96-30447. Implementation of Special Refund Procedures  

  • [Federal Register Volume 61, Number 231 (Friday, November 29, 1996)]
    [Notices]
    [Pages 60700-60702]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 96-30447]
    
    
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    DEPARTMENT OF ENERGY
    
    Implementation of Special Refund Procedures
    
    AGENCY: Office of Hearings and Appeals, Department of Energy.
    
    ACTION: Notice of implementation of special refund procedures and 
    solicitation of comments.
    
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    SUMMARY: The Office of Hearings and Appeals of the Department of Energy 
    announces procedures concerning the refunding of $30,000 (plus accrued 
    interest) in consent order funds. The funds are being held in escrow 
    pursuant to a Stipulation for Compromise Settlement involving Houston-
    Pasadena Apache Oil Company.
    
    DATE AND ADDRESS: Applications for Refund should be addressed to the 
    Office of Hearings and Appeals, Department of Energy, 1000 Independence 
    Avenue, S.W., Washington, D.C. 20585-0107. All Applications should 
    conspicuously display a reference to Case Number VEF-0022.
    
    FOR FURTHER INFORMATION CONTACT: Richard W. Dugan, Associate Director, 
    Office of Hearings and Appeals, 1000 Independence Avenue, S.W., 
    Washington, D.C. 20585-0107, (202) 426-1575.
    
    SUPPLEMENTARY INFORMATION: In accordance with Section 205.282(c) of the 
    procedural regulations of the Department of Energy, 10 C.F.R. 
    Sec. 205.282(c), notice is hereby given of the issuance of the Decision 
    and Order set forth below. The Decision relates to a Stipulation for 
    Compromise Settlement entered into by the Houston-Pasadena Apache Oil 
    Company (Apache) which settled possible pricing violations in the 
    firm's wholesale transactions of motor gasoline during the period 
    October-December 1979. A Proposed Decision and Order tentatively 
    establishing refund procedures and soliciting comments from the public 
    concerning the distribution of the Apache settlement fund was issued on 
    September 16, 1996. 61 Fed. Reg. 50018 (September 24, 1996).
        The Decision sets forth the procedures and standards that the DOE 
    has formulated to distribute funds remitted by Apache and being held in 
    escrow. The DOE has decided that the funds should be distributed in two 
    stages in the manner utilized with respect to consent order funds in 
    similar proceedings. In the first stage, the DOE will consider claims 
    for refunds made by firms and individuals that purchased motor gasoline 
    from Apache during the audit period and were identified as overcharged 
    Apache customers in DOE enforcement documentation.
        The second stage of the refund process will take place only in the 
    event that the meritorious first stage applicants do not deplete the 
    settlement funds. Any funds that remain after all first stage claims 
    have been decided will be distributed to state governments for use in 
    four energy conservation programs, in accordance with the provisions of 
    the Petroleum Overcharge Distribution and Restitution Act of 1986.
        All first stage applications should be submitted within 90 days of 
    publication of this notice. All comments and applications received in 
    this proceeding will be available for public inspection between the 
    hours of 1:00 to 5:00 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 Avenue, S.W., 
    Washington, D.C. 20585-0107.
    
        Dated: November 19, 1996.
    George B. Breznay,
    Director, Office of Hearings and Appeals.
    
    Department of Energy
    
    Decision and Order of the Department of Energy
    
    Special Refund Procedures
    
    November 19, 1996.
        Name of Petitioner: Houston-Pasadena Apache Oil Co.
        Date of Filing: September 1, 1995.
        Case Number: VEF-0022.
    
        In accordance with the procedural regulations of the Department 
    of Energy (DOE), 10 C.F.R. Part 205, Subpart V, the Regulatory 
    Litigation branch of the Office of General Counsel (OGC) (formerly 
    the Economic Regulatory Administration (ERA)) filed a Petition for 
    the Implementation of Special Refund Procedures with the Office of 
    Hearings and Appeals (OHA) on September 1, l995. The petition 
    requests that the OHA formulate and implement procedures for the 
    distribution of funds received pursuant to a Stipulation for 
    Compromise Settlement (Settlement Stipulation) concerning the 
    Houston-Pasadena Apache Oil Company (Apache).
    
    Background
    
        Apache was a ``reseller-retailer'' of motor gasoline during the 
    period of price controls. Accordingly, Apache was subject to the 
    provisions of 10 C.F.R. Part 212, Subpart F, governing wholesale and 
    retail sales of refined petroleum products. On April 30, l985, the 
    ERA issued a Proposed Remedial Order (PRO) to Apache concerning 
    Apache's compliance with the price regulations for the period March 
    1,1979 through December 31, l979 (the audit period). Apache provided 
    documents for a more limited period (October-December l979), and 
    based upon those documents, the ERA found that Apache sold motor 
    gasoline at prices in excess of those permitted under the DOE price 
    regulations governing reseller-retailers during that period. After 
    considering Apache's challenge to the PRO, the OHA issued a final 
    Remedial Order (RO) to Apache on June 19, l989. See Houston/Pasadena 
    Apache Oil Company, 19 DOE para. 83,001 (1989). In the RO, the OHA 
    remanded to the ERA a portion of the PRO involving retail 
    transactions and two sales to Dow Chemical Company (Dow) and 
    affirmed the rest of the PRO. The OHA also directed Apache to refund 
    the amount of $160,713 plus interest, this sum representing the 
    overcharges realized by the firm in its wholesale transactions 
    during the period October-December l979. Apache did not honor its 
    repayment obligation and the matter was referred to the Department 
    of Justice (DOJ) for resolution. On June 4, l993, the DOJ and Apache 
    executed a Stipulation for Compromise Settlement resolving the 
    issues addressed by the RO. Pursuant to this settlement, Apache 
    agreed to pay $30,000 in full settlement of the DOE claim. Apache's 
    compliance with the settlement has resulted in payment to DOE of 
    $30,000 which we shall disburse pursuant to the procedures set forth 
    in this Decision and Order. These funds are presently in an 
    interest-bearing escrow account maintained by the Department of the 
    Treasury.
    
    Jurisdiction
    
        The procedural regulations of the DOE set forth general 
    guidelines by which the OHA may formulate and implement a plan of 
    distribution for funds received as a result of an enforcement 
    proceeding. 10 C.F.R. Part 205, Subpart V. Generally, it is DOE 
    policy 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 obtained as part of 
    settlement agreements, see Office of Enforcement, 9 DOE para. 82,553 
    (1982); Office of Enforcement, 9 DOE para. 82,508 (1981). After 
    reviewing the record in the present case, we have concluded that a 
    Subpart V proceeding is an appropriate mechanism for distributing 
    the monies obtained from Apache. We therefore grant OGC's petition 
    and assume jurisdiction over distribution of the funds.
        On September 16, 1996, OHA issued a Proposed Decision and Order 
    (PDO) establishing tentative procedures to distribute the Apache 
    settlement fund. The PDO was published in the Federal Register and a 
    30 day period was provided for the submission of comments regarding 
    our proposed refund plan. See 61 Fed. Reg. 50018 (September 24, 
    l996). More than 30 days have elapsed and the OHA has received no 
    comments concerning the proposed procedures for the distribution of 
    the Apache settlement fund. Consequently, the procedures will be 
    adopted as proposed.
    
    Refund Procedures
    
    A. Refund Claimants
    
        Refund monies shall be distributed to those wholesale customers 
    which were injured in their transactions with Apache during the
    
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    period October 1, l979 through December 31, 1979. These customers of 
    Apache are listed in Appendix A to the RO. If any of these customers 
    are affiliates of Apache, they will be ineligible to apply for a 
    refund in this proceeding.
    
    B. Calculation of Refund Amounts
    
        For claims against the funds obtained from Apache, we have 
    established a maximum potential refund (allocable share) for each of 
    the customers identified in the Apache RO as an overcharged 
    customer. These claimant-specific maximum potential refunds are 
    based upon the ratio of overcharges incurred by each customer to the 
    total overcharge amount multiplied by the principal amount in the 
    Apache escrow account. A list of the identified Apache customers and 
    their maximum potential refunds is presented in the Appendix to this 
    Decision. Each successful refund claimant shall also receive a pro 
    rata share of interest which has accrued on the Apache escrow fund 
    account.
    
    C. Showing of Injury/Injury Presumptions
    
        As in previous Subpart V proceedings, those customers who were 
    ultimate consumers (end-users) of Apache motor gasoline shall be 
    presumed injured by Apache's alleged overcharges. They will 
    therefore not be required to make a further demonstration of injury 
    in order to receive a refund.
        Reseller claimants (including retailers and refiners) who 
    purchased on a regular (non-spot) basis and whose maximum potential 
    refund is $10,000 or less will be presumed injured and therefore 
    need not provide further demonstration of injury. See E.D.G., Inc., 
    17 DOE para. 85,679 (1988). We realize that the cost to an applicant 
    of gathering evidence of injury to support a relatively small refund 
    claim could exceed the expected refund. Consequently, in the absence 
    of simplified procedures some injured parties would be denied an 
    opportunity to obtain a refund.
        In addition, Tesoro Crude (Tesoro Energy), the only potential 
    reseller claimant whose allocable share exceeds $10,000, may elect 
    either to receive a refund under the small claims presumption 
    outlined above or to pursue its potential refund of $16,034.97. If 
    Tesoro limits its claim to the $10,000 small claims threshold, it 
    need not demonstrate injury beyond the requirements established for 
    other small claimants. If the firm elects to claim its entire 
    potential refund it must establish that it did not pass the Apache 
    overcharges along to its customers.1 See, e.g., Office of 
    Enforcement, 8 DOE para. 82,597 (1981). Tesoro can make such an 
    injury showing by demonstrating that it would have kept its motor 
    gasoline prices at the same level had the Apache overcharges not 
    occurred.
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        \1\ In the event that Tesoro demonstrates that it should be 
    treated as an end-user instead of as a reseller, it will not be 
    required to make this injury showing.
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        While there are a variety of means by which a claimant could 
    make this showing, Tesoro should demonstrate that at the time it 
    purchased Apache motor gasoline, market conditions would not permit 
    it to increase its prices to pass through the additional costs 
    associated with the Apache overcharges. In addition, Tesoro must 
    show that it had a ``bank'' of unrecovered product costs sufficient 
    to support its refund claim in order to demonstrate that it did not 
    subsequently recover those costs by increasing its prices. However, 
    the maintenance of a cost bank does not automatically establish 
    injury. See Tenneco Oil/Chevron U.S.A., 10 DOE para. 85,014 (1982); 
    Vickers Energy Corp./Standard Oil Co., 10 DOE para. 85,036 (1982); 
    Vickers Energy Corp./Koch Industries, Inc., 10 DOE para. 85,038 
    (1982).
        Finally, we hereby establish a minimum amount of $15 for refund 
    claims. We have found in prior refund proceedings that the cost of 
    processing claims in which refunds are sought for amounts less than 
    $15 outweighs the benefits of restitution in those situations. See, 
    e.g., Uban Oil Co., 9 DOE para. 82,541 at 85,225 (1982). See also 10 
    C.F.R. Sec. 205.286(b). This restriction rules out the participation 
    in this proceeding of two of the firms listed in the Appendix: Gulf 
    Coast Waste, and Parrish Corp.2
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        \2\ Although the allocable share of Clay Texaco, $14.70, is 
    under the $15 threshold, we have calculated that with interest its 
    refund would exceed $15.
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    D. Refund Application Requirements
    
        To apply for a refund from the Apache settlement fund, a 
    claimant should submit an Application for Refund containing all of 
    the following information:
        (1) Identifying information including the claimant's name, 
    current business address, business address during the refund period, 
    taxpayer identification number, a statement indicating whether the 
    claimant is an individual, corporation, partnership, sole 
    proprietorship, or other business entity, the name, title, and 
    telephone number of the person to contact for any additional 
    information, and the name and address of the person who should 
    receive any refund check.3 If the applicant operated under more 
    than one name or under a different name during the price control 
    period, the applicant should specify these names;
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        \3\ Under the Privacy Act of 1974, the submission of a social 
    security number by an individual applicant is voluntary. An 
    applicant that does not wish to submit a social security number must 
    submit an employer identification number if one exists. This 
    information will be used in processing refund applications, and is 
    requested pursuant to our authority under the Petroleum Overcharge 
    Distribution and Restitution Act of l986 and the regulations 
    codified at 10 C.F.R. Part 205, Subpart V. The information may be 
    shared with other Federal agencies for statistical, auditing or 
    archiving purposes, and with law enforcement agencies when they are 
    investigating a potential violation of civil or criminal law. Unless 
    an applicant claims confidentiality, this information will be 
    available to the public in the Public Reference Room of the Office 
    of Hearings and Appeals.
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        (2) The applicant's use of motor gasoline from Apache: e.g., 
    consumer (end-user), cooperative, or reseller;
        (3) A statement certifying that the applicant purchased motor 
    gasoline from Apache during the October 1979-December l979 period;
        (4) A statement as to whether the applicant or a related firm 
    has filed, or has authorized any individual to file on its behalf, 
    any other application in the Apache refund proceeding. If so, an 
    explanation of the circumstances of the other filing or 
    authorization should be submitted;
        (5) If the applicant is or was in any way affiliated with 
    Apache, it should explain this affiliation, including the time 
    period in which it was affiliated;
        (6) A statement as to whether the ownership of the applicant's 
    firm changed during or since the refund period. If an ownership 
    change occurred, the applicant should list the names, addresses, and 
    telephone numbers of any prior or subsequent owners. The applicant 
    should also provide copies of any relevant Purchase and Sale 
    Agreements, if available. If such written documents are not 
    available, the applicant should submit a description of the 
    ownership change, including the year of the sale and the type of 
    sale (e.g., sale of corporate stock, sale of company assets);
        (7) A statement as to whether the applicant has ever been a 
    party in a DOE enforcement action or a private Section 210 action. 
    If so, an explanation of the case and copies of the relevant 
    documents should also be provided;
        (8) The following statement signed by the individual applicant 
    or a responsible official of the firm filing the refund application: 
    4
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        \4\ We will not process applications signed by filing services 
    or other representatives. In addition, the statement must be dated 
    on or after the date of this Decision and Order. Any application 
    signed and dated before the date of this Decision will be summarily 
    dismissed.
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        ``I swear (or affirm) that the information contained in this 
    application is true and correct to the best of my knowledge and 
    belief. I understand that anyone who is convicted of providing false 
    information to the federal government may be subject to a fine, a 
    jail sentence, or both, pursuant to 18 U.S.C. Sec. 1001. I 
    understand that the information contained in this application is 
    subject to public disclosure. I have enclosed a duplicate of this 
    entire application which will be placed in the OHA Public Reference 
    Room.''
        All applications should be either typed or printed and clearly 
    labeled ``Houston-Pasadena Apache Oil Co. Special Refund Proceeding, 
    Case No. VEF-0022.'' Each applicant must submit an original and one 
    copy of the application. If the applicant believes that any of the 
    information in its application is confidential and does not wish for 
    this information to be publicly disclosed, it must submit an 
    original application, clearly designated ``confidential,'' 
    containing the confidential information, and two copies of the 
    application with the confidential information deleted. All refund 
    applications should be postmarked no later than 90 days from the 
    publication of this Decision and Order in the Federal Register, and 
    sent to: Houston-Pasadena Apache Oil Co., Special Refund Proceeding, 
    Office of Hearings and Appeals, Department of Energy, 1000 
    Independence Avenue, S.W., Washington, D.C. 20585-0107.
        Any representative that requests that it be a payee of a refund 
    check must file with the OHA if it has not already done so a 
    statement certifying that it maintains a separate escrow
    
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    account at a bank or other financial institution for the deposit of 
    all refunds received on behalf of applicants, and that its normal 
    business practice is to deposit all Subpart V refund checks in that 
    account within two business days of receipt and to disburse refunds 
    to applicants within 30 calendar days thereafter. Unless such 
    certification is received by the OHA, all refund checks approved 
    will be made payable solely to the applicants. Representatives who 
    have not previously submitted an escrow account certification form 
    to the OHA may obtain a copy of the appropriate form by contacting: 
    Marcia B. Carlson, HG-13, Chief, Docket and Publications Division, 
    Office of Hearings and Appeals, Department of Energy, Washington, 
    D.C. 20585-0107.
    
    E. Distribution of Funds Remaining After First Stage
    
        Any funds that remain after all first-stage claims have been 
    decided will be distributed in accordance with the provisions of the 
    Petroleum Overcharge Distribution and Restitution Act of l986 
    (PODRA), 15 U.S.C. Secs. 4501-07. 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 OHA. Any funds in the Apache 
    escrow account the OHA determines will not be needed to effect 
    direct restitution to injured Apache customers will be distributed 
    in accordance with the provisions of PODRA.
        It Is Therefore Ordered That:
        (1) Applications for Refund from the funds remitted to the 
    Department of Energy by the Houston-Pasadena Apache Oil Company 
    pursuant to the Stipulation for Compromise Settlement that became 
    effective on June 4, 1993, may now be filed.
        (2) All Applications for Refund must be postmarked no later than 
    90 days after publication of this Decision and Order in the Federal 
    Register.
    
        Dated: November 19, 1996.
    George B. Breznay,
    Director, Office of Hearings and Appeals.
    
                                    Appendix                                
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                                                                   Allocable
                              Applicant                              share  
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    Car Wash....................................................      $31.17
    Clay Texaco.................................................       14.70
    DuMac Oil...................................................       22.59
    Gulf Coast Waste *..........................................        8.97
    Jas Lee.....................................................      126.06
    Joe Lee.....................................................    3,059.22
    John Parker.................................................       28.60
    Kirby Car Wash..............................................       19.83
    Lloyd Parrish...............................................      288.03
    Main Stop...................................................       48.90
    Parrish Corp.*..............................................       11.43
    Quail Valley Gulf...........................................      166.95
    So Sweet Energy.............................................    2,098.14
    Tesoro Energy (Tesoro Crude)................................   16,034.97
    Trio Oil Co.................................................    1,414.17
    True Oil Co.................................................    1,119.96
    Two Oil Co..................................................    5,489.67
    Yims Texaco.................................................       16.64
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      Total.....................................................  $30,000.00
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    * Under $15 threshold. See n.2 of Decision.                             
                                                                            
    Note: The allocable share entries were generated by multiplying the     
      principal amount in the Apache escrow account by the percentage of    
      total overcharges incurred by each individual claimant as determined  
      by the ERA audit of Apache's business records.                        
    
    [FR Doc. 96-30447 Filed 11-27-96; 8:45 am]
    BILLING CODE 6450-01-P
    
    
    

Document Information

Published:
11/29/1996
Department:
Energy Department
Entry Type:
Notice
Action:
Notice of implementation of special refund procedures and solicitation of comments.
Document Number:
96-30447
Pages:
60700-60702 (3 pages)
PDF File:
96-30447.pdf