Case No. RK272-04523
December 16, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Supplemental Order
Names of Petitioners:Congress Financial Corp. (Central)
Franciscan Health Partnership, Inc.
Dates of Filing: July 18, 1997
October 22, 1997
Case Numbers: RK272-04523
RK272-04692
Pursuant to the long-standing policy of the Department of Energy (DOE), thousands of purchasers of petroleum products have applied for, and been granted, refunds from crude oil overcharge funds under jurisdiction of the DOE's Office of Hearings and Appeals (OHA). See Statement of Modified Restitutionary Policy To Be Implemented In Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986). The standards for considering Applications for Refund from these crude oil funds are set forth at 10 C.F.R. Part 205, Subpart V.
The OHA has approved more than 87,000 requests for refund from the pool of crude oil overcharge funds. In Subpart V crude oil refund cases, a claimant is generally eligible for a refund equal to the number of gallons of eligible refined petroleum products it purchased during the period from August 19, 1973 through January 27, 1981, multiplied by a per gallon amount. That per gallon refund amount is derived by dividing the total refund monies available by the total U.S. consumption of petroleum products during the crude oil price control period. Refunds had been calculated by multiplying the number of gallons of eligible refined petroleum products purchased by the applicant by $0.0008 (the volumetric factor). That volumetric factor had been in use since April 1989, when it replaced an earlier volumetric factor of $0.0002 per gallon. Any applicant who received a refund at the lower volumetric factor has also received a supplemental refund based on an additional $0.0006 per gallon. See Crude Oil Supplemental Refund Distribution, 18 DOE ¶ 85,878 (1989).
Additional crude oil overcharge funds have become available for disbursement and we can now issue additional refund checks to applicants. Sufficient funds are available to pay applicants at a new,
aggregate rate of $0.0016 per gallon.(1) Thus, the amount of the supplemental refund will be equal to the refund already received. Refunds are rounded to the nearest dollar.
In order to receive a supplemental refund check, applicants are being required to verify (directly or through their representatives) that their name and address in our records are correct, to correct any information that is not accurate, and to indicate whether there has been any change in circumstances affecting the payment of the refund. We intend to issue a series of Decision and Orders approving supplemental refunds as we receive completed verification forms from all applicants or certifications from their representatives.
This Decision and Order involves requests for supplemental refund in two cases in which there have been changes in circumstance since the initial refund. One applicant, Congress Financial Corp. (Central), hereinafter Congress, submitted an Application for Supplemental Refund on behalf of Hawthorn Mellody, Inc. (HMI). HMI was granted its original crude oil refund on April 5, 1991 (Case No. RF272-28349). The refund of $51,566 was based on 64,458,060 gallons of petroleum products purchased by HMI between August 1973 and January 1981. HMI filed for Chapter 11 bankruptcy in 1992. Later that year, this case was converted to Chapter 7 bankruptcy, and Michael F. Dubis was appointed Trustee. Also in 1992, the judge in the bankruptcy action lifted the automatic stay provision of Section 362, Title 11 of the U.S. Bankruptcy Code as it applied to Congress, to allow Congress to collect all monies available which were owing to HMI. Afterwards, Congress was still owed a principal amount of indebtedness totalling over $2,000,000. Because of these facts, Congress believes it is entitled to supplemental crude oil refund monies due to HMI.
Congress filed a similar Application for Supplemental Refund based on monies owed it by another applicant. See Congress Financial Corporation/Service Control Corporation, 25 DOE ¶ 85,102 (1996). In that case, we rejected Congress claim and granted the supplemental refund to the trustee of the applicants bankruptcy case. In this case, however, we have decided to issue the refund to Congress. We are treating these cases differently because in the instant case, the trustee has submitted an affidavit affirming that he is aware of the monetary amount of this supplemental refund and that Congress is entitled to the entire amount of that supplemental refund. We therefore will comply with the trustees intentions in this matter and grant the $51,566 (64,458,060 gallons x $0.0008 per gallon volumetric) refund to Congress.
The other applicant, Franciscan Health Partnership, Inc., submitted an Application for Supplemental Refund on behalf of St. Mary Hospital (St. Mary). St. Mary was granted its original crude oil refund on December 8, 1988 (Case No. RF272-22637). The refund of $959 was based on 1,198,557 gallons of petroleum products purchased by St. Mary between August 1973 and January 1981. St. Mary was a non-incorporated entity owned by Franciscan Health Partnership, Inc. (Franciscan) that was sold to another hospital on December 31, 1993. In this case, we find that Franciscan, as the owner of St. Mary during the refund period, has retained the right to the supplemental crude oil refund. See Neumann Medical Center, Case No. RK272-00841 (September 19, 1997). Franciscan will therefore be granted a supplemental refund of $959 (1,198,557 gallons x $0.0008 per gallon volumetric).
If there are any future disbursements of crude oil funds, these cases will be known by their RK272- numbers. The total amount of the refund that the applicants are being awarded is $52,525 (65,656,617 gallons x $0.0008 per gallon volumetric).
It Is Therefore Ordered That:
(1) The Application for Supplemental Refund for Case No. RF272-28349 filed by Congress Financial Corp. (Central), Case No. RK272-04523, is hereby approved as set forth in Paragraph (3) below.
(2) The Application for Supplemental Refund for Case No. RF272-22637 filed by Franciscan Health Partnership, Inc., Case No. RK272-04692, is hereby approved as set forth in Paragraph (4) below.
(3) 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 supplemental refund in the amount of $51,566 from the escrow fund denominated Crude Tracking-Claimants IV, Account No. 999DOE010Z, maintained at the Department of the Treasury to the following applicant:
Congress Financial Corp. (Central)
c/o Latham & Watkins, ATTN: Donald L. Schwartz Sears Tower, Suite 5800
Chicago, IL 60606
(4) 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 supplemental refund in the amount of $959 from the escrow fund denominated Crude Tracking-Claimants IV, Account No. 999DOE010Z, maintained at the Department of the Treasury to the following applicant:
Franciscan Health Partnership, Inc.
c/o Paul N. MacGiffert, Treas. & V.P.
8 Airport Park Blvd.-Albany Airport Park
Latham, NY 12110
(5) To facilitate the payment of future refunds, each applicant 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
Washington, D.C. 20585-0107
(6) The determinations made in this Decision and Order are based on the presumed validity of the statements and documentary material submitted by the applicants. Any of these determinations may be revoked or modified at any time upon a finding that the basis underlying any supplemental refund application is incorrect.
(7) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: December 16, 1997
(1)We are now paying first-time crude oil refund recipients at the volumetric rate of $0.0016 per gallon.