[Federal Register Volume 60, Number 117 (Monday, June 19, 1995)]
[Notices]
[Pages 32007-32010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-14916]



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DEPARTMENT OF ENERGY

Notice of Implementation of Special Refund Procedures

SUMMARY: The Office of Hearings and Appeals (OHA) of the Department of 
Energy (DOE) announces the procedures [[Page 32008]] for the 
disbursement of $75,638.48, plus accrued interest, in refined petroleum 
product violation amounts obtained by the DOE pursuant to an April 10, 
1985 Modified Remedial Order issued to Mockabee Gas & Fuel Oil Co. 
(Mockabee), Case No. VEF-0001. The OHA has determined that the funds 
obtained from Mockabee, plus accrued interest, will be distributed to 
customers who purchased No. 2 heating oil and kerosene from Mockabee 
during the period of November 1, 1973 through December 31, 1975.

ADDRESS: Applications must be filed in duplicate, addressed to 
``Mockabee Gas & Fuel Oil Co. Special Refund Proceeding'' and sent to: 
Office of Hearings and Appeals, Department of Energy, 1000 Independence 
Ave., SW., Washington, DC 20585.
    Applications should display a prominent reference to the case 
number ``VEF-0001.''

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

SUPPLEMENTARY INFORMATION: In accordance with 10 C.F.R. 
Sec. 205.282(c), 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 $75,638.48, plus accrued interest, obtained by the DOE 
pursuant to an April 10, 1985 Modified Remedial Order (MRO) issued to 
Mockabee Gas & Fuel Oil Co. (Mockabee). In the MRO, the DOE found that, 
during the period from November 1, 1973 through December 31, 1975, 
Mockabee sold No. 2 heating oil and kerosene 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 the 
identifiable purchasers of No. 2 heating oil and kerosene who may have 
been injured by the 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 
covered product they purchased from Mockabee.
    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 September 29, 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 labeled 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, 100 
Independence Avenue, SW., Washington, DC 20585.

    Date: June 12, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
June 12, 1995.

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

Name of Firm: Mockabee Gas & Fuel Oil Co.
Date of Filing: October 18, 1994
Case Number: VEF-0001

    On October 18, 1994, 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 $75,638.48, plus accrued interest, 
which Mockabee Gas & Fuel Oil Co. (Mockabee) remitted to the DOE 
pursuant to a Modified Remedial Order (MRO) issued by the OHA on April 
10, 1985. In accordance with the provisions of the procedural 
regulations found 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 the regulatory 
violations set forth in the MRO. This Decision and Order sets forth the 
OHA's plan to distribute these funds.

I. Background

    During the period relevant to this proceeding, Mockabee was a 
retailer of No. 2 heating oil, kerosene, diesel fuel, and motor 
gasoline in Upper Marlboro, Maryland. On December 18, 1974, the Federal 
Energy Administration (FEA) issued a Notice of Probable Violation to 
Mockabee. On January 28, 1975, the FEA issued a Remedial Order (RO) to 
Mockabee, finding that Mockabee had overcharged purchasers of No. 2 
heating oil and kerosene. A further investigation disclosed additional 
overcharges other than those cited in the RO, and on December 22, 1976, 
the FEA rescinded the RO and issued a Revised Remedial Order requiring 
Mockabee to roll back prices to compensate consumers who were 
overcharged by Mockabee.
    Mockabee failed to comply with the Revised Remedial Order. On April 
10, 1985, the ERA \1\ issued a Modified Remedial Order which rescinded 
the price rollbacks it had ordered Mockabee to make. Instead, the MRO 
required Mockabee to pay to the DOE $29,583.08 in assessed overcharges, 
and an additional $46,071.46 in interest due. On September 30, 1985, 
Mockabee appealed the MRO to the OHA, which denied the Appeal on 
December 19, 1985. Mockabee Gas & Fuel Oil Co., 13 DOE para. 83,059 
(1985). Mockabee has since remitted $75,638.48 in compliance with the 
MRO, which is now available for distribution through Subpart V.

    \1\ Under the DOE Organization Act, 42 U.S.C. 7151, et seq., and 
Executive Order 12009, 42 Fed. Reg. 46367 (September 25, 1977), all 
functions vested by law in the FEA were transferred to and vested in 
the DOE. Within the DOE, the ERA was delegated the authority to 
investigate violations of applicable regulations and to seek 
compliance of those regulations.
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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 for the 
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 
(PODRA), 15 U.S.C. 4501 et seq.; Office of Enforcement, 9 DOE para. 
82,508 (1981); Office of Enforcement, 8 DOE para. 82,597 (1981).
    We considered ERA's Petition that we implement a Subpart V 
proceeding with respect to the funds remitted by Mockabee and 
determined that such a proceeding was appropriate. On January 11, 1995, 
the OHA issued a Proposed Decision and Order (PD&O) establishing 
tentative procedures to distribute the money remitted by Mockabee (the 
Mockabee fund). That PD&O was published in the Federal Register and a 
30-day period was provided for submission of comments regarding our 
proposed refund plan. See 60 FR 3863 (January 19, 1995). More than 30 
days have elapsed, and the OHA has received no comments concerning the 
proposed refund procedures. Consequently, the procedures will be 
adopted as proposed. [[Page 32009]] 

III. Mockabee Refund Procedures

    We will implement a two-stage refund procedure for distribution of 
the Mockabee fund by which purchasers of No. 2 heating oil and kerosene 
from Mockabee during the period covered by the MRO may submit 
Applications for Refund in the initial stage. From our experience with 
Subpart V proceedings, we expect that 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.\2\

    \2\ If a refiner, reseller, or retailer should file an 
application in this refund proceeding, however, we will utilize the 
standards and appropriate presumptions established in previous 
proceedings. See, e.g., Stark's Shell Service, 23 DOE para. 85,017 
(1993); Shell Oil Co., 18 DOE para. 85,492 (1989).
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A. First Stage Refund Procedures

    In order to receive a refund, each claimant must submit a schedule 
of its monthly purchases of No. 2 heating oil or kerosene from Mockabee 
during the period covered by the MRO--November 1, 1973 through December 
31, 1975. Our experience also 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, e.g., Marathon 
Petroleum Co., 14 DOE para. 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 adopt the 
presumptions set forth below.
1. Calculation of Refunds
    First, we adopt a presumption that the overcharges were dispersed 
equally over all of Mockabee's sales of products covered by the MRO 
during the period covered by the MRO. See Permian Corp., 23 DOE para. 
85,034 (1993). In accordance with this presumption, refunds are made on 
a pro-rata or volumetric basis.\3\ 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 prices.

    \3\ 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 Mockabee's overcharges. See, 
e.g., Mobil Oil Corp./Atchison, Topeka and Santa Fe Railroad Co., 20 
DOE para. 85,788 (1990); Mobil Oil Corp./Marine Corps Exchange 
Service, 17 DOE para. 85,714 (1988). Such a claim will 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 para. 
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 
the Mockabee fund is equal to the number of gallons of covered product 
purchased from Mockabee during the period covered by the MRO times the 
per gallon refund amount. In the present case, the per gallon refund is 
$0.0612. We derived this figure by dividing the monies remitted by 
Mockabee ($75,638.48) by the total volume of covered products sold by 
Mockabee from November 1, 1973 through December 31, 1975 (1,236,132 
gallons). A claimant that establishes its eligibility for a refund will 
receive all or a portion of its allocable share plus a pro-rata share 
of accrued interest.\4\

    \4\ As in previous cases, we establish a minimum refund amount 
of $15. In this proceeding, any potential claimant purchasing less 
than 245 gallons of covered product from Mockabee would have an 
allocable share of less than $15. We have found through our 
experience that the cost of processing claims in which refund 
amounts of less than $15 are sought outweighs the benefits of 
restitution in those instances. See Exxon Corp., 17 DOE para. 85,590 
(1988).
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    In addition to the volumetric presumption, we also adopt a 
presumption regarding injury for end-users.
2. End Users
    In accordance with prior Subpart V proceedings, we adopt the 
presumption that an end user or ultimate consumer of covered products 
purchased from Mockabee whose business is unrelated to the petroleum 
industry was injured by the overcharges resolved by the MRO. See, e.g., 
Texas Oil and Gas Corp., 12 DOE para. 85,069 at 88,209 (1984). Unlike 
regulated firms in the petroleum industry, members of this group 
generally 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 price of goods and 
services produced by members of this group would go beyond the scope of 
the refund proceeding. Id. Therefore, end-users of covered products 
purchased from Mockabee need only document their purchase volumes from 
Mockabee during the period covered by the MRO to make a sufficient 
showing that they were injured by the overcharges.

B. Refund Application Requirements

    To apply for a refund from the Mockabee fund, a claimant should 
submit an Application for Refund containing all of the following 
information:
    (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. \5\ 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;

    \5\ 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 and Restititution Act of 1986 and other regulations 
codified at 10 CFR Part 205, Subpart V. The information may be 
shared with other federal agencies for statistical, auditing or 
archival 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 Remedial Order period 
(November 1, 1973 through December 31, 1975). The applicant should 
specify the source of this gallonage information. In calculating its 
purchase volumes, an applicant should use actual records from the 
Remedial Order period, if available. If these records are not 
available, the applicant may submit estimates of its purchases of 
covered products, but the estimation method must be reasonable and 
clearly explained;
    (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 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 Mockabee, 
it should explain this affiliation, including the time period during 
which it was affiliated.\6\

    \6\ As in other refund proceedings involving alleged refined 
products 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 para. 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 para. 85,611 (1987), 
amended, claim denied, 17 DOE para. 85,291 (1988), reconsideration 
denied, 20 DOE para. 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. [[Page 32010]] 
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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, 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 clearly and 
labeled ``Mockabee Gas & Fuel Oil Co. (Case No. VEF-0001) 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 September 29, 1995 and sent to: Mockabee Gas & 
Fuel Oil Co. Special Refund Proceeding, Office of Hearings and Appeals, 
Department of Energy, 1000 Independence Ave., S.W., Washington, DC 
20585.

C. Refund Applications Filed by Representatives

    We 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., Stark's Shell Service, 23 DOE para. 85,017 
(1993); Texaco, Inc., 20 DOE para. 85,147 (1990); Shell Oil Co., 18 DOE 
para. 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 closely scrutinize applications filed by filing services. 
Applications submitted by a filing service should contain all of the 
information indicated in this Decision.
    Finally, the OHA reserves the authority to require additional 
information before granting any refund in this proceeding. 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 will be distributed in accordance with the provisions of the 
Petroleum Overcharge Distribution and Restitution Act of 1986 (PODRA), 
15 U.S.C. 4501-07. The 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 monies in the Mockabee fund that 
the OHA determines will not be needed to effect direct restitution to 
injured customers will be distributed in accordance with the provisions 
of the PODRA.
    It is therefore ordered that: (1) Applications for Refund from the 
funds remitted to the Department of Energy by Mockabee Gas & Fuel Oil 
Co. pursuant to the Modified Remedial Order dated April 10, 1985 may 
now be filed.
    (2) Applications must be postmarked no later than September 29, 
1995.

    Dated: June 12, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 95-14916 Filed 6-16-95; 8:45 am]
BILLING CODE 6450-01-P