Federal Register, Volume 59 Issue 13 (Thursday, January 20, 1994)

[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}}}}}}