Case No. RF272-98600
June 27, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Applications for Refund
Names of Petitioners: Bay State Gas Co., Inc. et al.
Dates of Filing: July 5, 1994 et al.
Case Numbers: RF272-98600 et al.
This Decision and Order will consider 21 Applications for Refund that were submitted by purchasers of refined petroleum products during the period August 19, 1973, through January 27, 1981 (the crude oil price control period). These applicants have requested refunds from crude oil monies available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) pursuant to the OHA's authority under 10 C.F.R. Part 205, Subpart V. The names of the claimants and the volumes of refined petroleum products that they purchased are set forth in the Appendices to this Decision.
This refund proceeding was instituted to allow purchasers of refined petroleum products during the price control period to apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. Statement of Modified Restitutionary Policy in Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986). We established refund procedures for these funds, which have been made available through consent orders entered into by the DOE and numerous firms that sold crude oil during the crude oil 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 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. However, as we discussed in City of Columbus, Georgia, 16 DOE ¶ 85,550 (1987), applicants who were end- users of petroleum products and whose businesses were not covered by the DOE's or its predecessors' price controls are presumed to have been injured.
Generally, a claimant is eligible for a refund equal to the number of gallons it purchased multiplied by $0.0016. We derived this volumetric refund amount by dividing the total crude oil refund monies currently available by the total U.S. consumption of petroleum products during the period of crude oil price controls (2,020,997,335,000 gallons).
Each of the claimants has submitted all of the information required of crude oil applicants.(1) Specifically, they have all submitted actual or estimated volume claims, and documentation for those claims. We have thoroughly examined the information submitted, and we conclude that the estimation techniques used are reasonable and that the volumes claimed reflect accurately the applicants purchases. We will therefore approve the applicants gallonage claims.
Twenty of the twenty-one claimants purchased their refined petroleum products for use in businesses that are unrelated to the petroleum industry and did not resell those products.(2) They are therefore end-users of refined petroleum products and are presumed to have been injured by the crude oil overcharges. Accordingly, the applicants are entitled to receive their full allocable shares of the crude oil monies.
The refund amount granted to each applicant is set forth in the Appendices to this Decision and Order. The total volume approved in this Decision is 239,397,480 gallons of refined petroleum products, and the total of the refunds granted is $383,034.
The final deadline for applications in the crude oil refund proceeding was June 30, 1995. It is the current policy of the DOE to pay eligible crude oil refund claimants at the rate of $0.0016 per gallon. We will decide whether sufficient crude oil overcharge funds are available for additional refunds for this applicant 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 Applications for Refund filed by the claimants listed in the Appendices to this Decision and Order for all available crude oil overcharge funds are hereby approved 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 a total of $383,034 from the DOE deposit fund escrow account denominated Crude Tracking - Claimants 4, Account Number 999DOE010Z, maintained at the Department of the Treasury to the applicants set forth in the Appendices to this Decision and Order. The refund checks for the applicants set forth in Appendix A shall be remitted to those applicants at the addresses set forth in that Appendix. The refund checks for the applicants set forth in Appendix B shall be made payable to [Applicants Name] or Wilson, Keller & Associates, and shall be sent to the following address: Wilson, Keller & Associates, P.O. Box 221145, Memphis, TN, 38122.
(3) To facilitate the payment of future refunds, the applicants 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
(4) The determinations made in this Decision and Order are based upon the presumed validity of the statements and documentary materials submitted by the applicants. These determinations may be revoked or modified at any time upon a finding that the basis underlying any refund application is incorrect.
(5) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: June 27, 1997
(1)1/ Interested parties were provided with an opportunity to submit comments regarding individual crude oil refund applications. No such comments were filed with respect to the applications considered in this Decision.
(2)2/ One of the applicants, Bay State Gas Co. (Bay State) (RF272- 98600), seeks a refund based in part on its purchases of propane. In its application, Bay State indicates that it used the bulk of its propane purchases in its capacity as a natural gas utility, i.e., as an additive to the natural gas stream. However, the applicant also sold a portion of the propane on a retail or wholesale basis. In Subpart V refund proceedings, we have generally regarded refund applications filed by utilities as claims filed on behalf of their customers because overcharges in sales to utilities were generally passed through to its customers on a dollar-for-dollar basis, and because utilities are in a uniquely advantageous position to pass through any refunds received to their customers. Thus, the end-user presumption of injury is applicable to this claim as it regards the volumes of refined petroleum products that Bay State used in its capacity as a natural gas utility. Bay State has certified that it will pass through any refund to its customers.
In contrast, we have not established a presumption of injury for resellers of refined petroleum products. This is because the DOE regulations operated to spread crude oil overcharges evenly throughout the petroleum industry. See Mazer Chemicals, 22 DOE ¶ 85,109 (1992). Since these overcharges equally affected all resellers and retailers, we believe that their selling prices generally increased. It would be unreasonable to presume, therefore, that any reseller was injured by crude oil overcharges. Instead, we require a detailed demonstration that a reseller was unable to pass through the effects of crude oil overcharges to its customers. Because Bay State has not made such a showing regarding its reseller volumes of propane, we will subtract those volumes from its refund claim.
Appendix
CASE NO. APPLICANT CONTACT STREET ADDRESS CITY/STATE VOLUME REFUND RF272-98600 BAY STATE GAS CO. C/O THOMAS W. SHERMAN 300 FRIBERG PKWY. WESTBOROUGH, MA 015815039 136,975,299 $219,160 RF272-98601 BUSH CONSTRUCTION CO., INC. C/O JIMMY BOUNDS P.O. BOX 8327 LAUREL, MS 394418327 5,666,192 $9,066 RF272-98635 PENN VENDING CO. C/O RONALD BERSHAD 1028 BROADMOOR BRYN MAWR, PA 19010 768,000 $1,229 TOTALS: 3 143,409,491 $229,455 CASE NO. APPLICANT FIRM CONTACT VOLUME REFUND RF272-98648 L.J. DENNY & SON TRUCKING OR WILSON, KELLER & ASSOCIATES C/O DAVID H. MARCHBANKS 1,670,108 $2,672 RF272-98651 KAPRAUN TRANSPORT, INC. OR WILSON, KELLER & ASSOCIATES C/O ALBERT KAPRAUN 9,663,406 $15,461 RF272-98652 PACIFIC STORAGE, INC. OR WILSON, KELLER & ASSOCIATES C/O B.L. CORDOVA 780,831 $1,249 RF272-98654 BILL RACKLEY TRUCKING, INC. OR WILSON, KELLER & ASSOCIATES C/O BILL RACKLEY 3,234,651 $5,175 RF272-98656 CAROLINA CARTAGE CO.; ET AL OR WILSON, KELLER & ASSOCIATES FLEXI-VAN CORP. 9,651,440 $15,442 RF272-98659 CAL-COAST CARRIERS, INC. OR WILSON, KELLER & ASSOCIATES ANDY & PETER RADONICH 1,753,989 $2,806 RF272-98661 KLINE TRUCKING, INC. OR WILSON, KELLER & ASSOCIATES C/O JAMES L. KLINE 2,639,439 $4,223 RF272-98662 PABCO ROOFING DIV. OR WILSON, KELLER & ASSOCIATES PACIFIC COAST BLDG. PROD. 1,000,560 $1,601 RF272-98664 FISCHBACH TRUCKING CO. OR WILSON, KELLER & ASSOCIATES C/O CHARLES CARST 6,853,734 $10,966 RF272-98667 DILLIE MOTOR FREIGHT, INC. OR WILSON, KELLER & ASSOCIATES HARRY & CHARLES DILLIE 894,906 $1,432 RF272-98668 CARROLL COUNTY BOARD OF EDUC. OR WILSON, KELLER & ASSOCIATES C/O GARY JOHNSON 1,938,499 $3,102 RF272-98669 SILVER WHEEL FREIGHT LINES OR WILSON, KELLER & ASSOCIATES C/O GEORGE GRILL 14,895,169 $23,832 RF272-98670 WEBB'S TRANSFER, INC. OR WILSON, KELLER & ASSOCIATES C/O J.C. WEBB 1,815,452 $2,905 RF272-98680 T.H. RYAN CARTAGE CO. OR WILSON, KELLER & ASSOCIATES C/O TIM RYAN 2,845,879 $4,553 RF272-98681 B.R. WILLIAMS TRUCKING, INC. OR WILSON, KELLER & ASSOCIATES C/O GREG BROWN 5,066,825 $8,107 RF272-98682 LOGEX TRUCKING OR WILSON, KELLER & ASSOCIATES C/O KYLE MOONEY 15,503,132 $24,805 RF272-98693 KREUGER TRUCKING CO., INC. OR WILSON, KELLER & ASSOCIATES C/O W.E. ANSTROM 1,797,622 $2,876 RF272-98695 MASHKIN FREIGHT & GEN. FREIGHT OR WILSON, KELLER & ASSOCIATES BARI TRANSPORT 13,982,347 $22,372 Totals: 18 95,987,989 $153,579
Last Updated on 7/1/97
By OHA