Case No. RF272-98663
October 2, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Petitioner: Nationwide Utilities/Inactive Corp., Inc.
Date of Filing: July 5, 1994
Case Number: RF272-98663
This Decision and Order will consider an Application for Refund filed by Nationwide Utilities/Inactive Corp., Inc. (Nationwide) in the Department of Energys (DOE) Subpart V crude oil refund proceeding.(1) Nationwide was a purchaser of refined petroleum products during the period from August 19, 1973 through January 27, 1981 (the crude oil price control period).
Pursuant to DOE policy, purchasers of refined petroleum products could apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. Statement Of Modified Restitutionary Policy To Be Implemented In Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986). We established refund procedures for these funds which had been made available through consent orders entered into by the DOE and numerous firms that sold crude oil during the price control period. E.g., Berry Holding Co., 16 DOE ¶ 85,405 (1987); A. Tarricone, Inc., 15 DOE ¶ 85,495 (1987) (Tarricone); Mountain Fuel Supply Co., 14 DOE ¶ 85,475 (1986). The refund procedures set forth in these cases specify that in order to receive a refund, an applicant generally must: (1) document its purchase volumes; and (2) show that it was injured by alleged crude oil overcharges.
We have carefully reviewed Nationwides application, and we conclude that the firm has not established its eligibility for a
refund.(2) See Chet's Cedarville Quicki Stop, 17 DOE ¶ 85,081 (1988). In Subpart V proceedings, applicants generally are required to prove injury (i.e., that they did not pass the overcharges through to their own customers). In certain refined product refund proceedings, we have established injury presumptions for certain classes of resellers and retailers. See, e.g., Marathon Petroleum Co., 14 DOE ¶ 85,269 (1986); Mobil Oil Corp., 13 DOE ¶ 85,339 (1985). Because these overcharges were confined to purchasers of refined products from a specific consent order firm, these purchasers were likely to have been placed at a competitive disadvantage relative to purchasers who were not overcharged.
In contrast, no such injury presumptions have been adopted for resellers or retailers applying for refunds in the Subpart V crude oil refund proceedings. The Entitlements Program, 10 C.F.R. § 211.67, spread crude oil overcharges evenly throughout the petroleum industry. (3) Since crude oil overcharges equally affected all resellers and retailers (including Nationwide and its competitors), regardless of supplier, we believe that resellers' and retailers' selling prices generally increased. See Tarricone, 15 DOE at 88,896. It would be unreasonable to presume, therefore, that any resellers or retailers were injured by crude oil overcharges. Instead, we require a detailed demonstration that the reseller or retailer was unable to pass through the effects of crude oil overcharges to its own customers. Nationwide has not submitted any reasoned arguments or information indicating that it was injured by crude oil overcharges. Accordingly, its Application for Refund should be denied.
It Is Therefore Ordered That:
(1) The Application for Refund filed by Nationwide Utilities/Inactive Corp., Inc. on July 5, 1994 is hereby denied.
(2) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: October 2, 1997
(1)1/ Despite its name, Nationwide was a retailer, and not a publicly regulated utility. See memorandum of September 11, 1997 telephone conversation between Chris Edwards, Wilson, Keller & Associates, and Robert Palmer, OHA Staff Attorney.
(2)2/ Interested parties were given an opportunity to submit comments regarding individual crude oil refund applications. No such comments were filed with respect to Nationwides application.
(3)3/ The Department of Energy established the Entitlements Program to equalize access to the benefits of crude oil price controls among all domestic refiners and their downstream customers. To accomplish this end, refiners were required to make transfer payments among themselves through the purchase and sale of "entitlements." Because of the manner in which the program worked, it had the effect of dispersing overcharges resulting from crude oil miscertifications throughout the domestic refining industry. See Amber Refining, Inc., 13 DOE ¶ 85,217 (1985).