
importers, producers, refiners, and distributors of non-liquid
alternative fuels (other than electricity), and that manufacturers of
electric vehicle fuel dispensing systems certify to others to whom they
distribute the information that retailers must post on fuel
dispensers.154 Importers, producers, and refiners of non-liquid
alternative fuels (other than electricity) would be required to certify
to distributors consistent with their determination of the minimum mole
percent of the fuel's major component, and of any additional component
they wish to disclose. Manufacturers of electric vehicle fuel
dispensing systems would be required to certify to distributors and/or
retailers the information retailers would be required to disclose on
labels on fuel dispensers. Distributors of non-liquid alternative fuels
(other than electricity) and of electric vehicle fuel dispensing
systems would be required to certify to retailers consistent with the
certification they received.155
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\1\54See sections 309.10 and 309.11 of the text of the proposed
labeling rule in section XI infra.
\1\55See section 309.13 of the text of the proposed labeling
rule in section XI infra. If distributors blend fuels,
Sec. 309.13(c) of the proposed rule would require 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.
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Importers, producers, and refiners of non-liquid alternative fuel
(other than electricity) could make the certification in either of two
ways:
(a) Include 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 (other than electricity) is transferred, the date of
the transfer, the common name of the fuel and the minimum mole percent
of the fuel's major component, and of any additional component the
producer or importer wishes to disclose.
(b) Give the person to whom the fuel is transferred a letter or
written statement, including the date, the producer's or importer's
name, the name of the person to whom the fuel is transferred, the
common name of the fuel, and the minimum mole percent of the fuel's
major component, and of any additional component the producer or
importer wishes to disclose. The letter or written statement would be
effective until the importer, producer, or refiner transfers non-liquid
alternative vehicle fuel (other than electricity) with a lower
percentage of the major component, or of any other component claimed.
At that time, the importer, producer, or refiner would have to certify
the new information about the fuel with a new notice.
Distributors of non-liquid alternative fuel (other than
electricity) would be required to make the certification in each
transfer to anyone who is not a consumer. Distributors could make the
required certification by:
(a) Using a delivery ticket or other paper with each transfer, as
outlined for importers and producers in item (a), above, or by using a
letter of certification, as outlined for importers, producers, and
refiners in item (b), above.
(b) Using either a letter or a delivery ticket or other paper when
transferring to a common carrier. When distributors receive non-liquid
alternative vehicle fuel (other than electricity) from a common
carrier, the distributors also must receive from the common carrier a
certification of information required to be disclosed on the label on
the retail fuel dispenser, either by letter or on a delivery ticket or
other paper.
Manufacturers of electric vehicle fuel dispensing systems would be
required to make the certification in each transfer of such systems.
Manufacturers could do so in either of two ways:
(a) Manufacturers could make the required certification by
including a delivery ticket or other paper with each transfer of an EV
fuel dispensing system. It could be an invoice, bill of lading, bill of
sale, terminal ticket, delivery ticket, or any other written proof of
transfer. It would be 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) Manufacturers could make the required certification 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 would have to be
located where it can be seen after installation of the EV fuel
dispensing system. The marking or label would be deemed ``legible,'' in
terms of placement, if it is located in close proximity to the
manufacturer's identification marking. This marking or label would have
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.
Distributors of electric vehicle fuel dispensing systems would be
required to make the certification in each transfer. Distributors could
do so in either of two ways:
(a) Using a delivery ticket or other paper with each transfer, as
outlined for manufacturers of electric vehicle fuel dispensing systems
in item (a) supra.
(b) 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) supra.
The proposed requirements are consistent with the certification
requirements for sellers of liquid alternative fuels under the Fuel
Rating Rule.\156\
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\156\16 CFR 306.6, 306.8 (1994).
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(3) Recordkeeping. The Commission proposes requiring that
importers, producers, and refiners of non-liquid alternative fuels
(other than electricity) maintain records of the tests performed by or
for them that they rely upon as their required reasonable basis for
their certifications.\157\ The Commission likewise proposes 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.\158\ The Commission also proposes
requiring that distributors and retailers of non-liquid alternative
fuels (including 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
maintain records consisting of the certification they receive from
manufacturers or distributors of the systems.\159\ Like the Fuel Rating
Rule, the proposed rule would require that these records be kept for
one year.
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\157\See Sec. 309.12 of the text of the proposed labeling rule
in section XI infra.
\158\Id.
\159\See Secs. 309.14 and 309.16 of the text of the proposed
labeling rule in section XI infra.
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The proposed requirements are consistent with the recordkeeping
requirements for sellers of liquid alternative fuels under the Fuel
Rating Rule.\160\
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\160\16 CFR 306.7, 306.9, 306.11 (1994).
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c. Effective date. In the NPR, the Commission proposed requiring
that the non-liquid alternative fuels labeling requirements become
effective 90 days after publication of a final rule in the Federal
Register, and sought comment on that proposal.\161\ Nine commenters
addressed this issue either directly or by implication.\162\
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\161\59 FR 24014, 24017, 24021.
\162\SIGMA, G-23, 1 (supported all the Commission's proposals
and urged the Commission to adopt the proposed rule without change);
AGA/NGVC, G-6, 8 (expressed no opinion on proposed time period, but
stated it would check with members that own fuel stations to
ascertain if the compliance period would be too short); Phillips 66,
G-15, 2 (Phillips 66 did not respond directly to the time period for
the rule to become effective, but referred to separate comments
submitted by NPGA and API, which stated different opinions; Phillips
66 did not specify which comment it supported on this issue.).
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Four commenters stated that the proposed time period gave
sufficient time for covered parties to comply with the proposed
requirements.\163\ NPGA stated that the 90-day period was not
sufficient. It suggested a period of at least six months after
publication of the final rule would be necessary because information
must be collected from various fuel suppliers or wholesalers, the
information must be placed in a format that meets standards established
by the regulations, and layouts must be prepared in label form and
distributed for use.\164\ Thomas BB questioned the sufficiency of 90
days, but stated that it would depend on the content of the final
rule.\165\
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\163\API, G-25, 4 (90 days is sufficient, provided the effective
date, size, and format requirements for them are similar to those
contained in the Fuel Rating Rule for liquid fuels); Flxible, G-12,
2 (90 days is sufficient if the requirements for commercial vehicles
are made according to the proposals in the ANPR; if the requirements
were different, they would have to be reviewed to determine how long
it would take to comply); Mobil, G-2, 4 (provided effective date and
labeling requirements are consistent with the Fuel Rating Rule for
liquid alternative fuels, there should not be a problem with
implementation); RFA, G-5, 4 (90 days is sufficient because the
number of outlets affected is small and labels would be printed in
small quantities on a local basis or provided to retailers and their
fuel suppliers).
\164\NPGA, G-18, (comment) 4.
\165\Thomas BB, G-10, 2 (will take considerably longer to
establish national standards for some fuels).
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Section 406(a) of EPA 92 requires the Commission to issue the final
labeling rules within one year of publication of the notice of proposed
rulemaking, but does not specify when the rules shall become effective.
In developing this proposal, the Commission has considered how best to
balance consumers' needs for comparative information with industry's
need for a reasonable period of time to come into compliance. After
considering the comments, the Commission believes that the proposed
effective date (i.e., 90 days after publication in the Federal
Register) is reasonable.\166\
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\166\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.
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d. Periodic updating of labels. In the NPR, the Commission did not
propose a specific timetable for future reviews of the final labeling
rules. The Commission, however, explained that section 406(a) of EPA 92
requires the Commission to update its labeling requirements
``periodically.'' Three commenters addressed the need to update the
final rules periodically.
API encouraged the Commission to review the rule, particularly
after private, voluntary consensus standards organizations develop fuel
specifications for alternative fuels. API also encouraged the
Commission to consider reviewing the rule as new alternative fuels
enter the marketplace. API did not suggest a specific timetable for
periodic reviews.\167\ CEC suggested that the Commission may have to
update its labeling requirements as electric vehicle technology
advances, but likewise did not recommend a specific timetable.\168\ TVA
commented that the Commission should update labeling disclosures only
when necessary to reflect practical developments in technology. It also
stated that a new label should indicate that it supersedes the previous
label.\169\
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\167\API, G-25, 9.
\168\CEC, H-8, 5-6.
\169\TVA, H-5, 1.
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As required by section 406(a) of EPA 92, the Commission intends to
conduct reviews to update the rule periodically to take into
consideration relevant developments, such as when DOE designates new
non-liquid alternative fuels. In addition, the Commission's ongoing
regulatory review process schedules all rules and guides for review at
least once during every ten-year period. Because the Commission cannot
predict when new relevant developments may occur, the Commission is not
otherwise proposing a specific timetable for future reviews in the
final rule.
C. Labeling Requirements for AFVs
1. Scope of the AFV Labeling Requirement
In its NPR, the Commission proposed that original equipment
manufacturers (``OEMs'') and AFV conversion companies affix, and AFV
dealers maintain, standard labels on new AFVs sold or offered for sale
to consumers.170 The Commission further proposed that the term
``consumer,'' which is not defined in EPA 92, be defined as a person
(i.e., an individual, corporation, or any other business organization)
purchasing a new AFV from a dealer or AFV conversion company.171
These proposed requirements were derived in part from existing
regulations regarding posting of EPA fuel-economy labels172 and
were intended to exclude two sales categories (i.e., used AFV sales and
special orders directly from manufacturers) from the scope of the
Commission's AFV labeling requirement.173
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\1\7059 FR 24014, 24018.
\1\71Id. at 24018 n.138.
\1\72 Id. at 24018 n.136. See 40 CFR 600.306-86(a) (1993).
\1\73 59 FR 24014, 24018 n.138.
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Nineteen commenters addressed the proposed scope of the AFV
labeling requirements. Two of the nineteen indicated general support
for the Commission's labeling proposal but did not address this
specific issue.174 One other commenter supported the Commission's
definition of the term ``consumer'' as proposed.175 The remaining
sixteen addressed one or more issues pertaining to this aspect of the
Commission's proposal, as discussed below.
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\1\74EIA/EEU-ISD, H-2, 1; Texas RRC, H-3, 1.
\1\75AGA/NGVC stated that the Commission's proposed definition
was ``a reasonable interpretation of the statute'' because industry
``can target and educate specialty markets and their consumers.''
AGA/NGVC, G-6, 11-12. In its supplemental written comment, AGA/NGVC
addressed the issue of aftermarket conversions. See infra note 196
and accompanying text.
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a. Covered AFVs. Several commenters addressed whether the
Commission's labeling requirements should apply to all AFVs, as that
term is defined in EPA 92. As defined by that statute, an AFV is either
``a dedicated vehicle or a dual fueled vehicle.''176 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.177
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.178 As such, the statutory definition
of an ``AFV'' includes tour buses, transit buses, heavy-duty commercial
trucks, and large motor homes.
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\1\76 42 U.S.C. 13211(3) (Supp. IV 1993).
\1\77 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).
\1\78 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).
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Regarding the AFVs covered by the Commission's labeling
requirements, four commenters indicated that the labeling requirements
should apply to all AFVs, so that consumers of those vehicles have
access to the same information.179 Nine commenters, however,
suggested that the Rule's scope could reasonably be limited in a manner
consistent with EPA 92's mandate and purpose. For example, several
commenters supported the Commission's proposal to limit the Rule's
scope to AFVs obtained from dealers or AFV conversion companies (i.e.,
not directly from the manufacturer as a special order). Those
commenters stated that consumers making special orders would likely
have sufficient knowledge of available fuel alternatives and would need
more detailed and vehicle-specific information than could be provided
on a standardized label.180 They also stated that specially
ordered AFVs were typically manufactured after the order had been
placed, so that the consumer would not actually see the vehicle until
delivery.181 Requiring the posting of cost-benefit labels on such
vehicles thus would not help consumers.
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\1\79Boston Edison (Supp.), G-26, 13; NACAA (Tr.), 132; NAFA
(Tr.), 123, 134; TVA, H-5, 1.
\1\80CEC, H-8, 11; ETC, G-24, 5; Nebraska EO, H-9, 1. Flxible
stated that the Rule's scope should be limited to vehicles operated
by the general public. Flxible, G-12, 2.
\1\81GM (Tr.), 127-128 (``[P]utting a label on a vehicle after
it's been built is already a done deal because all those decisions
had to be made at the ordering.'').
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Other commenters suggested a different approach. Those commenters
stated that the Commission's AFV labeling requirements should exclude
from its scope AFVs with gross vehicle weight ratings
(``GVWR'')182 over 8,500 lbs. (i.e., medium and heavy duty AFVs).
EMA stated that AFVs over 8,500 lbs. GVWR should be excluded because
consumers considering such vehicles make decisions based on extensive
evaluations of more factors and information than a simple label could
provide.183 Flxible stated that consumers considering heavier
commercial vehicles have usually reviewed published data on features,
compared specific vehicle types, and studied life-cycle cost studies
before placing orders. They thus have no need for ``consumer''
labeling.184 AAMA stated that those vehicles are typically
manufactured after their purchase by commercial vehicle buyers who are
well informed about pertinent costs and benefits.185 EPA also
noted that its fuel economy requirements (disclosing fuel economy
information in window stickers) do not apply to vehicles over 8,500
lbs. GVWR.186
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\1\82EPA 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.'').
\1\83EMA, 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.
\1\84Flxible (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).
\1\85AAMA, G-7, 3-4, (Tr.), 124 (purchasing decision ``will
already have been made long before [purchaser] walks into the
showroom and sees the label.''). 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.
\1\86EPA (Tr.), 122; 40 CFR 600.002-85(4)(iii) (1993).
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As noted previously, the Commission must issue uniform labeling
requirements only ``to the greatest extent practicable.''187 In
developing this revised proposal the Commission has considered the
practicality and appropriateness of including all AFVs within the scope
of its labeling requirements. Including all such vehicles might help
educate consumers about the general availability of AFVs of all sizes.
However, the record appears to indicate 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. 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
also 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. As a result, the Commission has tentatively
determined that, at the present time, AFVs over 8,500 lbs. GVWR will
not be included within the scope of its AFV labeling requirements.
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\1\8742 U.S.C. 13232(a) (Supp. IV 1993).
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To implement this tentative determination, the Commission proposes
to include a definition of ``covered vehicles'' (i.e., in substance,
AFVs under 8,500 lbs. GVWR), in the proposed rule.188 The
Commission derived this definition from EPA 92's definition of the term
``light duty motor vehicles,'' a term given special significance by
that statute.189 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].''190 The Clean Air Act191 in turn refers to existing
EPA definitions of both vehicle classifications.192 Thus, the
proposed definition of ``covered vehicle'' basically encompasses the
same category of vehicle referenced in EPA 92's fleet acquisition
requirements.
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\1\88See proposed rule section 309.1(f) (defining ``covered
vehicle''). 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).
\1\89 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. The
Commission need not resolve the matter, however, because it seems
clear that the intent was to tailor the Federal fleet's acquisition
requirement to a certain category of AFVs.
\1\9042 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].'').
\1\91 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.'').
\1\92 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.
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b. AFV manufacturers and conversion companies. As noted previously,
in its NPR the Commission proposed that its AFV labeling requirements
apply to AFV manufacturers and conversion companies.193 The
Commission did not further specify, however, the extent to which such
entities would be required to comply with its labeling proposal. In
response, several commenters addressed the circumstances under which
either entity should be included within the scope of the AFV labeling
requirements. As to AFV manufacturers, the commenters 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.194
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\1\9359 FR 24014, 24018. A conversion company reconfigures the
fuel system of an existing vehicle to permit operation on
alternative fuel.
\1\94See, e.g., Boston Edison (Supp.), G-26, 13; ETC, G-24, 4.
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As to conversion companies, however, some commenters suggested that
the labeling requirements distinguish between two different categories
of conversions: whether the vehicle is converted to alternative fuel
before or after it is delivered to the first consumer. For example,
AGA/NGVC and ETC stated that conversions performed before the vehicle
is delivered to a first consumer should be included within the scope of
the AFV labeling requirement.195 These conversions bear
similarities to OEM AFVs because in both circumstances the vehicles are
configured to alternative fuel before delivery to the first consumer.
Consumers considering these converted AFVs would thus have equal need
for comparative information as consumers considering other ``new''
vehicles.
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\1\95AGA/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.
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As to the second category, those commenters stated 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 consumers would have already been
educated about the costs and benefits of alternative fuels.196
Four other commenters addressed this category. Three stated that
aftermarket conversions should be covered because the labeling
requirements should apply to all AFVs.197 NPGA stated that
aftermarket conversions should be treated in a separate rulemaking
proceeding because ``circumstances surrounding the majority of
aftermarket conversions * * * are so different from the vehicles
equipped by [OEMs] to operate on an alternative fuel.''198
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\1\96 AGA/NGVC (Supp.), G-6, 3-4, (Tr.), 231-232; ETC, G-24, 4.
\1\97 Boston Edison (Supp.), G-26, 13; NAFA (Tr.), 130 (the same
information available from manufacturers should be available from
conversion companies); TVA, H-5, 1.
\1\98 NPGA, G-18 (Supp.), 2.
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The intent of the Commission's proposal (as it applied to AFV
conversion companies) 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.''199 As a result, ``[t]he
demand for vehicles meeting the [clean-fuel] standards will presumably
grow, thus increasing the conversion market share for companies capable
of producing large numbers of high-quality converted
vehicles.''200 Among the factors creating such a demand are
acquisition requirements for centrally fueled fleets contained in the
1990 Clean Air Act Amendments (``CAAA'').201 Those requirements
``may be met through the conversion of existing or new gasoline or
diesel-powered vehicles to clean-fuel vehicles * * * ''202
Interests affected by those mandates, as well as others interested in
achieving the clean-air benefits of driving AFVs, may therefore find an
incentive to convert existing vehicles to alternative fuel. The
Commission therefore believes that it should address this issue in this
proceeding to the greatest extent practicable.
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\1\99 B-3, inside front cover.
\2\00 58 FR 32474, 32494, June 10, 1993.
\2\01 The CAAA's acquisition requirements are in addition to
similar requirements, described infra section III(C)(1)(c), imposed
by EPA 92.
\2\02 42 U.S.C. 7587(a).
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As noted, AGA/NGVC and ETC suggested that vehicles converted to
alternative fuel after being acquired by consumers should be excluded
from the AFV labeling requirements because consumers considering
conversion of existing vehicles would not benefit from a ``labeling''
requirement. Accordingly, in developing this revised proposal the
Commission has considered the practicality and appropriateness of
including this category within the scope of its AFV labeling
requirements. The Commission notes that section 406 does not address
the issue of AFV conversions, and that including such vehicles could
help consumers compare different alternative fuels and conversion
systems.
However, the Commission believes that the circumstances surrounding
such conversions may make such a requirement impractical or
unnecessary.203 For example, the Commission understands that some
consumers convert their vehicles themselves without utilizing the
services of a conversion installation company. Further, consumers
relying on conversion companies to perform the necessary
reconfiguration will presumably be evaluating which alternative fuel to
which their vehicle should be converted. In those circumstances,
consumers would not likely make such decisions based on information
contained in a simple label. 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. Further, as noted, requiring
disclosure other than in a labeling format may be beyond the scope of
the Commission's authority under EPA 92.204 The Commission also
finds that 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.205
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\2\03 In comments responding to the Commission's ANPR, DOE noted
that: ``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.'' DOE, E-10, 3-4.
\2\04 See supra section III(A).
\2\05 See infra text accompanying notes 235 and 236.
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In any event, the Commission notes that DOE has addressed
conversions of existing vehicles in its consumer information
brochure.206 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''),207 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.''208 Given the apparent impracticalities surrounding a
requirement for aftermarket alternative-fuel conversions, and the
availability of pertinent information in DOE's brochure, the Commission
intends to exclude from its AFV labeling requirements situations where
conventional fueled vehicles are converted to alternative fuel after
being acquired by consumers. The proposed rule thus imposes no
requirements on conversion companies to label such vehicles.209
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\2\06EPA 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).
\2\07B-3, 16.
\2\08B-3, 23.
\2\09 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'').
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The Commission also has considered whether vehicles converted to
alternative fuel prior to their acquisition by consumers (e.g., after a
gasoline powered vehicle has been fully assembled) should be included
within the scope of the AFV labeling requirements. As noted, section
406(a) does not expressly exclude such vehicles from its scope and the
Commission is aware of no reason why such vehicles should be so
excluded. Accordingly, the Commission proposes to include such vehicles
within the scope of its AFV labeling requirements.
The Commission has determined, however, that its treatment of the
entity responsible for such a labeling requirement (i.e., the AFV
conversion company) needs further refinement. In developing this
revised labeling proposal, the Commission took particular note of EPA
regulations addressing this subject issued after publication of the
Commission's NPR. Those regulations implemented a provision of the 1990
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.\210\
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\210\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.
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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.211 After considering the advantages and
disadvantages of assigning liability to either entity, however, 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. 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.212 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.213 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.214
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\2\11 Fleet Standards Rule, 59 FR 50042, 50061.
\2\12Fleet Standards Rule, 59 FR 50042, 50062. Implementing that
determination will provide that:
``The clean-fuel vehicle aftermarket conversion certifier shall
be considered a manufacturer for purposes of Clean Air Act sections
206 and 207 and related enforcement provisions, and must accept
liability for in-use performance of the (sic) all vehicles produced
under the certificate of conformity as outlined in 40 CFR part 85.''
Fleet Standards Rule, 59 FR 50042, 50081, to be codified at 40
CFR 88.306-94(d).
\2\13Fleet Standards Rule, 59 FR 50042, 50061-50062.
\2\14Fleet 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.
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Because harmonizing regulatory approaches, when practicable, is
appropriate and desirable, the Commission is basing 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 that it is appropriate 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
would take similar steps to insure compliance with this revised
labeling proposal, such as developing oversight programs and entering
into indemnification agreements with installers to insure that accurate
labels were posted as required.
Under the Commission's revised AFV labeling proposal, the entity
responsible for complying with its labeling requirements for new
covered vehicles\215\ is the ``manufacturer.'' The proposed rule
defines ``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].''\216\ Under the proposed rule, manufacturers of new
covered vehicles are required to affix (or cause to be affixed) new
vehicle labels on each such vehicle prior to its being offered for
acquisition by consumers.\217\ If, however, an ``aftermarket conversion
system'' (i.e., a conversion kit)\218\ is installed on a vehicle by a
person other than the manufacturer prior to being acquired by a
consumer, the manufacturer is responsible for providing that person
with the objective information regarding that vehicle required by the
proposed rule.\219\
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\215\The Commission's revised proposal as to used covered
vehicles is discussed infra section III(C)(1)(d).
\216\Proposed rule Sec. 309.1(r).
\217\Proposed rule Sec. 309.20(a)(1).
\218\See proposed rule Sec. 309.1(b) (defining ``aftermarket
conversion system''). This definition was derived from a recently-
issued EPA definition of the same term. See Gaseous Fuels Rule, 59
FR 48472, 48490, to be codified at 40 CFR 85.502(c).
\219\See proposed rule Sec. 309.20(a)(2). Specific data proposed
to be disclosed on labels for new covered AFVs is discussed infra
section III(C)(2)(a).
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c. Acquisitions by consumers. As noted previously, the Commission's
AFV labeling requirements are to assist ``consumers,'' and one aspect
of the Commission's NPR proposal defined that term as a purchase by an
individual, corporation, or other business organization.\220\ Several
commenters stated that the proposed definition incorrectly limited the
Rule's scope. For example, the Commission's proposal had the effect of
excluding leasing arrangements from its scope. NAFA noted that EPA 92
and the Clean Air Act both impose AFV ``acquisition'' mandates on
certain designated entities and suggested that the Commission's AFV
labeling requirements track those requirements.\221\ Other commenters
addressing this issue agreed that the Commission should broaden the
Rule's scope to encompass purchases and leases.\222\ The proposed
definition also had the effect of excluding purchases by government
agencies. API stated that this definition should be modified to include
federal, state, and local governments as consumers.\223\
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\220\59 FR 24014, 24018.
\221\NAFA (Tr.), 133. 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).
\222\DOE (Tr.), 135; ETC (Tr.), 135; NACAA (Tr.), 135; RFA, G-5,
5.
\223\API, G-25, 8.
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As to leasing arrangements, the commenters indicated that interest
in AFVs could be motivated in large part by congressional mandates.
Because consumers will be required to ``acquire'' AFVs, the Commission
has determined that its AFV labeling requirements should include such
arrangements to the greatest extent practicable, and to modify its
definition of consumer to further EPA 92's legislative purpose.
In determining what is practicable, the Commission notes that
consumers entering into leasing arrangements have different information
needs. 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 proposed 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. 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. Based on
its belief that consumers entering into short-term leasing arrangements
will not make decisions based upon information disclosed in a label,
the Commission thus has tentatively determined that including short-
term leasing arrangements in the proposed rule is not necessary.
As to including governmental entities within the scope of the term
``consumer,'' the Commission notes that EPA 92 imposes mandatory
acquisition requirements on the Federal fleet.\224\ As such, Federal
fleet operators will likely have equal need for comparative information
as other entities required to acquire AFVs. The Commission has
tentatively determined, therefore, that neither the Federal government
nor other governmental agencies should be excluded from the scope of
its AFV labeling requirements.
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\224\See 42 U.S.C. 13212 (Supp. IV 1993).
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To implement these tentative determinations, the proposed rule's
labeling requirements apply to covered vehicles ``offered for
acquisition by consumers.''\225\ The intent of one aspect of this
proposal is to include purchases and long-term leasing arrangements
within the scope of the AFV labeling requirements. Accordingly, an
acquisition is defined in the proposed rule 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.\226\
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\225\See proposed rule Secs. 309.20(a)(1) (new covered
vehicles), 309.21(a) (used covered vehicles).
\226\See proposed rule Sec. 309.1(a) (defining ``acquisition'').
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This definition was derived from a recent EPA regulation
implementing aspects of the 1990 Clean Air Act Amendments,\227\ which
used the 120 day period as the dividing line between short and long-
term leases. In the preamble announcing that regulation, EPA announced
its determination 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.\228\ The Commission agrees that the 120 day
period reflects a reasonable demarcation between short and long term
rentals.
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\227\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)).
\228\58 FR 64679, 64689, 64690 (excluding leases under 120 days
from Clean Fuel Fleet Program).
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The Commission also proposes 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.\229\ The
proposed definition of this term was derived from section 302(e) of the
1990 Clean Air Act Amendments\230\ and EPA's regulation implementing
that section, 40 CFR 88.302-94 (1993).
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\229\See proposed rule Sec. 309.1(d) (defining ``consumer'').
\230\42 U.S.C. 7602(e) (defining ``person'').
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d. Used AFVs. One commenter suggested that used AFVs should be
excluded from the Commission's labeling requirements because section
406(a) was primarily concerned with new AFVs.\231\ The remaining six
commenters addressing this issue agreed that a consumer contemplating
the acquisition of a used AFV would have the same need for comparative
information as a consumer considering a new AFV, and thus used AFVs
should be covered within the AFV labeling requirements.\232\ At the
Workshop, representatives for AMI and NAFA 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.\233\ Two of
these commenters recognized, however, that requiring used vehicle
dealers to make objective disclosures regarding a used AFV's
performance could be problematic.\234\
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\231\NACAA (Tr.), 221.
\232\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.
\233\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 whither 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.''
\234\ETC, G-24, 4; RFA (Tr.), 217.
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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.235 Requiring disclosure of information based on the
vehicle's condition when new could therefore be misleading to
consumers.236 To remedy this problem, EPA and ETC suggested that
used AFV labeling disclose general descriptive information and not
address objective performance factors.237
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