New FTC Labeling Rule Aims to Help Consumers Reduce Energy Costs

WASHINGTON — The Federal Trade Commission has updated its Energy Labeling Rule so that consumers can more accurately compare the estimated annual energy consumption of appliances before they buy them.

The FTC’s original Energy Labeling Rule, issued in 1979 under the Energy Policy and Conservation Act, required manufacturers to attach labels to major home appliances and other consumer products that help consumers compare the energy usage and costs of competing models. 

The labels contained three primary disclosures for most covered products: 1) estimated annual operating cost, 2) a “comparability range” showing the highest and lowest energy consumption or efficiencies for all similar models, and 3) the product’s energy consumption or energy efficiency rating. 

These labels continue to help consumers anticipate their energy costs and avoid costly surprises after a product has already been purchased.

However, in May 2022 the agency issued a notice of proposed rulemaking on updates to the comparability ranges and associated energy costs for refrigerators and freezers, dishwashers, water heaters, room air conditioners (range only), clothes washers, furnaces, televisions and pool heaters. 

In addition, the commission proposed updating the average energy cost figures manufacturers must use to calculate a model’s estimated energy cost.

After reviewing the comments received, the FTC this week finalized the updates to the rule as proposed, with two changes. 

First, the agency will wait to update the comparability rate for televisions until after the Department of Energy completes test procedure changes. 

Second, the FTC has set the effective date for room air conditioner labels to coincide with the 2023 production cycle, to help ensure an orderly transition for the manufacturers of these appliances.

The commission vote approving publication of the notice in the Federal Register was 4-1, with Commissioner Christine Wilson voting no. 

Details on the specific EnergyGuide label changes can be found in the Federal Register notice published on Monday, Oct. 3.

Dan can be reached at [email protected] and @DanMcCue