[Federal Register Volume 60, Number 25 (Tuesday, February 7, 1995)]
[Notices]
[Pages 7195-7197]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3012]



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DEPARTMENT OF ENERGY

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 $3,657.84, 
plus accrued interest, in refined petroleum product violation amounts 
obtained by the DOE pursuant to a September 30, 1981 Remedial Order 
issued to Ed's Exxon, Case No. LEF-0078, and an April 27, 1982 Remedial 
Order issued to Ron's Shell, Case No. LEF-0084. The OHA has determined 
that the funds obtained from the above firms, plus accrued interest, 
will be distributed to customers who purchased gasoline from them 
during the following periods: August 1, 1979 through October 31, 1979 
in the Ed's Exxon proceeding and August 1, 1979 through November 13, 
1981 in the Ron's Shell proceeding.

DATES AND ADDRESSES: Applications must be filed in duplicate, addressed 
to ``Ed's Exxon OR Ron's Shell Special Refund Proceeding'' and sent to: 
Office of Hearings and Appeals, Department of Energy, 1000 Independence 
Ave., S.W., Washington, DC 20585.
    Applications should display a prominent reference to the case 
number ``LEF-0078'' (for the Ed's Exxon proceeding) or ``LEF-0084'' 
(for the Ron's Shell proceeding).

FOR FURTHER INFORMATION CONTACT: Thomas O. Mann, Deputy Director, Roger 
Klurfeld, Assistant Director, Office of Hearings and Appeals, 1000 
Independence Avenue, S.W., Washington, D.C. 20585 (202) 586-2094 
(Mann); 586-2383 (Klurfeld).

SUPPLEMENTARY INFORMATION: In accordance with 10 C.F.R. 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 $3,657.84, plus 
accrued interest, obtained by the DOE pursuant to September 30, 1981 
and April 27, 1982 Remedial Orders. In the Remedial Orders, the DOE 
found that, during 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 
firms in two stages. In the first stage, we will accept claims from 
identifiable purchasers of gasoline from the firms who may have been 
injured by 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 Ed's Exxon or Ron's Shell.
    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 by August 31, 1995. 
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, S.W., Washington, DC 20585.

    Dated: January 27, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.

Decision and Order of the Department of Energy; Implementation of 
Special Refund Procedures

January 27, 1995.
Names of Firms: Ed's Exxon, Ron's Shell
Date of Filing: July 20, 1993
Case Numbers: LEF-0078, LEF-0084

    [[Page 7196]] 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 Ed's Exxon 
of Cotati, California, and Ron's Shell of Danville, California 
(hereinafter jointly referred to as the remedial order firms). In 
accordance with the provisions of the procedural regulations at 10 
C.F.R. 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:

    \1\Ed's Exxon was issued a PRO on January 25, 1980; Ron's Shell 
was issued a PRO on December 31, 1980.
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charged more than the maximum lawful selling price for one or more 
grades of gasoline in violation of 10 C.F.R. 212.93; failed to post 
and maintain the maximum lawful selling price or a proper 
certification in violation of 10 C.F.R. 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 C.F.R. 210.92 and 
212.93; and/or engaged in unlawful or discriminatory business 
practices in violation of 10 C.F.R. 210.62.

    After considering and dismissing the firms' objections to the 
PROs, the DOE issued final Remedial Orders. Ed's Exxon, 8 DOE 
83,035 (1981); Alameda Chevron Service, et al., 9 DOE 83,027 
(1982).2 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.

    \2\A Remedial Order was issued to Ed's Exxon on September 30, 
1981. A Remedial Order was issued to Ron's Shell on April 27, 1982.
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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 the OHA to fashion procedures to distribute 
refunds, see Petroleum Overcharge Distribution and Restitution Act 
of 1986, 15 U.S.C. Secs. 4501 et seq., Office of Enforcement, 9 DOE 
82,508 (1981), and Office of Enforcement, 8 DOE 82,597 (1981) 
(Vickers).
    We have considered the ERA's petition that we implement Subpart 
V proceedings with respect to the above 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. Proposed Refund Procedures

    On December 14, 1994, the OHA issued a Proposed Decision & 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 59 Fed. Reg. 66029 (December 22, 
1994). More than 30 days have elapsed and the OHA has received no 
comments concerning these proposed refund procedures. Consequently, 
the procedures will be adopted as proposed.
    We will to 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

    \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 C.F.R. Sec. 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 will 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.

    \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\

    \5\The per gallon refund amount is $0.0251 for claimants 
applying in the Ed's Exxon proceeding ($2,500 remitted/99,651 
gallons sold), $0.0072 in the Ron's Shell proceeding ($1,157.84 
remitted/160,777.9 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).
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    In addition to the volumetric presumption, we will adopt a 
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: [[Page 7197]] 
    (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 those names;

    \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 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 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 
method must be reasonable and must be explained.

    \8\The Remedial Orders cover the following periods: August 1, 
1979 through October 31, 1979 in the Ed's Exxon proceeding and 
August 1, 1979 through November 13, 1981 in the Ron's Shell 
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 be 
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\

    \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 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). Furthermore, if an affiliate of the remedial 
order firm were 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 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. Sec. 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 ``Ed's Exxon (Case No. LEF-0078) OR Ron's Shell (Case No. 
LEF-0084) 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 that 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 August 31, 1995 and 
sent to: Ed's Exxon OR Ron's Shell Special Refund Proceeding, Office 
of Hearings and Appeals, Department of Energy, 1000 Independence 
Ave., S.W., Washington, D.C. 20585.

C. Refund Applications Filed by Representatives

    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 C.F.R. Sec. 205.283, particularly 
the requirement that applications and the accompanying certification 
statement be signed by the applicant.
    The OHA reiterates its policy to scrutinize applications filed 
by filing services closely. Applications submitted by a filing 
service should contain all of the information indicated above.
    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 shall be distributed in accordance with the provisions of 
the Petroleum Overcharge Distribution and Restitution Act of 1986 
(PODRA), 15 U.S.C. Sec. 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 to the Department of Energy by Ed's Exxon and 
Ron's Shell pursuant to the Remedial Orders dated September 30, 1981 
and April 27, 1982 may now be filed.
    (2) Applications for Refund must be postmarked no later than 
August 31, 1995.

    Dated: January 27, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 95-3012 Filed 2-6-95; 8:45 am]
BILLING CODE 6450-01-P