[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