FTC Staff Comment to the National Association of Attorneys General Concerning Proposed Environmental Marketing Guidelines for Electricity

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Request for Comments on
Revised Draft of Proposed
Environmental Marketing Guidelines for Electricity
Response to the
National Association of Attorneys General
Comment of the Staff of the
Bureau of Consumer Protection
of the Federal Trade Commission(1)
August 12, 1999
I. Introduction and Summary
The staff of the Bureau of Consumer Protection of the Federal Trade Commission (FTC) appreciates this opportunity
to comment on the Second Discussion Draft Environmental Marketing Guidelines for Electricity (Draft Guidelines),
proposed by the Environmental Marketing Subcommittee of the National Association of Attorneys General (NAAG)
Energy Deregulation Working Group (Subcommittee). The Subcommittee has led the development of industry
guidelines governing environmental marketing claims for consumer electricity products that will facilitate competition
in retail electric power markets.
The FTC is an independent administrative agency responsible for maintaining competition and safeguarding the
interests of consumers. The staff of the FTC has a longstanding interest in regulation of and competition in energy
markets, and has submitted comments to the Federal Energy Regulatory Commission (FERC), as well as many state
and regional regulatory bodies.(2) The staff actively monitors industry and legislative developments in the electric
industry at the state and federal levels that will affect consumers' interests. The FTC's mission in this area includes
attempting to ensure truth in advertising and to prevent and remedy unfair or deceptive trade acts or practices.
The staff applauds the Subcommittee's thorough and intensive efforts in reshaping the Draft Guidelines in light of the
staff's and others' prior comments.(3) We continue to support the Draft Guidelines' use of the FTC's Guides for the
Use of Environmental Marketing Claims, 16 C.F.R. Part 260 (FTC Green Guides), as the starting point for developing
guidelines tailored to electricity. In large part, the revisions in the Draft Guidelines incorporate many of the general
suggestions made in the staff's First Guidelines Comment. We appreciate the Subcommittee's consideration in that
regard. Our intent here is to suggest improvements in six general areas to an already thoughtfully crafted proposal.
In brief, this comment observes that:
1) Research to date suggests consumers would not benefit from requiring a disclosure in advertisements about the
use of a "tagging" system;
2) Caution should be exercised when requiring companies to disclose the environmental effects of their power on a
"life cycle" basis;
3) The requirement that all environmental claims disclose the impact of other types of environmental harm appears
too restrictive and may chill advertising claims that would otherwise provide information useful to consumers'
purchasing decisions;

4) After further consideration of its earlier comment, staff believes it would be premature to state definitively and
categorically that the term "clean" connotes a claim of general environmental benefit, and to impose the burden of
substantiating all environmental benefits whenever it is used;
5) Further consideration should be given to the issue of allowable tolerances between claimed and actual content of
power supply portfolios; and
6) Other general FTC guidance and principles concerning substantiation and endorsements may be appropriately
incorporated into the Draft Guidelines.
II. Disclosures for Claims
Substantiated Under a Tagging System
The Draft Guidelines propose that any environmental claims that are substantiated through a "certificate-based" or
"tradeable tags" tracking system should be "accompanied by a clear and prominent disclosure of the use of a tagging
system to substantiate the claim."(4) The staff believes this requirement is not necessary to prevent deception, and
will not aid consumers in making informed choices about their electricity purchases.
Certificate-based or tradeable tags is one of two methods that have been suggested for tracking electric power from
generator to consumer to substantiate claims regarding the attributes of retail electricity. A "tagging" system involves
the separation of power, which is a pure commodity, from its characteristics. Each unit of power generated is given a
tag describing its characteristics, and the tag may be sold separately from the power itself. Under tagging, there are
two separate markets operating at the wholesale level. A retailer (or upstream distributor) may buy power from the
pool or from a particular generator and then buy "tags" from other generators which give the retailer the right to claim
that the power it sells has the attributes associated with the tags that it holds. This allows for consumers to support
environmentally preferred power through their power purchases, even when technological constraints on the grid
would prevent the consumer from purchasing the green power from the generator that produced it. By contrast, the
second method relies on a "contract path." Under this method, each unit of power, along with its attributes (fuel type,
emissions, etc.), is accounted for in contractual arrangements between the generator and a wholesale buyer,
between various distributors and retailers, and between the retailer and the consumer. The distinguishing
characteristic of the contracts system is that power is sold together with its attributes.
Although tags may seem more complicated than contracts and may raise the suspicions of some consumers with
only a cursory understanding of the tagging system, staff does not believe that the benefits to consumers of NAAG's
proposed required disclosure of the use of a tagging system would outweigh its burdens. Research conducted by the
National Council on Competition and the Electric Industry (NCCEI)(5) indicates that consumers have less confidence
in environmental claims about power when they are told that a tagging system is used to support them. There is no
reason, however, that a well-designed tagging system would be any less reliable for tracking electric power than a
contracts system. Moreover, some believe it would be less expensive to operate. Both systems succeed in matching
the premiums that consumers are willing to pay for green power to the generators who invest in and produce that
power. Thus, for the purposes relevant to consumers, there is no difference between the methods.(6)
Furthermore, it is important to note that these tracking methods are systems of substantiating claims, and should not
greatly affect the products or benefits that consumers are purchasing. The FTC does not generally require that
substantiation methods be disclosed. Rather than require that consumers evaluate for themselves whether a test
result was obtained based on sound scientific methods, the statutes, rules and guides that the FTC enforces seek to
ensure that the substantiation is reasonable. For example, the FTC Green Guides allow for recycled content to be
calculated on the basis of annual averages,(7) but disclosure of this fact to consumers is not required. Likewise,
consumers do not generally know what test methods are used to calculate the nutritional content stated on food
labels, but as long as the methods are reasonable and reliable, consumers are not misled or injured by such
omissions. Moreover, it would be extremely difficult to craft a disclosure that would be easy to understand and not
confusing. Accordingly, a disclosure might actually serve to increase consumer confusion, and could needlessly
undermine consumers' confidence in the new electricity market. For these reasons, the staff believes that requiring a

disclosure for tags-based claims is not necessary to prevent consumers from being misled or to assist them in
making informed choices about electricity.
III. Issues in Accounting for Life Cycle Effects
The Draft Guidelines propose that environmental claims should account for a number of factors associated not only
with electricity generation, but also with the life cycle of the product, including fuel source creation or preparation,
waste disposal, and facility siting.(8) The comment included in this Section also states that "life cycle aspects that are
further afield should be taken into account when the claim requires it to avoid deception." Such a requirement would
be over-inclusive by its application to all claims, rather than only to claims that raise life cycle issues by their own
terms.
When making a claim about environmental benefit, it is imperative that marketers not ignore significant impacts that
would affect the claim. On the other hand, if required to account for every environmental effect of electricity
production, marketers may be significantly hampered in their ability to make any environmental claims and thus
consumers may be deprived of useful information. The staff considers it unnecessary and contrary to consumers'
interests to require marketers to disclose all environmental impacts from the entire life cycle of their products when
making any environmental claims, for several reasons.
The Comment in Section 2(h) states that "consumers evaluate such claims primarily with reference to . . . the creation
or preparation of the fuel source, the actual generation of the electricity, the disposal of waste resulting from
generation, and the siting of the generating facility." Although there may be a significant percentage of consumers
that perceive claims in this way, the FTC staff is unaware of research or studies supporting this view. The staff
considers it premature to make such a judgment about consumer attitudes and to base advertising guidelines on
such an assumption absent such evidence. In addition, this claims interpretation approach would depart from the
approach represented in the FTC Green Guides.
Furthermore, the examples in the Draft Guidelines seem to indicate that life cycle disclosures will be required for
some fuel sources, but are silent with respect to others. For instance, Example 1 in Section 2(g), Geographic
Limitations on Claims, describes a clean air claim about a wind farm product without suggesting that the claim should
include a statement that windmill production, siting and construction may generate emissions. In Section 3(b),
"Green" and "Clean," Example 2 states that an offer of "green power" from solar panels would not be deceptive
because it is renewable and its generation and transmission processes and placement of the panels create no
releases or significant harm to the environment. The example, however, does not mention the environmental
attributes of manufacturing the panels or any other process associated with the product's life cycle. Example 3 in the
same section, as well as some examples in other sections, are similarly silent as to environmental impacts broader
than the face of the claim itself, and thus appear inconsistent with a life cycle disclosure principle.
The examples in the Draft Guidelines illustrate some of the difficulties in determining what effects should be
considered under a life cycle analysis. Further, there is no widely accepted and established method for measuring life
cycle environmental effects. Because of this and the lack of evidence regarding consumer attitudes, the FTC's Green
Guides do not require marketers to account for the effects from the entire life cycle of a product.
Consistent with the principles embodied in the FTC Green Guides, staff supports a guideline by which marketers
would be required to account for the significant life cycle effects of their product(s) to the extent that their advertising
claims warrant. For example, a claim that a product "meets all ISO 14000 standards for environmental quality" would
require substantiation with competent and reliable evidence based on a life cycle analysis meeting ISO 14000
standards. On the other hand, a claim that a company's "natural gas plants release 20% less smog-forming
compounds than neighboring coal-burning plants" by its terms does not seem to imply any claims about emissions
produced by extraction of the natural gas or transporting the fuel, and should not require substantiation of those
effects.

IV. Qualification Requirements May Cause
an Unnecessary Chilling of Claims
The Draft Guidelines state a general principle that "if a claim states a specific environmental benefit, it should be
accompanied by disclosure of all environmental harms associated with the relevant product or company that reduce
or eliminate the stated environmental benefit."(9) Example 1 in this section would require disclosure of emissions
from a company's waste incineration plants in an advertising claim about emissions from the company's electricity
production. The text and example may go too far in requiring disclosure of matters not raised by the claim itself. They
could be read as requiring advertisers to disclose all environmental characteristics of their products whenever they
make advertising claims about any characteristic. This may be broader than the Subcommittee actually intends, but
modifications to the quoted language (and similar language in the comment following it) as well as additional
examples are needed to define the limits of the principle.
In Example 1, the claim that the company is "working to reduce air pollution in Ohio" is still true and substantiated,
even if the company also produces pollution from other sources. Under the example, it is still true that pollution is less
than it would have been but for the company's investment in scrubber technology. Consumers may find the
information useful in making purchasing decisions, and those decisions are not undermined if air pollution from other
pre-existing sources is not disclosed. The claim does not state or imply that the company produces no air pollution --
just that it is "working" toward reductions -- so consumers should already be aware that the company continues to
produce some level of air pollution.
Example 2 in Section 4(e), Emissions Claims, appears to apply the concept described above to emissions claims in
particular. The example implies the same type of overly broad restrictions on otherwise truthful claims. It describes a
claim stating that a product is "good for the environment" because it produces "20% less SO2."(10) The example
finds the claim deceptive because the product would still emit significant amounts of air pollutants. Although the claim
would less likely be deceptive if it said "better" rather than "good" for the environment, if the amount of SO2
emissions is lower because of newly installed scrubber technology and the reduction benefits the environment, even
a "good" for the environment claim may not necessarily be misleading. The advertiser should be able to communicate
that information to consumers, so long as the advertising does not overstate the reduction in emissions or understate
the plant's overall effect on air pollution.(11)
V. Defining "Clean" to Be a Claim of General
Environmental Benefit Is Premature
The Draft Guidelines state that both "green" and "clean" are terms of general environmental benefit.(12) The Draft
Guidelines therefore impose requirements on the use of these terms consistent with the FTC Green Guides
requirements for such claims.(13) Accordingly, whenever the term "green" or "clean" is used, "every implied
representation that the general assertion conveys to consumers must be substantiated," and these terms should be
"accompanied by clear and prominent disclosure of the sense in which the term is being used." With respect to the
term "clean," there is a wide variety of ways in which the term could be used, and a significant lack of experience with
or consumer research concerning interpretation of advertising using the term. These factors suggest that it is
premature to state definitively and categorically that the term connotes a claim of general environmental benefit.
The staff's First Guidelines Comment urged that it would be premature and unnecessarily restrictive to adopt
standardized, predetermined definitions for the terms "green" and "clean," due to the lack of consumer research and
experience with their use in advertising. Instead, that comment suggested an easier approach would be to simply rely
on the approach taken for general environmental benefit claims in the FTC Green Guides. The staff continues to
believe that adopting the requirements for general environmental benefit claims is the proper approach for claims
using the term "green."(14)

Upon further reflection, however, the staff believes that applying this approach to the term "clean" could result in
unnecessary limitations on advertising claims and could deprive consumers of a shorthand way of recognizing certain
environmental information about electricity products. Given the use of the term "clean" in everyday speech and in
other energy advertising contexts -- such as the long-standing use of the phrase "clean natural gas" -- it seems likely
that consumers could interpret the term "clean" to refer only to emissions, rather than to other broad environmental
qualities.(15) Accordingly, it would be preferable for NAAG to adopt this narrower interpretation, rather than to equate
"clean" with "green." Of course, it would be best to test this interpretation by consumer research. Absent such
research, however, the staff believes that requiring advertisers to substantiate all possible environmental claims
about a product claimed to be "clean" would unnecessarily inhibit advertisers from conveying desirable attributes of
their products in ways that consumers are likely to understand.
VI. Allowance for Claimed vs. Actual Production
Various types of numerical or percentage type claims are discussed and defined in the Draft Guidelines Section 4(h),
Other Quantitative Claims. These include "No x or X-free," "Low x," "100% x or All-x," and other specific percentage
claims. The comment following the section states that "the Guideline does not permit tolerances from quantitative
claims that favor the marketer," except for de minimis(16) tolerances in situations where the marketer occasionally
uses a small amount of emergency backup power, and then only with clear and prominent disclosure of the reliance
on emergency backup. This standard may excessively restrict legitimate claims that would be informative and useful
to consumers. It seems premature to take such an approach at a point when marketers and regulators have so little
experience advertising products and using tracking to substantiate them. The staff believes that incorporating a
reasonableness standard for tolerances, rather than any specific level of tolerance, would be a more workable
approach.
Variations between claimed performance and actual performance may occur through no fault of the marketer, and in
greater than de minimis amounts, for a variety of reasons. In addition, advertising claims for electricity products are
necessarily made before the product is actually produced and before actual demand is known. Thus, it is not
reasonable to expect electricity marketers to be able to match their advertising claims exactly all of the time, or even
over a year's time. So long as the marketer had a reasonable basis supporting the claims at the time they were made,
and the deviation is not material to consumers' expectations under the circumstances, numerical or percentage
claims that constitute the reasonably expected amounts will convey useful information to consumers. A rigid standard
defining as deceptive any failure to meet exactly the claimed production will reduce the incentives of marketers to
make useful and informative claims regarding various types of power that they might provide to consumers.(17)
The degree to which a tolerance should be specified for the difference between predicted and actual production has
mostly to do with the technological and meteorological constraints that are specific to the industry, and generally
change over time. Because there has been little experience with competitive electricity marketing claims, using a
fixed tolerance, such as 5% or 10%, would find little support from an analysis of the industry. Rather than setting a
standard using a specific percentage allowance, it might be preferable to use a reasonableness standard in which
deviations from the claimed production would be considered on a case-by-case basis.
Allowing a tolerance in reasonable amounts for unexpected and unintended deviations from advertising claims does
not mean that marketers would be able to inflate numerical or percentage claims about the environmental
characteristics of their products. That is, an electricity seller who can reasonably expect to supply 40% of demand
from solar power could not advertise that their product is 50% solar simply because there is an allowance for
reasonable deviances to account for unexpected, unintended events. Such an inflated claim would not be reasonably
substantiated when made, and the subsequent deviation would not be due to unexpected events.
Unlike the certification organizations such as Green-e, neither the Attorneys General nor the FTC has the expertise or
the resources to audit the portfolio of each electricity marketer each year. When an investigation is opened because
of an apparent discrepancy, it may be that a marketer with huge differences between projected and actual portfolios
actually has a justifiable reason, while another marketer might have very small differences that are not justified.

Clearly, there would be no justification for persistent downward deviations year after year. But in a given year, the law
enforcement agency would consider whether it was reasonable for the marketer to make the claim(s) that it did. A
reasonableness standard would be workable as a starting point until experience can be gained that will allow more
specific standards to be set, if necessary, and will avoid the possibility that a numerical percentage standard could
sanction some unreasonable results. The need for a disclosure regarding a de minimis or reasonable tolerance is
also questionable.
An additional consideration applies to the requirements for "low x" claims, in Section 4(h)(2). "Low" is defined to mean
less than 10% of the amount in system power. This percentage standard seems overly stringent, especially since
companies must disclose the exact ratio to the system average, and since "system power" is defined to include all
power generated (so the system average itself already contains power with relatively low levels of the component at
issue). A given product might still be quite "low" in some component even when it contains even half as much as the
amount of that component in system power. For example, under the Draft Guidelines definition, a marketer could not
claim to have a "low emissions" product, even where its emissions were only a quarter of the amount in system
power, and one third the amount from a natural gas plant. Because a claim of "low" is very useful in guiding
consumers to the products having relatively less of something, it would seem unduly restrictive to define the term and
limit such claims to such extreme reduction levels.
VII. Incorporate Other FTC Principles in Draft Guidelines
The Draft Guidelines use the FTC Green Guides as a starting point and baseline. Certain sections of the Draft
Guidelines could also benefit from the application of other principles developed in FTC guidance and case law for
advertising in general.
For the most part, the Draft Guidelines present examples that are very useful in illustrating the principles involved. In
several instances, however, the Draft Guidelines' examples create some ambiguity about what wording is part of a
hypothetical claim and what wording is part of the example's explanation. This distinction is particularly important
because any claim (even a hypothetical one) can only be evaluated based on the message in the ad itself. The Draft
Guidelines should carefully identify what words are being used as part of a hypothetical advertisement, in order to
preserve the usefulness and force of their most concrete form of the guidance. Example 3 in Section 2(f),
Comparative Claims, is one such instance. There, it seems likely that the hypothetical advertisement is meant to
include the entire phrase, "our facilities emit fewer pollutants than a competing company's facility," but the placement
of the quotation marks in the example makes it uncertain. Conversely, Example 7 in Section 3(b) appears to quote an
ad as saying that it is "based on 'use of new scrubber technology, which reduces the emission of SO2,'" but the
example is unclear as to whether the quoted language is describing the wording of the advertisement itself or
describing the advertiser's substantiation.
Both the discussion of substantiation in Section 2(b) of the Draft Guidelines, as well as Definition 5(c), Competent and
Reliable Evidence, seem to adopt the FTC's definition of scientific evidence for all types of environmental claims
about electricity products or companies. General FTC principles of substantiation do not require scientific evidence
for every claim, but only where the nature of a particular claim makes it reasonable to expect such evidence as
substantiation.(18) Requiring scientific evidence for all claims would mean imposing a standard much higher than the
one for substantiation in general, which simply requires that there be a reasonable basis, consisting of some form of
competent and reliable evidence, for a claim. Legitimate claims could be discouraged by requiring that electricity
marketers have scientific evidence for claims such as the percent of solar power in a portfolio (which could be
substantiated by contracts rather than scientific research) or for the fact that a company donates a percent of profits
to environmental causes. Instead, the Draft Guidelines should qualify the requirement for scientific evidence by
limiting it to those situations in which such evidence would reasonably be expected.
The fact pattern and conclusion of Example 1 in Section 3(e), Emissions Claims, are sound, and with a slight change
in wording could be made consistent with the FTC Green Guides. The example states that an "ozone friendly" claim
would be deceptive if the product emits "any ozone-depleting substance." This wording is consistent with the FTC

Green Guides' Section 260.7(h), Example 1, concerning "ozone friendly" claims; however, staff is not aware of any
association between electricity generation and ozone-depleting compounds. The second example in the FTC Green
Guides concerning such claims more aptly pertains to electricity. The second FTC Green Guides example illustrates
that an "ozone friendly" claim is also deceptive if the product produces compounds that contribute to formation of
ground-level ozone and smog. Thus, the wording of the Draft Guidelines' example could be changed to state that an
ozone-friendly claim is deceptive if the product emits "any NOx or other substance that degrades air quality." In that
way, the example would be consistent with both the FTC Green Guides and current operating conditions in the
electric industry.
FTC advertising guidelines other than the Green Guides may also provide concepts applicable to Section 3(f),
Environmental Certifications. The Subcommittee may wish to consider adding language in that section to address the
potential deception when a certifying organization lacks the expertise necessary to make an environmental
certification, or the certification is not based on the actual exercise of such expertise, or the organization is not
independent from the advertiser. Such prohibitions are consistent with the FTC's guidelines concerning product
endorsements by experts and organizations (Guides Concerning Use of Endorsements and Testimonials in
Advertising, 16 C.F.R. Part 255), as well as FTC orders prohibiting such endorsements.(19)
* * * * *
The staff supports NAAG's efforts, and looks forward to further participation as the process moves forward.
Respectfully submitted,
________________________
Joan Z. Bernstein, Director
Elaine D. Kolish, Assoc. Dir., Division of Enforcement
Mary K. Engle, Asst. Dir., Division of Enforcement
Gina Schaar Howard, Attorney, Division of Enforcement
Bureau of Consumer Protection
Federal Trade Commission
August 12, 1999
Endnotes:
1. This comment represents the views of the staff of the FTC's Bureau of Consumer Protection. They are not
necessarily the views of the FTC or of any individual Commissioner.
2. For example, the staff submitted a comment on consumer protection issues to the Utah Public Service
Commission <www.ftc.gov/be/advofile.htm (V980016)>. On May 26, 1999, Elaine Kolish, Associate Director of the
Enforcement Division, Bureau of Consumer Protection, provided testimony about the FTC's consumer protection role
in emerging electricity markets before the U.S. House of Representatives Committee on Commerce Subcommittee
on Energy and Power
< www.ftc.gov/os/1999/9905/electrictestimony.shtm >.
3. The staff previously submitted a comment addressing the first draft of the Draft Guidelines, on August 10, 1998
<www.ftc.gov/be/V980020.shtm> (First Guidelines Comment).
4. Draft Guidelines, Section 2(b), Substantiation.

5. Melissa J. Hermann & Brian Roe, "Consumer Research on Tracking Approaches and Product Versus Supplier
Labeling," National Council on Competition and the Electric Industry (Oct. 1998).
6. It may make a difference to consumers if the environmental benefits associated with the power they are buying will
be enjoyed in a remote geographical area rather than in the region where they live. If advertising implied a
geographical scope that was different from the scope of the tagging system, the existing guidelines prohibiting
misrepresentation or overstatement of environmental benefits would cover them. This problem could also be solved
by limiting the geographical area over which tags can be traded.
7. FTC Green Guides, 16 C.F.R. § 260.7(e).
8. Draft Guidelines, Section 2(h), Scope of Claims.
9. Draft Guidelines, Section 2(c), Qualifications and Disclosures.
10. The example also includes a statement that the claim is deceptive based on the lack of basis for comparison.
Although this statement is correct, it would be less confusing to limit the example so that it illustrates only one
problem at a time. For example, the hypothetical claim could be that the product produces "20% less SO2 than 5
years ago."
11. A similar problem arises due to an ambiguity in Example 5 in Section 3(b), "Green" and "Clean." The example
deals with an ad urging consumers to "Help us make the environment clean" by buying a product produced by half
renewable sources and half system power. The example finds the claim deceptive because the use of system power
would result in harmful emissions and radioactive waste. This example may be ambiguous because many electricity
sellers will be required to disclose their fuel sources and emissions levels in advertising under the mandatory
disclosure requirements being adopted by many states. If the advertising in this example included disclosures
indicating that the fuel sources used would continue to emit some pollutants, but at a level lower than the system
average, then the claim would not be deceptive.
12. Draft Guidelines, Section 3(b).
13. 16 C.F.R. § 260.7(a).
14. This does not necessarily mean, however, that a "green" product must be entirely benign and completely free of
environmental impacts. Consumer interpretation of the term has not been tested to our knowledge, and remains
uncertain. If consumers interpret the term "green" to mean that a product is environmentally preferable, but not
necessarily free of environmental impacts, then the claim could be substantiated by competent and reliable evidence
that it is superior to other products in environmentally significant ways.
15. This concept is raised in Example 6, also in Section 3(b), which poses the situation of a seller claiming to use
"clean coal." The example states that the claim is deceptive because consumers "may infer" a representation that the
fuel source "will eliminate the levels of air emissions commonly associated with coal." Such an inference is not
necessarily obvious enough, however, to state that the words "clean coal" imply that claim without copy testing or
other research to verify it. Moreover, the natural gas industry currently makes the claim "clean natural gas" with
respect to automobile fuels but, to our knowledge, there has been no regulatory or legal challenge testing it to date.
16. In the sections on "No x or X-free" and "100% X or All-x," the use of the phrase "less than" in conjunction with the
de minimis standard (amount must be, e.g., "less than a de minimis percentage of the percentage of "x" in the total
system power") is somewhat confusing. Also, in the section on "Specific percentage claims," it would be clearer to
state the requirements as "...that 'p%' is greater than or equal to the percentage of 'x'..." for claims of a small amount
of 'x' and "...that 'p%' is less than or equal to the percentage of 'x'" for claims about a large amount. The current
reference to the "maximum/minimum percentage of 'x'" may imply that the relevant percentage varies, for example,

from day to day or hour to hour (that 'p' must be greater/less than the percentage of 'x' on any given day or in any
given hour), which is not the case with allowance for annual averaging. With annual averaging, there is only one
relevant percentage and it is the annual percentage of 'x.' The definitions might be reworded to avoid these
grammatical problems.
17. The chilling effect on numerical or percentage claims could have economic consequences for the electricity
market's development as well. If the claim by a company that wishes to advertise its wind power is limited by the strict
need to produce the claimed amount of wind power, then the company will be less likely to be able to obtain an
adequate return on the investment that it made. Thus, there will be less incentive for companies to invest in
environmentally superior technologies that happen to have variable production potential, a result contrary to most
states' goals of encouraging such development.
18. See Pfizer, Inc., 81 F.T.C. 23, 64 (1972); see also FTC Policy Statement Regarding Advertising Substantiation,
appended to Thompson Medical Co., 104 F.T.C. 648, 839 (1984), aff'd, 791 F. 2d 189 (D.C. Cir. 1986), cert. denied,
479 U.S. 1086 (1987).
19. See Black & Decker, 113 F.T.C. 63 (Jan. 10, 1990) (consent order entered settling allegations that iron ad carried
deceptive endorsement of National Fire Safety Council, which lacked expertise in evaluation and testing of appliance
fire safety); FTC v. Nat'l Energy Specialists Ass'n, 1992 U.S. Dist. LEXIS 18453 (D. Kan. Aug. 26, 1992) (Complaint)
and 1993-1 Trade Cas. (CCH), p. 70211 (D. Kan. April 29, 1993) (Order) (trade association endorsements of energy
efficiency and savings allegedly were false and misleading because they were granted based only on application and
payment of fee). See also Complaint filed in Screen Test U.S.A., No. 99-2371, U.S. Dist. Ct., D.N.J. (May 27, 1999),
<www.ftc.gov/opa/1999/9905/screen.shtm> (alleging that supposedly independent, nonprofit organization endorsing
modeling agency is simply a shell corporation owned and organized by the agency itself).