[Federal Register Volume 61, Number 231 (Friday, November 29, 1996)]
[Notices]
[Pages 60700-60702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30447]


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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 and 
solicitation of comments.

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SUMMARY: The Office of Hearings and Appeals of the Department of Energy 
announces procedures concerning the refunding of $30,000 (plus accrued 
interest) in consent order funds. The funds are being held in escrow 
pursuant to a Stipulation for Compromise Settlement involving Houston-
Pasadena Apache Oil Company.

DATE AND ADDRESS: Applications for Refund should be addressed to the 
Office of Hearings and Appeals, Department of Energy, 1000 Independence 
Avenue, S.W., Washington, D.C. 20585-0107. All Applications should 
conspicuously display a reference to Case Number VEF-0022.

FOR FURTHER INFORMATION CONTACT: Richard W. Dugan, Associate Director, 
Office of Hearings and Appeals, 1000 Independence Avenue, S.W., 
Washington, D.C. 20585-0107, (202) 426-1575.

SUPPLEMENTARY INFORMATION: In accordance with Section 205.282(c) of the 
procedural regulations of the Department of Energy, 10 C.F.R. 
Sec. 205.282(c), notice is hereby given of the issuance of the Decision 
and Order set forth below. The Decision relates to a Stipulation for 
Compromise Settlement entered into by the Houston-Pasadena Apache Oil 
Company (Apache) which settled possible pricing violations in the 
firm's wholesale transactions of motor gasoline during the period 
October-December 1979. A Proposed Decision and Order tentatively 
establishing refund procedures and soliciting comments from the public 
concerning the distribution of the Apache settlement fund was issued on 
September 16, 1996. 61 Fed. Reg. 50018 (September 24, 1996).
    The Decision sets forth the procedures and standards that the DOE 
has formulated to distribute funds remitted by Apache and being held in 
escrow. The DOE has decided that the funds should be distributed in two 
stages in the manner utilized with respect to consent order funds in 
similar proceedings. In the first stage, the DOE will consider claims 
for refunds made by firms and individuals that purchased motor gasoline 
from Apache during the audit period and were identified as overcharged 
Apache customers in DOE enforcement documentation.
    The second stage of the refund process will take place only in the 
event that the meritorious first stage applicants do not deplete the 
settlement funds. Any funds that remain after all first stage claims 
have been decided will be distributed to state governments for use in 
four energy conservation programs, in accordance with the provisions of 
the Petroleum Overcharge Distribution and Restitution Act of 1986.
    All first stage applications should be submitted within 90 days of 
publication of this notice. All comments and applications received in 
this proceeding will be available for public inspection between the 
hours of 1:00 to 5:00 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, D.C. 20585-0107.

    Dated: November 19, 1996.
George B. Breznay,
Director, Office of Hearings and Appeals.

Department of Energy

Decision and Order of the Department of Energy

Special Refund Procedures

November 19, 1996.
    Name of Petitioner: Houston-Pasadena Apache Oil Co.
    Date of Filing: September 1, 1995.
    Case Number: VEF-0022.

    In accordance with the procedural regulations of the Department 
of Energy (DOE), 10 C.F.R. Part 205, Subpart V, the Regulatory 
Litigation branch of the Office of General Counsel (OGC) (formerly 
the Economic Regulatory Administration (ERA)) filed a Petition for 
the Implementation of Special Refund Procedures with the Office of 
Hearings and Appeals (OHA) on September 1, l995. The petition 
requests that the OHA formulate and implement procedures for the 
distribution of funds received pursuant to a Stipulation for 
Compromise Settlement (Settlement Stipulation) concerning the 
Houston-Pasadena Apache Oil Company (Apache).

Background

    Apache was a ``reseller-retailer'' of motor gasoline during the 
period of price controls. Accordingly, Apache was subject to the 
provisions of 10 C.F.R. Part 212, Subpart F, governing wholesale and 
retail sales of refined petroleum products. On April 30, l985, the 
ERA issued a Proposed Remedial Order (PRO) to Apache concerning 
Apache's compliance with the price regulations for the period March 
1,1979 through December 31, l979 (the audit period). Apache provided 
documents for a more limited period (October-December l979), and 
based upon those documents, the ERA found that Apache sold motor 
gasoline at prices in excess of those permitted under the DOE price 
regulations governing reseller-retailers during that period. After 
considering Apache's challenge to the PRO, the OHA issued a final 
Remedial Order (RO) to Apache on June 19, l989. See Houston/Pasadena 
Apache Oil Company, 19 DOE para. 83,001 (1989). In the RO, the OHA 
remanded to the ERA a portion of the PRO involving retail 
transactions and two sales to Dow Chemical Company (Dow) and 
affirmed the rest of the PRO. The OHA also directed Apache to refund 
the amount of $160,713 plus interest, this sum representing the 
overcharges realized by the firm in its wholesale transactions 
during the period October-December l979. Apache did not honor its 
repayment obligation and the matter was referred to the Department 
of Justice (DOJ) for resolution. On June 4, l993, the DOJ and Apache 
executed a Stipulation for Compromise Settlement resolving the 
issues addressed by the RO. Pursuant to this settlement, Apache 
agreed to pay $30,000 in full settlement of the DOE claim. Apache's 
compliance with the settlement has resulted in payment to DOE of 
$30,000 which we shall disburse pursuant to the procedures set forth 
in this Decision and Order. These funds are presently in an 
interest-bearing escrow account maintained by the Department of the 
Treasury.

Jurisdiction

    The procedural regulations of the DOE set forth general 
guidelines by which the OHA may formulate and implement a plan of 
distribution for funds received as a result of an enforcement 
proceeding. 10 C.F.R. Part 205, Subpart V. Generally, it is DOE 
policy 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 obtained as part of 
settlement agreements, see Office of Enforcement, 9 DOE para. 82,553 
(1982); Office of Enforcement, 9 DOE para. 82,508 (1981). After 
reviewing the record in the present case, we have concluded that a 
Subpart V proceeding is an appropriate mechanism for distributing 
the monies obtained from Apache. We therefore grant OGC's petition 
and assume jurisdiction over distribution of the funds.
    On September 16, 1996, OHA issued a Proposed Decision and Order 
(PDO) establishing tentative procedures to distribute the Apache 
settlement fund. The PDO was published in the Federal Register and a 
30 day period was provided for the submission of comments regarding 
our proposed refund plan. See 61 Fed. Reg. 50018 (September 24, 
l996). More than 30 days have elapsed and the OHA has received no 
comments concerning the proposed procedures for the distribution of 
the Apache settlement fund. Consequently, the procedures will be 
adopted as proposed.

Refund Procedures

A. Refund Claimants

    Refund monies shall be distributed to those wholesale customers 
which were injured in their transactions with Apache during the

[[Page 60701]]

period October 1, l979 through December 31, 1979. These customers of 
Apache are listed in Appendix A to the RO. If any of these customers 
are affiliates of Apache, they will be ineligible to apply for a 
refund in this proceeding.

B. Calculation of Refund Amounts

    For claims against the funds obtained from Apache, we have 
established a maximum potential refund (allocable share) for each of 
the customers identified in the Apache RO as an overcharged 
customer. These claimant-specific maximum potential refunds are 
based upon the ratio of overcharges incurred by each customer to the 
total overcharge amount multiplied by the principal amount in the 
Apache escrow account. A list of the identified Apache customers and 
their maximum potential refunds is presented in the Appendix to this 
Decision. Each successful refund claimant shall also receive a pro 
rata share of interest which has accrued on the Apache escrow fund 
account.

C. Showing of Injury/Injury Presumptions

    As in previous Subpart V proceedings, those customers who were 
ultimate consumers (end-users) of Apache motor gasoline shall be 
presumed injured by Apache's alleged overcharges. They will 
therefore not be required to make a further demonstration of injury 
in order to receive a refund.
    Reseller claimants (including retailers and refiners) who 
purchased on a regular (non-spot) basis and whose maximum potential 
refund is $10,000 or less will be presumed injured and therefore 
need not provide further demonstration of injury. See E.D.G., Inc., 
17 DOE para. 85,679 (1988). We realize that the cost to an applicant 
of gathering evidence of injury to support a relatively small refund 
claim could exceed the expected refund. Consequently, in the absence 
of simplified procedures some injured parties would be denied an 
opportunity to obtain a refund.
    In addition, Tesoro Crude (Tesoro Energy), the only potential 
reseller claimant whose allocable share exceeds $10,000, may elect 
either to receive a refund under the small claims presumption 
outlined above or to pursue its potential refund of $16,034.97. If 
Tesoro limits its claim to the $10,000 small claims threshold, it 
need not demonstrate injury beyond the requirements established for 
other small claimants. If the firm elects to claim its entire 
potential refund it must establish that it did not pass the Apache 
overcharges along to its customers.1 See, e.g., Office of 
Enforcement, 8 DOE para. 82,597 (1981). Tesoro can make such an 
injury showing by demonstrating that it would have kept its motor 
gasoline prices at the same level had the Apache overcharges not 
occurred.
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    \1\ In the event that Tesoro demonstrates that it should be 
treated as an end-user instead of as a reseller, it will not be 
required to make this injury showing.
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    While there are a variety of means by which a claimant could 
make this showing, Tesoro should demonstrate that at the time it 
purchased Apache motor gasoline, market conditions would not permit 
it to increase its prices to pass through the additional costs 
associated with the Apache overcharges. In addition, Tesoro must 
show that it had a ``bank'' of unrecovered product costs sufficient 
to support its refund claim in order to demonstrate that it did not 
subsequently recover those costs by increasing its prices. However, 
the maintenance of a cost bank does not automatically establish 
injury. See Tenneco Oil/Chevron U.S.A., 10 DOE para. 85,014 (1982); 
Vickers Energy Corp./Standard Oil Co., 10 DOE para. 85,036 (1982); 
Vickers Energy Corp./Koch Industries, Inc., 10 DOE para. 85,038 
(1982).
    Finally, we hereby establish a minimum amount of $15 for refund 
claims. We have found in prior refund proceedings that the cost of 
processing claims in which refunds are sought for amounts less than 
$15 outweighs the benefits of restitution in those situations. See, 
e.g., Uban Oil Co., 9 DOE para. 82,541 at 85,225 (1982). See also 10 
C.F.R. Sec. 205.286(b). This restriction rules out the participation 
in this proceeding of two of the firms listed in the Appendix: Gulf 
Coast Waste, and Parrish Corp.2
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    \2\ Although the allocable share of Clay Texaco, $14.70, is 
under the $15 threshold, we have calculated that with interest its 
refund would exceed $15.
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D. Refund Application Requirements

    To apply for a refund from the Apache settlement 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 the person to contact for any additional 
information, and the name and address of the person who should 
receive any refund check.3 If the applicant operated under more 
than one name or under a different name during the price control 
period, the applicant should specify these names;
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    \3\ Under the Privacy Act of 1974, the submission of a social 
security number by an individual applicant is voluntary. An 
applicant that 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, and is 
requested pursuant to our authority under the Petroleum Overcharge 
Distribution and Restitution Act of l986 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) The applicant's use of motor gasoline from Apache: e.g., 
consumer (end-user), cooperative, or reseller;
    (3) A statement certifying that the applicant purchased motor 
gasoline from Apache during the October 1979-December l979 period;
    (4) A statement as to whether the applicant or a related firm 
has filed, or has authorized any individual to file on its behalf, 
any other application in the Apache refund proceeding. If so, an 
explanation of the circumstances of the other filing or 
authorization should be submitted;
    (5) If the applicant is or was in any way affiliated with 
Apache, it should explain this affiliation, including the time 
period in which it was affiliated;
    (6) A statement as to whether the ownership of the applicant's 
firm changed during or since the refund period. If an ownership 
change occurred, the applicant should list the names, addresses, and 
telephone numbers of any prior or subsequent owners. The applicant 
should also provide copies of any relevant Purchase and Sale 
Agreements, if available. If such written documents are not 
available, the applicant should submit a description of the 
ownership change, including the year of the sale and the type of 
sale (e.g., sale of corporate stock, sale of company assets);
    (7) A statement as to whether the applicant has ever been a 
party in a DOE enforcement action or a private Section 210 action. 
If so, an explanation of the case and copies of the relevant 
documents should also be provided;
    (8) The following statement signed by the individual applicant 
or a responsible official of the firm filing the refund application: 
4
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    \4\ We will not process applications signed by filing services 
or other representatives. In addition, the statement must be dated 
on or after the date of this Decision and Order. Any application 
signed and dated before the date of this Decision will be summarily 
dismissed.
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    ``I swear (or affirm) that the information contained in this 
application 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. 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 ``Houston-Pasadena Apache Oil Co. Special Refund Proceeding, 
Case No. VEF-0022.'' 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 
this 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 no later than 90 days from the 
publication of this Decision and Order in the Federal Register, and 
sent to: Houston-Pasadena Apache Oil Co., Special Refund Proceeding, 
Office of Hearings and Appeals, Department of Energy, 1000 
Independence Avenue, S.W., Washington, D.C. 20585-0107.
    Any representative that requests that it be a payee of a refund 
check must file with the OHA if it has not already done so a 
statement certifying that it maintains a separate escrow

[[Page 60702]]

account at a bank or other financial institution for the deposit of 
all refunds received on behalf of applicants, and that its normal 
business practice is to deposit all Subpart V refund checks in that 
account within two business days of receipt and to disburse refunds 
to applicants within 30 calendar days thereafter. Unless such 
certification is received by the OHA, all refund checks approved 
will be made payable solely to the applicants. Representatives who 
have not previously submitted an escrow account certification form 
to the OHA may obtain a copy of the appropriate form by contacting: 
Marcia B. Carlson, HG-13, Chief, Docket and Publications Division, 
Office of Hearings and Appeals, Department of Energy, Washington, 
D.C. 20585-0107.

E. 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 l986 
(PODRA), 15 U.S.C. Secs. 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. Any funds in the Apache 
escrow account the OHA determines will not be needed to effect 
direct restitution to injured Apache 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 the Houston-Pasadena Apache Oil Company 
pursuant to the Stipulation for Compromise Settlement that became 
effective on June 4, 1993, may now be filed.
    (2) All Applications for Refund must be postmarked no later than 
90 days after publication of this Decision and Order in the Federal 
Register.

    Dated: November 19, 1996.
George B. Breznay,
Director, Office of Hearings and Appeals.

                                Appendix                                
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                                                               Allocable
                          Applicant                              share  
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Car Wash....................................................      $31.17
Clay Texaco.................................................       14.70
DuMac Oil...................................................       22.59
Gulf Coast Waste *..........................................        8.97
Jas Lee.....................................................      126.06
Joe Lee.....................................................    3,059.22
John Parker.................................................       28.60
Kirby Car Wash..............................................       19.83
Lloyd Parrish...............................................      288.03
Main Stop...................................................       48.90
Parrish Corp.*..............................................       11.43
Quail Valley Gulf...........................................      166.95
So Sweet Energy.............................................    2,098.14
Tesoro Energy (Tesoro Crude)................................   16,034.97
Trio Oil Co.................................................    1,414.17
True Oil Co.................................................    1,119.96
Two Oil Co..................................................    5,489.67
Yims Texaco.................................................       16.64
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  Total.....................................................  $30,000.00
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* Under $15 threshold. See n.2 of Decision.                             
                                                                        
Note: The allocable share entries were generated by multiplying the     
  principal amount in the Apache escrow account by the percentage of    
  total overcharges incurred by each individual claimant as determined  
  by the ERA audit of Apache's business records.                        

[FR Doc. 96-30447 Filed 11-27-96; 8:45 am]
BILLING CODE 6450-01-P