[Federal Register Volume 60, Number 117 (Monday, June 19, 1995)] [Notices] [Pages 32007-32010] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 95-14916] ----------------------------------------------------------------------- DEPARTMENT OF ENERGY Notice of Implementation of Special Refund Procedures SUMMARY: The Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) announces the procedures [[Page 32008]] for the disbursement of $75,638.48, plus accrued interest, in refined petroleum product violation amounts obtained by the DOE pursuant to an April 10, 1985 Modified Remedial Order issued to Mockabee Gas & Fuel Oil Co. (Mockabee), Case No. VEF-0001. The OHA has determined that the funds obtained from Mockabee, plus accrued interest, will be distributed to customers who purchased No. 2 heating oil and kerosene from Mockabee during the period of November 1, 1973 through December 31, 1975. ADDRESS: Applications must be filed in duplicate, addressed to ``Mockabee Gas & Fuel Oil Co. Special Refund Proceeding'' 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 case number ``VEF-0001.'' FOR FURTHER INFORMATION CONTACT: Thomas O. Mann, Deputy Director, Roger Klurfeld, Assistant Director, Office of Hearings and Appeals, 1000 Independence Ave., SW., Washington, DC 20585, (202) 586-2094 (Mann); 586-2383 (Klurfeld). SUPPLEMENTARY INFORMATION: In accordance with 10 C.F.R. Sec. 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 to eligible claimants $75,638.48, plus accrued interest, obtained by the DOE pursuant to an April 10, 1985 Modified Remedial Order (MRO) issued to Mockabee Gas & Fuel Oil Co. (Mockabee). In the MRO, the DOE found that, during the period from November 1, 1973 through December 31, 1975, Mockabee sold No. 2 heating oil and kerosene in excess of the maximum lawful selling price, in violation of Federal petroleum price regulations. The OHA has determined to distribute the funds obtained from the firms in two stages. In the first stage, we will accept claims from the identifiable purchasers of No. 2 heating oil and kerosene who may have been injured by the overcharges. The specific requirements which an applicant must meet in order to receive a refund are set out in Section III of the Decision. Claimants who meet these specific requirements will be eligible to receive refunds based on the number of gallons of covered product they purchased from Mockabee. If any funds remain after valid claims are paid in the first stage, they may be used 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. 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, 100 Independence Avenue, SW., Washington, DC 20585. Date: June 12, 1995. George B. Breznay, Director, Office of Hearings and Appeals. June 12, 1995. Decision and Order of the Department of Energy; Implementation of Special Refund Procedures Name of Firm: Mockabee Gas & Fuel Oil Co. Date of Filing: October 18, 1994 Case Number: VEF-0001 On October 18, 1994, the Economic Regulatory Administration (ERA) of the Department of Energy (DOE) filed a Petition for the Implementation of Special Refund Procedures with the Office of Hearings and Appeals (OHA) to distribute $75,638.48, plus accrued interest, which Mockabee Gas & Fuel Oil Co. (Mockabee) remitted to the DOE pursuant to a Modified Remedial Order (MRO) issued by the OHA on April 10, 1985. In accordance with the provisions of the procedural regulations found at 10 C.F.R. Part 205, Subpart V (Subpart V), the ERA requests in its Petition that the OHA establish special procedures to make refunds in order to remedy the effects of the regulatory violations set forth in the MRO. This Decision and Order sets forth the OHA's plan to distribute these funds. I. Background During the period relevant to this proceeding, Mockabee was a retailer of No. 2 heating oil, kerosene, diesel fuel, and motor gasoline in Upper Marlboro, Maryland. On December 18, 1974, the Federal Energy Administration (FEA) issued a Notice of Probable Violation to Mockabee. On January 28, 1975, the FEA issued a Remedial Order (RO) to Mockabee, finding that Mockabee had overcharged purchasers of No. 2 heating oil and kerosene. A further investigation disclosed additional overcharges other than those cited in the RO, and on December 22, 1976, the FEA rescinded the RO and issued a Revised Remedial Order requiring Mockabee to roll back prices to compensate consumers who were overcharged by Mockabee. Mockabee failed to comply with the Revised Remedial Order. On April 10, 1985, the ERA \1\ issued a Modified Remedial Order which rescinded the price rollbacks it had ordered Mockabee to make. Instead, the MRO required Mockabee to pay to the DOE $29,583.08 in assessed overcharges, and an additional $46,071.46 in interest due. On September 30, 1985, Mockabee appealed the MRO to the OHA, which denied the Appeal on December 19, 1985. Mockabee Gas & Fuel Oil Co., 13 DOE para. 83,059 (1985). Mockabee has since remitted $75,638.48 in compliance with the MRO, which is now available for distribution through Subpart V. \1\ Under the DOE Organization Act, 42 U.S.C. 7151, et seq., and Executive Order 12009, 42 Fed. Reg. 46367 (September 25, 1977), all functions vested by law in the FEA were transferred to and vested in the DOE. Within the DOE, the ERA was delegated the authority to investigate violations of applicable regulations and to seek compliance of those regulations. --------------------------------------------------------------------------- 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 for the 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 (PODRA), 15 U.S.C. 4501 et seq.; Office of Enforcement, 9 DOE para. 82,508 (1981); Office of Enforcement, 8 DOE para. 82,597 (1981). We considered ERA's Petition that we implement a Subpart V proceeding with respect to the funds remitted by Mockabee and determined that such a proceeding was appropriate. On January 11, 1995, the OHA issued a Proposed Decision and Order (PD&O) establishing tentative procedures to distribute the money remitted by Mockabee (the Mockabee fund). That PD&O was published in the Federal Register and a 30-day period was provided for submission of comments regarding our proposed refund plan. See 60 FR 3863 (January 19, 1995). More than 30 days have elapsed, and the OHA has received no comments concerning the proposed refund procedures. Consequently, the procedures will be adopted as proposed. [[Page 32009]] III. Mockabee Refund Procedures We will implement a two-stage refund procedure for distribution of the Mockabee fund by which purchasers of No. 2 heating oil and kerosene from Mockabee during the period covered by the MRO may submit Applications for Refund in the initial stage. From our experience with Subpart V proceedings, we expect that applicants generally will be limited to ultimate consumers (``end users''). Therefore, we do not anticipate that it will be necessary to employ the injury presumptions that we have used in past proceedings in evaluating applications submitted by refiners, resellers, and retailers.\2\ \2\ If a refiner, reseller, or retailer should file an application in this refund proceeding, however, we will utilize the standards and appropriate presumptions established in previous proceedings. See, e.g., Stark's Shell Service, 23 DOE para. 85,017 (1993); Shell Oil Co., 18 DOE para. 85,492 (1989). --------------------------------------------------------------------------- A. First Stage Refund Procedures In order to receive a refund, each claimant must submit a schedule of its monthly purchases of No. 2 heating oil or kerosene from Mockabee during the period covered by the MRO--November 1, 1973 through December 31, 1975. Our experience also indicates that the use of certain presumptions permits claimants to participate in the refund process without incurring inordinate expense and ensures that refund claims are evaluated in the most efficient manner possible. See, e.g., Marathon Petroleum Co., 14 DOE para. 85,269 (1986) (Marathon). Presumptions in refund cases are specifically authorized by the applicable Subpart V regulations at 10 C.F.R. Sec. 205.282(e). Accordingly, we adopt the presumptions set forth below. 1. Calculation of Refunds First, we adopt a presumption that the overcharges were dispersed equally over all of Mockabee's sales of products covered by the MRO during the period covered by the MRO. See Permian Corp., 23 DOE para. 85,034 (1993). In accordance with this presumption, refunds are made on a pro-rata or volumetric basis.\3\ In the absence of better information, a volumetric refund is appropriate because the DOE price regulations generally required a regulated firm to account for increased costs on a firm-wide basis in determining prices. \3\ If an individual claimant believes that it was injured by more than its volumetric share, it may elect to forego this presumption and file a refund application based upon a claim that it suffered a disproportionate share of Mockabee's overcharges. See, e.g., Mobil Oil Corp./Atchison, Topeka and Santa Fe Railroad Co., 20 DOE para. 85,788 (1990); Mobil Oil Corp./Marine Corps Exchange Service, 17 DOE para. 85,714 (1988). Such a claim will be granted if the claimant makes a persuasive showing that it was ``overcharged'' by a specific amount, and that it absorbed those overcharges. See Panhandle Eastern Pipeline Co./Western Petroleum Co., 19 DOE para. 85,705 (1989). To the degree that a claimant makes this showing, it will receive an above-volumetric refund. --------------------------------------------------------------------------- Under the volumetric approach, a claimant's ``allocable share'' of the Mockabee fund is equal to the number of gallons of covered product purchased from Mockabee during the period covered by the MRO times the per gallon refund amount. In the present case, the per gallon refund is $0.0612. We derived this figure by dividing the monies remitted by Mockabee ($75,638.48) by the total volume of covered products sold by Mockabee from November 1, 1973 through December 31, 1975 (1,236,132 gallons). A claimant that establishes its eligibility for a refund will receive all or a portion of its allocable share plus a pro-rata share of accrued interest.\4\ \4\ As in previous cases, we establish a minimum refund amount of $15. In this proceeding, any potential claimant purchasing less than 245 gallons of covered product from Mockabee would have an allocable share of less than $15. We have found through our experience that the cost of processing claims in which refund amounts of less than $15 are sought outweighs the benefits of restitution in those instances. See Exxon Corp., 17 DOE para. 85,590 (1988). --------------------------------------------------------------------------- In addition to the volumetric presumption, we also adopt a presumption regarding injury for end-users. 2. End Users In accordance with prior Subpart V proceedings, we adopt the presumption that an end user or ultimate consumer of covered products purchased from Mockabee whose business is unrelated to the petroleum industry was injured by the overcharges resolved by the MRO. See, e.g., Texas Oil and Gas Corp., 12 DOE para. 85,069 at 88,209 (1984). Unlike regulated firms in the petroleum industry, members of this group generally were not required to keep records which justified selling price increases by reference to cost increases. Consequently, analysis of the impact of the overcharges on the final price of goods and services produced by members of this group would go beyond the scope of the refund proceeding. Id. Therefore, end-users of covered products purchased from Mockabee need only document their purchase volumes from Mockabee during the period covered by the MRO to make a sufficient showing that they were injured by the overcharges. B. Refund Application Requirements To apply for a refund from the Mockabee fund, a claimant should submit an Application for Refund containing all of 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. \5\ If the applicant operated under more than one name or under a different name during the price control period, the applicant should specify those names; \5\ 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 Restititution Act of 1986 and other regulations codified at 10 CFR Part 205, Subpart V. The information may be shared with other federal agencies for statistical, auditing or archival 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 Remedial Order period (November 1, 1973 through December 31, 1975). The applicant should specify the source of this gallonage information. In calculating its purchase volumes, an applicant should use actual records from the Remedial Order period, if available. If these records are not available, the applicant may submit estimates of its purchases of covered products, but the estimation method must be reasonable and clearly 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 this 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 Mockabee, it should explain this affiliation, including the time period during which it was affiliated.\6\ \6\ As in other refund proceedings involving alleged refined products violations, the DOE will presume that affiliates of the Remedial Order 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 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 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 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. [[Page 32010]] --------------------------------------------------------------------------- (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, 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 clearly and labeled ``Mockabee Gas & Fuel Oil Co. (Case No. VEF-0001) Special Refund Proceeding.'' 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: Mockabee Gas & Fuel Oil Co. Special Refund Proceeding, Office of Hearings and Appeals, Department of Energy, 1000 Independence Ave., S.W., Washington, DC 20585. C. Refund Applications Filed by Representatives We 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., Stark's 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 closely scrutinize applications filed by filing services. Applications submitted by a filing service should contain all of the information indicated in this Decision. Finally, the OHA reserves the authority to require additional information before granting any refund in this proceeding. Applications lacking the required information may be dismissed or denied. D. Distribution of Funds Remaining After First Stage Any funds that remain after all first stage claims have been decided will be distributed in accordance with the provisions of the Petroleum Overcharge Distribution and Restitution Act of 1986 (PODRA), 15 U.S.C. 4501-07. The 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 monies in the Mockabee fund that the OHA determines will not be needed to effect direct restitution to injured customers will be distributed in accordance with the provisions of the PODRA. It is therefore ordered that: (1) Applications for Refund from the funds remitted to the Department of Energy by Mockabee Gas & Fuel Oil Co. pursuant to the Modified Remedial Order dated April 10, 1985 may now be filed. (2) Applications must be postmarked no later than September 29, 1995. Dated: June 12, 1995. George B. Breznay, Director, Office of Hearings and Appeals. [FR Doc. 95-14916 Filed 6-16-95; 8:45 am] BILLING CODE 6450-01-P