Case No. RR300-00293
May 18, 1998
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Motion for Reconsideration
Name of Petitioner: Gulf Oil Corp./U.S. Reduction
Date of Filing: July 7, 1994
Case Number: RR300-00293
The Travelers Group, Inc. (Travelers) requests reconsideration of Gulf Oil Corp./U.S. Reduction, Case No. RF300-20907 (June 6, 1994) (Gulf/U.S. Reduction). In Gulf/U.S. Reduction, we granted Travelers a refund. In its reconsideration motion, Travelers contends that we overlooked a supplement to its application, in which Travelers claimed an additional 2,197,340 gallons. As explained below, after considering the matter, we have determined that Travelers is entitled to a refund for an additional 1,436,930 gallons.
I. Background
A. The Gulf Refund Proceeding
The Gulf refund proceeding is the result of a consent order entered into between the DOE and Gulf. The consent order resolved DOE allegations that Gulf violated the mandatory petroleum regulations in its sales of crude oil and refined petroleum products from January 1, 1973 through January 27, 1981 (the consent order period).
The procedures for the Gulf refund proceeding are set forth in Gulf Oil Corp., 16 DOE ¶ 85,381 (1987) (Gulf). Gulf provides for a two- stage proceeding for distributing the portion of the consent order amount attributed to refined product violations ($42,499,566). The first stage consists of granting refunds to firms that are able to demonstrate that they were injured by such violations. Any funds remaining after the first stage will be used to make indirect restitution in accordance with the provisions of the Petroleum
Overcharge Distribution and Restitution Act of 1986, 15 U.S.C. § 4501 et seq. (1994).
Gulf adopts a presumption that each claimant was overcharged $.00064 per gallon of covered Gulf product purchased. This volumetric amount was calculated by dividing the portion of the consent order amount attributed to refined product violations ($42,499,566) by the estimated volume of refined products sold by Gulf from August 1973 through the date of decontrol of the relevant product (66,387,563,569 gallons). Gulf, 16 DOE at 88,736.
Gulf further provides that refiner, reseller, or retailer claimants must demonstrate that they were injured as a result of their Gulf purchases; that is, that they were unable to pass through the presumed overcharge amount to their customers. Gulf establishes a presumption of injury for end-users (the end-user presumption). Gulf also establishes a presumption of injury for claims of $5,000 or less (the small claims presumption) and a 40 percent presumption of injury for claims between $5,000 and $50,000 (the medium range presumption).
Successful applicants receive interest. The current interest volumetric is $.00061 per gallon.
B. Travelers Gulf Refund Applications
Travelers is the successor to Primerica Corp., which in turn is the successor to the American Can Company (American Can). American Can operated a variety of businesses during the refund period. These businesses included (i) U.S. Reduction, which operated an aluminum business, (ii) the manufacture of metal containers (the can business), (iii) lumber and paper operations (the paper business), and (iv) a joint venture called the Chemplex Company (Chemplex).
In 1987, Travelers filed a Gulf application, based on the purchases of one of its lumber mills. In 1989, we granted that application. Gulf Oil Corp./American Can, Case No. RF300-03714 (January 9, 1989) (5,367,346 gallons).
In 1993, Travelers filed the instant application, citing the purchases on the Gulf customer list for U.S. Reduction. Travelers then supplemented its application, citing three entries for American Can on the customer list of Warren Petroleum Company, a subsidiary of Gulf. These entries, which total 2,197,340 gallons, list the American Can headquarters and two other locations of unidentified American Can operations.
In Gulf/U.S. Reduction, we granted a refund for the gallons purchased by U.S. Reduction. In response to that decision, Travelers filed the instant motion, requesting reconsideration of the additional claimed gallonage for other American Can operations.
Recently, we determined that Travelers is not eligible for a refund for purchases by American Can for its can business, or for purchases by Chemplex. Primerica Corp., 26 DOE ¶ 85,050 (1997), reconsideration denied, 27 DOE ¶ 85,001 (1998) (Primerica) (right to refunds included in transfer to third parties of can business and interest in Chemplex).
II. Analysis
Travelers is entitled to a refund for an additional 1,436,930 gallons, which reflects two of the three entries on the Warren customer list. The third entry concerns a facility located in Hammond, Indiana, which was part of the American Can can business. See Primerica Corp., Case No. RF272-68493 (Assets Purchase Agreement, Schedule 5.12(a) at 2 (listing can business facilities)). As we indicated in Primerica, Travelers is not entitled to a refund for the purchases of the can business. See Primerica, 26 DOE at 88,139-40, 27 DOE at 88,003-05. Accordingly, Travelers is not entitled to a refund for the 760,410 gallons listed for the Hammond, Indiana facility.
Travelers is entitled to the end-user presumption of injury. Accordingly, Travelers is entitled to an additional refund of $1,796 (1,436,930 gallons x $.00125 per gallon = $1,796).
It Is Therefore Ordered That:
(1) The Motion for Reconsideration filed by The Travelers Group, Inc., on July 5, 1994, Case No. RR300-00293, be and hereby is granted, as set forth in Paragraphs (2) through (4) 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 $1,796 from the DOE deposit fund escrow account maintained at the Department of the Treasury and funded by Gulf Oil Corporation, Consent Order No. RGFA00001Z to "The Travelers Group, Inc. at the following address:
The Travelers Group, Inc.
c/o Ellen T. OBrien
388 Greenwich Street
New York, NY 10013
(3) The determination made in this Decision and Order is based on the presumed validity of statements and documentary material submitted by the applicant. The determination may be revoked or modified at any time upon a finding that the factual basis underlying the Application for Refund is incorrect.
(4) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: May 18, 1998