[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
[[Page 60701]]
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
[[Page 60702]]
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