Case No. RG272-00699
May 9, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Applicant:First District Association
Date of Filing: July 3, 1995
Case Number: RG272-699
This Decision and Order will consider the Application for Refund filed by First District Association (First District). The application is based upon First Districts purchases of refined petroleum products during the crude oil price control period (August 19, 1973 through January 27, 1981). First District has requested a refund from crude oil funds available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) under the provisions of 10 C.F.R. Part 205, Subpart V.
In the past, purchasers of refined petroleum products were allowed to apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. 51 Fed. Reg. 27899 (August 4, 1986). We have established refund procedures for these funds, which have been made available through consent orders between 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); Mountain Fuel Supply Co., 14 DOE ¶ 85,475 (1986). The refund procedures that we have established specify that, to receive a refund, an applicant generally must: (1) document its purchase volumes; and (2) show that it was injured by crude oil overcharges.
We have further established that an applicant is presumed to have absorbed rather than passed on crude oil overcharges if it (1) was an end-user (ultimate consumer) of petroleum products; (2) was in a business unrelated to the petroleum industry; and, (3) was not subject to the price regulations of the DOE or its predecessors. 52 Fed. Reg. 11737 (April 10, 1987); City of Columbus, Georgia, 16 DOE ¶ 85,550 (1987). Such an applicant is presumed to have been injured and does not need to provide a showing of injury.
First District is an agricultural cooperative. Its application is based on petroleum products that it purchased for resale to the farmers who were its members. We regard a refund application filed by a cooperative that resold petroleum products to its members as
a claim filed on behalf of the members themselves. Farmers Union Oil Co., 17 DOE ¶ 85,464 (1988). A cooperative can thus claim the presumption of end-user injury to the extent that its members were end-users. Consequently, we will consider granting a refund to a cooperative based on products resold to its members on the condition that it certify that it will pass through the refund to its members.
The farmers who compose First Districts membership are end-users. First District has certified that it will pass through any refund received to its members. We will therefore consider First Districts claim under the presumption of end-user injury.
We have carefully reviewed First Districts application. We also contacted First District by telephone to verify that it is still in business. First Districts gallonage claim consists of 2,268,000 gallons of diesel fuel, 530,734 gallons of propane, and 16,993,170 gallons of natural gas. The number of gallons of natural gas was determined by converting cubic feet to gallons. The Office of Hearings and Appeals has adopted a standard for considering the products for which an applicant can claim a refund in this proceeding. In a Notice published in the Federal Register on July 10, 1992, we announced that we would accept applications based on products that were either (a) designated as covered products in regulations promulgated pursuant to the Emergency Petroleum Allocation Act of 1973 (EPAA), 15 U.S.C. §§ 751-760; (b) purchased from a crude oil refinery; or (c) originated in a crude oil refinery and purchased from a reseller who did not substantially change the products' form. Diesel fuel and propane are considered covered products under the EPAA. Natural gas, however, is not listed as a covered product.
The DOE has previously denied refunds to applicants claiming purchases of natural gas. See Escanaba Public Schools, 16 DOE ¶ 85,602 (1987). First District has not presented any arguments to show why it should receive a refund for purchases of natural gas. Therefore, we do not believe that First District has shown that it is eligible for a refund based on its natural gas purchases.
We find that First District was an end-user of diesel fuel and propane. Accordingly, it is presumed injured by the crude oil overcharges and is entitled to receive its full allocable share of the crude oil funds. The total volume approved in this Decision and Order is 2,798,734 gallons of refined petroleum products. The total refund amount granted, which is calculated by multiplying the approved gallonage claim by the volumetric refund amount of $0.0016 per gallon, is $4,478.
The final deadline for the crude oil proceeding was June 30, 1995. It is the current policy of the DOE to pay eligible crude oil refund applicants at the rate of $0.0016 per gallon. We will decide whether sufficient crude oil overcharge funds are available for additional refunds for this and other successful applicants
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.
It Is Therefore Ordered That:
(1) The Application for Refund filed by First District Association is hereby granted as set forth in Paragraph (2) below.
(2) 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 appropriate action to disburse $4,478 from the DOE deposit fund escrow account denominated Crude Tracking-Applicants 4, Account Number 999DOE010Z, maintained at the Department of Treasury to First District Association, c/o Ray Nelson, Box 842, Litchfield, MN, 55355.
(3) First District shall pass through to its members/patrons any refund that it receives on a dollar-for-dollar basis.
(4) To facilitate the payment of future refunds, First District shall notify the Office of Hearings and Appeals in the event that there is a change of address, or if an address correction is necessary. Such notification shall be sent to:
Director of Management Information
Office of Hearings and Appeals
Department of Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585-0107
(5) The determinations made in this Decision and Order are based upon the presumed validity of the statements and documentary materials submitted by the applicant. These determinations may be revoked or modified at any time upon a finding that the factual basis underlying any Application for Refund is incorrect.
(6) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: May 9, 1997