[Federal Register Volume 60, Number 105 (Thursday, June 1, 1995)]
[Notices]
[Pages 28607-28608]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13366]



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DEPARTMENT OF ENERGY

Implementation of Special Refund Procedures

AGENCY: Office of Hearings and Appeals, Department of Energy.

ACTION: Implementation of special refund procedures.

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SUMMARY: The Office of Hearings and Appeals of the Department of Energy 
has adopted the procedures to be followed in refunding monies obtained 
by the Department of Energy (DOE) from Gulf Oil Corporation to settle 
alleged crude oil violations. The funds will be distributed pursuant to 
the DOE's Modified Statement of Restitutionary Policy.

ADDRESSES: Applications for Refund must be filed in duplicate no later 
than June 30, 1995, and should be addressed to: Subpart V Crude Oil 
Overcharge Refunds, Office of Hearings and Appeals, Department of 
Energy, 1000 Independence Avenue, S.W., Washington, D.C. 20585.

FOR FURTHER INFORMATION CONTACT: Thomas L. Wieker, Deputy Director, 
Office of Hearings and Appeals, 1000 Independence Avenue, S.W., 
Washington, D.C. 20585, (202) 586-2390.

SUPPLEMENTARY INFORMATION: In accordance with the procedural 
regulations of the Department of Energy, 10 CFR 205.282(c), notice is 
hereby given of the issuance of the final Decision and Order set out 
below. The Decision relates to a June 14, 1985 consent order between 
the DOE and Gulf Oil Corporation. The Decision sets forth the 
procedures that the DOE has formulated to distribute funds that Gulf 
Oil Corporation remitted to the DOE to settle allegations that it 
violated the Agency's crude oil price and allocation regulations. The 
consent order covers the period January 1, 1973 through January 27, 
1981.
    The Decision disburses the available funds in accordance with the 
DOE's Modified Statement of Restitutionary Policy. Specifically, a 
total of $37,309,761, will made available for direct restitution to 
injured end users of refined petroleum products. The States will 
receive $8,706,529, and the Federal Government will receive $8,604,301.
    Applications for Refund from the portion of the Gulf Oil 
Corporation consent order funds allocated to the crude oil overcharge 
refund pool may now be filed. Applications must be filed by June 30, 
1995. Applicants that have previously filed a crude oil overcharge 
refund application with the Department of Energy need not file an 
additional application in order to receive a refund from the Gulf crude 
oil monies.

    Dated: May 19, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
DEPARTMENT OF ENERGY, WASHINGTON, DC 20585

    May 19, 1995.

Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

    Name of Firm: Gulf Oil Corporation.
    Date of Filing: June 30, 1987.
    Case Number: KFX-0037.
    On July 25, 1985, the Economic Regulatory Administration (ERA) 
of the Department of Energy (DOE) filed a petition with the Office 
of Hearings and Appeals (OHA), requesting that the OHA formulate and 
implement procedures for distributing funds obtained through the 
settlement of enforcement proceedings involving Gulf Oil Corporation 
(Gulf). See 10 C.F.R. Part 205, Subpart V. On October 15, 1986, the 
OHA issued a Proposed Decision and Order tentatively setting forth 
procedures for distributing the Gulf settlement fund, remitted to 
the DOE pursuant to a June 14, 1985 consent order. 51 Fed. Reg. 
37479 (October 22, 1986). This Decision and Order will provide the 
final procedures for the disbursement of the Gulf funds attributable 
to Gulf's alleged crude oil violations.
    Under the terms of a consent order, Gulf remitted 
$146,550,226.79 to the DOE in settlement of alleged violations 
occurring between January 1, 1973 and January 27, 1981. Because the 
consent order resolves alleged violations involving both sales of 
crude oil and refined products, we divided the fund into two pools. 
See Standard Oil Co. (Indiana), 10 DOE para. 85,048 (1982)(Amoco). 
As we stated in the Proposed Order, [[Page 28608]] according to 
information set forth in the Federal Register Notice announcing the 
proposed Gulf consent order, approximately 71 percent of the 
aggregate amount of the alleged violations settled by the consent 
order concern Gulf's alleged production and sales of crude oil. 50 
Fed. Reg. 9493, 9496 (March 6, 1985). We therefore proposed that 
this same percentage of the principal in the Gulf escrow account, or 
$104,050,661, be set aside as a pool to be used for crude oil 
refunds.\1\

    \1\ Our Proposed Decision covered tentative refund procedures 
for both crude oil and refined petroleum products. We stated that 
the remaining 29 percent of the Gulf funds, or $42,499,566, would be 
made available for distribution to claimants who were injured by 
Gulf's alleged violations in its sales of refined petroleum 
products. For simplicity, our final refund procedures relating to 
alleged overcharges in Gulf's sales of crude oil and refined 
products have been split into two Decisions and Orders. The Decision 
and Order establishing refund procedures concerning Gulf's alleged 
refined product overcharges was issued on September 8, 1987. Gulf 
Oil Corp., 16 DOE para. 85,381 (1987) (Gulf). We did not receive any 
comments regarding our proposed allocation of 29 percent of the Gulf 
funds to the refined product proceeding. Accordingly, in Gulf, we 
adopted the proposed 71/29 percent allocation between crude oil and 
refined product monies. We have actively been disbursing refunds to 
Gulf refined product purchasers for a number of years based on that 
division of the funds.
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    The DOE's Modified Statement of Restitutionary Policy (MSRP) is 
applicable to the disbursal of the Gulf crude oil funds. Under the 
terms of the MSRP, 20 percent of crude oil violation funds are 
reserved to satisfy claims by injured end users of petroleum 
products. The remaining 80 percent of the funds are divided equally 
between the States and the Federal Government. We will next consider 
how the funds in the Gulf account should be disbursed.\2\

    \2\ The DOE used $73,585,129 of the $104,050,661 in Gulf crude 
oil funds to pay entitlements receive order firms. This includes 
funds paid to Consumers Power Company. As of March 31, 1995, there 
was $45,815,755 in the Gulf account. We will return to the Gulf 
account the excess $13,026,674 that is currently in the DOE's 
Consumers Power Company escrow account. The funds in the Consumers 
Power escrow account are those remaining after the Agency's 
litigation with that firm was concluded. See Consumers Power Co. 
versus DOE, 3 Fed. Energy Guidelines para. 26,532 (1990). After the 
Consumers Power transaction, there will be a total of $58,842,429 in 
the Gulf account.
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    Pursuant to the MSRP, we will reserve 20 percent of the 
$104,050,661 Gulf crude oil fund, or $20,810,132, for direct 
restitution to end users. 51 Fed. Reg. 27899 (August 4, 1986). We 
will also transfer $16,499,629 in interest on that sum for this 
purpose.\3\ Thus, the total amount to be disbursed to the end user 
account is $37,309,761.

    \3\ The DOE Controller has indicated that the interest factor 
for the Gulf crude oil funds is $.79286517, as of March 31, 1995. 
This amount represents interest earned on each dollar of Gulf funds 
since the day of deposit into the Department of Treasury escrow 
account. To derive the amount of interest to be deposited into the 
escrow account for end users, we multiplied that interest factor by 
$20,810,132, the end users' 20 percent share.
    We next consider the refund amount due to the States. Under the 
terms of the MSRP, the States were entitled to 40 percent of the 
Gulf crude oil fund, or $41,620,264. The States have already been 
reimbursed $36,792,564.\4\ Therefore, the States are entitled to an 
additional $4,827,700 plus interest. Applying the current interest 
factor discussed above, we find that the interest on this amount is 
$3,827,715. Thus, the total is $8,655,415. We further find that the 
Federal Government should receive the same share.

    \4\ This amount includes a payment to State governments of 
$18,396,282 of principal from the Bank IV Escrow, pursuant to a June 
26, 1987 Order of the United States District Court for the District 
of Kansas. See Stripper Well Exemption Litigation, 16 DOE para. 
85,200 (1987). The States also received $17,492,250 of credit in the 
``Federal Tilt'' formula, and a related $904,032. Id. at 88,387.
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    However, one small modification must be made to this State/
Federal Government division. We will provide an adjustment to 
account for a payment of $57,019, for which the Federal Government 
is solely responsible. This payment was made from the Gulf crude oil 
funds to Sage Creek Refining Company, an entitlements receive order 
firm. Sage Creek Refining Co., 14 DOE para. 85,288 (1986). We will 
disburse to the States one half of the amount of the Sage Creek 
payment plus interest, or one half of $102,227, which is $51,114.\5\ 
Thus, the States' total refund equals $8,655,415 plus $51,114, or 
$8,706,529. We will also deduct $51,114 from the Federal 
Government's share. Thus, the Federal Government's share will be 
$8,604,301.

    \5\ Interest on the $57,019 Sage Creek payment is $45,208 
(57,019  x  .79286517 = 45,208).
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    In view of the above considerations, Applications for Refund 
from the funds remitted by Gulf to settle alleged crude oil 
violations may now be filed.\6\

    \6\ Procedures for filing crude oil overcharge refund claims are 
by now well-known. We will not reiterate them here.
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    It Is Therefore Ordered That:
    (1) Applications for Refund from the portion of the Gulf Oil 
Corporation consent order funds allocated to the crude oil 
overcharge refund pool may now be filed. Applicants that have 
previously filed a crude oil overcharge refund application with the 
Department of Energy need not file an additional application in 
order to receive a refund from the Gulf crude oil monies.
    (2) All applications submitted pursuant to Paragraph (1) above 
must be filed no later than June 30, 1995.
    (3) The Director of Special Accounts and Payroll, Office of 
Departmental Accounting and Financial Systems Development, Office of 
the Controller, Department of Energy shall take all necessary steps 
to transfer all funds in the Consumers Power Company escrow account 
(Number AAAAAAAAAA) to the Gulf Oil Corporation escrow account, 
Number RGFA00001Z, hereinafter the Gulf account.
    (4) The Director of Special Accounts and Payroll shall take all 
necessary steps to make the disbursements set forth in Paragraphs 
(5), (6) and (7) below from the Gulf account.
    (5) The Director of Special Accounts and Payroll shall transfer 
the sum of $37,309,761 to the subaccount denominated ``Crude 
Tracking-Claimants 4,'' Number 999DOE010Z.
    (6) The Director of Special Accounts and Payroll shall transfer 
$8,604,301 into the subaccount denominated ``Crude Tracking-
Federal,'' Number 999DOE002W.
    (7) The Director of Special Accounts and Payroll shall transfer 
$8,706,529 into the subaccount denominated ``Crude Tracking-
States,'' Number 999DOE003W.

    Dated: May 19, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 95-13366 Filed 5-31-95; 8:45 am]
BILLING CODE 6450-01-P