[Federal Register Volume 59, Number 13 (Thursday, January 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1387]


[[Page Unknown]]

[Federal Register: January 20, 1994]


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DEPARTMENT OF ENERGY
 

Implementation of Special Refund Procedures

AGENCY: Office of Hearings and Appeals, Energy.

ACTION: Notice of 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 procedures for disbursement of $5,784.33, 
plus accrued interest, in alleged refined petroleum product violation 
amounts obtained by the DOE pursuant to settlements with Buchanan 
Shell, Inc. (Case No. LEF-0081), Jim Campbell Shell (Case No. LEF-
0082), Miles Union Service (Case No. LEF-0083), and Elwood Chevron 
Service (Case No. LEF-0085) (the consenting firms) reached on August 
25, 1982, August 2, 1982, April 11, 1982, and March 25, 1992, 
respectively. The OHA has determined that the funds obtained from the 
consenting firms, plus accrued interest, will be distributed to 
customers who purchased gasoline from them during the following 
periods: August 1, 1979, through November 13, 1979, in the Buchanan 
Shell, Inc., Jim Campbell Shell, and Miles Union Service proceedings; 
and August 2, 1979, through April 23, 1980, in the Elwood Chevron 
Service proceeding.

DATES: Applications should display a reference to the appropriate case 
number and be postmarked on or before June 30, 1994.

ADDRESSES: Applications for Refund must be filed in duplicate, 
addressed to ``Buchanan Shell, Inc./Jim Campbell Shell/Miles Union 
Service/OR Elwood Chevron Service Special Refund Proceeding'' and sent 
to: Office of Hearings and Appeals, Department of Energy, 1000 
Independence Avenue, SW., Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT: Thomas O. Mann, Deputy Director Roger 
Klurfeld, Assistant Director Office of Hearings and Appeals 1000 
Independence Avenue, SW. 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 Decision and Order set out 
below. The Decision and Order sets forth the procedures that the DOE 
has formulated to distribute to eligible claimants $5,784.33 plus 
accrued interest, obtained by the DOE pursuant to agreements reached on 
April 11, 1982, August 2, 1982, August 25, 1982, and March 25, 1992. In 
the agreements, the DOE settled allegations that, during the periods 
beginning August 1, 1982, Buchanan Shell, Inc., Jim Campbell Shell, 
Miles Union Service, and Elwood Chevron Service, Inc. had sold motor 
gasoline at prices in excess of the maximum lawful selling price, in 
violation of Federal petroleum price regulations.
    The OHA has determined to distribute the funds obtained from the 
consenting firms in two stages. In the first stage, we will accept 
claims from identifiable purchasers of gasoline from the consenting 
firms who may have been injured by alleged overcharges. The specific 
requirements which an applicant must meet to receive a refund are set 
out in Section III of the Decision. Claimants who meet these 
requirements will be eligible to receive refunds based on the number of 
gallons of gasoline which they purchased from the consenting firms.
    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 must be postmarked on or before June 30, 
1994. Instructions for the completion of refund applications are set 
forth in the Decision that immediately follows this notice. 
Applications should be sent to the address listed at the beginning of 
this notice.
    Unless labelled as ``confidential,'' all submissions must be made 
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 Avenue, SW., Washington, DC 20585.

    Dated: January 13, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.
January 13, 1994.

Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

Names of Firms:
    Buchanan Shell, Inc.
    Jim Campbell Shell
    Miles Union Service
    Elwood Chevron Service
Date of Filing: July 20, 1993
Case Numbers:
    LEF-0081
    LEF-0082
    LEF-0083
    LEF-0085

    Under the procedural regulations of the Department of Energy 
(DOE), the Economic Regulatory Administration (ERA) of the DOE may 
request that the Office of Hearings and Appeals (OHA) formulate and 
implement special procedures to make refunds in order to remedy the 
effects of alleged violations of DOE regulations. See 10 C.F.R. Part 
205, Subpart V. The ERA filed such a petition on July 20, 1993, 
requesting that the OHA implement special refund proceedings to 
distribute funds received pursuant to Consent Orders or Judgments 
entered into by the DOE and the following gasoline retailers: 
Buchanan Shell, Inc., Jim Campbell Shell, Miles Union Service, and 
Elwood Chevron Service (hereinafter collectively referred to as the 
consenting firms).1

I. Background

    Each of the consenting firms is a reseller-retailer of refined 
petroleum products as those terms were defined in 10 CFR 212.31. ERA 
audits of the consenting firms revealed possible pricing violations 
of the Mandatory Petroleum Price Regulations. Subsequently, each of 
these firms entered into a separate Consent Order or Judgment with 
the DOE in order to settle its disputes concerning certain sales of 
gasoline. Pursuant to these Consent Orders and Judgment, the firms 
agreed to pay to the DOE specified amounts in settlement of their 
potential liability with respect to sales to their customers during 
the settlement periods. The firms' payments are currently being held 
in separate interest-bearing escrow accounts pending distribution by 
the DOE. The names and locations of the firms, the settlement 
amounts, the products covered by the settlement agreements, the 
volumes, in gallons, sold by the firms during the settlement 
periods, and the dates of the settlement periods are set forth in 
the Appendix to this Decision.

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, 15 U.S.C. 4501-4507; Office of Enforcement, 9 DOE 82,508 
(1981); and Office of Enforcement, 8 DOE 82,597 (1981) (Vickers).
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    \1\The DOE entered into Consent Orders with Buchanan Shell, 
Inc., Jim Campbell Shell, and Miles Union Service. The DOE entered 
into a Consent Judgment with Elwood Chevron Service filed in the 
United States District Court, Central District of California.
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    We have considered the ERA's petition that we implement subpart 
V proceedings with respect to the four settlement funds and have 
determined that such proceedings are appropriate. This Decision and 
Order sets forth the OHA's plan to distribute these funds.

III. Proposed Refund Procedures

    On November 24, 1993, the OHA issued a Proposed Decision and 
Order (PD&O) establishing tentative procedures to distribute the 
settlement funds. That PD&O was published in the Federal Register, 
and a 30-day period was provided for the submission of comments 
regarding our proposed refund plan. See 58 FR 63937 (December 3, 
1993). More than 30 days have elapsed and the OHA has received no 
substantive comments concerning the proposed procedures for the 
distribution of the settlement funds. Consequently, the procedures 
will be adopted as proposed.
    The OHA will implement a two-stage refund procedure for 
distribution of the settlement funds by which purchasers of gasoline 
from the consenting firms during the periods covered by the 
settlements may submit Applications for Refund in the initial stage. 
From our experience with subpart V proceedings, we expect that 
potential 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
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    \2\If a refiner, reseller, or retailer should file an 
application in any of these refund proceedings, however, we will 
utilize the standards and appropriate presumptions established in 
previous proceedings. See, e.g., Starks Shell Service, 23 DOE 
85,017 (1993); Shell Oil Co., 18 DOE 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 gasoline from each of 
the consenting firms during each of their respective settlement 
periods. Our experience 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 85,269 (1986) (Marathon).
    Presumptions in refund cases are specifically authorized by the 
applicable subpart V regulations at 10 CFR 205.282(e). Accordingly, 
we propose to adopt the presumptions set forth below.

1. Calculation of Refunds

    First, we will adopt a presumption that for each consenting firm 
the overcharges were dispersed equally in all of its sales of 
gasoline during the period covered by its settlement. In accordance 
with this presumption, refunds are made on a pro-rata or volumetric 
basis.3 In the absence of 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 its prices.
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    \3\If an individual claimant believes that it was injured by 
more than its volumetric share, it may elect to forego this 
presumption and file a refund application based upon a claim that it 
suffered a disproportionate share of the consenting firms' 
overcharges. See, e.g., Mobil Oil Corp./Atchison, Topeka and Santa 
Fe Railroad Co., 20 DOE  85,788 (1990); Mobil Oil Corp./Marine 
Corps Exchange Service, 17 DOE  85,714 (1988). Such a claim will 
only 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  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 a settlement fund is equal to the number of gallons purchased 
from the consenting firms during the periods covered by the 
settlements, times the per gallon refund amount. In the present 
cases, the per gallon refund amounts are as follows:

LEF-0081 Buchanan Shell, Inc.
$0.0060
LEF-0082 Jim Campbell Shell
$0.0011
LEF-0083 Miles Union Service
$0.0113
LEF-0085 Elwood Chevron Service
$0.0095

    We derived these figures by dividing the dollar amount of each 
settlement fund by the volume of gasoline which the corresponding 
consenting firm sold during the period covered by its settlement. 
See Appendix. 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 the accrued interest.4
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    \4\As in previous cases, we propose to establish minimum refund 
amounts of $15. In these proceedings, any potential claimant 
purchasing less than a total of 2,416 gallons of gasoline from 
Buchanan Shell, Inc., less than 13,177 gallons from Jim Campbell 
Shell, less than 1,283 gallons from Miles Union Service, or less 
than 1,526 gallons from Elwood Chevron Service would have an 
allocable share of less than $15. We have found that the cost of 
processing claims in which refunds for amounts less than $15 are 
sought outweighs the benefits of restitution in those instances. See 
Exxon Corp., 17 DOE  85,590, at 89,150 (1988) (Exxon).
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2. End-Users

    In accordance with prior Subpart V proceedings, we also propose 
to adopt the presumption that an end-user or ultimate consumer of 
gasoline purchased from the consenting firms whose business is 
unrelated to the petroleum industry was injured by the overcharges 
resolved by the settlement agreements. See, e.g., Texas Oil and Gas 
Corp., 12 DOE  85,069 at 88,209 (1984). Members of this group 
generally were not subject to price controls during the periods 
covered by the settlement agreements, and 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 prices of goods and services produced by members of 
this group would be beyond the scope of the refund proceeding. Id. 
Accordingly, end-users of gasoline purchased from the consenting 
firms need only document their purchase volumes from the consenting 
firms during the periods covered by the settlement agreements to 
make a sufficient showing that they were injured by the alleged 
overcharges.

B. Refund Application Requirements

    To apply for a refund from any of the settlement funds, 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 a person to contact for additional information, 
and the name and address of the person who should receive any refund 
check.5 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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    \5\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 1986 and the regulations 
codified at 10 CFR 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 
investigation 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) A monthly purchase schedule covering the relevant settlement 
period. See Appendix. The applicant should specify the source of 
this gallonage information. In calculating its purchase volumes, an 
applicant should use actual records from the settlement period, if 
available. If these records are not available, the applicant may 
submit estimates of its gasoline purchases, but the estimation 
methodology must be reasonable and must be explained.
    (3) A statement whether the applicant or a related firm has 
filed, or has authorized any individual to file on its behalf, any 
other application in that refund proceeding. If so, an explanation 
of the circumstances of the other filing or authorization should be 
submitted;
    (4) If the applicant is or was in any way affiliated with the 
consenting firms, it should explain this affiliation, including the 
time period in which it was affiliated;6
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    \6\As in other refund proceedings involving alleged refined 
product violations, the DOE will presume that affiliates of the 
consenting firms were not injured by the firms' overcharges. See, 
e.g., Marathon Petroleum Co./EMRO Propane Co., 15 DOE  85,288 
(1987). This is so because a consenting firm presumably would not 
have sold petroleum products to an affiliate if such a sale would 
have placed the purchaser at a competitive disadvantage. See 
Marathon Petroleum Co./Pilot Oil Corp., 16 DOE  85,611 (1987), 
amended claim denied, 17 DOE  85,291 (1988), reconsideration 
denied, 20 DOE  85,236 (1990). Additionally, if an affiliate of one 
of the consenting firms was granted a refund, the consenting firm 
would be indirectly compensated from a fund remitted to settle its 
own alleged violations.
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    (5) The statement listed below signed by the individual 
applicant or a responsible official of the firm filing the refund 
application:
    I swear (or affirm) that the information contained in this 
application and its attachments 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. 
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 should 
clearly refer to the appropriate proceeding name and case number. 
See Appendix. 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 March 15, 1994 and 
be sent to: Buchanan Shell, Inc./Jim Campbell Shell/Miles Union 
Service/OR, Elwood Chevron Service Special Refund Proceeding, Office 
of Hearings and Appeals, Department of Energy, 1000 Independence 
Ave., SW., Washington, DC 20585.

C. Refund Applications Filed by Representatives

    In addition, 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., Shell Oil Co., 18 DOE 
 85,492 (1989); Texaco Inc., 20 DOE  85,147 (1990); Starks Shell 
Service, 23 DOE  85,017 (1993). 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 this final 
Decision and Order.
    Finally, the OHA reserves the authority to require additional 
information before granting any refund in these proceedings. 
Applications lacking the required information may be dismissed or 
denied.

D. Distribution of Funds Remaining After First Stage

    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. 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 
consenting firms settlement funds that the OHA determines will not 
be needed to effect direct restitution to injured customers will be 
distributed in accordance with the provisions of PODRA.
    It Is Therefore Ordered That:
    (1) Applications for Refund from the funds remitted by Buchanan 
Shell, Inc., Jim Campbell Shell, Miles Union Service, and Elwood 
Chevron Service, pursuant to the settlements reached on August 25, 
1982, August 2, 1982, April 11, 1982, and March 25, 1992, 
respectively, may now be filed.
    (2) Applications for Refund must be postmarked on or before June 
30, 1994.

    Dated: January 13, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.

                                                                                                                                                        
                                                                        Appendix                                                                        
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                                                                                                            Volume sold   Settlement                    
    Case No.              Firm                  Address          Settlement period          Product                        amount         Consent No.   
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LEF-0081........  Buchanan Shell, Inc..  1315 Buchanan Rd.,         8/1/79-11/13/79  Gasoline.............      250,480    $1,500.87  90OZO3255         
                                          Pittsburg, CA 94565.                                                                                          
LEF-0082........  Jim Campbell Shell...  3201 Lakeshore Ave.,       8/1/79-11/13/79  Gasoline.............      297,953      $323.13  90OZO3255         
                                          Oakland, CA 94610.                                                                                            
LEF-0083........  Miles Union Service..  500 Bancroft Ave.,         8/1/79-11/13/79  Gasoline.............      107,566    $1,210.33  90OZO3258         
                                          San Leandro, CA                                                                                               
                                          94577.                                                                                                        
LEF-0085........  Elwood Chevron         7952 Hollister Ave.,        8/2/79-4/23/80  Gasoline.............      290,124    $2,750.00  999K90097         
                   Service.               Goleta, CA 93117.                                                                                             
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[FR Doc. 94-1387 Filed 1-19-94; 8:45 am]
BILLING CODE 6450-01-P