[Federal Register Volume 59, Number 86 (Thursday, May 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-10650]


[[Page Unknown]]

[Federal Register: May 5, 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, Department of Energy.

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 
$21,764.57, plus accrued interest, in refined petroleum overcharges 
obtained by the DOE under the terms of a Remedial Order issued to Aptos 
Shell, et al. (Aptos) Case Nos. LEF-0092, et al. The OHA has 
tentatively determined that the funds will be distributed in accordance 
with the provisions of 10 CFR 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 within 30 days 
of publication of this notice in the Federal Register 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-0092, 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 
$21,764.57, plus accrued interest, obtained by the DOE under the terms 
of a Remedial Order that the DOE issued to Aptos Shell, et al. (Aptos) 
on December 14, 1981. Under the Remedial Order, Aptos was found to have 
violated the Federal petroleum price and allocation regulations 
involving the sale of refined petroleum products during the relevant 
audit periods.
    The OHA has proposed to distribute the Remedial Order funds in a 
two stage refund proceeding. Purchasers of motor gasoline from any one 
of the gasoline retailers considered in the Aptos proceeding 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 refined petroleum products they purchased from one of the gasoline 
retailers during the relevant audit periods. 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: April 28, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.

Proposed Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

    Date: April 28, 1994.

    Names of Firms: Aptos Shell, et al.
    Date of Filing: July 20, 1993.
    Case Numbers: LEF-0092, et al.
    On July 20, 1993, the Economic Regulatory Administration of the 
Department of Energy (ERA) 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 Aptos Shell and 4 other firms pursuant to a Remedial Order 
(hereafter, the Order) issued by OHA on December 14, 1981, and have 
determined that such procedures are appropriate. Each firm's name, case 
number and amount of money it remitted under the Order has been set out 
in the appendix immediately following this Decision.
    The firms remitted a total of $21,764.57 to the DOE to remedy 
pricing violations which occurred during the period covered by the 
ERA's audit. These funds are being held in an escrow account 
established with the 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 30, 1993. OHA's tentative plan to distribute those 
funds is set forth in this Decision. Specific application requirements 
appear in Section III. 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 refund 
amount each person should receive. For a more detailed discussion of 
subpart V and OHA's authority to fashion procedures to distribute 
refunds, see Office of Enforcement, 9 DOE 82,508 (1981) and Office of 
Enforcement, 8 DOE 82,597 (1981).

II. Background

    The facts alleged in the Order were undisputed. Aptos and each of 
the 4 firms identified in the Appendix to this Decision were 
``retailers'' of motor gasoline as that term has been defined at 10 CFR 
212.31 and were therefore subject to the provisions of 10 CFR part 210 
and 10 CFR part 212, subpart F. The Order states that, during the 
period covered by the ERA's audit, each retailer 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 its records 
available for inspection in violation of 10 CFR 210.92(b).
    The retailers were ordered to reduce their prices for motor 
gasoline by specified amounts until sufficient volumes of gasoline 
could be 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 retailers objected. The Order has 
since been affirmed by the Federal Energy Regulatory Commission (FERC) 
in a Proposed Order issued on August 13, 1982. Id. FERC issued a final 
Order adopting its Proposed Order on September 29, 1982.
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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.
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III. The Proposed Refined Product Refund Procedures

    This section sets forth the considerations that will be used to 
evaluate refund applications payable from the monies remitted by the 
retailers. We propose implementing a two stage refund proceeding. 
Purchasers of motor gasoline from any one of the gasoline retailers 
considered in this proceeding 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 the 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 the nature and extent of the pricing violations 
and the requirement that applicants demonstrate injury. Our authority 
to adopt presumptions in refund cases is set forth at 10 CFR 
205.282(e).
    With regard to the pricing violations, we propose adopting a 
rebuttable presumption that such violations were dispersed equally 
throughout each retailer's sales of motor gasoline during the 
appropriate audit period and that refunds should therefore be made on a 
pro rata or volumetric basis. Under this volumetric refund approach, 
applicants will be eligible to receive refunds that are equal to the 
gallons of gasoline they purchased multiplied by the per gallon refund 
amount (volumetric), plus accrued interest.
    We propose that a separate volumetric be set for each retailer. The 
volumetrics for each retailer appear in the Appendix. Each was obtained 
by dividing the funds the retailer remitted to the DOE by the total 
gallons of motor gasoline we believe that retailer sold during the 
period covered by the ERA's audit.2 A higher volumetric may be 
used to calculate an applicant's refund provided he satisfactorily 
demonstrates that he was disproportionately overcharged by one or more 
of the retailers, during a relevant audit period.
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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 the 
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 in this proceeding are likely to fall into 
just two categories since each of the Remedial Order firms was a 
retailer of motor gasoline. We will provide a presumption of injury for 
both categories of applicants; that is, 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. 751-760h, 
and retailers or resellers.
    End-user applicants whose businesses were unrelated to the 
petroleum industry were presumed injured by the motor gasoline 
overcharges covered by the Remedial Order. These applicants need only 
document the volume of motor gasoline they purchased from one of the 
gasoline retailers in this proceeding in order to be eligible to 
receive a refund.
    We are proposing to adopt a small claim presumption of injury for 
reseller and retailer applicants seeking refunds of $5,000 or less, 
exclusive of interest. These applicants will not be required to prove 
injury. In order to be eligible to receive a refund in this proceeding, 
a small claim applicant need only document the volume of motor gasoline 
he purchased from one of the gasoline retailers listed in the appendix.
    Only claims for at least $15 in principal will be processed. We 
have adopted this minimum 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 Aptos 
Shell and the 4 other firms listed in the Appendix, pursuant to the 
Remedial Order finalized on December 14, 1981, be distributed in 
accordance with the foregoing Decision.

    Dated: April 28, 1994.

                                                    Appendix                                                    
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                                                                        Amount                        Volumetric
      Case No.                          Case name                     (dollars)      Audit period     (dollars) 
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LEF-0092............  Aptos Shell, 18 Rancho Del Mar, Aptos, CA        $4,588.44    8/1/79-11/13/79       $.0267
                       95003.                                                                                   
LEF-0109............  C.J. King Chevron, 403 S. Saratoga Ave., San      4,786.36   12/15/79-11/6/80        .0089
                       Jose, CA 95129.                                                                          
LEF-0110............  Hughes Burlingame Shell, 1490 Burlingame          7,284.06    8/1/79-11/13/79        .0424
                       Ave., Burlingame, CA 94010.                                                              
LEF-0111............  Sandusky's Service, 1201 Terrence Street,         2,855.71       1/79-1/31/80        .0096
                       Vallejo, CA 94590.                                                                       
LEF-0112............  Skycrest Shell, 1600 King Drive, Daly City,       2,250.00    8/1/79-11/13/79       .0131 
                       CA 94015.                                                                                
                                                                    -------------                               
    Total...........  .............................................   21,764.57                                 
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[FR Doc. 94-10650 Filed 5-4-94; 8:45 am]
BILLING CODE 6450-01-P