[Federal Register Volume 59, Number 28 (Thursday, February 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3097]


[[Page Unknown]]

[Federal Register: February 10, 1994]


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DEPARTMENT OF ENERGY
Office of Hearings and Appeals

 

Proposed Implementation of Special Refund Procedures

AGENCY: Office of Hearings and Appeals, DOE.

ACTION: Notice of Proposed 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 proposed procedures for disbursement of a 
total of $83,847.58, plus accrued interest, in refined petroleum 
overcharges obtained by the DOE under the terms of a Remedial Order 
issued to Alameda Chevron, et al., Case Nos. LEF-0093, et al. The OHA 
has tentatively determined that the funds will be distributed in 
accordance with the provisions of 10 C.F.R. Part 205, Subpart V and 15 
U.S.C. 4501, the Petroleum Overcharge Distribution and Restitution Act 
(PODRA).

DATE AND ADDRESS: Comments must be filed in duplicate on or before 
March 14, 1994 and should be addressed to the Office of Hearings and 
Appeals, Department of Energy, 1000 Independence Avenue, SW., 
Washington, DC 20585. All comments should display a reference to Case 
Number LEF-0093, et al.

FOR FURTHER INFORMATION CONTACT: Kim L. Hargrove, Staff Attorney, 
Office of Hearings and Appeals, 1000 Independence Avenue, SW., 
Washington, DC 20585, (202) 586-2400.

SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(b), notice 
is hereby given of the issuance of the Proposed Decision and Order set 
out below. The Proposed Decision sets forth the procedures that the DOE 
has tentatively formulated to distribute to eligible claimants 
$83,847.58, plus accrued interest, obtained by the DOE under the terms 
of a Remedial Order that the DOE issued to Alameda Chevron, et al., on 
October 22, 1980. Under the Remedial Order, Alameda Chevron and 15 
other firms were found to have violated the Federal petroleum price and 
allocation regulations involving the sale of motor gasoline during the 
relevant audit periods.
    The OHA has proposed to distribute the Remedial Order funds is a 
two stage refund proceeding. Purchasers of motor gasoline from any one 
of the Remedial Order firms named in the Appendix following the 
Proposed Decision and Order will have an opportunity to submit refund 
applications in the first stage. Refunds will be granted to applicants 
who satisfactorily demonstrate they were injured by the pricing 
violations and who document the volume of motor gasoline they purchased 
from one or more of the Remedial Order firms during the relevant audit 
period. In the event that money remains after all first stage claims 
have been disposed of, the remaining funds will be disbursed in 
accordance with the provisions of 15 U.S.C. 4501, the Petroleum 
Overcharge Distribution and Restitution Act of 1986 (PODRA).
    Any member of the public may submit written comments regarding the 
proposed refund procedures. Commenting parties are requested to forward 
two copies of their submissions, within 30 days of publication of this 
notice in the Federal Register, to the address set forth at the 
beginning of this notice. Comments so received, will 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 
1E-234, 1000 Independence Avenue, SW., Washington, DC 20585.

    Dated: February 3, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.

Proposed Decision and Order of the Department of Energy

Proposed Implementation of Special Refund Procedures

February 3, 1994.
    Names of Firms: Alameda Chevron, et al.
    Date of Filing: July 20, 1993.
    Case Numbers: LEF-0093, et al.
    On July 20, 1993, the Economic Regulatory Administration (ERA) of 
the Department of Energy (DOE) filed a Petition requesting that the 
Office of Hearings and Appeals (OHA) formulate and implement Subpart V 
special refund proceedings. Under the procedural regulations of the 
DOE, special refund proceedings may be implemented to refund monies to 
persons injured by violations of the DOE petroleum price regulations, 
provided DOE is unable to readily identify such persons or to ascertain 
the amount of any refund. 10 CFR 205.280. We have considered the ERA's 
request to formulate refund procedures for the disbursement of monies 
remitted by Alameda Chevron and 15 other firms pursuant to a Remedial 
Order (hereafter, the Order) issued by OHA on October 22, 1980, to 
those firms and have determined that such procedures are appropriate. 
Each firm's name, case number and amount of money remitted to remedy 
its pricing violations has been set out in the Appendix immediately 
following this Decision.
    Under the terms of the Order, a total of $83,847.58 has been 
remitted to the DOE to remedy pricing violations which occurred during 
the relevant audit periods. These funds are being held in an escrow 
account established with the United States Treasury pending a 
determination of their proper distribution. See Memorandum from George 
B. Breznay, Director OHA, to James T. Campbell, Comptroller, 
``Transferring Funds to Escrow Account,'' August 20, 1993. This 
Decision sets forth OHA's tentative plan to distribute those funds. The 
specific application requirements appear in Section III of this 
Decision. Because these procedures are set forth in proposed form, 
refund applications should not be filed at this time. Comments are 
solicited.

I. Jurisdiction and Authority

    The general guidelines that govern OHA's ability to formulate and 
implement a plan to distribute refunds are set forth at 10 CFR part 
205, Subpart V. These procedures apply in situations where the DOE 
cannot readily identify the persons who were injured as a result of 
actual or alleged violations of the regulations or ascertain the amount 
of the refund each person should receive. For a more detailed 
discussion of Subpart V and the authority of the OHA to fashion 
procedures to distribute refunds, see Office of Enforcement, 8 DOE 
82,508 (1981) and Office of Enforcement, 8 DOE 82,597 (1981).

II. Background

    The facts alleged in the Remedial Order were undisputed. Each 
Remedial Order firm was a ``retailer'' of motor gasoline as that term 
has been defined at 10 CFR 212.31 and was therefore subject to the 
provisions of 10 CFR part 210 and 10 CFR part 212, Subpart F. The Order 
states that during the relevant audit period, they each charged prices 
higher than those permitted by 10 CFR 212.93(a)(2); levied a cents-per-
gallon fee for services associated with the sale of motor gasoline in 
violation of 10 CFR 210.62(d)(1) and refused to make their records 
available for inspection in violation of 10 CFR 210.92(b).
    The firms were ordered to reduce their prices for motor gasoline by 
specified amounts until a sufficient volume of gasoline had been sold 
at the reduced prices to remedy the violations.\1\ After decontrol, the 
Order was modified to require direct monetary restitution to the 
Treasury instead. See Sunset Boulevard Car Wash, 20 FERC 62,319 at 
63,537 (1982). The firms objected. The Order has since been affirmed by 
the Federal Energy Regulatory Commission (FERC) in a Decision issued on 
August 13, 1982. Id.
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    \1\The Order imposed no sanctions upon the firms for failing to 
provide records pursuant to 10 CFR 210.92(b). See Remedial Order at 
1 and 7.
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III. The Proposed Motor Gasoline Refund Procedures

    This section sets forth the considerations that will be used to 
evaluate applications for refund payable from the monies remitted by 
each firm. We propose to implement a two stage refund proceeding. 
Purchasers of motor gasoline from any of these gasoline retailers will 
have an opportunity to submit refund applications in the first stage. 
In the event that money remains after all first stage claims have been 
disposed of, the remaining funds will be disbursed in accordance with 
the provisions of the Petroleum Overcharge Distribution and Restitution 
Act of 1986 (15 U.S.C. 4501) (PODRA).
    Refund applications submitted in this special refund proceeding 
will be evaluated in exactly the same manner as applications submitted 
in other refined product proceedings. Refunds will be granted to 
applicants who satisfactorily demonstrate they were injured by the 
pricing violations and who document the volume of motor gasoline they 
purchased from one or more of these retailers during the relevant audit 
period. In order to permit applicants to participate in the refund 
proceeding without incurring inordinate expense and to facilitate OHA's 
consideration of refund applications, we plan to adopt certain 
presumptions regarding pricing violations and injury. 10 CFR 
205.282(e).
    With regard to the pricing violations, we propose to adopt a 
rebuttable presumption that such violations were dispersed equally 
throughout each of these retailer's sales of motor gasoline during the 
audit period and that refunds should therefore be made on a pro rata or 
volumetric basis. Under this volumetric refund approach, an applicant 
will be eligible to receive a refund that is equal to the gallons of 
gasoline purchased multiplied by the per gallon refund amount, plus 
accrued interest.
    We are proposing that a separate per gallon refund amount 
(volumetric) be set for each retailer. The volumetric was obtained by 
dividing the remedial order funds each retailer remitted by the gallons 
of motor gasoline we believe it sold during the relevant audit 
period.\2\ Applicants believing they were disproportionately 
overcharged will have an opportunity to rebut this presumption and 
those who succeed in doing so, will be eligible to receive refunds 
calculated at a higher volumetric.
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    \2\In the absence of accurate figures indicating the amount of 
motor gasoline sold by each firm during the audit period, we have 
estimated the volume of their sales using the best available data. 
Our estimate is that each gasoline retailer sold 50,000 gallons of 
motor gasoline per month for each month of its audit period. This 
figure was used to calculate each retailer's volumetric. Should 
interest in claims submitted pursuant to this Order indicate that 
our sales volume estimate was inaccurate, it may be necessary to 
reestimate the volumetric.
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    The potential applicants are likely to fall into just two 
categories since each of the Remedial Order firms was retailer. We will 
provide a presumption of injury for end-users of petroleum products 
whose businesses were unrelated to the petroleum industry and were 
therefore not subject to the regulations promulgated under the 
Emergency Petroleum Allocation Act of 1973 (EPAA), 15 U.S.C. Secs. 751-
760h. In order to receive a refund, such applicants will only be 
required to document the volume of motor gasoline they purchased from 
one or more of these retailers during that retailer's audit period. See 
Shell Oil Company, 17 DOE  85,204 (1988). The second category of 
applicant consists of both retailer and reseller applicants who will be 
required to submit detailed evidence of injury. These applicants must 
show that the overcharges were absorbed, not passed through to their 
customers. They therefore will be unable to rely upon injury 
presumptions utilized in many refined product refund cases. Id.
    Only claims for at least $15 in principal will be processed. This 
minimum has been adopted in refined product refund proceedings because 
the cost of processing claims for refunds of less than $15 outweighs 
the benefits of restitution in those instances. See Mobil Oil Corp., 13 
DOE  85,339 (1985).
    The deadline for filing an Application for Refund is June 1, 1995.
    It Is Therefore Ordered That:
    The refund amount remitted to the Department of Energy by Alameda 
Chevron and the 15 firms listed in the Appendix, pursuant to the 
Remedial Order finalized on October 22, 1980, be distributed in 
accordance with the foregoing Decision.

                                                    Appendix                                                    
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           Case No.                          Case name                $ Amount      Audit period      Volumetric
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LEF-0093......................  Alameda Chevron....................    $2,270.92    8/1/79-10/30/79        .0151
LEF-0094......................  Ben's Exxon Service................     3,056.42     8/1/79-1/30/80        .0102
LEF-0095......................  Berryessa Chevron..................     2,933.32    8/1/79-10/30/79        .0196
LEF-0096......................  Bill Wren's Shell..................     4,366.42     8/1/79-1/11/80        .0163
LEF-0097......................  Cutting Shell Service..............     4,815.87     8/1/79-1/30/80        .0161
LEF-0098......................  Ed Gularte Chevron.................     6,235.74     8/1/79-1/30/80        .0208
LEF-0099......................  Joe Berube Services................     8,294.00    8/1/79-12/13/79        .0375
LEF-0100......................  McDowell Exxon.....................     6,998.37    8/1/79-10/20/79        .0529
LEF-0101......................  Petaluma Standard Service..........     3,987.27     8/1/79-1/30/80        .0133
LEF-0102......................  Regalia's Chevron Service..........     8,887.87     8/1/79-1/11/80        .0332
LEF-0103......................  Starr Union Service................     6,773.51    8/1/79-11/20/79        .0372
LEF-0104......................  Tenth Street Chevron...............     7,097.98     8/1/79-1/30/80        .0237
LEF-0105......................  Tom's Coffee Tree Chevron..........     4,500.00    8/1/79-11/20/79        .0247
LEF-0106......................  Wallace Arco Service...............     2,067.09     8/1/79-1/11/80        .0069
LEF-0107......................  Walt's Shell Service...............     3,562.80    8/1/79-11/14/79        .0206
LEF-0108......................  Weber's Chevron Service............     8,000.00    8/1/79-11/14/79        .0464
                                                                    -------------                               
                                                                      $83,847.58                                
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[FR Doc. 94-3097 Filed 2-9-94; 8:45 am]
BILLING CODE 6450-01-M