Proposed Implementation of Special Refund Procedures

DEPARTMENT OF ENERGY

Office of Hearings and Appeals

Proposed Implementation of Special Refund Procedures

AGENCY: Office of Hearings and Appeals, DOE.

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 (DOE) announces the proposed procedures for disbursement of a

total of $83,847.58, plus accrued interest, in refined petroleum

overcharges obtained by the DOE under the terms of a Remedial Order

issued to Alameda Chevron, et al., Case Nos. LEF-0093, et al. The OHA

has tentatively determined that the funds will be distributed in

accordance with the provisions of 10 C.F.R. Part 205, Subpart V and 15

U.S.C. 4501, the Petroleum Overcharge Distribution and Restitution Act

(PODRA).

DATE AND ADDRESS: Comments must be filed in duplicate on or before

March 14, 1994 and should be addressed to the Office of Hearings and

Appeals, Department of Energy, 1000 Independence Avenue, SW.,

Washington, DC 20585. All comments should display a reference to Case

Number LEF-0093, et al.

FOR FURTHER INFORMATION CONTACT: Kim L. Hargrove, Staff Attorney,

Office of Hearings and Appeals, 1000 Independence Avenue, SW.,

Washington, DC 20585, (202) 586-2400.

SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(b), notice

is hereby given of the issuance of the Proposed Decision and Order set

out below. The Proposed Decision sets forth the procedures that the DOE

has tentatively formulated to distribute to eligible claimants

$83,847.58, plus accrued interest, obtained by the DOE under the terms

of a Remedial Order that the DOE issued to Alameda Chevron, et al., on

October 22, 1980. Under the Remedial Order, Alameda Chevron and 15

other firms were found to have violated the Federal petroleum price and

allocation regulations involving the sale of motor gasoline during the

relevant audit periods.

The OHA has proposed to distribute the Remedial Order funds is a

two stage refund proceeding. Purchasers of motor gasoline from any one

of the Remedial Order firms named in the Appendix following the

Proposed Decision and Order will have an opportunity to submit refund

applications in the first stage. Refunds will be granted to applicants

who satisfactorily demonstrate they were injured by the pricing

violations and who document the volume of motor gasoline they purchased

from one or more of the Remedial Order firms during the relevant audit

period. In the event that money remains after all first stage claims

have been disposed of, the remaining funds will be disbursed in

accordance with the provisions of 15 U.S.C. 4501, the Petroleum

Overcharge Distribution and Restitution Act of 1986 (PODRA).

Any member of the public may submit written comments regarding the

proposed refund procedures. Commenting parties are requested to forward

two copies of their submissions, within 30 days of publication of this

notice in the Federal Register, to the address set forth at the

beginning of this notice. Comments so received, 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 the Public Reference Room

1E-234, 1000 Independence Avenue, SW., Washington, DC 20585.

Dated: February 3, 1994.

George B. Breznay,

Director, Office of Hearings and Appeals.

Proposed Decision and Order of the Department of Energy

Proposed Implementation of Special Refund Procedures

February 3, 1994.

Names of Firms: Alameda Chevron, et al.

Date of Filing: July 20, 1993.

Case Numbers: LEF-0093, et al.

On July 20, 1993, the Economic Regulatory Administration (ERA) 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 the ERA's

request to formulate refund procedures for the disbursement of monies

remitted by Alameda Chevron and 15 other firms pursuant to a Remedial

Order (hereafter, the Order) issued by OHA on October 22, 1980, to

those firms and have determined that such procedures are appropriate.

Each firm's name, case number and amount of money remitted to remedy

its pricing violations has been set out in the Appendix immediately

following this Decision.

Under the terms of the Order, a total of $83,847.58 has been

remitted to the DOE to remedy pricing violations which occurred during

the relevant audit periods. These funds are being held in an escrow

account established with the United States Treasury pending a

determination of their proper distribution. See Memorandum from George

B. Breznay, Director OHA, to James T. Campbell, Comptroller,

``Transferring Funds to Escrow Account,'' August 20, 1993. This

Decision sets forth OHA's tentative plan to distribute those funds. The

specific application requirements appear in Section III of this

Decision. Because these procedures are set forth in proposed form,

refund applications should not be filed at this time. Comments are

solicited.

I. 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, 8 DOE

82,508 (1981) and Office of Enforcement, 8 DOE 82,597 (1981).

II. Background

The facts alleged in the Remedial Order were undisputed. Each

Remedial Order firm was a ``retailer'' of motor gasoline as that term

has been defined at 10 CFR 212.31 and was therefore subject to the

provisions of 10 CFR part 210 and 10 CFR part 212, Subpart F. The Order

states that during the relevant audit period, they each charged prices

higher than those permitted by 10 CFR 212.93(a)(2); levied a cents-per-

gallon fee for services associated with the sale of motor gasoline in

violation of 10 CFR 210.62(d)(1) and refused to make their records

available for inspection in violation of 10 CFR 210.92(b).

The firms were ordered to reduce their prices for motor gasoline by

specified amounts until a sufficient volume of gasoline had been sold

at the reduced prices to remedy the violations.\1\ After decontrol, the

Order was modified to require direct monetary restitution to the

Treasury instead. See Sunset Boulevard Car Wash, 20 FERC 62,319 at

63,537 (1982). The firms objected. The Order has since been affirmed by

the Federal Energy Regulatory Commission (FERC) in a Decision issued on

August 13, 1982. Id.

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\1\The Order imposed no sanctions upon the firms for failing to

provide records pursuant to 10 CFR 210.92(b). See Remedial Order at

1 and 7.

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III. The Proposed Motor Gasoline Refund Procedures

This section sets forth the considerations that will be used to

evaluate applications for refund payable from the monies remitted by

each firm. We propose to implement a two stage refund proceeding.

Purchasers of motor gasoline from any of these gasoline retailers will

have an opportunity to submit refund applications in the first stage.

In the event that money remains after all first stage claims have been

disposed of, the remaining funds will be disbursed in accordance with

the provisions of the Petroleum Overcharge Distribution and Restitution

Act of 1986 (15 U.S.C. 4501) (PODRA).

Refund applications submitted in this special refund proceeding

will be evaluated in exactly the same manner as applications submitted

in other refined product proceedings. Refunds will be granted to

applicants who satisfactorily demonstrate they were injured by the

pricing violations and who document the volume of motor gasoline they

purchased from one or more of these retailers during the relevant audit

period. In order to permit applicants to participate in the refund

proceeding without incurring inordinate expense and to facilitate OHA's

consideration of refund applications, we plan to adopt certain

presumptions regarding pricing violations and injury. 10 CFR

205.282(e).

With regard to the pricing violations, we propose to adopt a

rebuttable presumption that such violations were dispersed equally

throughout each of these retailer's sales of motor gasoline during the

audit period and that refunds should therefore be made on a pro rata or

volumetric basis. Under this volumetric refund approach, an applicant

will be eligible to receive a refund that is equal to the gallons of

gasoline purchased multiplied by the per gallon refund amount, plus

accrued interest.

We are proposing that a separate per gallon refund amount

(volumetric) be set for each retailer. The volumetric was obtained by

dividing the remedial order funds each retailer remitted by the gallons

of motor gasoline we believe it sold during the relevant audit

period.\2\ Applicants believing they were disproportionately

overcharged will have an opportunity to rebut this presumption and

those who succeed in doing so, will be eligible to receive refunds

calculated at a higher volumetric.

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\2\In the absence of accurate figures indicating the amount of

motor gasoline sold by each firm during the audit period, we have

estimated the volume of their sales using the best available data.

Our estimate is that each gasoline retailer sold 50,000 gallons of

motor gasoline per month for each month of its audit period. This

figure was used to calculate each retailer's volumetric. Should

interest in claims submitted pursuant to this Order indicate that

our sales volume estimate was inaccurate, it may be necessary to

reestimate the volumetric.

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The potential applicants are likely to fall into just two

categories since each of the Remedial Order firms was retailer. We will

provide a presumption of injury for end-users of petroleum products

whose businesses were unrelated to the petroleum industry and were

therefore not subject to the regulations promulgated under the

Emergency Petroleum Allocation Act of 1973 (EPAA), 15 U.S.C. Secs. 751-

760h. In order to receive a refund, such applicants will only be

required to document the volume of motor gasoline they purchased from

one or more of these retailers during that retailer's audit period. See

Shell Oil Company, 17 DOE  85,204 (1988). The second category of

applicant consists of both retailer and reseller applicants who will be

required to submit detailed evidence of injury. These applicants must

show that the overcharges were absorbed, not passed through to their

customers. They therefore will be unable to rely upon injury

presumptions utilized in many refined product refund cases. Id.

Only claims for at least $15 in principal will be processed. This

minimum has been adopted in refined product refund proceedings because

the cost of processing claims for refunds of less than $15 outweighs

the benefits of restitution in those instances. See Mobil Oil Corp., 13

DOE  85,339 (1985).

The deadline for filing an Application for Refund is June 1, 1995.

It Is Therefore Ordered That:

The refund amount remitted to the Department of Energy by Alameda

Chevron and the 15 firms listed in the Appendix, pursuant to the

Remedial Order finalized on October 22, 1980, be distributed in

accordance with the foregoing Decision.

Appendix

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Case No. Case name $ Amount Audit period Volumetric

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LEF-0093...................... Alameda Chevron.................... $2,270.92 8/1/79-10/30/79 .0151

LEF-0094...................... Ben's Exxon Service................ 3,056.42 8/1/79-1/30/80 .0102

LEF-0095...................... Berryessa Chevron.................. 2,933.32 8/1/79-10/30/79 .0196

LEF-0096...................... Bill Wren's Shell.................. 4,366.42 8/1/79-1/11/80 .0163

LEF-0097...................... Cutting Shell Service.............. 4,815.87 8/1/79-1/30/80 .0161

LEF-0098...................... Ed Gularte Chevron................. 6,235.74 8/1/79-1/30/80 .0208

LEF-0099...................... Joe Berube Services................ 8,294.00 8/1/79-12/13/79 .0375

LEF-0100...................... McDowell Exxon..................... 6,998.37 8/1/79-10/20/79 .0529

LEF-0101...................... Petaluma Standard Service.......... 3,987.27 8/1/79-1/30/80 .0133

LEF-0102...................... Regalia's Chevron Service.......... 8,887.87 8/1/79-1/11/80 .0332

LEF-0103...................... Starr Union Service................ 6,773.51 8/1/79-11/20/79 .0372

LEF-0104...................... Tenth Street Chevron............... 7,097.98 8/1/79-1/30/80 .0237

LEF-0105...................... Tom's Coffee Tree Chevron.......... 4,500.00 8/1/79-11/20/79 .0247

LEF-0106...................... Wallace Arco Service............... 2,067.09 8/1/79-1/11/80 .0069

LEF-0107...................... Walt's Shell Service............... 3,562.80 8/1/79-11/14/79 .0206

LEF-0108...................... Weber's Chevron Service............ 8,000.00 8/1/79-11/14/79 .0464

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$83,847.58

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[FR Doc. 94-3097 Filed 2-9-94; 8:45 am]

BILLING CODE 6450-01-M