[Federal Register Volume 60, Number 12 (Thursday, January 19, 1995)]
[Notices]
[Pages 3863-3865]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-1356]
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DEPARTMENT OF ENERGY
Proposed Implementation of Special Refund Procedures
AGENCY: Office of Hearings and Appeals, Department of Energy.
ACTION: Notice of proposed implementation of Special Refund Procedures.
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SUMMARY: The Office of Hearings and Appeals (OHA) of the Department of
Energy (DOE) announces the proposed procedures for the disbursement of
$75,638.48, plus accrued interest, in refined petroleum product
violation amounts obtained pursuant to an April 10, 1985 Modified
Remedial Order issued to Mockabee Gas & Fuel Co., Case No. VEF-0001
(Mockabee). The OHA has tentatively determined that the funds obtained
from Mockabee, plus accrued interest, will be distributed to customers
who purchased No. 2 heating oil or kerosene from Mockabee during the
period of November 1, 1973 through December 31, 1975.
DATES AND ADDRESSES: Comments must be filed in duplicate within 30 days
of publication of this notice in the Federal Register, and should be
addressed to the Office of Hearings and Appeals, 1000 Independence
Avenue, S.W., Washington, DC 20585. All comments should be marked with
the reference number VEF-0001.
FOR FURTHER INFORMATION CONTACT: Thomas O. Mann, Deputy Director, Roger
Klurfeld, Assistant Director,Office of Hearings and Appeals, 1000
Independence Avenue, S.W., Washington, DC 20585, (202) 586-2094 (Mann);
586-2383 (Klurfeld).
SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(b), notice
is hereby given of the issuance of the Proposed Decision and Order set
out below. The Proposed Decision and Order sets forth the procedures
that the DOE has tentatively formulated to distribute a total of
$75,638.48, plus accrued interest, obtained by the DOE pursuant to the
April 10, 1985 Modified Remedial Order issued to Mockabee. In the
Modified Remedial Order, the DOE found that, during the period from
November 1, 1973 through December 31, 1975, Mockabee sold No. 2 heating
oil and kerosene in excess of the maximum lawful selling price.
The OHA has proposed to distribute the funds obtained from Mockabee
in two stages. In the first stage, we will accept claims from
identifiable purchasers of covered products from Mockabee who may have
been injured by the overcharges. The specific requirements which an
applicant must meet in order to receive a refund are set out in Section
III of the Proposed Decision. Claimants who meet these specific
requirements will be eligible to receive refunds based on the number of
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gallons of covered product which they purchased from Mockabee.
If any funds remain after valid claims are paid in the first stage,
they may be used for indirect restitution in accordance with the
provisions of the Petroleum Overcharge Distribution and Restitution Act
of 1986 (PODRA), 15 U.S.C. 4501-07. Applications for Refund should not
be filed at this time. Appropriate public notice will be provided prior
to acceptance of claims.
Any member of the public may submit written comments regarding the
proposed refund procedures. Commenting parties are requested to provide
two copies of their submissions. Comments must be submitted within 30
days of publication of this notice. All comments received in this
proceeding will be available for public inspection between the hours of
1 p.m. and 5 p.m., Monday through Friday, except federal holidays, in
the Public Reference Room of the Office of Hearings and Appeals,
located in Room 1E-234, 1000 Independence Ave., S.W., Washington, DC
20585.
Dated: January 11, 1995.
Richard W. Dugan,
Acting Director, Office of Hearings and Appeals.
Name of Firm: Mockabee Gas & Fuel Co.
Date of Filing: October 18, 1994.
Case Number: VEF-0001.
On October 18, 1994, the Economic Regulatory Administration (ERA)
of the Department of Energy (DOE) filed a Petition for the
Implementation of Special Refund Procedures with the Office of Hearings
and Appeals (OHA) to distribute $75,638.48, plus accrued interest,
which Mockabee Gas & Fuel Co. (Mockabee) remitted to the DOE pursuant
to a Modified Remedial Order (MRO) issued by the OHA on April 10, 1985.
In accordance with the provisions of the procedural regulations found
at 10 CFR Part 205, subpart V (subpart V), the ERA requests in its
Petition that the OHA establish special procedures to make refunds in
order to remedy the effects of the regulatory violations set forth in
the MRO. This Proposed Decision and Order sets forth the OHA's plan to
distribute these funds.
I. Background
During the period relevant to this proceeding, Mockabee was a
retailer of No. 2 heating oil, kerosene, diesel fuel, and motor
gasoline in Upper Marlboro, Maryland. On December 18, 1974, the Federal
Energy Administration (FEA) issued a Notice of Probable Violation to
Mockabee. On January 28, 1975, the FEA issued a Remedial Order (RO) to
Mockabee, finding that Mockabee had overcharged purchasers of No. 2
heating oil and kerosene. A further investigation disclosed additional
overcharges other than those cited in the RO, and on December 22, 1976,
the FEA rescinded the RO and issued a Revised Remedial Order requiring
Mockabee to roll back prices to compensate consumers who were
overcharged by Mockabee.
Mockabee failed to comply with the Revised Remedial Order. On April
10, 1985, the ERA1 issued a Modified Remedial Order which
rescinded the price rollbacks it had ordered Mockabee to make. Instead,
the MRO required Mockabee to pay to the DOE $29,583.08 in assessed
overcharges, and an additional $46,071.46 in interest due. On September
30, 1985, Mockabee appealed the MRO to the OHA, which denied the Appeal
on December 19, 1985. Mockabee Gas & Fuel Co., 13 DOE para.83,059
(1985). Mockabee has since remitted $75,638.48 in compliance with the
MRO, which is now available for distribution through Subpart V.
\1\Under the DOE Organization Act, 42 U.S.C. 7151, et seq., and
Executive Order 12009, 42 Fed. Reg. 46367 (September 25, 1977), all
functions vested by law in the FEA were transferred to and vested in
the DOE. Within the DOE, the ERA was delegated the authority to
investigate violations of applicable regulations and to seek
compliance of those regulations.
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II. Jurisdiction and Authority
The Subpart V regulations set forth general guidelines which may be
used by the OHA in formulating and implementing a plan for the
distribution of funds received as a result of an enforcement
proceeding. The DOE policy is to use the Subpart V process to
distribute such funds. For a more detailed discussion of Subpart V and
the authority of the OHA to fashion procedures to distribute refunds,
see Petroleum Overcharge Distribution and Restitution Act of 1986
(PODRA), 15 U.S.C. 4501 et seq.; Office of Enforcement, 9 DOE
para.82,508 (1981); Office of Enforcement, 8 DOE para.82,597 (1981).
We have considered ERA's Petition that we implement a Subpart V
proceeding with respect to the funds remitted by Mockabee and have
determined that such a proceeding is appropriate. This Proposed
Decision and Order sets forth the OHA's tentative plan to distribute
this fund. We intend to publicize our proposal and solicit comments
from interested parties before taking the actions set forth in this
Proposed Decision and Order. Comments regarding the tentative
distribution process set forth in this Proposed Decision and Order
should be filed with the OHA within 30 days of its publication in the
Federal Register.
III. Proposed Refund Procedures
We propose to implement a two-stage refund procedure for
distribution of the monies remitted by Mockabee (the Mockabee fund) by
which purchasers of No. 2 heating oil and kerosene from Mockabee during
the period covered by the MRO may submit Applications for Refund in the
initial stage. From our experience with Subpart V proceedings, we
expect that applicants generally will be limited to ultimate consumers
(``end users''). Therefore, we do not anticipate that it will be
necessary to employ the injury presumptions that we have used in past
proceedings in evaluating applications submitted by refiners,
resellers, and retailers.2
\2\If a refiner, reseller, or retailer should file an
application in this refund proceeding, however, we will utilize the
standards and appropriate presumptions established in previous
proceedings. See, e.g., Stark's Shell Service, 23 DOE para.85,017
(1993); Shell Oil Co., 18 DOE para.85,492 (1989).
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A. First Stage Refund Procedures
In order to receive a refund, each claimant will be required to
submit a schedule of its monthly purchases of No. 2 heating oil or
kerosene from Mockabee during the period covered by the MRO--November
1, 1973 through December 31, 1975. Our experience also indicates that
the use of certain presumptions permits claimants to participate in the
refund process without incurring inordinate expense and ensures that
refund claims are evaluated in the most efficient manner possible. See,
e.g., Marathon Petroleum Co., 14 DOE para.85,269 (1986) (Marathon).
Presumptions in refund cases are specifically authorized by the
applicable Subpart V regulations at 10 C.F.R. Sec. 205.282(e).
Accordingly, we propose to adopt the presumptions set forth below.
1. Calculation of Refunds
First, we will adopt a presumption that the overcharges were
dispersed equally over all of Mockabee's sales of products covered by
the MRO during the period covered by the MRO. See Permian Corp., 23 DOE
para.85,034 (1993). In accordance with this presumption, refunds are
made on a pro-rata or volumetric basis.3 In the absence of
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better information, a volumetric refund is appropriate because the DOE
price regulations generally required a regulated firm to account for
increased costs on a firm-wide basis in determining prices.
\3\If an individual claimant believes that it was injured by
more than its volumetric share, it may elect to forgo this
presumption and file a refund application based upon a claim that it
suffered a disproportionate share of Mockabee's overcharges. See,
e.g., Mobil Oil Corp./Atchison, Topeka and Santa Fe Railroad Co., 20
DOE para.85,788 (1990); Mobil Oil Corp./Marine Corps Exchange
Service, 17 DOE para.85,714 (1988). Such a claim will be granted if
the claimant makes a persuasive showing that it was ``overcharged''
by a specific amount, and that it absorbed those overcharges. See
Panhandle Eastern Pipeline Co./Western Petroleum Co., 19 DOE
para.85,705 (1989). To the degree that a claimant makes this
showing, it will receive an above-volumetric refund.
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Under the volumetric approach, a claimant's ``allocable share'' of
the Mockabee fund is equal to the number of gallons of covered product
purchased from Mockabee during the period covered by the MRO times the
per gallon refund amount. In the present case, the per gallon refund is
$0.0612. We derived this figure by dividing the monies remitted by
Mockabee ($75,638.48) by the total volume of covered products sold by
Mockabee from November 1, 1973 through December 31, 1975 (1,236,132
gallons). A claimant that establishes its eligibility for a refund will
receive all or a portion of its allocable share plus a pro-rata share
of accrued interest.4
\4\As in previous cases, we propose to establish a minimum
refund amount of $15. In this proceeding, any potential claimant
purchasing less than 245 gallons of covered product from Mockabee
would have an allocable share of less than $15. We have found
through our experience that the cost of processing claims in which
refund amounts of less than $15 are sought outweighs the benefits of
restitution in those instances. See Exxon Corp., 17 DOE para.85,590
(1988).
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In addition to the volumetric presumption, we also propose to adopt
a presumption regarding injury for end-users.
2. End Users
In accordance with prior Subpart V proceedings, we propose to adopt
the presumption that an end user or ultimate consumer of covered
products purchased from Mockabee whose business is unrelated to the
petroleum industry was injured by the overcharges resolved by the MRO.
See, e.g., Texas Oil and Gas Corp., 12 DOE para.85,069 at 88,209
(1984). Unlike regulated firms in the petroleum industry, members of
this group generally were not required to keep records which justified
selling price increases by reference to cost increases. Consequently,
analysis of the impact of the overcharges on the final price of goods
and services produced by members of this group would go beyond the
scope of the refund proceeding. Id. We therefore propose that the end-
users of covered products purchased from Mockabee need only document
their purchase volumes from Mockabee during the period covered by the
MRO to make a sufficient showing that they were injured by the
overcharges.
B. Refund Applications Filed by Representatives
We propose to adopt the standard OHA procedures relating to refund
applications filed on behalf of applicants by ``representatives,''
including refund filing services, consulting firms, accountants, and
attorneys. See, e.g., Stark's Shell Service, 23 DOE para.85,017 (1993);
Texaco, Inc., 20 DOE para.85,147 (1990); Shell Oil Co., 18 DOE
para.85,492 (1989). We will also require strict compliance with the
filing requirements as specified in 10 CFR 205.283, particularly the
requirement that applications and the accompanying certification
statement be signed by the applicant.
The OHA reiterates its policy to closely scrutinize applications
filed by filing services. Applications submitted by a filing service
should contain all of the information indicated in the final Decision
and Order in this proceeding.
C. Distribution of Funds Remaining After First Stage
We propose that any funds that remain after all first stage claims
have been decided be distributed in accordance with the provisions of
the Petroleum Overcharge Distribution and Restitution Act of 1986
(PODRA), 15 U.S.C. 4501-07. The PODRA requires that the Secretary of
Energy determine annually the amount of oil overcharge funds that will
not be required to refund monies to injured parties in Subpart V
proceedings and make those funds available to state governments for use
in four energy conservation programs. The Secretary has delegated these
responsibilities to the OHA, and any funds in the Mockabee fund that
the OHA determines will not be needed to effect direct restitution to
injured customers will be distributed in accordance with the provisions
of the PODRA.
It is therefore ordered that: the monies remitted to the Department
of Energy by Mockabee Gas & Fuel Oil Co. pursuant to the Modified
Remedial Order issued on April 10, 1985, will be distributed in
accordance with the foregoing Decision.
[FR Doc. 95-1356 Filed 1-18-95; 8:45 am]
BILLING CODE 6450-01-P
