[Federal Register Volume 59, Number 180 (Monday, September 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23127]
[[Page Unknown]]
[Federal Register: September 19, 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 (OHA) of the Department of
Energy (DOE) announces the procedures for disbursement of $52,092.73,
plus accrued interest, in refined petroleum overcharges obtained by the
DOE under the terms of a Remedial Order issued to Sunset Boulevard Car
Wash (Sunset) Case No. LEF-0112. The OHA has 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).
DATES AND ADDRESSES: Applications for Refund must be filed in
duplicate, addressed to Sunset Boulevard Car Wash Special Refund
Proceeding and sent to: Office of Hearings and Appeals, Department of
Energy, 1000 Independence Avenue SW., Washington, DC 20585. All
applications must reference Case Number LEF-0112 and be postmarked on
or before June 1, 1995.
FOR FURTHER INFORMATION CONTACT: Thomas L. Wieker, Deputy Director Kim
L. Hargrove, Staff Attorney Office of Hearings and Appeals 1000
Independence Avenue SW., Washington, DC 20585 (202) 586-2390
SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(c), notice
is hereby given of the issuance of the Decision and Order set out
below. The Decision sets forth the procedures that the DOE has
formulated to distribute to eligible claimants $52,092.73, plus accrued
interest, obtained by the DOE under the terms of a Remedial Order that
the DOE issued to Sunset Boulevard Car Wash (Sunset) on October 22,
1980. Under the Remedial Order, Sunset was found to have violated the
Federal petroleum price and allocation regulations involving the sale
of refined petroleum products between August 1, 1979 and January 27,
1980 (the Audit period).
The OHA will distribute the Remedial Order funds in a two stage
refund proceeding. Purchasers of Sunset motor gasoline 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
gasoline they purchased from Sunset during the 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).
Applications for Refund must be postmarked on or before June 1,
1995. Instructions for the completion of refund applications have been
set forth in Section IV of the Decision immediately following this
notice. Refund applications should be mailed 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.
Date: September 12, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.
Decision and Order of the Department of Energy
Implementation of Special Refund Procedures
Name of Firm: Sunset Boulevard Car Wash
Date of Filing: July 20, 1993
Case Number: LEF-0112
Under the procedural regulations of the Department of Energy (DOE),
the Economic Regulatory Administration (ERA) may request that the
Office of Hearings and Appeals (OHA) formulate and implement special
refund proceedings. 10 CFR 205.281. These procedures are used to refund
monies to those injured by actual or alleged violations of the DOE
price regulations.
In this Decision and Order, we consider a Petition for
Implementation of Special Refund Procedures filed by ERA on July 20,
1993. In that Petition, ERA specifically requests that we formulate
refund procedures to disburse funds that had been remitted to DOE by
Sunset Boulevard Car Wash (Sunset). The funds at issue in that Petition
were obtained through a Remedial Order (the Order) issued by our Office
on October 22, 1980.
Under the terms of the Order, Sunset remitted $52,092.73 to the DOE
to remedy pricing violations which Sunset committed between August 1,
1979 and January 27, 1980.1 These funds are being held in an
escrow account established with the Treasury pending a determination of
their proper distribution. The present Decision and Order sets forth
final procedures for the distribution of those funds to qualified
purchasers of Sunset's refined products.
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\1\Sunset remitted a total of $52,092.73. The PDO inadvertently
stated that Sunset remitted $52,093.73.
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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 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 OHA 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. Sunset 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 from August 1,
1979 to January 27, 1980 (the audit period), Sunset 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).
Sunset was ordered to reduce its prices for motor gasoline by
specified amounts until a sufficient volume of gasoline had been sold
at reduced prices to remedy the violations.2 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 (Sunset) (1982). Under the terms of the modified Order (the MO),
Sunset was required to disgorge and remit to DOE the violation amount
and the profits it had acquired as a result of its violation of the
aforementioned provisions of the pricing regulations.
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\2\The Order imposed no sanctions upon Sunset as a result of its
failure to make its records available in accordance with 10 CFR
210.92(b). See Remedial Order at 1 and 7.
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Sunset objected to the remedial provisions of the MO at every
available tier of administrative and judicial review. As a result, the
Federal Energy Regulatory Commission (FERC) affirmed the MO on August
12, 1982. When Sunset renewed its objections in proceedings before the
United States District Court for the Central District of California,
the District Court affirmed the MO. Finally, on March 9, 1993, the
Temporary Emergency Court of Appeals definitively disposed of Sunset's
objections. Bush v. U.S., 989 F.2d 509 (Em. App. 1993).
III. The Proposed Decision and Order
On November 24, 1993, we issued a Proposed Decision and Order (PDO)
establishing tentative procedures to distribute the funds that Sunset
had remitted to DOE pursuant to the MO. We proposed implementing a two
stage refund proceeding and we stated that purchasers of Sunset motor
gasoline would be provided an opportunity to submit refund applications
in the first stage. In the event funds remained after all first stage
claims had been considered, we stated that the remaining funds would be
disbursed in the second stage in accordance with the provisions of the
Petroleum Overcharge Distribution and Restitution Act of 1986 (15
U.S.C. 4501) (PODRA).
We provided a 30 day period for the submission of comments
concerning the proposed procedures. However, we have received no
comments since the PDO was published in the Federal Register more than
30 days ago. The proposed procedures will therefore be adopted in the
same form in which they were originally outlined. Set forth below are
the specific considerations that will guide our evaluation of refund
applications during the first stage, as well as, the provisions
governing distribution of any remaining funds in the second stage
proceeding.
IV. First Stage Refund Procedures
Refund applications submitted in the Sunset special refund
proceeding will be evaluated in exactly the same manner as applications
submitted in other refined product proceedings. In those proceedings,
we often adopt rebuttable presumptions which relate to pricing
violations and injury. Such a policy reflects our belief that adoption
of these presumptions permits applicants to participate in refund
proceedings in larger numbers by avoiding the need to incur inordinate
expense; and facilitates our consideration of first stage refund
applications. 10 CFR 205.282(e). For those reasons, we have adopted
similar presumptions in the present proceeding.
(1) Calculating the Refund
We have presumed that the pricing violations were dispersed equally
throughout Sunset's motor gasoline sales during the audit period. We
therefore proposed that each applicant's potential refund should be
calculated on a volumetric basis. Under the volumetric approach,
refunds are calculated by multiplying the gallons of refined product
each applicant purchased by the per gallon refund amount (volumetric)
established for this proceeding, plus accrued interest. Applicants
believing they were disproportionately overcharged by the pricing
violations may present documentation which supports that claim. Those
who succeed in showing they were disproportionately overcharged by
Sunset will be eligible to receive refunds calculated at a higher
volumetric.
The volumetric for this proceeding has been set at $.0868 per
gallon. This figure was obtained by dividing the remedial order funds
available for distribution by the volume of gasoline Sunset is believed
to have sold during the audit period.3
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\3\In the absence of precise figures indicating the amount of
motor gasoline Sunset sold during the audit period, we estimated
Sunset's total sales using the best available data. Based on sales
of 200,000 gallons per month for 6 months, we believe Sunset sold
1,200,000 gallons of gasoline during the audit period. This figure
will be used to calculate the volumetric refund amount unless the
refund applications submitted pursuant to this Decision and Order
indicate that our estimate is inaccurate. In the event the estimate
proves to be inaccurate, it may be necessary to reestimate the
volumetric.
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(2) Eligibility for a Refund
In order to be eligible to receive a refund in this proceeding,
each applicant must (1) document the volume of motor gasoline it
purchased during the audit period; and (2) demonstrate that it was
injured by Sunset's overcharges. The threshold requirement for any
applicant is documenting the volume of product it purchased. This
requirement is typically satisfied when the applicant successfully
demonstrates ownership of the business for which the refund is sought
and submits documentation which supports the volume claimed in its
refund application.
The injury showing, however, is a potentially more difficult
requirement for applicants to satisfy, especially those seeking smaller
refund amounts. This is true because an applicant must demonstrate that
it was forced to absorb Sunset's overcharges. Our cases have often
stated that an applicant accomplishes this by demonstrating that it
maintained a ``bank'' of unrecovered product costs and showing that
market conditions would not permit the applicant to pass through those
increased costs. See, Quintana Energy Corp., 21 DOE 85,032 at 88,117
(1991).
Unless simplified application procedures were provided, we
recognized that the cost to the applicant of gathering evidence of
injury to support a relatively small refund claim could exceed the
expected refund and thereby cause some injured parties to be denied an
opportunity to obtain a refund. Moreover, simplified procedures were
needed to minimize the burden that would be placed on this Office if we
found it necessary to analyze a detailed injury showing for large
numbers of small refund applications. In view of these difficulties, we
proposed adopting a number of injury presumptions which simplify and
streamline the refund process.
(3) Presumptions of Injury
Each presumption of injury turns on the category of applicant. Set
forth below is the presumption of injury that has been adopted for each
class of applicant likely to submit a refund application in this
proceeding.
Small-claim Presumption. We have adopted a small claim presumption
of injury for resellers, retailers and refiners whose claim is $10,000
or less, exclusive of interest. A small claim threshold of $10,000 has
been adopted, even though we established a lower threshold amount of
$5,000 in many prior proceedings. See, e.g., Gulf Oil Corporation, 16
DOE 85,381 (1987)(establishing a $5,000 threshold). The $10,000
threshold is more appropriate here because the volumetric for this
proceeding is significantly higher than the volumetric set in Gulf and
in most other proceedings. Id. If we were to adopt a lower threshold
amount for this proceeding, then the high volumetric would increase
substantially the number of very small firms that would be burdened
with the requirement to make a detailed injury showing before they
become eligible to receive their full allocable share.
The small claim presumption of injury for this proceeding, exempts
applicants whose claims are $10,000 or less, exclusive of interest,
from the requirement to prove injury. Such an applicant need only
document the volume of motor gasoline he or she purchased from Sunset
during the audit period in order to be eligible to receive a full
refund. See Enron Corporation, 21 DOE 85,323 at 88,957 (1991).
Mid-range Presumption. Mid-range applicants; that is, applicants
seeking refunds in excess of $10,000 but less than $50,000, excluding
interest, are eligible to receive 40 percent of their allocable share
without proving injury. Like small-claim applicants, these applicants
will only be required to document the volume of Sunset gasoline they
purchased during the audit period to be eligible to receive refunds.
See Shell, 17 DOE at 88,406.
End-user Presumption. We have presumed that end-users of petroleum
products whose businesses were unrelated to the petroleum industry and
were not subject to the regulations promulgated under the Emergency
Petroleum Price and Allocation Act of 1973 (EPAA), 15 U.S.C. Secs. 751-
760h, were injured by Sunset's pricing violations. Unlike regulated
firms, end-users were not subject to price controls during the audit
period. Moreover, these firms were not required to keep records that
justified selling price increases by reference to cost increases. An
analysis of the impact of the alleged overcharges on the final prices
of non-petroleum goods and services is beyond the scope of a special
refund proceeding. See American Pacific International, Inc., 14 DOE
85,158 at 88,294 (1986). End-users seeking refunds in this proceeding
will therefore be presumed to have been injured by Sunset's pricing
violations. In order to receive a refund, end-user applicants need only
document the volume of Sunset product they purchased during the audit
period. Meritorious applicants are eligible to receive their full
allocable share. See Shell, 17 DOE at 88,406.
Refunds in Excess of $50,000 and Other Applicants. Applicants
seeking refunds in excess of $50,000, excluding interest, 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 will therefore be unable to rely upon injury
presumptions utilized in many refined product refund cases. Id.
We do not anticipate that other categories of applicants, such as,
regulated firms, cooperatives, indirect purchasers or spot purchasers,
would have obtained products from Sunset. Such applicants may
nonetheless submit refund applications if they purchased motor gasoline
from Sunset during the audit period. Any such applicants must
demonstrate that they purchased products from Sunset during the audit
period and show they were injured as a result of their purchases to be
eligible to receive a refund in this proceeding. Regulated firms and
cooperatives are exempt from the requirement to show injury. They must,
however, show that they will pass through to their customers any
refunds they receive.
(4) How to Apply for a Refund
To apply for a refund from the Sunset settlement fund, an applicant
must submit an Application for Refund containing all of the following
information:
(1) The Applicant's name; the current name and address of the
business for which the refund is sought; the name and address during
the refund period of the business for which the refund is sought;
the taxpayer identification number; a statement specifying whether
the applicant 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.\4\ If the applicant operated under more than one name or
under a different name during the price control period, the
applicant should specify those names.
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\4\Under the Privacy Act of 1974, the submission of a social
security number by an individual applicant is voluntary. An
applicant who 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. It is
requested pursuant to our authority under the Petroleum Overcharge
Distribution and Restitution Act of 1986 and the regulations
codified at 10 CFR 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 should specify the source of its gallonage
information. In calculating its purchase volumes, an applicant
should use actual records from the settlement 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.
(3) A statement indicating whether the applicant or a related
firm has filed, or has been authorized to file on its behalf, any
other application in this refund proceeding. If so, an explanation
of the circumstances of the other filing or authorization should be
submitted;
(4) If the applicant is or was in any way affiliated with the
consenting firm, in this case Sunset Boulevard Car Wash, the
applicant should explain this affiliation, including the time period
in which it was affiliated. If not, a statement that the applicant
was not affiliated with the consenting firm.
(5) The statement listed below, provided it has been signed by
the 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 should
clearly refer to the appropriate proceeding name (Sunset Boulevard Car
Wash) and case number (LEF-0112). 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 this information to be publicly disclosed, the applicant 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 no later than June 1, 1995, and sent
to: Sunset Boulevard Car Wash, LEF-0112, Office of Hearings and
Appeals, Department of Energy, 1000 Independence Avenue SW.,
Washington, DC 20585.
(5) Minimal Amount Requirement
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
Corporation, 13 DOE 85,339 (1985). Using the volumetric methodology,
an applicant must have purchased at least 173 gallons of Sunset motor
gasoline in order for its claim to be considered in this proceeding.
(6) Additional Information
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.
(7) Refund Applications Filed by Representatives
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 this final Decision and
Order. Strict compliance with the filing requirement as specified in 10
CFR 205.283, particularly the requirement that applications and the
accompanying certification statement be signed by the applicant, will
be required.
(8) Filing Deadline
The deadline for filing an Application for Refund is June 1, 1995.
V. Second Stage Refund Procedures
Any funds that remain after all first stage claims have been
decided will be distributed in accordance with the provisions of 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 OHA, and any funds that 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:
Applications for Refund from the funds remitted to the Department
of Energy by Sunset Boulevard Car Wash, pursuant to the Remedial Order
finalized on October 22, 1980, may now be filed.
Dated: September 12, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 94-23127 Filed 9-16-94; 8:45 am]
BILLING CODE 6450-01-P