[Federal Register Volume 62, Number 32 (Tuesday, February 18, 1997)]
[Notices]
[Pages 7227-7229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3874]
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DEPARTMENT OF ENERGY
Office of Hearings and Appeals
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 $214,236.37 (plus
accrued interest) in consent order funds. The funds are being held in
escrow pursuant to a Consent Judgment and a Bankruptcy Distribution
involving Houma Oil Company and Jedco, Inc., respectively.
DATE AND ADDRESS: Applications for Refund should be addressed to the
Office of Hearings and Appeals, Department of Energy, 1000 Independence
Avenue, SW., Washington, DC. 20585-0107. All Applications should
conspicuously display a reference to either Case Number VEF-0023 (Houma
Oil Co.) or VEF-0024 (Jedco, Inc.).
FOR FURTHER INFORMATION CONTACT: Richard W. Dugan, Associate Director,
Office of Hearings and Appeals, 1000 Independence Avenue, SW.,
Washington, DC. 20585-0107, (202) 426-1575.
SUPPLEMENTARY INFORMATION: In accordance with Sec. 205.282(c) of the
procedural regulations of the Department of Energy, 10 CFR 205.282(c),
notice is hereby given of the issuance of the Decision and Order set
forth below. The Decision relates to a Consent Judgment entered into by
the Houma Oil Company which settled possible pricing violations in the
firm's sales of motor gasoline during the period May 1, 1979 through
April 30, 1980. The Decision also relates to a Bankruptcy Distribution
which settled pricing violations stemming from Jedco, Inc.'s sales of
motor gasoline during the period November 1, 1973 through March 31,
1974. A Proposed Decision and Order tentatively establishing refund
procedures and soliciting comments from the public concerning the
distribution of the Houma and Jedco settlement funds was issued on
October 28, 1996. 61 FR 57868 (November 8, 1996).
The Decision sets forth the procedures and standards that the DOE
has formulated to distribute funds remitted by Houma and Jedco 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 Houma and/or Jedco during the respective
audit periods.
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 l986.
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 to 5 p.m., Monday through Friday, except federal
[[Page 7228]]
holidays, in the Public Reference Room of the Office of Hearings and
Appeals, located in Room 1E-234, 1000 Independence Avenue, SW.,
Washington, DC. 20585-0107.
Dated: February 7, 1997.
George B. Breznay,
Director, Office of Hearings and Appeals.
Decision and Order of the Department of Energy
Special Refund Procedures
Name of Firms: Houma Oil Company, Jedco, Inc.
Date of Filing: September 1, 1995
Case Numbers: VEF-0023, VEF-0024
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 Petitions for
the Implementation of Special Refund Procedures with the Office of
Hearings and Appeals (OHA) on September 1, 1995. The petitions
request that the OHA formulate and implement procedures for the
distribution of funds received pursuant to a Consent Judgment and a
Bankruptcy Distribution concerning Houma Oil Co. (Houma) and Jedco,
Inc. (Jedco), respectively.
Background
Houma was a ``reseller-retailer'' during the period of price
controls. The ERA audited Houma's business records and determined it
violated DOE's regulations in its sales of motor gasoline during the
period May 1, 1979 through April 30, 1980. On November 21, 1983, the
ERA issued a Proposed Remedial Order (PRO) to Houma in which it
determined the firm overcharged its customers by $503,810 during the
audit period. On August 1, 1984, Houma and DOE entered into a
consent order in which Houma agreed to refund the overcharge amount,
plus interest, in installment payments to DOE over a two year
period. Houma ultimately defaulted on its repayment obligation and
the matter was referred to the Department of Justice (DOJ) for
enforcement. The DOJ then obtained a Consent Judgment against Houma
on February 9, 1995. Pursuant to this Judgment, Houma remitted a
total of $210,414.73 to the DOE. Houma then stopped making payment,
and the DOE determined that further legal action against Houma was
unlikely to result in meaningful benefits to the taxpayer. The
residual payment obligation was therefore declared uncollectible.
The DOE issued a Remedial Order (RO) to Jedco on October 24,
1978. Jedco, Inc., Case No. DRW-0006. Like Houma, Jedco was a
``reseller-retailer'' during the audit period November 1, 1973
through March 31, 1974. The RO required the firm to implement a
rollback of its motor gasoline prices, thereby restoring its
overcharged customers to the position they would have been in absent
the overcharges. After the deregulation of petroleum prices, the RO
was modified and this requirement was replaced by an order requiring
payment to the U.S. Treasury. Jedco, Inc., 8 DOE para. 81,068
(1981). Jedco failed to comply with the directives of the DOE in
this matter and ultimately declared bankruptcy. The DOE's claim
against the firm led to a final distribution to the DOE of
$3,821.64. In accordance with current DOE policy, since OGC has been
unable to identify the customers injured by the Jedco overcharges,
it has petitioned OHA to distribute this amount pursuant to Subpart
V.
The funds obtained from the two firms are presently in interest-
bearing escrow accounts maintained by the Department of the
Treasury. They will be distributed in accord with the procedures
outlined herein.
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. 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 the 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 Houma and Jedco. We therefore grant OGC's petitions
and assume jurisdiction over distribution of the funds.
On October 28, 1996, OHA issued a Proposed Decision and Order
(PDO) establishing tentative procedures to distribute the Houma and
Jedco settlement funds. 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. 57868
(November 8, l996). More than 30 days have elapsed and the OHA has
received no comments concerning the proposed procedures for the
distribution of the Houma or Jedco settlement funds. Consequently,
the procedures will be adopted as proposed.
Refund Procedures
In cases where the DOE is unable to identify parties injured by
the alleged overcharges or the specific amounts to which they may be
entitled, we normally implement a two-stage refund procedure. In the
first stage of the proceeding, those who bought refined petroleum
products from the consent order firm may apply for a refund, which
is calculated on a pro-rata or volumetric basis. In order to
calculate the volumetric refund amount, the OHA divides the amount
of money available for direct restitution by the number of gallons
sold by the consent order firm during the period covered by the
consent order. In the second stage, any funds remaining after all
first-stage claims are decided are distributed for indirect
restitution in accordance with the provisions of the Petroleum
Overcharge Distribution and Restitution Act of 1986 (PODRA), 15
U.S.C. Secs. 4501-07.
In the two cases covered by this Decision, however, we lack much
of the information that we normally use to provide direct
restitution to injured customers of the consent order firms. In
particular, we have been unable to obtain any information on the
volume of the relevant petroleum products sold by Houma and Jedco
during the respective settlement periods. Nor do we have any
information concerning the customers of these firms. Based on the
present state of the record in these cases, it would be difficult to
implement a volumetric refund process. Nevertheless, we shall accept
any refund claims submitted by persons who purchased motor gasoline
from Houma during the period May 1, 1979 through April 30, 1980 or
from Jedco during the period November 1, 1973 through March 31,
1974. We will work with those claimants to develop additional
information that would enable us to determine who should receive
refunds and in what amounts. See Bell Fuels, Inc., 25 DOE para.
85,020 (1995).
Injury Presumptions/Showing of injury
As in previous Subpart V proceedings, those customers of Houma
and Jedco who were ultimate consumers (end-users) of their motor
gasoline shall be presumed injured by their alleged overcharges.
These customers 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 motor gasoline from either of the two firms on a regular
(non-spot) basis and whose refund claim is $10,000 or less will also
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, any reseller refund claimant advancing a refund claim
in excess of $10,000 must establish that it did not pass the alleged
Houma or Jedco overcharges along to its customers. See, e.g., Office of
Enforcement, 8 DOE para. 82,597 (1981). While there are a variety of
means by which a claimant could make this showing, a successful
claimant should demonstrate that at the time it purchased motor
gasoline from the consent order firm, market conditions would not
permit it to increase its prices to pass through the additional costs
associated with the alleged overcharges. In addition, such claimants
must show that they had a ``bank'' of unrecovered product costs
sufficient to support their refund claim in order to demonstrate that
they did not subsequently recover those costs by increasing their
product 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.
[[Page 7229]]
85,036 (1982); Vickers Energy Corp./Koch Industries, Inc., 10 DOE para.
85,038 (1982), Motion for Modification denied, 10 DOE para. 85,062
(1983).
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).
Refund Application Requirements
To apply for a refund from either the Houma or Jedco 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.1 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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\1\ Under the Privacy Act of l974, 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 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, audition 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 Houma and/or
Jedco during the audit period: e.g., consumer (end-user),
cooperative, or reseller;
(3) A statement certifying that the applicant purchased motor
gasoline from Houma during the period May 1, 1979 through April 30,
1980, or from Jedco during the period November 1, 1973 through March
31, 1974;
(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 Houma and/or Jedco 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 Houma
and/or Jedco, it should explain this affiliation, including the time
period in which the affiliation existed;
(6) A statement as to whether the ownership of the applicant's
firm changed during or since the respective audit periods. 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:
2
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\2\ 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.
Applications should be either typed or printed and clearly
labeled ``Houma Oil Company Special Refund Proceeding, Case No. VEF-
0023'' or ``Jedco, Inc. Special Refund Proceeding, Case No. VEF-
0024.'' 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, two copies of the application with the
confidential information deleted and an explanation of the basis for
its confidentiality claim. 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: Houma Oil
Company, OR, Jedco, Inc., 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 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, Chief, Docket & Publications Division, Office of
Hearings and Appeals, Department of Energy, Washington, D.C. 20585-
0107.
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
PODRA. PODRA requires that the Secretary of Energy determine
annually the amount of all 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 Houma and/
or Jedco escrow accounts the OHA determines will not be needed to
effect direct restitution to injured customers of either Houma or
Jedco 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 Houma Oil Company pursuant to the
Consent Judgment that became effective on February 9, 1995, may now
be filed.
(2) Applications for Refund from the funds remitted to the
Department of Energy by Jedco, Inc., pursuant to a final bankruptcy
distribution effective July 23, l995, may now be filed.
(3) All Applications for Refund must be postmarked no later than
90 days after publication of this Decision and Order in the Federal
Register.
Dated: February 7, 1997.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 97-3874 Filed 2-14-97; 8:45 am]
BILLING CODE 6450-01-P