[Federal Register Volume 60, Number 105 (Thursday, June 1, 1995)]
[Notices]
[Pages 28605-28607]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13306]



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DEPARTMENT OF ENERGY

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 a total of 
$7,280,202, plus accrued interest, in crude oil overcharges obtained by 
the DOE from MAPCO, Inc. and MAPCO International, Inc., Case No. VEF-
0004 (MAPCO). The OHA has determined that the funds obtained from 
MAPCO, plus accrued interest, will be distributed in accordance with 
the DOE's Modified Statement of Restitutionary Policy in Crude Oil 
Cases, 51 Fed. Reg. 27899 (August 4, 1986).

DATE AND ADDRESSES: Applications for Refund should be filed in 
duplicate and sent to: Subpart V Crude Oil Overcharge Refunds, Office 
of Hearings and Appeals, Department of Energy, 1000 Independence Ave., 
SW., Washington, DC 20585
    Applications must be postmarked no later than June 30, 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(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 a total of $7,280,202, plus accrued 
interest, remitted to the DOE by MAPCO, Inc. and MAPCO International, 
Inc. to the DOE. The DOE is currently holding these funds in an 
interest bearing account pending distribution.
    The OHA will distribute these funds in accordance with the DOE's 
Modified Statement of Restitutionary Policy in [[Page 28606]] Crude Oil 
Cases, 51 Fed. Reg. 27899 (August 4, 1986) (the MSRP). Under the MSRP, 
crude oil overcharge monies 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.
    The deadline for filing Applications for Refund is June 30, 1995. A 
suggested application form may be obtained by sending a written request 
to the address given at the beginning of this notice. All applications 
should also be sent to that address. As we state in the Proposed 
Decision, any party who has previously submitted a refund application 
in the crude oil proceedings should not file another Application for 
Refund. The previously filed crude oil application will be deemed filed 
in all crude oil proceedings as the proceedings are finalized.
    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 Ave., SW., Washington, DC 20585.

    Dated: May 19, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
DEPARTMENT OF ENERGY, WASHINGTON, DC 20585

May 19, 1995.

Decision and Order of the Department of Energy

Implementation of Special Refund Procedures

    Name of Firm: MAPCO International, Inc.
    Date of Filing: February 23, 1995.
    Case Number: VEF-0004.
    On February 23, 1995, 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 crude oil overcharge funds 
received from MAPCO, Inc. (MAPCO) pursuant to a June 23, 1994 
Settlement Agreement. The Settlement Agreement resolved claims and 
litigation arising from an April 21, 1986 Remedial Order originally 
issued to MAPCO Inc.'s subsidiary MAPCO International, Inc. (MAPCO 
International) (Case No. HRO-0193). 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 Petition that the OHA 
establish special procedures to make refunds in order to remedy the 
effects of alleged regulatory violations set forth in the Remedial 
Order. This Decision and Order sets forth the OHA's plan to 
distribute these funds.

I. Background

    During the period relevant to this proceeding, MAPCO 
International, Inc. was a reseller of crude oil. On June 30, 1983, 
the ERA issued a Proposed Remedial Order (PRO) to the firm. The PRO 
alleged that during the period from August 1978 through November 
1980 (the audit period), MAPCO International sold crude oil at 
prices in excess of those permitted by 10 C.F.R. Part 212, Subpart 
L. After considering and dismissing MAPCO International's objections 
to the PRO, the DOE issued a final Remedial Order. 14 DOE para. 
83,019 (1986). MAPCO International appealed the Remedial Order to 
the Federal Energy Regulatory Commission, which affirmed the 
Remedial Order. 43 FERC para. 63,041 (1988); 56 FERC para. 61,063 
(1991). Three years of litigation ensued. MAPCO, MAPCO International 
and the DOE finally resolved all their disputes arising from the 
Remedial Order with the June 23, 1994 Settlement Agreement. Pursuant 
to the Settlement Agreement, MAPCO remitted to the DOE the sum of 
$7,280,202, to which interest has since accrued. These funds are 
being held in an interest-bearing escrow account maintained at the 
Department of the Treasury pending a determination regarding their 
proper distribution.

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., Office of Enforcement, 9 DOE 
para. 82,508 (1981), and Office of Enforcement, 8 DOE para. 82,597 
(1981) (Vickers).
    We have considered the ERA's petition that we implement Subpart 
V proceedings with respect to the MAPCO funds and have determined 
that such proceedings are appropriate. This Decision and Order sets 
forth the OHA's plan to distribute these funds.

III. Refund Procedures

    On April 3, 1995, the OHA issued a Proposed Decision and Order 
(PD&O) establishing tentative procedures to distribute the MAPCO 
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. 18812 (April 13, 1995). More 
than 30 days have elapsed and the OHA has received no comments 
concerning the proposed procedures for the distribution of the MAPCO 
funds. Consequently, the procedures will be adopted as proposed.

A. Crude Oil Refund Policy

    We will distribute the monies remitted by MAPCO in accordance 
with DOE's Modified Statement of Restitutionary Policy in Crude Oil 
Cases (MSRP). See 51 Fed. Reg. 27899 (August 4, 1986). The MSRP was 
issued as a result of a court-approved Settlement Agreement In Re: 
The Department of Energy Stripper Well Exemption Litigation, 653 
Fed. Supp. 108 (D. Kan.), 6 Fed. Energy Guidelines para. 90,509 
(1986) (the Stripper Well Settlement Agreement). This policy has 
been applied in all Subpart V proceedings involving alleged crude 
oil violations. See Order Implementing the MSRP, 51 Fed. Reg. 29689 
(August 20, 1986) (the August 1986 Order).
    Under the MSRP, 40 percent of crude oil overcharge funds will be 
refunded to the federal government, another 40 percent to the 
states, and up to 20 percent may initially be reserved for the 
payment of claims to injured parties. The MSRP also specifies that 
any funds remaining after all valid claims by injured purchasers are 
paid will be disbursed to the federal government and the states in 
equal amounts.
    On April 10, 1987, the OHA issued a Notice analyzing the 
numerous comments received in response to the August 1986 Order. 52 
Fed. Reg. 11737 (April 10, 1987) (the April 10 Notice). This Notice 
provided guidance to claimants that anticipated filing refund 
applications for crude oil monies under the Subpart V regulations. 
In general, we stated that all claimants would be required to (1) 
document their purchase volumes of petroleum products during the 
August 19, 1973 through January 27, 1981 crude oil price control 
period, and (2) prove that they were injured by the alleged crude 
oil overcharges. End-users of petroleum products whose businesses 
were unrelated to the petroleum industry would be presumed to have 
been injured by the alleged crude oil overcharges and would not be 
required to submit proof of injury. See City of Columbus, Georgia, 
16 DOE para. 85,550 (1987).
B. Refund Claims

    The amount of money covered by this Decision is $7,280,202, plus 
accrued interest. In accordance with the MSRP, we will initially 
reserve 20 percent of those funds ($1,456,040 in principal, plus 
accrued interest) for direct refunds to applicants who claim that 
they were injured by crude oil overcharges.
    We will evaluate claims in the MAPCO crude oil refund proceeding 
in exactly the same manner as in other crude oil proceedings. As we 
stated in the April 10 Notice, claimants will generally be required 
to document their purchase volumes of petroleum products and prove 
that they were injured as a result of the alleged violations. We 
will presume that the alleged crude oil overcharges were absorbed, 
rather than passed on, by applicants who were (1) end-users of 
petroleum products, (2) unrelated to the petroleum industry, and (3) 
not subject to the regulations promulgated under the Emergency 
Petroleum Price and Allocation Act of 1973, 15 U.S.C. Secs. 751-
760h. In order to receive a refund, such claimants need not submit 
any evidence of injury beyond documentation of their purchase 
volumes. It is the current policy of the DOE to pay all crude oil 
refund claims at the rate of $0.0016 per gallon. [[Page 28607]] 
    As has been stated in earlier Decisions, a crude oil refund 
applicant will only be required to submit one application for its 
share of all available crude oil overcharge funds. See, e.g., 
A.Tarricone Inc., 15 DOE para.85,475 (1987). A party that has 
already submitted a claim in any other crude oil refund proceeding 
implemented by the DOE need not file another claim. The deadline for 
filing an Application for Refund is June 30, 1995. See 60 Fed. Reg. 
19914 (April 21, 1995). Any claimant that has executed a valid 
waiver pursuant to one of the escrow accounts established by the 
Stripper Well Agreement, however, has waived its right to file an 
application for a Subpart V crude oil refund. See Mid-American 
Dairymen v. Herrington, 878 F. 2d 1448 (Temp. Emer. Ct. App.), 3 
Fed. Energy Guidelines para.26,617 (1989); In re: Department of 
Energy Stripper Well Exemption Litigation, 707 F. Supp. 11267 (D. 
Kan.), 3 Fed. Energy Guidelines ] 26,613 (1987).
    To apply for a refund, a claimant should submit an Application 
for Refund. Each crude oil Application for Refund should contain the 
information specified by the OHA in past decisions. See Texaco Inc., 
19 DOE para.85,200 at 88,374, corrected, 19 DOE para.85,236 (1989); 
Hood Goldsberry, 18 DOE para.85,902 at 89,477-78 (1989); Wickett 
Refining Co., 18 DOE para.85,659 at 89,081-82 (1989). All 
applications should be postmarked no later than June 30, 1995 and 
sent to: Subpart V Crude Oil Overcharge Refunds, Office of Hearings 
and Appeals, Department of Energy, 1000 Independence Ave., S.W., 
Washington, D.C. 20585.
    Although an applicant is not required to use any specific form 
for its crude oil refund application, the OHA has prepared a 
suggested form, which may be obtained by sending a written request 
to the address given above.

D. Payments to the States and Federal Government

    Under the terms of the MSRP, the remaining 80 percent of the 
amount remitted by MAPCO, or $5,824,162 in principal, plus accrued 
interest, will be disbursed in equal shares to the states and 
federal government for indirect restitution. Refunds to the states 
will be in proportion to the consumption of petroleum products in 
each state during the crude oil price control period. The share of 
the funds allocated to each state is contained in Exhibit H of the 
Stripper Well Agreement. When disbursed, these funds will be subject 
to the same limitations and reporting requirements that apply to any 
other crude oil overcharge funds received by the states in 
accordance with the Stripper Well Agreement.
    It Is Therefore Ordered That:
    (1) Applications for Refund from the alleged crude oil 
overcharges remitted to the Department of Energy by MAPCO, Inc. 
pursuant to the Settlement Agreement dated June 23, 1994 may now be 
filed.
    (2) All crude oil refund applications submitted pursuant to 
Paragraph (1) above must be postmarked no later than June 30, 1995.
    (3) The Director of Special Accounts and Payroll, Office of 
Departmental Accounting and Financial Systems Development, Office of 
the Controller, Department of Energy, shall transfer a total of 
$2,912,081, plus accrued interest, from the subaccount denominated 
``MAPCO International,'' Consent Order No. 6C0X00270W, into the 
subaccount denominated ``Crude Tracking-States,'' Account No. 
999DOE003W.
    (4) The Director of Special Accounts and Payroll shall transfer 
a total of $2,912,081, plus accrued interest, from the subaccount 
denominated ``MAPCO International,'' Consent Order No. 6C0X00270W, 
into the subaccount denominated ``Crude Tracking-Federal,'' Account 
No. 999DOE002W.
    (5) The Director of Special Accounts and Payroll shall transfer 
a total of $1,456,040, plus accrued interest, from the subaccount 
denominated ``MAPCO International,'' Consent Order No. 6C0X00270W, 
into the subaccount denominated ``Crude Tracking-Claimants 4,'' 
Account No. 999DOE0010Z.
    (6) This is a final Order of the Department of Energy.

Date: May 19, 1995.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 95-13306 Filed 5-31-95; 8:45 am]
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