[Federal Register Volume 72, Number 127 (Tuesday, July 3, 2007)]
[Notices]
[Pages 36446-36449]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-12832]


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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.

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SUMMARY: The Office of Hearings and Appeals (OHA) of the Department of 
Energy (DOE) announces the procedures for the disbursement of 
$1,592,901, plus accrued interest, in motor gasoline overcharges 
obtained by the DOE pursuant to remedial orders issued to Powerine Oil 
Company, Case No. TEF-0006, and Storey Oil Company, Inc., Case No. TEF-
0009. The OHA has determined that the funds will be distributed in 
accordance with the provisions of 10 CFR part 205, subpart V.

DATES: Applications must be filed in duplicate with OHA by December 28, 
2007.

ADDRESSES: Applications should be sent to the Office of Hearings and 
Appeals, Department of Energy, 1000 Independence Ave., SW., Washington, 
DC 20585-1615. All applications should display a reference to Case Nos. 
TEF-0006 or TEF-0009.

FOR FURTHER INFORMATION CONTACT: Richard A. Cronin, Jr., Assistant 
Director, Office of Hearings and Appeals, 1000 Independence Ave., SW., 
Washington, DC 20585-1615, (202) 287-1589, [email protected].

[[Page 36447]]


SUPPLEMENTARY INFORMATION:
    In accordance with 10 CFR 205.282(b), notice is hereby given of the 
issuance of the Decision and Order set out below. The Decision sets 
forth the procedures that the DOE has formulated to distribute to 
eligible claimants $1,592,901, plus accrued interest, obtained by the 
DOE pursuant to Remedial Orders issued to Powerine Oil Company 
(Powerine) and Storey Oil Company, Inc. (Storey). The Remedial Orders 
issued to Powerine and Storey adjudicated allegations concerning 
violations of the federal petroleum price regulations involving the 
sale of motor gasoline during the relevant audit periods.
    The OHA will distribute the Remedial Order funds in a refund 
proceeding using the procedures described in the Proposed Decision and 
Order published in the Federal Register on May 8, 2007. See 72 FR 26083 
(May 8, 2007). This refund proceeding seeks to provide restitution for 
those parties injured by Powerine or Storey's alleged violations of 
pricing regulations for motor gasoline. Purchasers of motor gasoline 
from Powerine or Storey will have the opportunity to submit refund 
applications. Refunds will be granted to applicants who satisfactorily 
demonstrate that they were injured by the pricing violations and who 
document the volume of motor gasoline they purchased from one of the 
firms during the relevant consent order period.
    All applications must be postmarked by December 28, 2007. All 
applications received in this proceeding will be made available for 
public inspection between the hours of 1 p.m. and 5 p.m., Monday 
through Friday, except Federal holidays, in Room 7132 ( the public 
reference room), 950 L'Enfant Plaza, Washington, DC.

    Dated: June 27, 2007.
Fred L. Brown,
Acting Director, Office of Hearings and Appeals.

Decision And Order--Department Of Energy

Implementation of Special Refund Procedures

    Names of Firms: Powerine Oil Company, Storey Oil Company, Inc.
    Dates of Filing: June 23, 2005, June 23, 2005.
    Case Numbers: TEF-0006, TEF-0009.
    The Office of General Counsel (OGC) of the Department of Energy 
(DOE) filed a Petition requesting that the Office of Hearings and 
Appeals (OHA) formulate and implement Subpart V special refund 
proceedings. Under the procedural regulations of the DOE, special 
refund proceedings may be implemented to refund monies to persons 
injured by violations of the DOE petroleum price regulations, provided 
DOE is unable to readily identify such persons or to ascertain the 
amount of any refund. 10 CFR 205.280. We have considered OGC's request 
to formulate refund procedures for the disbursement of monies remitted 
by Powerine Oil Company (Powerine) and Storey Oil Company (Storey) 
pursuant to Remedial Orders DOE has issued regarding them and have 
determined that such procedures are appropriate.
    Under the terms of the Remedial Orders, Powerine's bankruptcy 
trustee has remitted a total of $1,546,302 to the DOE to remedy motor 
gasoline retailer-reseller pricing violations which occurred during the 
relevant audit period. Storey has remitted a total of $46,599 to remedy 
similar violations. These funds are being held in an escrow account 
established with the United States Treasury pending a determination of 
their proper distribution. This Decision sets forth OHA's plan to 
distribute those funds. The specific application requirements are 
detailed in Section III of this Decision.

I. Background

    Powerine was a privately held corporation which operated a refinery 
located in Santa Fe Springs, California during the period of price 
controls, August 13, 1973 through January 27, 1981. During this period, 
Storey, operating in Colorado, was a reseller of refined petroleum 
products. Economic Regulatory Administration audits of Powerine and 
Storey revealed possible violations of the Mandatory Petroleum Price 
Regulations (MPPR) in their sales of motor gasoline. Subsequently, OHA 
issued Remedial Orders in each case directing Powerine and Storey to 
remit to the DOE $7,956,934 and $64,639 in restitution with respect to 
overcharges of each firm in regard to sales to their customers during 
the period of price controls.\1\
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    \1\ See Powerine Oil Company, 21 DOE ] 83,008 (1991); Storey Oil 
Company, Inc., 16 DOE ] 83,007 (1987).
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II. Jurisdiction and Authority

    The general guidelines that govern OHA's ability to formulate and 
implement a plan to distribute refunds are set forth at 10 CFR part 
205, subpart V. These procedures apply in situations where the DOE 
cannot readily identify the persons who were injured as a result of 
actual or alleged violations of the regulations or ascertain the amount 
of the refund each person should receive. For a more detailed 
discussion of Subpart V and the authority of the OHA to fashion 
procedures to distribute refunds, see Office of Enforcement, 9 DOE ] 
82,508 (1981) and Office of Enforcement, 8 DOE ] 82,597 (1981).
    On May 8, 2007, the OHA issued a Proposed Decision and Order (PD&O) 
establishing tentative procedures to distribute the Consent Order 
funds. That PD&O was published in the Federal Register, and a 30-day 
period was provided for the submission of comments regarding our 
proposed refund plan. See 72 FR 26083 (May 8, 2007). More than 30 days 
have elapsed and OHA has received no comments concerning these proposed 
refund procedures. Consequently, the procedures will be adopted as 
proposed.

III. Refund Procedures

A. Allocation of Consent Order Funds

    Both firms violations of the MPPR involved sales of a refined 
petroleum product--motor gasoline. Consequently, all of the funds that 
have been remitted by Powerine and Storey will be allocated for 
restitution for those parties injured by the firms' alleged violations 
of the pricing regulations for motor gasoline.

B. Refined Petroleum Product Refund Procedures

1. Application Requirements
    In cases where the ERA 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, those who bought refined petroleum products from the 
consenting firms may apply for refunds, which are typically 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 firm during the price 
control period covered by the remedial order.
    In the present case, however, we lack much of the information that 
we normally use to provide direct restitution to injured customers of 
the consenting firms. In particular, we have been unable to obtain any 
information on the volumes of motor gasoline products sold by the firms 
during the price control period. 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 will accept any refund

[[Page 36448]]

claims submitted by persons who purchased motor gasoline from Powerine 
or Storey during the settlement periods discussed above. We will work 
with those claimants to develop additional information that would 
enable us to determine who should receive refunds and in what 
amounts.\2\
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    \2\ Applications for Refund be accepted only for motor gasoline 
pricing violations. With regard to crude oil pricing violations the 
deadline for filing applications for refund has passed. See infra.
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    To apply for a refund from the Powerine or Storey Remedial Order 
funds, a claimant should submit an Application for Refund containing 
the following information:
    (1) Identifying information including the claimant's name, current 
business address, business address during the refund period, social 
security number or 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.\3\
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    \3\ An applicant must submit the social security number or 
employer identification number of the person or legal entity that is 
seeking the refund. 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 CFR 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.
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    (2) A monthly motor gasoline gallonage purchase schedule covering 
the price control order period. The applicant should specify the source 
of this gallonage information. In calculating its purchase volumes, an 
applicant should use actual records from the refund period, if 
available. If these records are not available, the applicant may submit 
estimates of its refined petroleum product purchases, but the 
estimation method must be reasonable and must be 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 that refund proceeding. If so, an explanation of the 
circumstances of the other filing or authorization must be submitted;
    (4) If the applicant is or was in any way affiliated with Powerine 
or Storey, it must explain this affiliation, including the time period 
in which it was affiliated; \4\
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    \4\ As in other refund proceedings involving alleged refined 
product violations, the DOE will presume that affiliates of a 
remedial order firm were not injured by the firm's overcharges. See, 
e.g., Marathon Petroleum Co./EMRO Propane Co., 15 DOE ] 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 ] 85,611 (1987), 
amended claim denied, 17 DOE ] 85,291 (1988), reconsideration 
denied, 20 DOE ] 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.
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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, a jail sentence, or both, pursuant to 18 U.S.C. 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 made available at OHA.

    All applications should be either typed or printed and clearly 
labeled with the name and case number of the relevant firm (Powerine 
Oil Company, Case No. TEF-0006 or Storey Oil Company, Inc., Case No. 
TEF-0009). 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 December 28, 2007: Office of Hearings and Appeals, Department of 
Energy, 1000 Independence Ave., SW., Washington, DC 20585-1615.
    We will 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., Starks Shell Service, 23 DOE ] 85,017 (1993); 
Texaco Inc., 20 DOE ] 85,147 (1990) (Texaco); Shell Oil Co., 18 DOE ] 
85,492 (1989). We will also require strict compliance with the filing 
requirements as specified in 10 CFR 205.283, particularly the 
requirement that applications and the accompanying certification 
statement be signed by the applicant. The OHA reiterates its policy to 
scrutinize applications filed by filing services closely. Applications 
submitted by a filing service should contain all of the information 
indicated above.
    Finally, the OHA reserves the authority to require additional 
information from an applicant before granting any refund in these 
proceedings.
2. Allocation Claims
    We may receive claims based upon Powerine's or Storey's failure to 
furnish motor gasoline that they were obliged to supply under the DOE 
allocation regulations that became effective in January 1974. See 10 
CFR Part 211. Any such application will be evaluated with reference to 
the standards set forth in Texaco (and cases cited therein). See 
Texaco, 20 DOE at 88,321.
3. Impact of the Petroleum Overcharge Distribution and Restitution Act 
of 1986 (PODRA) Amendments on Powerine and Storey Refined Product 
Refund Claims
    The Interior and Related Agencies Appropriations Act for FY 1999 
amended certain provisions of the Petroleum Overcharge and Distribution 
and Restitution Act of 1986 (PODRA). These amendments extinguished 
rights that refund applicants had under PODRA to refunds for 
overcharges on the purchases of refined petroleum products. They also 
identified and appropriated a substantial portion of the funds being 
held by the DOE to pay refund claims (including the funds paid by 
Powerine and Storey). Congress specified that these funds were to be 
used to fund other DOE programs. As a result, the petroleum overcharge 
escrow accounts in the refined product area contain substantially less 
money than before. In fact they may not contain sufficient funds to pay 
in full all pending and future refund claims (including those in 
litigation) if they should all be found to be meritorious. See Enron 
Corp./Shelia S. Brown, 27 DOE ] 85,036 at 88,244 (2000) (Brown). 
Congress directed OHA to ``assure the amount remaining in escrow to 
satisfy refined petroleum product claims for direct restitution is 
allocated equitably among all claimants.'' Omnibus Consolidated and 
Emergency Supplemental Appropriation Act of 1999, Public Law 105-277 
section 337, 112 Stat 2681, 2681-295 (1998) (language added to PODRA); 
Brown, 27 DOE at 88,244. In view of this Congressional directive and 
the limited amount of funds available, it may become necessary to 
prorate the funds available for the meritorious claimants

[[Page 36449]]

in the Powerine and Storey refund proceedings.
    It Is Therefore Ordered That:
    The payments remitted to the Department of Energy by Powerine Oil 
Company and Storey Oil Company, Inc., pursuant to remedial orders 
signed on August 30, 1991 and June 24, 1987 respectively, will be 
distributed in accordance with the foregoing Decision.

     Dated: June 27, 2007.
Fred L. Brown,
Acting Director, Office of Hearings and Appeals.
[FR Doc. E7-12832 Filed 7-2-07; 8:45 am]
BILLING CODE 6450-01-P