[Federal Register Volume 62, Number 83 (Wednesday, April 30, 1997)]
[Notices]
[Pages 23444-23445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11145]


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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 announces proposed procedures for disbursement of $2,380,290 
(plus accrued interest) in alleged or adjudicated crude oil overcharges 
obtained by the DOE from Crude Oil Purchasing, Incorporated (Case No. 
LEF-0058), Jaguar Petroleum, Incorporated (Case No. LEF-0059), Westport 
Energy Corporation/Westport Petroleum Corporation (Case No. LEF-0113), 
and Gratex Corporation/Compton Corporation (Case No. VEF-0012). The OHA 
has tentatively determined that the funds obtained from these firms, 
plus accrued interest, will be distributed in accordance with the DOE's 
Modified Statement of Restitutionary Policy in Crude Oil Cases, 51 FR 
27899 (August 4, 1986).

DATES AND ADDRESSES: Comments must be filed in duplicate within 30 days 
of the date of publication in the Federal Register and should be 
addressed to: Office of Hearings and Appeals, Department of Energy, 
1000 Independence Avenue, SW, Washington, DC 20585-0107. All comments 
shall refer to the case number or numbers referred to above.

FOR FURTHER INFORMATION CONTACT: Bryan F. MacPherson, Assistant 
Director, Office of Hearings and Appeals, Washington, DC 20585-0107, 
(202) 426-1571.

SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(b), notice 
is hereby given of the issuance of the Proposed Decision and Order set 
forth below. The Proposed Decision and Order sets forth procedures that 
the DOE has proposed to use to distribute a total of $2,380,290, plus 
accrued interest, remitted to the DOE by (1) Crude Oil Purchasing, 
Incorporated, (2) Jaguar Petroleum, Incorporated, (3) Westport Energy 
Corporation & Westport Petroleum Corporation, and (4) Gratex 
Corporation/Compton Corporation. The DOE is currently holding these 
funds in interest bearing escrow accounts 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 moneys 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. Because 
the June 30, 1995, deadline for the crude oil refund applications has 
passed, no new applications from purchasers of refined petroleum 
products will be accepted.
    Any member of the public may submit written comments regarding the 
proposed refund procedures. Commenting parties are requested to submit 
two copies of their comments. Comments should be submitted within 30 
days of the publication of this notice in the Federal Register and 
should be sent to the address provided at the beginning of the notice. 
All comments received will be available for public inspection between 
the hours of 1 pm and 5 pm, 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, SW., 
Washington, DC 20585-0107.

    Dated: April 22, 1997.
George B. Breznay,
Director, Office of Hearings and Appeals.

Proposed Decision and Order of the Department of Energy

    April 22, 1997.

Implementation of Special Refund Procedures

    Names of Firms: Crude Oil Purchasing, Incorporated; Jaguar 
Petroleum, Incorporated; Westport Energy Corporation & Westport 
Petroleum Corporation; Gratex Corporation/Compton Corporation.
    Dates of Filings: July 20, 1993; July 20, 1993; September 9, 
1993; March 23, 1995.
    Case Numbers: LEF-0058; LEF-0059; LEF-0113; VEF-0012.
    The Economic Regulatory Administration (ERA) of the Department 
of Energy filed four Petitions for the Implementation of Special 
Refund Procedures with the Office of Hearings and Appeals (OHA) to 
distribute funds remitted to the DOE pursuant to settlements between 
Crude Oil Purchasing, Incorporated (COP), Jaguar Petroleum, 
Incorporated (Jaguar), Westport Energy Corporation & Westport 
Petroleum Corporation (Westport), Gratex Corporation and its parent, 
Compton Corporation (Gratex/Compton). A total of $2,380,290, plus 
interest, is available for restitution. All of these funds are now 
being held in interest-bearing escrow accounts pending a

[[Page 23445]]

determination regarding their proper disposition.
    In accordance with the procedural regulations codified at 10 CFR 
Part 205, Subpart V, the ERA requests in its Petitions that the OHA 
establish special refund procedures to remedy the effects of any 
regulatory violations which were resolved by these settlements. This 
Proposed Decision and Order sets forth the OHA's proposed plan to 
distribute these funds.1
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    \1\ 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. Secs. 4501-07, Office of Enforcement, 9 DOE para. 82,508 
(1981), and Office of Enforcement, 8 DOE para. 82,597 (1981).
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I. Background

    On September 21, 1982, DOE and COP entered into a Consent Order 
which resolved all pending or potential claims that DOE had or may 
have against COP relating to COP's compliance with the federal 
petroleum price and allocation regulations during the period from 
January 1, 1973 to January 27, 1981. There is a total of $93,750, 
plus interest, available from COP for restitution.
    On May 31, 1983, DOE and Jaguar entered into a Consent Order 
which resolved all pending or potential claims that DOE had or may 
have against Jaguar relating to Jaguar's compliance with the federal 
petroleum price and allocation regulations during the period from 
November 14, 1979 to January 27, 1981. There is a total of $64,500, 
plus interest, available from Jaguar for restitution.
    On May 11, 1983, the ERA issued a Proposed Remedial Order (PRO) 
to Westport alleging overcharges in the resale of crude oil during 
the period from June 1980 to November 1980. OHA dismissed this PRO 
after Westport was discharged in bankruptcy and DOE was entitled to 
receive payments under the bankruptcy reorganization plan. Under 
Westport's Second Amended Liquidating Plan of Reorganization, 
approved by the US Bankruptcy Court for the District of Colorado on 
July 30, 1986, Westport was required to make payments to DOE, and 
OHA was directed to distribute to the Westport escrow account 35% of 
any refunds that it granted to Westport in other refund proceedings. 
Thus far, DOE has collected a total of $126,172 from Westport. That 
amount, plus interest, is available for restitution.
    ERA filed claims in the bankruptcy cases of Gratex and Compton 
alleging overcharges in the resale of crude oil during the period 
from December 1978 to December 1980. On April 27, 1984, ERA issued a 
PRO to Gratex and Compton based on these same facts. On October 18, 
1988, the United States Bankruptcy Court for the Northern District 
of Texas approved a Compromise Agreement in the Gratex proceeding 
which obligated Gratex to pay DOE a lump sum plus a percentage of 
future distributions made to unsecured creditors. In 1992, the 
United States Bankruptcy Court for the Northern District of Texas 
approved a compromise agreement in the Compton proceeding. Thus far, 
Gratex and Compton have paid to the DOE the sum of $2,095,868. This 
amount, plus interest, is available for restitution.

II. The Proposed Refund Procedure

    As each of these petitions concern only violations of the 
regulations governing the sale of crude oil, we propose 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). The MSRP has been used as the basis for 
the distribution of all crude oil funds in Subpart V proceedings. 
See Order Implementing the MSRP, 51 FR 29689 (August 20, 1986); 
Notice regarding the Order Implementing the MSRP, 52 FR 11737 (April 
10, 1987).
    The MSRP was issued as a result of a court-approved Settlement 
Agreement. In re: The Department of Energy Stripper Well Exemption 
Litigation, 653 F. Supp. 108 (D. Kan. 1986) (the Stripper Well 
Settlement Agreement). The MSRP establishes that 40 percent of the 
crude oil funds will be remitted to the federal government, another 
40 percent to the states, and up to 20 percent may be initially 
reserved for payment of claims to injured parties. The MSRP also 
specifies that any monies remaining after all valid claims by 
injured purchasers are paid be disbursed to the federal government 
and the states in equal amounts.
    We propose to distribute the funds remitted by COP, Jaguar, 
Westport, and Gratex/Compton in accordance with the MSRP. 
Accordingly, we propose to initially reserve 20 percent of these 
funds for direct refunds to claimants.2 We propose that 
the remaining 80 percent of the funds collected from these firms 
shall be disbursed in equal shares to the states and the federal 
government for indirect restitution. Refunds to the states will be 
in proportion to the consumption of petroleum products in each state 
during the period of price controls. The share or ratio of the funds 
which each state will receive is contained in Exhibit H of the 
Stripper Well Settlement Agreement, 6 Fed. Energy Guidelines para. 
90,509 at 90,687. When disbursed, these funds will be subject to the 
same limitations and reporting requirements as all other crude oil 
monies received by the states under the Stripper Well Settlement 
Agreement. If additional funds are subsequently collected from these 
firms after the issuance of this Decision and Order, such funds 
shall be distributed in the same manner.
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    \2\ It is no longer possible to file an Application for Refund 
from the crude oil funds as the final deadline for such Applications 
was June 30, 1995. See 60 FR 19914 (April 21, 1995). A party that 
submitted a timely claim in the crude oil refund proceeding need not 
file another claim in order to share in the funds at issue in this 
Decision. OHA is currently paying crude oil refund claims at the 
rate of $0.0016 per gallon. We will decide whether sufficient crude 
oil overcharge funds are available for additional refunds when we 
are better able to determine how much additional money will be 
collected from firms that have either outstanding obligations to the 
DOE or enforcement cases currently in litigation.
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    It is therefore ordered that: The refund amounts remitted to the 
Department of Energy by (1) Crude Oil Purchasing, Incorporated, 
pursuant to the Consent Order which became effective on September 
21, 1982, (2) Jaguar Petroleum, Incorporated, pursuant to the 
Consent Order which became effective on May 31, 1983, (3) Westport 
Petroleum Corporation & Westport Energy Corporation, pursuant to the 
Second Amended Plan of Reorganization confirmed on July 30, 1986, by 
the U.S. Bankruptcy Court for the District of Colorado, and (4) 
Gratex Corporation and its parent, Compton Corporation, pursuant to 
the compromise agreements in the Gratex and Compton bankruptcy
[FR Doc. 97-11145 Filed 4-29-97; 8:45 am]
BILLING CODE 6450-01-P