[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: 94-1395]


[[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 $10,089.18, 
plus accrued interest, in refined petroleum product violation amounts 
obtained by the DOE pursuant to a March 8, 1982 Remedial Order issued 
to A-1 Exxon and Redhill Mobil & Towing, Case Nos. LEF-0086 and LEF-
0088 and a March 29, 1982 Remedial Order issued to Half Moon Bay Exxon, 
Case No. LEF-0087 (the remedial order firms). The OHA has determined 
that the funds obtained from the remedial order firms, plus accrued 
interest, will be distributed to customers who purchased gasoline from 
them during the following periods: August 1, 1979, through November 20, 
1979, in the A-1 Exxon proceeding; August 1, 1979, through October 23, 
1979 in the Half Moon Bay Exxon proceeding; and August 1, 1979 through 
November 13, 1979 in the Redhill Mobil and Towing proceeding.

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).

ADDRESSES: Applications for Refund must be filed in duplicate, 
addressed to ``A-1 Exxon; Half-Moon Bay Exxon/OR Redhill Mobil and 
Towing Special Refund Proceeding'' and sent to: Office of Hearings and 
Appeals, Department of Energy, 1000 Independence Avenue, SW., 
Washington, DC 20585.

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

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 $10,089.18, plus 
accrued interest, obtained by the DOE pursuant to March 8, 1982 and 
March 29, 1982. In the Remedial Orders, the DOE found that, during the 
relevant periods beginning August 1, 1979, the firms each 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 in order to receive a refund 
are set out in Section III of the Decision. Claimants who meet these 
specific 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 Appeal.
January 13, 1994.

Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

Names of Firms:
    A-1 Exxon
    Half Moon Bay Exxon
    Redhill Mobil & Towing
Date of Filing: July 20, 1993
Case Numbers:
    LEF-0086
    LEF-0087
    LEF-0088

    On July 20, 1993, the Economic Regulatory Administration (ERA) 
of the Department of Energy (DOE) filed a Petition for the 
Implementation of Special Refund Procedures with the Office of 
Hearings and Appeals (OHA), to distribute the funds received 
pursuant to Remedial Orders issued by the DOE to the following 
parties: A-1 Exxon of Capitola, California, Half Moon Bay Exxon of 
Half Moon Bay, California, and Redhill Mobil & Towing of San 
Anselmo, California (hereinafter collectively referred to as the 
remedial order firms). In accordance with the provisions of the 
procedural regulations at 10 CFR part 205, Subpart V (Subpart V), 
the ERA requests in its Petition that the OHA establish special 
procedures to make refunds in order to remedy the effects of 
regulatory violations set forth in the Remedial Order. This Decision 
and Order sets forth the OHA's plan to distribute these funds.

I. Background

    Each of the remedial order firms was a retailer of motor 
gasoline during the periods relevant to this proceeding. The ERA 
issued Proposed Remedial Orders (PROs) to each of the firms.1 
The PROs alleged that, during separate periods beginning on August 
1, 1979, the remedial order firms had: charged more than the maximum 
lawful selling price for one or more grades of gasoline in violation 
of 10 CFR 212.93; failed to post and maintain the maximum lawful 
selling price or a proper certification in violation of 10 CFR 
212.129; failed to keep and maintain books and records to support 
the lawfulness of the price for gasoline on the audit date in 
violation of 10 CFR 210.92 and 212.93; and/or engaged in unlawful or 
discriminatory business practices in violation of 10 CFR 210.62.
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    \1\ A-1 Exxon was issued a PRO on January 22, 1981; Half Moon 
Bay Exxon was issued a PRO on May 7, 1981, and Redhill Mobil & 
Towing was issued a PRO on February 25, 1981.
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    After considering and dismissing the firms' objections to the 
PROs, the DOE issued final Remedial Orders. A-1 Exxon, et al., 9 DOE 
83,020 (1982); Chip's Chevron Service, et al., 9 DOE 83,046 
(1982).2 Each of the retailers, represented by the same 
counsel, appealed the remedial orders to the Federal Energy 
Regulatory Commission (FERC). On September 19, 1982, FERC affirmed 
each of the contested remedial orders in every respect. A-1 Exxon, 
et al., 20 FERC 61,387 (1982). Each of the firms has since remitted 
a specified amount in compliance with the Remedial Orders, to which 
interest has since accrued. These funds are being held in an 
interest-bearing escrow account maintained at the Department of the 
Treasury pending a determination regarding their proper 
distribution.

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 of 
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 OHA to fashion procedures to distribute 
refunds, see Petroleum Overcharge Distribution and Restitution Act 
of 1986, 15 U.S.C. 4501 et seq., Office of Enforcement, 9 DOE 
82,508 (1981), and Office of Enforcement, 8 DOE 82,597 (1981) 
(Vickers).
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    \2\ A Remedial Order was issued to A-1 Exxon and Redhill Mobil & 
Towing on March 8, 1982. A Remedial Order was issued to Half Moon 
Bay Exxon on March 29, 1982.
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    We have considered the ERA's petition that we implement a 
Subpart V proceeding with respect to the above remedial order funds 
and have determined that such proceedings are appropriate. This 
Proposed Decision and Order sets forth the OHA's tentative plan to 
distribute these funds. Before taking the actions proposed in this 
Decision, we intend to publicize our proposal and solicit comments 
from interested parties. Comments regarding the tentative 
distribution processes set forth in this Proposed Decision and Order 
should be filed with the OHA within 30 days of its publication in 
the Federal Register.

III. Proposed Refund Procedures

    On December 2, 1993, the OHA issued a Proposed Decision and 
Order (PD&O) establishing tentative procedures to distribute the 
Remedial Order 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 Fed. Reg. 64758 
(December 9, 1993). More than 30 days have elapsed and the OHA has 
received no comments concerning the proposed procedures for the 
distribution of the Remedial Order funds. Consequently, the 
procedures will be adopted as proposed. We will implement a two-
stage refund procedure for distribution of the remedial order funds 
by which purchasers of gasoline from the remedial order firms during 
the period covered by the Remedial Orders 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.3
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    \3\ If a refiner, reseller, or retailer should file an 
application in any of the 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 the 
remedial order firm during the period covered by the Remedial Order. 
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 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 will adopt the 
presumptions set forth below.

1. Calculation of Refunds

    First, we will adopt a presumption that the overcharges were 
dispersed equally in all of the remedial order firms' sales of 
gasoline during the period covered by the Remedial Orders. In 
accordance with this presumption, refunds are to be made on a pro-
rata or volumetric basis.4 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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    \4\ 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 remedial firm's 
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 Remedial Order fund is equal to the number of gallons purchased 
from the remedial order firm during the period covered by that 
Remedial Order times the per gallon refund amount.5 We derived 
the per gallon refund figures by dividing the amount of each 
Remedial Order fund by the total volume of gasoline which each 
remedial order firm sold during the period specified in that 
Remedial Order. An applicant 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.6
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    \5\ The per gallon refund amount is $.0465 for claimants 
applying in the A-1 Exxon proceeding ($3,000 remitted/64,456.4 
gallons sold), $.0173 in the Half-Moon Bay Exxon proceeding ($2,500 
remitted/144,331 gallons sold), and $.0314 in the Redhill Mobil & 
Towing proceeding ($4,589.18 remitted/146,145.7 gallons sold).
    \6\ As in previous cases, we will establish a minimum refund 
amount of $15. We have found through our experience 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). 
    In addition to the volumetric presumption, we will also adopt a 
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presumption regarding injury for end-users. 
2. End-Users 
    In accordance with prior Subpart V proceedings, we will adopt 
the presumption that an end-user or ultimate consumer of gasoline 
purchased from one of the remedial order firms whose business is 
unrelated to the petroleum industry was injured by the overcharges 
resolved by the Remedial Order. See, e.g., Texas Oil and Gas Corp., 
12 DOE 85,069 at 88,209 (1984) (TOGCO). Members of this group 
generally were not subject to price controls during the period 
covered by the Remedial Order, 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. 
End-users of gasoline purchased from the remedial order firms need 
only document their purchase volumes from the firm during the period 
covered by the Remedial Order to make a sufficient showing that they 
were injured by the overcharges. 
B. Refund Application Requirements 
    To apply for a refund from any of the Remedial Order 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.7 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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    \7\ 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 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) A monthly purchase schedule covering the relevant Remedial 
Order period.8 The applicant should specify the source of this 
gallonage information. In calculating its purchase volumes, an 
applicant should use actual records from the refund 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.
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    \8\The Remedial Orders cover the following periods: August 1, 
1979 through November 20, 1979 in the A-1 Exxon proceeding; August 
1, 1979 through October 23, 1979 in the Half-Moon Bay Exxon 
proceeding; and August 1, 1979 through November 13, 1979 in the 
Redhill Mobil and Towing proceeding.
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    (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 by 
submitted;
    (4) If the applicant is or was in any way affiliated with the 
remedial order firm, it should explain this affiliation, including 
the time period in which it was affiliated;9
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    \9\As in other refund proceedings involving alleged refined 
product violations, the DOE will presume that affiliates of the 
remedial order firm were not injured by the firm's overcharges. See, 
e.g., Marathon Petroleum Co./EMRO Propane Co., 15 DOE 85,288 
(1987). This is so because the remedial order 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 the remedial 
order firm was granted a refund, the remedial order firm would be 
indirectly compensated from a Remedial Order 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 clearly 
labeled A-1 Exxon (Case No. LEF-0086)/Half Moon Bay Exxon (Case No. 
LEF-0087)/OR Redhill Mobil and Towing (Case No. LEF-0088) Special 
Refund Proceeding.'' 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 on or before June 30, 1994 and 
sent to: A-1 Exxon/Half Moon Bay Exxon/OR Redhill Mobil & Towing 
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 will 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., Starks Shell Service, 
23 DOE 85,017 (1993); Texaco Inc., 20 DOE 85,147 (1990); Shell Oil 
Co., 18 DOE 85,492 (1989). We will also require strict compliance 
with the filing requirements as specified in 10 CFR 205.283, 
particularly the requirement that applications and the accompanying 
certification statement be signed by the applicant.
    The OHA reiterates its policy to closely scrutinize applications 
filed by filing services. Applications submitted by a filing service 
should contain all of the information indicated in the final 
Decision and Order in this proceeding.
    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 will 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 
Remedial Order 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 A-1 
Exxon, Half Moon Bay Exxon, and Redhill Mobil & Towing pursuant to 
the Remedial Orders dated March 8, 1982 and March 29, 1982 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.
[FR Doc. 94-1395 Filed 1-19-94; 8:45 am]
BILLING CODE 6450-01-P