[Federal Register Volume 59, Number 50 (Tuesday, March 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-5990]


[[Page Unknown]]

[Federal Register: March 15, 1994]


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DEPARTMENT OF ENERGY
Office of Hearings and Appeals

 

Implementation of Special Refund Procedures

AGENCY: Office of Hearings and Appeals Department of Energy.

ACTION: Notice of implementation of special refund procedures.

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SUMMARY: The Office of Hearings and Appeals of the Department of Energy 
announces the procedures for disbursement of $14,912.58 (plus accrued 
interest) obtained by the DOE under the terms of Remedial Orders issued 
to Pete Aljian Chevron and Shaw & 99 Chevron. The money is being held 
in escrow following the settlement of enforcement proceedings brought 
by the DOE's Economic Regulatory Administration.

DATE AND ADDRESS: Applications for Refund from the remedial order funds 
must be filed in duplicate and must be postmarked no later than June 
13, 1994. All Applications should refer to either Case Number LEF-0089 
or LEF-0090 and should be addressed to the Office of Hearings and 
Appeals, Department of Energy, 1000 Independence Avenue, SW., 
Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT:  Richard W. Dugan, Associate Director, 
Office of Hearings and Appeals, 1000 Independence Avenue, SW., 
Washington, DC 20585, (202) 586-2860.

SUPPLEMENTARY INFORMATION: In accordance with Sec. 205.282(c) of the 
procedural regulations of the Department of Energy, 10 CFR 205.282(c), 
notice is hereby given of the issuance of the Decision and Order set 
forth below. The Decision relates to Remedial Orders issued to Pete 
Aljian Chevron (Aljian) and Shaw & 99 Chevron (Shaw), two motor 
gasoline retail outlets located in Castro Valley and Fresno, 
California, respectively. The Remedial Orders found that the firms had 
committed pricing violations in their sales of motor gasoline during 
the periods of December 15, 1979 through May 28, 1980, and December 15, 
1979 through July 7, 1980, respectively.
    The Decision sets forth the procedures and standards that the 
Office of Hearings and Appeals (OHA) of the DOE has formulated to 
distribute funds remitted by Aljian and Shaw and being held in escrow. 
The OHA has decided to accept Applications for Refund from individuals 
that purchased motor gasoline from Aljian or Shaw during the respective 
audit periods. Each claimant will be required to submit a listing of 
its monthly purchases from Aljian and Shaw. The specific information 
required in an Application for Refund is set forth in the following 
Decision and Order. Applications for Refund will now be accepted 
provided they are filed in duplicate and postmarked no later than 90 
days after publication of this Decision and Order in the Federal 
Register.

    Dated: March 8, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.

Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

March 8, 1994.
Names of Firms: Pete Aljian Chevron
Shaw & 99 Chevron
Date of Filing: July 20, 1993
Case Numbers: LEF-0089, LEF-0090.

    In accordance with the procedural regulations of the Department 
of Energy (DOE), 10 CFR part 205, subpart V, 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 
which Pete Aljian Chevron (Aljian) and Shaw & 99 Chevron (Shaw) 
remitted to the DOE pursuant to a May 3, 1982 Remedial Order 
Decision.

I. Background

    During the periods relevant to this proceeding, Aljian and Shaw 
operated Chevron-branded retail service stations located in Castro 
Valley, and Fresno, California, respectively. In 1980, the ERA 
audited the pricing practices of the two retailers and, as a result 
of those audits, issued Proposed Remedial Orders (PROs) to the two 
firms. The PROs alleged that Aljian, during the period December 15, 
1979 through May 28, 1980, and Shaw, during the period December 15, 
1979 through July 7, 1980, sold motor gasoline at prices in excess 
of their maximum lawful selling prices, in violation of the Federal 
petroleum price regulations at 10 CFR 212.93(a)(2). After 
considering the firms' objections to the PROs, the DOE amended the 
remedial provisions of the PROs and issued a final consolidated 
Remedial Order Decision on May 3, 1982, to five retailers, including 
Aljian and Shaw. Allen Union, 9 DOE  83,028 (1982). On November 22, 
1982, the Federal Energy Regulatory Commission issued a consolidated 
Order affirming the Aljian and Shaw Remedial Orders. Gary Pfister's 
Mobil Service, 21 FERC  61,109 (1982). Aljian and Shaw have 
remitted to the DOE $8,190.51 and $6,722.07, respectively, in 
compliance with the Remedial Orders. The firms' payments are 
currently being held in separate interest-bearing escrow accounts 
pending distribution by the DOE.1
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    \1\The funds were held in a non-interest bearing DOE suspense 
account until September 3, 1993, when they were transferred to 
separate escrow accounts.
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    On December 15, 1993, we issued a Proposed Decision and Order 
(PD&O) setting forth a tentative plan for the distribution of the 
consent order funds. 58 FR 67403 (December 15, 1993). We stated in 
the PD&O that the basic purpose of a special refund proceeding is to 
make refunds in order to remedy the effects of regulatory 
violations. In order to effect restitution in this proceeding, we 
proposed to establish a claims procedure whereby applications for 
refund would be accepted from customers who can demonstrate that 
they were injured as a result of any alleged overcharges made by one 
of the consent order firms during the relevant consent order period.

II. Jurisdiction and Authority

    The subpart V regulations set forth general guidelines by which 
the Office of Hearings and Appeals may formulate and implement 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 the Office of Hearings and Appeals 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); Office of Enforcement, 
8 DOE 82,597 (1981).
    We have considered the ERA's petition that we implement subpart 
V proceedings with respect to the Aljian and Shaw Remedial Order 
funds and have determined that such proceedings are appropriate. 
This Decision and Order sets forth the OHA's plan to distribute 
these funds.

III. Refund Procedures

    The PD&O provided a 30-day period for the submission of comments 
regarding our proposed refund procedures. Since more than 30 days 
have elapsed and we have not received any comments regarding our 
proposed refund procedures, we have determined that those procedures 
should be adopted.
    The distribution of refunds will take place in two stages. In 
the first stage, refund monies will be refunded to those customers 
who purchased motor gasoline from one of the firms during the 
relevant audit period and who demonstrate that they were injured by 
the overcharges of the applicable firm. Such purchasers must file 
claims and document their purchases in order to be eligible for a 
refund.

A. Calculation of Refunds

    As in many prior special refund cases, we will adopt certain 
presumptions. First, we will adopt a presumption that the 
adjudicated overcharges were dispersed equally in all sales of motor 
gasoline made by each firm during its audit period. The OHA has 
referred to this presumption in the past as a volumetric refund 
amount.
    Presumptions in refund cases are specifically authorized by 
applicable DOE procedural regulations. Section 205.282(e) of those 
regulations states that:
    In establishing standards and procedures for implementing refund 
distributions, the Office of Hearings and Appeals shall take into 
account the desirability of distributing the refunds in an 
efficient, effective and equitable manner and resolving to the 
maximum extent practicable all outstanding claims. In order to do 
so, the standards for evaluation of individual claims may be based 
upon appropriate presumptions.
    10 CFR 205.282(e). The presumptions we will adopt in this case 
are used to permit claimants to participate in the refund process 
without incurring disproportionate expenses, and to enable the OHA 
to consider the refund applications in the most efficient way 
possible in view of the limited resources available.
    The volumetric refund presumption assumes that the overcharges 
were spread equally over all gallons of product marketed by a 
particular firm. In the absence of better information, this 
assumption is sound because the DOE price regulations generally 
required a regulated firm to account for increased costs on a firm-
wide basis in determining its prices. However, we also recognize 
that the impact of a firm's pricing practices on an individual 
purchaser could have been greater, and any purchaser is allowed to 
file a refund application based on a claim that it suffered a 
disproportionate share of the overcharges. See, e.g., Amtel, Inc., 
12 DOE 85,073 at 88,233-34 (1984); Sid Richardson Carbon and 
Gasoline Co./Siouxland Propane Co., 12 DOE 85,054 at 88,164 (1984).
    In each of the cases being considered here, the information 
available in the ERA audit files is insufficient to base refunds on 
the amount each individual customer was overcharged.\2\ We therefore 
shall use the volumetric method to allocate the Remedial Order fund 
in each case. An applicant's allocable share will be equal to the 
number of gallons purchased from Aljian or Shaw during the relevant 
audit period multiplied by the per gallon volumetric refund amount. 
In the present case, the per gallon refund amount for Aljian 
customers is $0.0340. We derived this figure by dividing the amount 
of the Remedial Order funds remitted by Aljian, $8,190.51, by the 
240,777 gallons which the firm sold during the period December 15, 
1979 through May 28, 1980. The per gallon refund amount for Shaw 
customers is $0.0202, which we derived by dividing the amount it 
remitted $6,722.07, by the 333,505 gallons that it sold during the 
period December 15, 1979 through July 7, 1980. Any firm 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.
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    \2\The ERA audit files do not identify any customers of Aljian 
or Shaw.
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    The relevant information for the two proceedings is summarized 
below. 

------------------------------------------------------------------------
                                                              Volumetric
         Firm             Amount          Audit period          refund  
                                                               amount   
------------------------------------------------------------------------
Pete Aljian Chevron,      $8,190.51  December 15, 1979-May       $0.0340
 Castro Valley, CA.                   28, 1980.                         
Shaw & 99 Chevron,         6,722.07  December 15, 1979-July      0.0202 
 Fresno, CA.                          7, 1980.                          
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B. Presumption of Injury

    Since both firms were small retailers, we presume that all, or 
virtually all, of their sales were to end-users. In accordance with 
prior Subpart V proceedings, we shall adopt the presumption that an 
end-user (ultimate consumer) of gasoline purchased from Aljian and 
Shaw whose business is unrelated to the petroleum industry was 
injured by the overcharges set forth in the Remedial Order Decision. 
See, e.g., Texas Oil and Gas Corp., 12 DOE 85,069 at 88,209 (1984). 
Unlike regulated firms in the petroleum industry, members of this 
group generally were not subject to price controls during the 
periods covered by the Remedial Orders, 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. Therefore, end-users of gasoline purchased from 
Aljian and Shaw need only document their purchase volumes from 
Aljian and Shaw during the applicable period covered by the Remedial 
Orders to make a sufficient showing that they were injured by the 
overcharges.3
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    \3\If a reseller or retailer should file a refund application in 
this proceeding, we will utilize the standards and appropriate 
presumptions established in previous refined product refund 
proceedings. See, e.g., Shell Oil Co., 18 DOE 85,492 at 88,799 
(1989).
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C. Minimum Refund Amount

    We will establish a minimum amount of $15 for refund claims. We 
have found through our experience in prior refund cases that the 
cost of processing claims in which refunds are sought for amounts 
less than $15 outweighs the benefits of restitution in those 
situations.4 See, e.g., Uban Oil Co., 9 DOE 82,541 at 85,225 
(1982); see also 10 CFR Sec. 205.286(b).
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    \4\In order to be eligible for the minimum refund, applicants in 
the Aljian and Shaw proceedings will have to have purchased during 
the relevant audit period 442 and 743 gallons, respectively.
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D. Refund Application Requirements

    All Applications for Refund must be filed in duplicate and must 
be postmarked no later than 90 days after publication of this 
Decision and Order in the Federal Register. A copy of each 
Application will be available for public inspection in the Public 
Reference Room of the Office of Hearings and Appeals, Forrestal 
Building, Room 1E-234, 1000 Independence Avenue, S.W., Washington, 
D.C. Any applicant that believes that its Application contains 
confidential information must so indicate on the first page of its 
Application and submit two additional copies of its Application from 
which the material alleged to be confidential has been deleted, 
together with a statement specifying why the information is alleged 
to be privileged or confidential. The following information should 
be included in all Applications for Refund:
    1. Identifying information including the claimant's name, 
current business address, business address during the refund period, 
taxpayer identification number,5 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 any additional 
information, and the name and address of the person who should 
receive any refund check;
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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 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. The applicant's use of gasoline purchased from Pete Aljian 
Chevron or Shaw & 99 Chevron: e.g., consumer (end-user), retailer, 
or reseller;
    3. A monthly purchase schedule covering the period December 15, 
1979 through May 28, 1980, for Aljian and December 15, 1979 through 
July 7, 1980 for Shaw. The applicant should specify the source of 
this gallonage information;
    4. A statement as to whether the applicant or a related firm has 
filed, or has authorized any individual to file on its behalf, any 
other application in the Aljian or Shaw refund proceedings. If so, 
an explanation of the circumstances of the other filing or 
authorization should be submitted;
    5. If the applicant is or was in any way affiliated with Aljian 
or Shaw, it should explain this affiliation, including the time 
period in which it was affiliated;
    6. A statement as to whether the ownership of the applicant's 
firm changed during or since the refund period. If an ownership 
change occurred, the applicant should list the names, addresses, and 
telephone numbers of any prior or subsequent owners. The applicant 
should also provide copies of any relevant Purchase and Sale 
Agreements, if available. If such written documents are not 
available, the applicant should submit a description of the 
ownership change, including the year of the sale and the type of 
sale (e.g., sale of corporate stock, or sale of company assets);
    7. A statement as to whether the applicant has ever been a party 
in a DOE enforcement action or a private Section 210 action. If so, 
an explanation of the case and copies of relevant documents should 
also be provided.
    8. The statement set forth below signed by the individual 
applicant or a responsible official of the firm filing the refund 
application:
    I swear (or affirm) that the information submitted is true and 
accurate 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 
labelled ``Aljian Special Refund Proceeding, Case No. LEF-0089'' or 
``Shaw Special Refund Proceeding, Case No. LEF-0090.'' Applications 
should be sent to: Office of Hearings and Appeals, Department of 
Energy, 1000 Independence Avenue, SW., Washington, DC 20585.

E. Distribution of Funds Remaining After First Stage

    Any funds that remain after all first stage claims have been 
decided shall 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 portion of the 
Aljian and Shaw 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 to the 
Department of Energy by Pete Aljian Chevron and Shaw & 99 Chevron 
will be distributed in accordance with the foregoing Decision.
    (2) All Applications must be postmarked no later than 90 days 
after publication of this Decision and Order in the Federal 
Register.

    Dated: March 8, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 94-5990 Filed 3-14-94; 8:45 am]
BILLING CODE 6450-01-P