Implementation of Special Refund Procedures

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 disbursement of $866,352.24,

plus accrued interest, in refined petroleum product violation amounts

obtained by the DOE pursuant to Consent Orders issued to Bell Fuels,

Inc., et al., Case Nos. LEF-0061, et al. In the absence of sufficient

information to implement direct restitution to injured customers of the

consenting firms, the OHA has determined that if no such customers come

forward, the funds obtained from these firms, plus accrued interest,

will be made available to state governments for use in four energy

conservation programs.

DATE AND ADDRESS: Applications for Refund from customers of the

consenting firms must be filed in duplicate and sent to:

Office of Hearings and Appeals, Department of Energy, 1000 Independence

Ave., SW., Washington, DC 20585.

Applications should display a prominent reference to the name of

the consenting firm in question and the appropriate case number.

Applications should be postmarked by September 29, 1995.

FOR FURTHER INFORMATION CONTACT: Thomas O. Mann, Deputy Director, Roger

Klurfeld, Assistant Director, Office of Hearings and Appeals, 1000

Independence Avenue, SW., Washington, DC 20585, (202) 586-2094 (Mann);

586-2383 (Klurfeld).

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. This Decision and

Order sets forth the procedures that the DOE has formulated to

distribute $866,352.24, plus accrued interest, obtained by the DOE

pursuant to Consent Orders issued to eighteen resellers and retailers

of refined petroleum products. The Consent Orders settled DOE

allegations that, during periods between 1973 and 1981, the firms had

sold certain refined petroleum products at prices in excess of the

maximum lawful selling price, in violation of Federal petroleum price

regulations. The names of the firms, their case numbers, the dates of

the settlement periods, the products covered by each Consent Order, and

the amounts received from each firm are set forth in the Appendix to

the Decision.

Since it lacks sufficient information to implement a standard

first-stage refund process, the OHA has determined that it will accept

refund claims from any injured customers of the consenting firms who

come forward and will devise refund procedures based on the information

these applicants provide. If no applicants come forward, all of the

funds obtained from the firms will be made available for indirect

restitution in accordance with the provisions of the Petroleum

Overcharge Distribution and Restitution Act of 1986 (PODRA), 15 U.S.C.

4501-07. The funds will be distributed to state governments for use in

four energy conservation programs.

Applications for Refund must be postmarked by September 29, 1995.

Instructions for the completion of refund applications are set forth in

the Decision that immediately follows this notice. Applications should

be sent to the address listed at the beginning of this notice.

Unless labeled as ``confidential,'' all submissions must 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 of the Office of Hearings and Appeals, located in Room 1E-234,

1000 Independence Avenue, SW., Washington, DC 20585.

Dated: May 19, 1995.

George B. Breznay,

Director, Office of Hearings and Appeals.

Decision and Order of the Department of Energy; Implementation of

Special Refund Procedures

May 19, 1995.

Names of Firms: Bell Fuels, Inc., et al.

Dates of Filing: July 20, 1993, November 16, 1993.

Case Numbers: LEF-0061, et al.

On July 20 and November 16, 1993, the Economic Regulatory

Administration (ERA) of the Department of Energy (DOE) filed

Petitions for the Implementation of Special Refund Procedures with

the Office of Hearings and Appeals (OHA), to distribute the funds

received pursuant to Consent Orders entered into by the DOE and the

eighteen petroleum resellers and retailers listed in the Appendix to

this Decision and Order (hereinafter collectively referred to as the

consenting firms). In accordance with the provisions of the

procedural regulations at 10 C.F.R. Part 205, Subpart V (Subpart V),

the ERA requests in its Petitions that the OHA establish special

procedures to make refunds in order to remedy the effects of

regulatory violations set forth in the Consent Orders.

I. Background

Each of the consenting firms was a reseller or retailer of

refined petroleum products during the periods relevant to this

proceeding. ERA audits of the consenting firms revealed possible

violations of the Mandatory Petroleum Price Regulations.

Subsequently, each of these firms entered into a separate Consent

Order with the DOE in order to settle its disputes with the DOE

concerning certain sales of refined petroleum products. Pursuant to

these Consent Orders, the firms agreed to pay to the DOE specified

amounts in settlement of their potential liability with respect to

sales to their customers during the settlement periods. The firms'

payments are currently being held in separate interest-bearing

accounts pending [[Page 28604]] distribution by the DOE. The names

of the firms, their addresses, the dates of the settlement periods

and of the Consent Orders, the amount received from each firm, and

the products covered by each Consent Order are set forth in the

Appendix to this Decision.

II. Jurisdiction and Authority

The Subpart V regulations set forth general guidelines which may

be used by the OHA in formulating and implementing a plan of

distribution of funds received as a result of an enforcement

proceeding. The DOE policy is 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, see Petroleum Overcharge Distribution and Restitution Act

of 1986, 15 U.S.C. Secs. 4501 et seq. (PODRA), Office of

Enforcement, 9 DOE para. 82,508 (1981), and Office of Enforcement, 8

DOE para. 82,597 (1981) (Vickers).

III. Refund Procedures

On April 3, 1995, 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 60 Fed. Reg. 18809 (April 13, 1995).

More than 30 days have elapsed and the OHA has received no comments

concerning these proposed refund procedures. Consequently, the

procedures will be adopted as proposed.

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 of such a proceeding, those who bought refined petroleum

products from the consenting firms may apply for refunds, which are

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 period covered by the consent order. In the

second stage, any funds remaining after all first-stage claims are

decided are distributed in accordance with PODRA.

In the 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 consenting firms. In particular, we have

been unable to obtain any information on the volumes of the relevant

petroleum products sold by the consenting firms during the

settlement 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 claims

submitted by persons who purchased the products specified in the

Appendix from the consenting firms during the periods shown in the

Appendix. We will work with those claimants to develop additional

information that would enable us to determine who should receive

refunds and in what amounts.

To apply for a refund from any of the Consent 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,

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.1

\1\ Under the Privacy Act of 1974, the submission of a social

security number by an individual applicant is voluntary. An

applicant that does not 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, auditing 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.

(2) A monthly purchase schedule covering the relevant settlement

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 gasoline 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 should be

submitted;

(4) If the applicant is or was in any way affiliated with the

consenting firm, it should explain this affiliation, including the

time period in which it was affiliated; 2

\2\ As in other refund proceedings involving alleged refined

product violations, the DOE will presume that affiliates of a

consenting firm were not injured by the firm's overcharges. See,

e.g., Marathon Petroleum Co./EMRO Propane Co., 15 DOE para. 85,288

(1987). This is because the consenting 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 para. 85,611 (1987),

amended claim denied, 17 DOE para. 85,291 (1988), reconsideration

denied, 20 DOE para. 85,236 (1990). Furthermore, if an affiliate of

the consenting firm were granted a refund, the consenting firm would

be indirectly compensated from a Consent 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. 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.

All applications should be either typed or printed and clearly

labeled with the name and case number of the relevant consenting

firm. 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 September 29, 1995, and sent to: Office of

Hearings and Appeals, Department of Energy, 1000 Independence Ave.,

S.W., Washington, D.C. 20585.

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 para. 85,017

(1993); Texaco Inc., 20 DOE para. 85,147 (1990); Shell Oil Co., 18

DOE para. 85,492 (1989). We will also require strict compliance with

the filing requirements as specified in 10 C.F.R. Sec. 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 before granting any refund in these proceedings.

If no claims are received, we will distribute all of the funds

received from the consenting firms in accordance with the provisions

of PODRA. See Green Oil Company, 20 DOE para. 85,450 (1990). PODRA

requires that the Secretary of Energy determine annually the amount

of oil 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 those responsibilities to the

OHA, and any funds that the OHA determines will not be needed to

effect direct restitution to injured customers 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 firms listed in the Appendix to this

Decision and Order pursuant to the Consent Orders whose dates are

set forth in the Appendix may now be filed. [[Page 28605]]

(2) Applications for Refund must be postmarked no later than

September 29, 1995.

George B. Breznay,

Director, Office of Hearings and Appeals.

Date: May 19, 1995.

Appendix

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Date of

Case No. Firm Address Settlement period consent Amount Product

order received

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LEF-0061 Bell Fuels, Inc............ 4116 W. Peterson Ave., 1/1/79-11/30/79 8/31/82 $33,973.12 Gasoline.

Chicago, IL 60646.

LEF-0062 Este Oil Co................ 5556 Vine St., Cincinnati, 11/1/73-1/28/81 5/13/83 63,033.90 Refined petroleum

OH 45217. products.

LEF-0063 G&G Oil Co. of Indiana, 220 E. Centennial Ave., 4/1/79-12/31/79 2/1/83 49,097.11 Do.

Inc.. Muncie, IN 47305.

LEF-0064 General Petroleum Products, P.O. Box 209, Gary, IN 11/1/73-4/30/74 7/13/83 23,060.52 Do.

Inc.. 46402.

LEF-0065 Reco Petroleum, Inc........ 100 N. 4th St., Reading, 3/1/79-1/30/81 2/8/83 26,472.40 Gasoline.

PA 19601.

LEF-0066 SOS Monarch Oil Corp....... East Village Rd., Tuxedo, 4/1/79-9/30/79 10/25/82 5,901.03 Do.

NY 10987.

LEF-0067 Capitol 66 Oil Co.......... P.O. Box 2839, Jackson, MS 11/1/73-3/31/74 9/15/82 15,766.43 Refined petroleum

39207. products.

LEF-0068 Cumberland Farms Dairy, 777 Dedham St., Canton, MA 1/1/73-1/28/81 4/17/83 183,193.74 Gasoline.

Inc.. 02021.

LEF-0069 Kickapoo Oil Co............ 215 E. Madison, Hillsboro, 3/1/79-8/31/79 9/24/82 40,812.58 Propane.

WI 54634.

LEF-0070 Lampton-Love, Inc.......... P.O. Drawer 1607, Jackson, 11/73-4/74 9/30/82 12,983.93 Gasoline.

MS 39205.

LEF-0071 Skinny's Inc............... 5189 Texas Ave., Abilene, 3/1/79-3/31/80 9/2/82 16,000.00 Do.

TX 79608.

LEF-0072 Vermont Morgan Corp........ 114 Broadway, Saratoga, NY 4/1/79-6/30/79 4/5/83 20,275.00 Do.

12866.

LEF-0075 Bob's Broadway Shell....... 220 W. 17th St., Santa 8/1/79-5/7/80 10/8/81 2,100.00 Do.

Ana, CA 92708.

LEF-0076 Clearview Gulf............. 3120 Clearview Parkway, 4/1/79-7/15/79 8/14/81 594.84 Do.

Metairie, LA 70002.

LEF-0077 E-Z Serve, Inc............. P.O. Box 3579, Abilene, TX 8/19/73-1/27/81 12/27/82 368,550.56 Do.

79604.

LEF-0079 Millbrae Shell............. 825 Spruance Ln., Foster 8/1/79-11/30/79 3/5/82 2,500.00 Do.

City, CA 94404.

LEF-0080 Bob Hutchinson, Inc........ 1334 Breckenridge St., San 8/1/79-11/30/79 3/5/82 1,762.07 Do.

Leandro, CA 94579.

LEF-0116 Maxwell Oil Co., Inc....... P.O. Box 1936, Olympia, WA 5/1/79-12/1/79 9/1/81 275.01 Do.

98507.

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[FR Doc. 95-13305 Filed 5-26-95; 8:45 am]

BILLING CODE 6450-01-P