[Federal Register Volume 62, Number 218 (Wednesday, November 12, 1997)]
[Notices]
[Pages 60708-60709]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29737]


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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 disbursement of $2,451,396 (plus 
accrued interest) in alleged or adjudicated crude oil overcharges 
obtained by the DOE from Crude Oil Purchasing, Incorporated (Case No. 
LEF-0058), Jaguar Petroleum, Incorporated (Case No. LEF-0059), Westport 
Energy Corporation/Westport Petroleum Corporation (Case No. LEF-0113), 
and Gratex Corporation/Compton Corporation (Case No. VEF-0012). The OHA 
has determined that the funds obtained from these firms, plus accrued 
interest, will be distributed in accordance with the DOE's Modified 
Statement of Restitutionary Policy in Crude Oil Cases, 51 FR 27899 
(August 4, 1986).

FOR FURTHER INFORMATION CONTACT:
Bryan F. MacPherson, Assistant Director, Office of Hearings and 
Appeals, Washington, DC 20585-0107, (202) 426-1571.

SUPPLEMENTARY INFORMATION: In accordance with 10 CFR 205.282(c), notice 
is hereby given of the issuance of the Decision and Order set forth 
below. The Decision and Order sets forth procedures that the DOE will 
use to distribute a total of $2,451,396, plus accrued interest, 
remitted to the DOE by (1) Crude Oil Purchasing, Incorporated, (2) 
Jaguar Petroleum, Incorporated, (3) Westport Energy Corporation & 
Westport Petroleum Corporation, and (4) Gratex Corporation/Compton 
Corporation. The DOE is currently holding these funds in interest 
bearing escrow accounts pending distribution.
    The OHA will distribute these funds in accordance with the DOE's 
Modified Statement of Restitutionary Policy in Crude Oil Cases, 51 FR 
27899 (August 4, 1986)(the MSRP). Under the MSRP, crude oil overcharge 
moneys are divided among the federal government, the states, and 
injured purchasers of refined petroleum products. Refunds to the states 
will be distributed in proportion to each state's consumption of 
petroleum products during the price control period. Refunds to eligible 
purchasers will be based on the volume of petroleum products that they 
purchased and the extent to which they can demonstrate injury. Because 
the June 30, 1995, deadline for the crude oil refund applications has 
passed, no new applications from purchasers of refined petroleum 
products will be accepted.

    Dated: October 29, 1997.
George B. Breznay,
Director, Office of Hearings and Appeals.

Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

    Names of Firms: Crude Oil Purchasing, Incorporation; Jaguar 
Petroleum, Incorporated; Westport Energy Corporation & Westport 
Petroleum Corporation; Gratex Corporation/Compton Corporation.
    Dates of Filings: July 20, 1993; July 20, 1993; September 9, 1993; 
March 23, 1995.
    Case Numbers: LEF-0058, LEF-0059, LEF-0113, VEF-0012.
    The Economic Regulatory Administration (ERA) of the Department of 
Energy filed four Petitions for the Implementation of Special Refund 
Procedures with the Office of Hearings and Appeals (OHA). In the 
petitions, ERA asks OHA to distribute funds remitted to the DOE 
pursuant to settlements between Crude Oil Purchasing, Incorporated 
(COP), Jaguar Petroleum, Incorporated (Jaguar), Westport Energy 
Corporation & Westport Petroleum Corporation (Westport), Gratex 
Corporation and its parent, Compton Corporation (Gratex/Compton). A 
total of $2,451,396, plus interest, is available for restitution. All 
of these funds are now being held in interest-bearing escrow accounts 
pending a determination regarding their proper disposition.
    In accordance with the procedural regulations codified at 10 C.F.R. 
Part 205, Subpart V, the ERA requests in its Petitions that the OHA 
establish special refund procedures to remedy the effects of any 
regulatory violations which were resolved by these settlements. This 
Decision and Order sets forth the OHA's final plan to distribute these 
funds.\1\
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    \1\ 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. 4501-07, and Office of Enforcement, 9 DOE para.82,508 
(1981).
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I. Background

    On September 21, 1982, DOE and COP entered into a Consent Order 
which resolved all pending or potential claims that DOE had or may have

[[Page 60709]]

against COP relating to COP's compliance with the federal petroleum 
price and allocation regulations during the period from January 1, 1973 
to January 27, 1981. There is a total of $93,750, plus interest, 
available from COP for restitution.
    On May 31, 1983, DOE and Jaguar entered into a Consent Order which 
resolved all pending or potential claims that DOE had or may have 
against Jaguar relating to Jaguar's compliance with the federal 
petroleum price and allocation regulations during the period from 
November 14, 1979 to January 27, 1981. There is a total of $64,500, 
plus interest, available from Jaguar for restitution.
    On May 11, 1983, the EAR issued a Proposed Remedial Order (PRO) to 
Westport alleging overcharges in the resale of crude oil during the 
period from June 1980 to November 1980. OHA dismissed this PRO after 
Westport was discharged in bankruptcy and DOE was entitled to receive 
payments under the bankruptcy reorganization plan. Under Westport's 
Second Amended Liquidating Plan of Reorganization, approved by the U.S. 
Bankruptcy Court for the District of Colorado on July 30, 1986, 
Westport was required to make payments to DOE, and OHA was directed to 
distribute to the Westport escrow account %35 of any refunds that it 
granted to Westport in other refund proceedings. Thus far, DOE has 
collected a total of $126,172 from Westport. That amount, plus 
interest, is available for restitution.
    ERA filed claims in the bankruptcy cases of Gratex and Compton 
alleging overcharges in the resale of crude oil during the period from 
December 1978 to December 1980. On April 27, 1984, ERA issued a PRO to 
Gratex and Compton based on these same facts. On October 18, 1988, the 
United States Bankruptcy Court for the Northern District of Texas 
approved a Compromise Agreement in the Gratex proceeding which 
obligated Gratex to pay DOE a lump sum plus a percentage of future 
distributions made to unsecured creditors. In 1992, the United States 
Bankruptcy Court for the Northern District of Texas approved a 
compromise agreement in the Compton proceeding. Thus far, Gratex and 
Compton have paid to the DOE the sum of $2,166,974. This amount, plus 
interest, is available for restitution.

II. The Proposed Refund Procedures

    On April 22, 1997, we issued a proposed Decision and Order (PDO) 
that tentatively concluded that ERA's Petitions for the Implementation 
of Special Refund Procedures with respect to the funds collected from 
these four firms should be approved. Notice of Proposed Implementation 
of Special Refund Procedures, 62 Fed. Reg. 23444 (April 30, 1997). In 
each case, we proposed to distribute these funds in accordance with the 
DOE's Modified Statement of Restitutionary Policy in Crude Oil Cases, 
51 Fed. Reg. 27899 (August 4, 1986) (the MSRP). The MSRP has been the 
basis for the distribution in these Subpart V proceedings of all crude 
oil funds DOE has obtained. See Order Implementing the MSRP, 51 Fed. 
Reg. 29689 (August 20, 1986); Notice regarding the Order Implementing 
the MSRP, 52 Fed. Reg. 11737 (April 10, 1987).
    The MSRP was issued as a result of a court-approved Settlement 
Agreement. In re: The Department of Energy Stripper Well Exemption 
Litigation, 653 F. Supp. 108 (D. Kan. 1986) (the Stripper Well 
Settlement Agreement). The MSRP establishes that 40 percent of the 
crude oil funds will be remitted to the federal government, another 40 
percent to the states, and up to 20 percent may be initially reserved 
for payment of claims to injured parties. The MSRP also specifies that 
any monies remaining after all valid claims by injured purchasers are 
paid be disbursed to the federal government and the states in equal 
amounts.
    OHA did not receive any comments on the PDO, and we adopt its 
tentative determination to distribute the funds remitted by COP, 
Jaguar, Westport, and Gratex/Compton in accordance with the MSRP. 
Accordingly, we will reserve 20 percent of these funds for direct 
refunds to claimants.\2\ The remaining 80 percent of the funds 
collected from these firms shall be disbursed in equal shares to the 
states and the federal government for indirect restitution. Refunds to 
the states will be in proportion to the consumption of petroleum 
products in each state during the period of price controls, as set 
forth in Exhibit H of the Stripper Well Settlement Agreement, 6 Fed. 
Energy Guidelines para. 90,509 at 90,687. When disbursed, these funds 
will be subject to the same limitations and reporting requirements as 
all other crude oil monies received by the states under the Stripper 
Well Settlement Agreement. If additional funds are subsequently 
collected from these firms after the issuance of this Decision and 
Order, such funds shall be distributed in the same manner.
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    \2\ It is no longer possible to file an Application for Refund 
from the crude oil funds as the final deadline for such Applications 
was June 30, 1995. See 60 FR 19914 (April 21, 1995). A party that 
submitted a timely claim in the crude oil refund proceeding need not 
file another claim in order to share in the funds at issue in this 
Decision. OHA is currently paying crude oil refund claims at the 
rate of $0.0016 per gallon. We will decide whether additional 
refunds will be made when we are better able to determine how much 
additional money will be collected from firms that have either 
outstanding obligations to the DOE or enforcement cases currently in 
litigation.
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    It Is Therefore Ordered That:
    (1) The Director of Special Accounts and Payroll, Office of 
Departmental Accounting and Financial Systems Development, Office of 
the Controller of the Department of Energy shall take all steps 
necessary to transfer the full balances from the following accounts: 
approximately $93,750, plus all accrued interest, from the Crude Oil 
Purchasing, Incorporated subaccount (Account No. 6A0X00269T), 
approximately $64,500 plus all accrued interest from the Jaguar 
Petroleum, Incorporated subaccount (Account No. 640X00444T), 
approximately $126,172, plus all accrued interest from the Westport 
Energy Corporation & Westport Petroleum Corporation subaccount (Account 
No. 6C0X00292Z), approximately $2,166,974 plus all accrued interest 
from the Gratex Corporation/Compton Corporation subaccount (Account No. 
6A0X00340W), for a total of approximately $2,451,396, plus all accrued 
interest, pursuant to Paragraphs (2), (3), and (4) of this Decision.
    (2) The Director of Special Accounts and Payroll shall transfer 
$980,558 (plus interest) of the funds obtained pursuant to Paragraph 
(1) above into the subaccount denominated ``Crude Tracking--States,'' 
Number 999DOE003W.
    (3) The Director of Special Accounts and Payroll shall transfer 
$980,558 (plus interest) of the funds obtained pursuant to Paragraph 
(1) above into the subaccount denominated ``Crude Tracking--Federal,'' 
Number 999DOE002W.
    (4) The Director of Special Accounts and Payroll shall transfer 
$490,280 (plus interest) of the funds obtained pursuant to Paragraph 
(1) above into the subaccount denominated ``Crude Tracking--Claimants 
4,'' Number 999DOE010Z.
    (5) This is a final Order of the Department of Energy.

    Dated: October 29, 1997.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 97-29737 Filed 11-10-97; 8:45 am]
BILLING CODE 6550-01-M