[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