Case No. RR272-00305
April 28, 1998
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Motion for Reconsideration
Name of Petitioner: Advance Publications, Inc.
Date of Filing: January 28, 1998
Case Number: RR272-00305
This Decision and Order will consider a Motion for Reconsideration filed by Paul Scherer & Company on behalf of Advance Publications, Inc. (Advance) with the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE). In its reconsideration request, Advance asks OHA to reconsider its December 30, 1997 dismissal of Advances Application for Refund (Case No. RF272-15364), and to reinstate that refund application.
I. Background
Pursuant to DOE policy, purchasers of refined petroleum products were permitted to apply to the OHA, until June 30, 1995, 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 have 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 price control period. E.g., Berry Holding Co., 16 DOE ¶ 85,045 (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. In order to receive a refund for crude oil overcharges, an applicant that was an end-user (i.e., consumer) of refined petroleum products must document its purchase volumes. City of Columbus, Georgia, 16 DOE ¶ 85,550
(1987).(1) Each applicants refund share is calculated using the current refund amount of $0.0016 per gallon.
Advance is a publisher of newspapers and magazines. On December 11, 1987, Sheldon Singer, CPA of Paul Scherer & Company, filed an Application for Refund on behalf of Advance, based on Advances purchases of 23,859,092 gallons of petroleum products. In its application, Mr. Singer stated that Advance consumed petroleum products to operate various motor vehicles, in boilers for heat and hot water, as lubricants and cleaning solvents and in ink. However, in its application, the company did not submit any documentation to support its calculation of the gallons of petroleum products purchased. We specifically requested information about its purchases. Again the company failed to provide that information. As a consequence, OHA dismissed Advances refund application on December 30, 1997.
One month later, on January 28, 1998, Paul Scherer & Company filed the Motion for Reconsideration under consideration on behalf of Advance. In its reconsideration request, Paul Scherer & Company asks OHA to reinstate Advances Application for Refund, and provides documentation in support thereof.
II. Analysis of Motion for Reconsideration
The DOE regulations do not explicitly provide for reconsideration of a determination in a refund proceeding. See 10 C.F.R. Part 205, Subpart V. In prior cases, we have used our discretion to consider the factual and procedural merits of Motions for Reconsideration.
As we stated in Wheless Drilling Company, 25 DOE ¶ 85,110 (1996), [w]hen a refund application is dismissed because of an applicants failure to supply requested information, we generally reopen the case when the information is provided in a timely manner. Id. at 88,282. As discussed below, we find that Advance has submitted sufficient documentation to correct the deficiency that caused us to dismiss the earlier application. Since Advance has acted responsibly and has corrected the deficiency very soon after dismissal, we will grant Advances reconsideration request and consider the firms crude oil refund claim.
III. Analysis of Refund Claim
As an initial matter, we find that Advance was an end-user of eligible petroleum products, i.e., it did not resell any of the refined petroleum products for which it requests a refund, but used them in its business operations. In addition, Advance has certified that it has not elsewhere waived its right to receive a Subpart V crude oil refund.
We have examined the documentation Advance has supplied to support its gallonage estimation techniques and have determined that the estimation methodology is reasonable. The estimates will therefore be accepted, with the following adjustments. Advance has applied on behalf of two subsidiaries which have already received a refund for their purchases of gasoline, Birmingham News Co. (Birmingham), Case No. RF272-98717, and Plain Dealer Publishing Co. (Plain Dealer), Case No. RF272-98080. Birminghams crude oil refund was based on its petroleum product purchases from Gulf Oil Corp. and Plain Dealers crude oil refund was based on its purchases from Shell Oil Company, Case No. RF315-05122. We gave Advance an opportunity to demonstrate that Birmingham and Plain Dealer purchased gasoline from other suppliers. Advance was unable to show that Birmingham purchased gasoline from additional suppliers. However, it did demonstrate that Plain Dealer purchased 1,238,016 gallons of gasoline from Pennzoil Company (Pennzoil), Case No. RF010-00023, during the crude oil refund period. Therefore, we will grant a crude oil refund for these gasoline purchases from Pennzoil but will subtract the remaining estimated amount of gasoline purchases by Plain Dealer and Birmingham, 6,982,037 gallons, from Advances total claim.
In addition, Advance applied for 2,933,440 gallons of black ink which Plain Dealer purchased and 246,743 gallons of black ink that the Staten Island Advance purchased. We gave Advance an opportunity to demonstrate that the black ink was purchased from or originated in a crude oil refinery. Because it failed to do so, we are therefore subtracting those 3,180,183 gallons from Advances claim. Advance has also informed us that it is no longer applying for 4,910 gallons of cleaner and degreaser purchased by the Staten Island Advance. The volume approved for Advance is therefore 13,691,962 gallons. The total volume approved, 13,691,962 gallons, is then multiplied by the current volumetric amount of $0.0016 per gallon. The refund amount granted to Advance is $21,907.
Although we have carefully scrutinized the applicants claim and supporting data, the determination reached in this Decision is based on the representations made by the applicant. If the factual basis underlying our determination in this Decision is later shown to be inaccurate, this Office has the authority to order appropriate remedial action, including recision or reduction of the refund.
The final deadline for the crude oil refund proceeding was June 30, 1995. It is the current policy of the DOE to pay crude oil refund claimants at the current rate of $0.0016 per gallon. We will decide whether sufficient crude oil overcharge funds are available for additional refunds for these 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 Motion for Reconsideration filed by Paul Scherer & Company on behalf of Advance Publications, Inc., Case No. RR272-00305, is 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 a refund in the amount of $21,907 from the DOE deposit fund escrow account maintained at the Department of the Treasury denominated Crude Tracking-Claimants IV, Account No. 999DOE010Z. The check should be made payable to Advance Publications, Inc. and sent to the following address:
Advance Publications, Inc.
c/o James Kantor, Paul Scherer & Company
335 Madison Avenue
New York, NY 10017
(3) To facilitate the payment of future refunds, the applicant shall notify the Office of Hearings and Appeals in the event that there is a change in its 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 material submitted by the applicant. This Decision and Order may be revoked or modified at any time upon a determination that the basis underlying the 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: April 28, 1998
(1)A group of States and Territories filed a consolidated objection to the original Advance Application and a Motion for Discovery. These filings present arguments in support of the States position that, although Advance was an end-user, it was in fact able to pass through the alleged crude oil overcharges. The States claim that Advance must go forward with evidence showing that it did not pass through the overcharges. We have on numerous occasions rejected this argument. E.g., El Paso Sand Products, Inc., 22 DOE ¶ 85,173 (1992). The general information presented by the States in this case is not sufficient to shift the burden of going forward with evidence back to Advance. Id. at 88,482. For similar reasons, we will not reconsider the States Motion for Discovery that we earlier dismissed as moot. Id. at 88,482-83.