[Federal Register Volume 59, Number 147 (Tuesday, August 2, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-18780]
[[Page Unknown]]
[Federal Register: August 2, 1994]
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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 announces the procedures for the disbursement of $56,149.35
(plus accrued interest) that Telum, Inc. remitted to the DOE pursuant
to a Consent Order entered into by the DOE and Telum. The OHA has
determined that the funds will be distributed in accordance with the
DOE's special refund procedures, 10 CFR Part 205, Subpart V.
DATES AND ADDRESSES: The Application for Refund must be filed in
duplicate, addressed to ``Telum Special Refund Proceeding,'' and sent
to: Office of Hearings and Appeals, Department of Energy, 1000
Independence Avenue, S.W., Washington, DC 20585.
The application should display a prominent reference to Case Number
LEF-0114 and be postmarked no later than October 31, 1994.
FOR FURTHER INFORMATION CONTACT: Richard W. Dugan, Associate Director,
Andrew W. Beckwith, Staff Analyst, Office of Hearings and Appeals, 1000
Independence Avenue, S.W., Washington, DC 20585, (202) 586-2860
(Dugan), (202) 586-4921 (Beckwith).
SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(c), notice
is hereby given of the issuance of the Decision and Order set out
below. The Decision and Order sets forth the procedures that the DOE
has formulated to distribute monies that have been remitted by Telum,
Inc. to the DOE to settle possible pricing violations with respect to
its sale of middle distillates. The DOE is currently holding $56,149.35
in an interest-bearing escrow account pending distribution.
The OHA has determined to distribute these funds in a refund
process in which we will accept a refund claim from the party injured
as a result of Telum's alleged overcharges. The specific requirements
that the applicant must meet in order to receive the refund are set out
in Section III of the Decision. The claimant who meets these specific
requirements will be eligible to receive a refund of the entire consent
order amount plus any accrued interest. In the event that a valid
refund application is not filed, the funds will be used for indirect
restitution in accordance with the provisions of the Petroleum
Overcharge and Distribution Act of 1986, 15 U.S.C. Secs. 4501-4507.
The Application for Refund must be postmarked no later than 90 days
after publication of this Decision and Order in the Federal Register.
Instructions for the completion of the refund application are set forth
in the Decision that immediately follows this notice. The application
should be sent to the address listed at the beginning of this notice.
All submissions, except those containing confidential information,
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 of the Office of Hearings and Appeals, located in
Room 1E-234, 1000 Independence Avenue, S.W., Washington, D.C. 20585.
Dated: July 25, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.
Decision and Order of the Department of Energy
July 25, 1994.
Implementation of Special Refund Procedures
Name of Firm: Telum, Inc.
Date of Filing: October 7, 1993
Case Number: LEF-0114
In accordance with the procedural regulations of the Department
of Energy (DOE), 10 C.F.R. Part 205, Subpart V, the Economic
Regulatory Administration (ERA) of the DOE filed a Petition for the
Implementation of Special Refund Procedures with the Office of
Hearings and Appeals (OHA) on October 7, 1993. The petition requests
that OHA formulate and implement procedures for the distribution of
funds received pursuant to a consent order entered into by the DOE
and Telum, Inc. (Telum).
I. Background
Telum was a ``reseller-retailer'' of ``covered products'' as
those terms were defined in 6 CFR 150.352 and 10 CFR 212.31.
Therefore, Telum was required to price middle distillate fuel in
accordance with the price rule of the Mandatory Petroleum Price
Regulations set forth at 10 C.F.R. Part 212, Subpart F, and
antecedent regulations at 6 C.F.R. Part 150, Subpart L. As a result
of an audit, the ERA alleged that Telum and entities under Telum's
direction violated the price regulations in sales of middle
distillate fuel to Salt River Project (Salt River) during a five
month period from December 1, 1973, through April 30, 1974 (the
audit period).* The auditors determined that during this period
Telum made sales of middle distillates to Salt River at prices in
excess of the maximum lawful selling price (MLSP) permitted by the
regulations. Consequently, the ERA issued a Proposed Remedial Order
(PRO) to Telum on May 28, 1980, alleging pricing violations in the
sale of middle distillate fuel to Salt River. After revising its
selection of the ``nearest comparable outlet'' with regard to the
``new market'' determination under 10 CFR 212.111(b), the ERA issued
an Amended PRO on September 15, 1986, alleging that Telum had
overcharged Salt River in its sales of middle distillate fuel in the
amount of $357,587. On April 7, 1988, that Amended PRO was remanded
by OHA to the ERA for a new determination regarding Telum's nearest
comparable outlet and a recalculation of MLSPs and any overcharges
in sales to Salt River. Telum, Inc., 17 DOE 83,010 (1988).
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*Telum was incorporated as Bonus Oil Company on August 13, 1968.
Bonus Oil Company's name was changed to Telum, Inc. effective
December 3, 1974. For the purposes of this Decision, we will refer
to the firm only as Telum.
The other entities under Telum's direction, as listed in the
consent order, are: Industrial Fuels, Inc., an Arizona Corporation,
and Giraud Corporation, a Utah corporation.
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The ERA did not issue a second Amended PRO. Instead, on May 30,
1990, the DOE entered into a consent order (No. 820H00020Z) with
Telum to resolve all administrative and civil claims related to
Telum's compliance with the Federal petroleum price and allocation
regulations in its resale transactions of petroleum products during
the period December 1, 1973 through April 30, 1974. Specifically,
Telum agreed to remit $60,000, plus interest, to the DOE for deposit
in an interest-bearing escrow account. Telum has remitted $56,149.35
to the DOE, consisting of $51,626.18 toward payment of the $60,000
principal amount due and $4,523.17 toward payment of interest due on
principal. The DOE has authorized a write-off of the remainder of
the amount due for reasons of uncollectability. Telum is no longer
in business, and Earl K. Cook, the former president of Telum, has
indicated that he is unable to pay the remainder of the amount due.
As of June 30, 1994, $9,615 in interest had accrued in the DOE
escrow account on the amount paid by Telum.
On May 31, 1994, we issued a Proposed Decision and Order in
which we determined that it was appropriate to establish a special
refund proceeding with respect to the Telum consent order fund. In
that Proposed Decision, we tentatively set forth procedures to
distribute a refund to the party that was injured by Telum's alleged
pricing violations in sales of middle distillates during the consent
order period. Specifically, we proposed that Salt River, the party
injured by Telum's alleged pricing violations, be eligible for the
entire consent order fund plus accrued interest. The Proposed
Decision was published in the Federal Register on June 6, 1994 (59
Fed. Reg. 29289), and comments on the proposed refund mechanism were
to be submitted within 30 days of that date. No comments regarding
the Proposed Decision and Order were received. Accordingly, we have
determined that the proposed procedures should be adopted.
The purpose of this Decision and Order is to establish
procedures to be used for filing and processing Salt River's claim
to a refund in this matter. This Decision sets forth the information
that Salt River should submit in order to receive the entire Telum
consent order fund.
I. Jurisdiction
The procedural regulations of the DOE set forth general
guidelines by which the Office of Hearings and Appeals may formulate
and implement a plan of distribution for funds received as a result
of an enforcement proceeding. 10 C.F.R. Part 205, Subpart V. It is
the DOE policy to use the Subpart V process to distribute such
funds. For a more detailed discussion of Subpart V and the authority
of the Office of Hearings and Appeals to fashion procedures to
distribute refunds obtained as part of consent orders, see Office of
Enforcement, 9 DOE 82,553 (1982); Office of Enforcement, 9 DOE
82,508 (1981); Office of Enforcement, 8 DOE 82,597 (1981). As we
stated in the Proposed Decision, we have determined that a Subpart V
proceeding is an appropriate method for distributing the Telum
consent order fund. Therefore, we will grant the ERA's petition and
assume jurisdiction over distribution of the fund.
III. Refund Procedures
A. Refund Claimant
In the Proposed Decision, we determined that insofar as possible
the consent order fund should be distributed to the customer of
Telum who was injured by the alleged overcharges. Salt River, the
only Telum customer who made purchases during the consent order
period that were covered by the PRO and Amended PRO, is the only
Telum customer we identified as likely to have been injured by the
alleged overcharges. Although the Telum consent order covers all
sales of ``covered products'' by Telum for the period December 1,
1973 through April 30, 1974, the ERA audit files, the PRO, and the
Amended PRO are all based only on sales by Telum to Salt River. The
consent order, while lacking in specificity, was clearly arrived at
in order to settle this one outstanding enforcement issue. We are
thus able to use the information contained in the audit files for
guidance as to the identity of Telum's injured customer and the
extent of the alleged overcharges, as we have done in some prior
refund proceedings. See, e.g., Howard Oil Co., 15 DOE 85,072
(1986). Consequently, we are establishing a claims procedure in
which Salt River may apply for a refund equal to the entire consent
order fund. Limiting the universe of applicants to Salt River allows
us to fashion a refund plan that will correspond most closely to the
alleged overcharges settled by the consent order. See Consumers Oil
Co., 13 DOE 85,226 (1985); Marion Corp., 12 DOE 85,014 (1984).
In prior refund proceedings, in order to receive a full refund,
claimants whose prices for goods and services are regulated by a
governmental body, e.g., a public utility, have not been required to
provide a detailed showing of injury. See, e.g., Dorchester Gas
Corp., 14 DOE 85,240 at 88,451 (1986). Instead, regulated firms
have been required to (i) Certify that they will pass any refund
received through to their customers, (ii) provide us with a full
explanation of how they plan to accomplish the restitution, and
(iii) certify that they will notify the appropriate regulatory body
of the receipt of the refund. Id. These requirements are based on
the presumption that, with respect to a regulated firm, any
overcharges would have been routinely passed through to its
customers. Similarly, any refunds received should be passed through
to its customers.
We have been informed by Salt River that the nature of its
business is that of a municipal public power utility whose rates for
electricity are set by a publicly-elected Board of Directors (i.e.,
a governmental body). See Memorandum of April 29, 1994 Telephone
Conversation between John Egan, Spokesperson for Salt River, and
Andrew Beckwith, OHA Staff Analyst. We have determined, therefore,
that Salt River is a regulated firm as that category is defined
above. See City of Lubbock, 18 DOE 85,116 (1988). Accordingly, we
have determined that Salt River, as a regulated firm, need not make
a showing that it was injured by the alleged overcharges. However,
Salt River will be required to comply with the stipulations outlined
above that are incumbent upon regulated firms when submitting an
Application for Refund.
B. Calculation of Refund Amount
As stated above, the ERA audit files identify Salt River as the
Telum customer injured by the alleged overcharges that were the
subject of the consent order. In the Proposed Decision, we indicated
our intention to find Salt River eligible for the entire amount of
the consent order fund as restitution for the alleged overcharges.
We received no comments in opposition to this proposal and therefore
shall adopt it. In addition, Salt River will be eligible to receive
all of the interest that has accrued on the consent order fund.
C. Application for Refund Procedures
An Application for Refund may now be filed by Salt River. Salt
River's Application must be postmarked within 90 days after
publication of this Decision and Order in the Federal Register. See
10 C.F.R. Sec. 205.286. The application must be in writing, signed
by an authorized representative of Salt River, and specify that it
pertains to the Telum, Inc. consent order fund, Case No. LEF-0114.
Salt River's Application for Refund must be filed in duplicate.
A copy of the application will be available for public inspection in
the Public Reference Room of the Office of Hearings and Appeals,
Room 1E-234, 1000 Independence Avenue, S.W., Washington, DC. If Salt
River believes that its application contains confidential
information, it must so indicate on the first page of its
application and submit two additional copies of its application from
which the information that it claims is confidential has been
deleted, together with a statement specifying why any such
information is privileged or confidential.
The application must also indicate whether the applicant or any
person acting on its instructions has filed or intends to file any
other application or claim of whatever nature regarding the matters
at issue in the underlying Telum enforcement proceeding. Salt River
must also certify that it is not related to Telum, the consent order
firm. The application must include the following statement: ``I
swear (or affirm) that the information submitted is true and
accurate to the best of my knowledge and belief.'' See 10 CFR
205.283(c); 18 USC 1001. Furthermore, Salt River should furnish us
with the name, title, and telephone number of a person who may be
contacted by the OHA for additional information concerning the
application. In addition, Salt River's employer identification
number and current address must be listed in the application. The
application should be sent to: Telum, Inc. Consent Order Refund
Proceeding, Office of Hearings and Appeals, U.S. Department of
Energy, Washington, DC 20585.
As indicated above, Salt River should also: (i) Certify that it
will pass any refund received through to its customers, (ii) provide
us with a full explanation of how it plans to accomplish the
restitution, and (iii) certify that it will notify the appropriate
regulatory body of the receipt of the refund.
In the event that Salt River does not file a refund application
that meets the requirements set forth in this Decision and Order,
the funds in the Telum consent order account shall be distributed in
accordance with the provisions of the Petroleum Overcharge
Distribution and Restitution Act of 1986 (PODRA), 15 U.S.C. 4501-07.
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 these
responsibilities to the OHA, and any refined product pool funds in
the Telum consent order escrow account that the OHA determines will
not be used to effect direct restitution to Salt River will be
distributed in accordance with the provisions of PODRA.
It Is Therefore Ordered That:
(1) An Application for Refund from the funds remitted to the
Department of Energy by Telum, Inc. pursuant to the consent order
executed on May 30, 1990, may now be filed.
(2) The application must be postmarked no later than 90 days
after publication of this Decision and Order in the Federal
Register.
Dated: July 25, 1994.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 94-18780 Filed 8-1-94; 8:45 am]
BILLING CODE 6450-01-P