[Federal Register Volume 61, Number 103 (Tuesday, May 28, 1996)]
[Notices]
[Pages 26514-26515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13245]



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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 $1,140,552.84 (plus 
accrued interest) in alleged or adjudicated crude oil overcharges 
obtained by the DOE from Gil-Mc Oil Corporation (Case No. LEF-0054), 
LeClair Operating Company (Case No. LEF-0054), SRG Corporation (Case 
No. LEF-0056), Petroleum Carrier Company (Case No.LEF-0119) and Dane 
Energy Company (LEF-0122). 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 Fed. Reg. 27899 (August 4, 1986).

FOR FURTHER INFORMATION CONTACT: Richard T. Tedrow, Deputy Director, 
Office of Hearings and Appeals, Washington, DC 20585, (202) 426-1562.

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 for the procedures that the DOE has 
formulated to distribute a total of $1,140,553, plus accrued interest, 
remitted to the DOE by Gil-Mc Oil Corporation, LeClair Operating 
Company, SRG Corporation, Petroleum Carrier Company, and Dane Energy 
Company. 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 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. 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 for the 
20 percent of these funds allocated to individual claimants. Instead, 
that share of the funds will be added to the general crude oil 
overcharge pool used for direct restitution.

    Dated: May 16, 1996.
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: Gil-Mc Oil Corporation, LeClair Operating 
Company, SRG Corporation, Petroleum Carrier Company, Dane Energy 
Company.
    Dates of Filings: July 20, 1993, December 7, 1993, April 8, 
1994.
    Case Numbers: LEF-0054, LEF-0055, LEF-0056, LEF-0119, LEF-0122.
    The Economic Regulatory Administration (ERA) of the Department 
of Energy filed five Petitions for the Implementation of Special 
Refund Procedures with the Office of Hearings and Appeals (OHA), to 
distribute funds remitted to the DOE pursuant to settlements between 
Gil-Mc Oil Corporation (Gil-Mc), LeClair Operating Company 
(LeClair), SRG Corporation (SRG), Petroleum Carrier Company, 
(Petroleum Carrier), and Dane Energy Company (Dane). A total of 
$1,140,553, plus interest, is available for restitution. All of 
these funds are now being held in an interest-bearing account 
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. 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. 4501-07 (PODRA), Office of Enforcement, 9 
DOE para. 82,508 (1981), and Office of Enforcement, 8 DOE para. 
82,597 (1981).

I. Background

    On June 16, 1982, the DOE issued a Proposed Remedial Order (PRO) 
to Gil-Mc which alleged that certain first sales of crude oil by 
Gil-Mc had been in excess of applicable ceiling prices during the 
period August 19, 1973 through January 27, 1981. The DOE and Gil-Mc 
entered into a Consent Order on March 29, 1983, which satisfied the 
DOE's claim against Gil-Mc. There is a total of $10,273, plus 
interest, available from Gil-Mc for restitution.
    On June 3, 1982, the DOE issued a PRO to LeClair which alleged 
that certain first sales of crude oil by LeClair had been in excess 
of applicable ceiling prices during the period August 19, 1973 
through January 27, 1981. The DOE and LeClair entered into a Consent 
Order on November 5, 1982, which satisfied the DOE's claim against 
LeClair. There is a total of $70,386, plus interest, available from 
LeClair for restitution.
    On July 23, 1982, the DOE entered into a Consent Order with SRG 
which resolved DOE's claims against SRG. Specifically, the DOE 
alleged that during the period of August 19, 1973 through January 
27, 1981, crude oil was sold from certain properties operated by SRG 
in excess of the applicable lawful ceiling prices. There is a total 
of $171,041, plus interest, available from SRG for restitution.
    On June 26, 1987, the DOE issued a Remedial Order to Petroleum 
Carrier for violations of the crude oil pricing regulations during 
the period from June 1974 through December 1977. The DOE collected a 
total of $18,853 from Petroleum Carrier pursuant to the Remedial 
Order. That amount, plus interest, is available for restitution.
    On December 10, 1992, the DOE issued a Remedial Order to Dane 
for violations of the crude oil pricing regulations during the 
period December 1978 through December 1980. The DOE and Dane entered 
into a Consent Order on December 16, 1993, which

[[Page 26515]]

satisfied the DOE's claim against Dane. There is a total of 
$870,000, plus interest, available from Dane for restitution.

II. The Proposed Decisions

    On October 26, 1993, May 20, 1994, and June 6, 1994, we issued 
Proposed Decisions and Orders (PDOs) that tentatively concluded that 
ERA's Petitions to implement Subpart V proceedings with respect to 
the funds collected from these five firms should be approved. Gil-Mc 
Oil Corp., 58 FR 57595 (October 26, 1993) (also included LeClair and 
SRG); Petroleum Carrier Co., 59 FR 26493 (May 20, 1994); Dane Energy 
Co., 59 FR 29287 (June 6, 1994). In each of the PDOs, we tentatively 
determined that the funds obtained from these firms should be 
distributed in accordance with the DOE's Modified Statement of 
Restitutionary Policy in Crude Oil Cases, 51 FR 27899 (August 4, 
1986) (the MSRP). 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.
    The OHA has utilized the MSRP in all Subpart V proceedings 
involving alleged crude oil violations. See Order Implementing the 
MSRP, 51 FR 29689 (August 20, 1986). This Order provided a period of 
30 days for filing of comments or objections to our proposed use of 
the MSRP as the groundwork for evaluating claims in crude oil refund 
proceedings. Following this period, the OHA issued a Notice 
evaluating the numerous comments which it had received pursuant to 
the Order Implementing the MSRP. This notice was published at 52 FR 
11737 (April 10, 1987).
    The April 10, 1987 Notice contained guidance to assist potential 
claimants wishing to file refund applications for crude oil monies 
under the Subpart V regulations. Generally, 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) show that they were injured by the 
alleged crude oil overcharges. We also specified that end-users of 
petroleum products whose businesses were unrelated to the petroleum 
industry will be presumed to have been injured by the alleged crude 
oil overcharges. End-users, therefore, need only submit 
documentation of their purchase volumes. See City of Columbus, 
Georgia, 16 DOE para. 85,550 (1987). Additionally, we stated that we 
would calculate crude oil refunds on a per gallon (or volumetric) 
basis. We obtained this figure by dividing the crude oil refund pool 
by the total consumption of petroleum products in the United States 
during the crude oil price control period. OHA is currently paying 
crude oil refund claims at the rate of $0.0016 per gallon. We will 
decide whether sufficient crude oil overcharge funds are available 
for additional refunds 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.

III. The Refund Procedure

    No comments were received on the PDOs, and we adopt the 
tentative determination to distribute these funds in accordance with 
the MSRP. These standard crude oil procedures will be used to 
distribute the funds remitted by Gil-Mc, LeClair, SRG, Petroleum 
Carrier and Dane. Accordingly, we shall initially reserve 20 percent 
of these funds, $228,110.56, plus accrued interest, for direct 
refunds to claimants in order to ensure sufficient funds will be 
available for injured parties. As we have stated in prior decisions, 
a crude oil refund applicant need only submit one application for 
its share of all available crude oil overcharge funds. See, e.g., A. 
Tarricone, Inc., 15 DOE para. 85,495 (1987). June 30, 1995, was the 
final deadline for filing Applications for Refund from the crude oil 
funds. 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.
    Under the terms of the MSRP, the remaining 80 percent of the 
funds collected from these five 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. The share or ratio of the funds which each state 
will receive is contained 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.
    It Is Therefore Ordered That: 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 $10,273, plus all accrued 
interest, from the Gil-Mc subaccount (Account No. 670C00339T), 
$70,386, plus all accrued interest from the LeClair subaccount 
(Account No. 600C20071T), $171,041, plus all accrued interest from 
the SRG subaccount (Account No. 400C00200T), $18,853, plus all 
accrued interest from the Petroleum Carrier subaccount (Account No. 
6A0X00253Z) and $870,000, plus all accrued interest, from the Dane 
subaccount (Account No. 6A0X00320Z), for a total of $1,140,553, plus 
all accrued interest, pursuant to Paragraphs (2), (3), and (4) of 
this Decision.
    (2) The Director of Special Accounts and Payroll shall transfer 
$456,221 (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 
$456,221 (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 
$228,111 (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: May 16, 1996.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. 96-13245 Filed 5-24-96; 8:45 am]
BILLING CODE 6450-01-P