Sen. Wendell Ford (D-Ky.) introduced legislation Thursday that would set up interium standards for the manufacture of cellulose insulation.

Ford, chairman of the Senate Commerce Committee's consumer subcommittee, said he was dissatisfied with the Consumer Product Safety Commission's timetable for developing the standards.

Noting that he was worried about potential fire hazards posed by cellulose insulation, Ford said, "The current shortage of fiberglass insulation will mean that more and more people will turn to cellulose, and this is a product about which many safety questions still exist."

In June, 1975, the Denver District Attorney's office proposed that the commission study the safety of home insulation after a series of fires there were attributed to faulty wiring. Because of new tax incentives to install home insulation as an energy saver and the resulting increase in the demand for insulation, many new firms were producing what some investigators called questionable products.

After more than a year, te CPSC got around to holding hearings on the problem last summer. One witness testified that the insulation sold her was represented as fireproof, but when she tested it by lighting a handful in her fireplace, it ignited.

Cellulose insulation is generally powdered newspaper treated with a fire retardant chemical. It has been appearing more often recently because of a shortage of fiberglass, the most popular form of insulation.

The bill directs the CPSC to adapt the existing General Service Administration's specification for cellulose insulation as an interim mandatory standard for everyone. The GSA standard is one of several the CPSC has been looking at. When the CPSC does issue rules, they will supersede those in the bill.

Ford said his standards could go into effect 120 days after the bill becomes law. He is also calling for the health and safety aspects of all other forms of home insulation and will direct that a report he made to congress within a year recommending any appropriate action.

Meanwhile, the Federal Trade Commission has threatened home insulation companies with heavy fines if they make "fale or misleading" claims about both the risks associated with their products, and the potential energy savings.

The FTC issued the warning Thursday, and promptly ordered its field offices to investigate consumer complaints of abuses involving the industry. The action is part of a new enforcement program at the FTC allowing the agency to first warn companies about orders that have been granted and then to take the companies to court.