[Federal Register Volume 60, Number 71 (Thursday, April 13, 1995)]
[Notices]
[Pages 18811-18812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9171]



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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 a 
total of $7,280,202, plus accrued interest, in crude oil overcharges 
obtained by the DOE from MAPCO, Inc. and MAPCO International, Inc., 
Case No. VEF-0004 (MAPCO). The OHA has determined that the funds 
obtained from MAPCO, plus accrued interest, will be distributed in 
accordance with the DOE's Modified Statement of Restitutionary Policy 
in Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986).

DATES AND ADDRESSES: Comments must be filed on or before May 15, 1995, 
and should be addressed to the Office of Hearings and Appeals, 
Department of Energy, 1000 Independence Ave., S.W., Washington, DC 
20585. All comments should display a reference to Case No. VEF-0004.

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

SUPPLEMENTARY INFORMATION: In accordance with 10 C.F.R. 205.282(c), 
notice is hereby given of the issuance of the Proposed Decision and 
Order set out below. The Proposed Decision and Order sets forth the 
procedures that the DOE has tentatively formulated to distribute a 
total of $7,280,202, plus accrued interest, remitted to the DOE by 
MAPCO, Inc. and MAPCO International, Inc. to the DOE. The DOE is 
currently holding these funds in an interest bearing account pending 
distribution.
    The OHA proposes to distribute these funds in accordance with the 
DOE's Modified Statement of Restitutionary Policy in Crude Oil Cases, 
51 FR 27899 (August 4, 1986) (the MSRP). Under the MSRP, crude oil 
overcharge monies are divided among the federal government, the states, 
and injured purchasers of refined petroleum products. Refunds to the 
states will be distributed in proportion to each state's consumption of 
petroleum products during the price control period. Refunds to eligible 
purchasers will be based on the volume of petroleum products that they 
purchased and the extent to which they can demonstrate injury.
    The tentative deadline for filing Applications for Refund is June 
3, 1996. As we state in the Proposed Decision, any party who has 
previously submitted a refund application in the crude oil proceedings 
should not file another Application for Refund. The previously filed 
crude oil application will be deemed filed in all crude oil proceedings 
as the proceedings are finalized.

    Dated: April 4, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
Proposed Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

Name of Firm: MAPCO International, Inc.
Date of Filing: February 23, 1995
Case Number: VEF-0004


[[Page 18812]]

    Dated: April 4, 1995.

    On February 23, 1995, 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 crude oil overcharge funds 
received from MAPCO, Inc. (MAPCO) pursuant to a June 23, 1994 
Settlement Agreement. The Settlement Agreement resolved claims and 
litigation arising from an April 21, 1986 Remedial Order originally 
issued to MAPCO Inc.'s subsidiary MAPCO International, Inc. (MAPCO 
International) (Case No. HRO-0193). 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 alleged regulatory violations set forth in the Remedial 
Order. This Decision and Order sets forth the OHA's plan to 
distribute these funds.

I. Background

    During the period relevant to this proceeding, MAPCO 
International, Inc. was a reseller of crude oil. On June 30, 1983, 
the ERA issued a Proposed Remedial Order (PRO) to the firm. The PRO 
alleged that during the period from August 1978 through November 
1980 (the audit period), MAPCO International sold crude oil at 
prices in excess of those permitted by 10 C.F.R. Part 212, Subpart 
L. After considering and dismissing MAPCO International's objections 
to the PRO, the DOE issued a final Remedial Order. 14 DOE para. 
83,019 (1986). MAPCO International appealed the Remedial Order to 
the Federal Energy Regulatory Commission, which affirmed the 
Remedial Order. 43 FERC para. 63,041 (1988); 56 FERC para. 61,063 
(1991). Three years of litigation ensued. MAPCO, MAPCO International 
and the DOE finally resolved all their disputes arising from the 
Remedial Order with the June 23, 1994 Settlement Agreement. Pursuant 
to the Settlement Agreement, MAPCO remitted to the DOE the sum of 
$7,280,202, 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.

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. 4501 et seq., Office of Enforcement, 9 DOE para. 
82,508 (1981), and Office of Enforcement, 8 DOE para. 82,597 (1981) 
(Vickers).
    We have considered the ERA's petition that we implement Subpart 
V proceedings with respect to the MAPCO funds and have determined 
that such proceedings are appropriate. This Proposed Decision and 
Order sets forth the OHA's tentative plan to distribute these funds. 
Before taking the actions proposed in this Decision, we intend to 
publicize our proposal and solicit comments from interested parties. 
Comments regarding the tentative distribution processes set forth in 
this Proposed Decision and Order should be filed with the OHA within 
30 days of its publication in the Federal Register.

III. Proposed Refund Procedures

A. Crude Oil Refund Policy

    We propose to distribute the monies remitted by MAPCO in 
accordance with DOE's Modified Statement of Restitutionary Policy in 
Crude Oil Cases (MSRP). See 51 FR 27899 (August 4, 1986). This 
policy has been applied in all Subpart V proceedings involving 
alleged crude oil violations. See Order Implementing the MSRP, 51 
Fed. Reg. 29689 (August 20, 1986) (the August 1986 Order).
    Under the MSRP, 40 percent of crude oil overcharge funds will be 
refunded to the federal government, another 40 percent to the 
states, and up to 20 percent may initially be reserved for the 
payment of claims to injured parties. The MSRP also specifies that 
any funds remaining after all valid claims by injured purchasers are 
paid will be disbursed to the federal government and the states in 
equal amounts. See In re: The Department of Energy Stripper Well 
Exemption Litigation, 653 F. Supp. 108 (D. Kan.), 6 Fed. Energy 
Guidelines para. 90,509 (1986) (the Stripper Well Settlement 
Agreement) for a more detailed discussion of the MSRP.
    On April 10, 1987, the OHA issued a Notice analyzing the 
numerous comments received in response to the August 1986 Order. 52 
Fed. Reg. 11737 (April 10, 1987) (the April 10 Notice). This Notice 
provided guidance to claimants that anticipated filing refund 
applications for crude oil monies under the subpart V regulations. 
In general, we stated that all claimants would be required to (1) 
document their purchase volumes of petroleum products during the 
August 19, 1973 through January 27, 1981 crude oil price control 
period, and (2) prove that they were injured by the alleged crude 
oil overcharges. End-users of petroleum products whose businesses 
were unrelated to the petroleum industry would be presumed to have 
been injured by the alleged crude oil overcharges and would not be 
required to submit proof of injury. See City of Columbus, Georgia, 
16 DOE para. 85,550 (1987).

B. Refund Claims

    The amount of money covered by this Proposed Decision is 
$7,280,202, plus accrued interest. In accordance with the MSRP, we 
propose initially to reserve 20 percent of those funds ($1,456,040 
in principal, plus accrued interest) for direct refunds to 
applicants who claim that they were injured by crude oil 
overcharges.
    We propose to evaluate claims in the MAPCO crude oil refund 
proceeding in exactly the same manner as in other crude oil 
proceedings. As we stated in the April 10 Notice, claimants will 
generally be required to document their purchase volumes of 
petroleum products and prove that they were injured as a result of 
the alleged violations. We propose to base the refunds on a 
volumetric amount which has been calculated in accordance with the 
description in the April 10 Notice. We will also presume that the 
alleged crude oil overcharges were absorbed, rather than passed on, 
by applicants who were (1) end-users of petroleum products, (2) 
unrelated to the petroleum industry, and (3) not subject to the 
regulations promulgated under the Emergency Petroleum Price and 
Allocation Act of 1973, 15 U.S.C. 751-760h. In order to receive a 
refund, such claimants need not submit any evidence of injury beyond 
documentation of their purchase volumes.

    As has been stated in earlier Decisions, a crude oil refund 
applicant will only be required to submit one application for its 
share of all available crude oil overcharge funds. See, e.g., 
A.Tarricone Inc., 15 DOE para.85,475 (1987). A party that has 
already submitted a claim in any other crude oil refund proceeding 
implemented by the DOE need not file another claim. The tentative 
deadline for filing an Application for Refund is June 3, 1996. Any 
claimant that has executed a valid waiver pursuant to one of the 
escrow accounts established by the Stripper Well Agreement, however, 
has waived its right to file an application for a Subpart V crude 
oil refund. See Mid-American Dairymen v. Herrington, 878 F. 2d 1448 
(Temp. Emer. Ct. App.), 3 Fed. Energy Guidelines para.26,617 (1989); 
In re: Department of Energy Stripper Well Exemption Litigation, 707 
F. Supp. 11267 (D. Kan.), 3 Fed. Energy Guidelines para.26,613 
(1987).

C. Payments to the States and Federal Government

    Under the terms of the MSRP, we propose that the remaining 80 
percent of the amount remitted by MAPCO, or $5,824,162 in principal, 
plus accrued interest, be disbursed in equal shares to the states 
and federal government for indirect restitution. Refunds to the 
states will be in proportion to the consumption of petroleum 
products in each state during the crude oil price control period. 
The share of the funds allocated to each state is contained in 
Exhibit H of the Stripper Well Agreement. When disbursed, these 
funds will be subject to the same limitations and reporting 
requirements that apply to any other crude oil overcharge funds 
received by the states in accordance with the Stripper Well 
Agreement.

    It Is Therefore Ordered That:

    The payment remitted to the Department of Energy by MAPCO, Inc. 
pursuant to the Settlement Agreement dated June 23, 1994 will be 
distributed in accordance with the foregoing Decision.

[FR Doc. 95-9171 Filed 4-12-95; 8:45 am]

BILLING CODE 6450-01-P