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Under one proposal, consumers would see a letter grade reflecting both a vehicle's fuel economy and its emissions. It also would show an estimate for what consumers can expect to get in fuel cost savings over five years compared with an average gasoline-powered car manufactured in the same model year.

Under the second proposal, the label would keep the mile-per-gallon metrics and the estimate for annual fuel costs. It also would include information on the tailpipe emissions of the cars.

For electric and plug-in hybrid electric vehicles, either label will translate the electricity usage into an equivalent in miles per gallon. For electric cars in particular, either label would show fuel economy as measured in kilowatt hours per 100 miles.

Currently, the fuel economy labels, which show up as window stickers on every new car in the sales lot, show a fuel economy measured in miles per gallon, as well as an estimated fuel costs for driving an average of 15,000 miles per year. The government compares the fuel economy and costs among cars in the same class.

One Option: Easy to Understand Letter Grades

The new proposals announced Monday would compare numbers across all classes. For example, under the letter-grade proposal, electric cars are likely to get A+ while regular hybrids such as the Toyota (TM) Prius would get an A-. A Toyota Corolla would get a B+ while a Chevy Corvette would fall in the C category. A Ferrari 612 would get a D.

"As new technologies emerge from laboratories and start to show up in showroom floors, we think a new label is absolutely necessary for consumers to make the right decisions for the wallet and the environment," said Gina McCarthy, assistant administrator for air and radiation at the Environmental Protection Agency, during a press conference Monday.

Consumers can see details of the proposed labels at the EPA's Website. The government is seeking public comments on the proposal for 60 days and hold hearings before settling on a label design in early 2011. The goal is to have the new label available for 2012 models. Consumers can email their comments to newlabels@epa.gov.

Biggest Change in Three Decades

The plan to change the label represents the biggest change how the government evaluates and labels cars' fuel economy in about 30 years, McCarthy said. The change is coming in part because the government and auto industry expect to see a growth in the sales of alternative-fuel vehicles.

The government began to push the auto industry to invest more in building fuel-efficient cars after gasoline prices shot up a few years ago. President Obama announced plans to require fuel economy improvements soon after he took office. General Motors vowed to do more to engineer those kind of cars after it received government bailout last year.

But revamping the fuel-economy sticker has been a complex task, not least because the information that will end up on the new label could greatly sway consumers' buying decisions. The EPA, along with the Department of Transportation, has had to figure out how to make valid comparisons between conventional gasoline cars and cars that run entirely or partly on electricity. It also had to come up with a way to label greenhouse gas emissions -- information that hasn't been available on sales stickers -- in order to comply with the Energy Independence and Security Act of 2007.

As a result, the EPA took more time than was initially expected by the auto industry to come up with rules for new fuel economy and greenhouse gas emissions labeling.

Both GM and Nissan (NSANY) have been itching to show off fuel economy numbers for the new cars they are rolling out later this year: the plug-in hybrid Chevy Volt and the all-electric Nissan Leaf. Both companies once released some incredible fuel-economy numbers based on one version of the EPA's proposal to measure fuel economy for electric cars and plug-in hybrids. But the numbers raised eyebrows and questions about their accuracy (and warnings from the government), so both companies stopped touting them.

The EPA is working with GM and Nissan on labeling the Volt and Leaf separately since both automakers have started taking orders for the cars. But McCarthy declined to say more about how fuel economy information might appear on labels for these two vehicles.

Interactive Website and Smartphone Use

The EPA is also proposing to to provide more information than can fit on the labels by setting up a website that consumers can browse, and a method for downloading cars' data onto smartphones.

The additional information being made available would include greenhouse gas emissions emitted by power plants and refineries. Consumers also could access the website to get better electricity pricing for where they live.

"We don't want to make the label so complicated that it becomes meaningless. With smartphones, you can download info at the point of sale. The goal is to make the label useful and simple," said David Strickland, administrator for the National Highway Traffic Safety Administration.

Given the importance of fuel-economy labels in car sales, the government can expect to receive heavy lobbying from carmakers, who might not like the letter-grade proposal. After all, a C or D will denote poor performance in consumers' minds, so cars getting those grades might not sell well.

McCarthy said the grades follow a standard bell curve and are meant to provide information to consumers in a format they can relate to. She also pointed out that the consumers might ultimately prefer the second proposal, which sticks with the more traditional metrics.

"It's our job to communicate what the law says, so we are interested to hear from the public if they don't like the grades," she said.

The U.S. Department of Energy says it has picked about 120 organizations nationwide to receive roughly $120 million to help low-income families cut energy use and save money.

The money is going to local agencies and businesses to finance and install a variety of equipment, including tankless hot water systems, energy-efficient appliances and lighting, energy-monitoring devices, small wind turbines and solar electric systems, the DOE says.

"We want to make sure low-income folks get the benefits of innovative technologies and lower utility bills," says Cathy Zoi, assistant secretary for energy efficiency and renewable energy, during a press conference today.

Trying Out New Technology

The funding will allow the grant recipients to try out new technologies that don't currently meet the energy savings criteria established for the Weatherization Assistance Program, says Jen Stutsman, a DOE spokeswoman. The program's listed technologies have been around for a while and tend to focus more on insulating rooms, sealing air ducts and replacing old heating and cooling systems. The new technologies could use more real-world testing.

"We want to gather information to test whether they are cost-effective and [it] makes sense to make them available to the broader weatherization program," Stutsman says.

The weatherization program, which targets low-income residents, has been around since 1976, started in the wake of the October 1973-March 1974 Arab oil embargo that prompted the U.S. government to invest in technology development and installation programs to help consumers cut their use of electricity and heating oil.

Stimulus Package Boost

The weatherization program got a big funding boost last year when the American Recovery and Reinvestment Act allocated about $5 billion to weather-proof nearly 600,000 homes. Congress approved the act mainly to create jobs. Last quarter, the program helped to create 13,000 jobs, Zoi says.

Most of the $120 million announced today is coming from the stimulus package, with the rest coming from the program's regular annual budget. So far, the program has weatherized an average of about 25,000 homes per month, Zoi says. In June, more than 31,600 homes underwent the energy makeover, she adds (here is a state-by-state chart). Since 2009, New York has had more homes benefit from the program than any other state, followed by Ohio, Illinois, Pennsylvania and Wisconsin.

Of the $120 million, $90 million will go to 103 local government agencies, nonprofits and private businesses to install a variety of equipment for heating, cooling and lighting homes and for generating renewable electricity from solar, wind and geothermal sources (see list of awards).

Pilot Projects

Another $30 million will go to 16 pilot projects, including those that provide new financing options for these home improvements, launch education campaigns and test the use of energy monitoring devices to show consumers how much energy they use and help them find ways to reduce it (see list of awards). One project, located in New Hampshire, will focus on buying materials to weatherproof mobile homes.

Some projects come with a job-training component, such as the one to be carried out by Habitat for Humanity, the nonprofit that organizes volunteers to build housing for low-income families.

Creating good education campaigns will be key to shaping consumers' energy use habits. A study published this week by the Proceedings of the National Academy of Sciences showed that consumers tend to overestimate the amount of energy they could save by turning off lights and driving less. At the same time, they place a lower value on actions that could lead to greater savings, such as using energy-efficient light bulbs and appliances and insulating their homes, possibly because those measures take more investment of time, money and effort.