Case No. RF340-00054
April 24, 1998
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Petitioner: Enron Corp./ Anchor Gas & Fuel
Date of Filing: January 28, 1992
Case Number: RF340-54
On September 14, 1988, the Economic Regulatory Administration of the Department of Energy (DOE) filed a Petition with the Office of Hearings and Appeals (OHA) requesting that the OHA formulate and implement procedures for distributing funds obtained through a consent order with Enron Corp. (Enron). See 10 C.F.R. Part 205, Subpart V. The consent order resolved DOE allegations that Enron and all of its subsidiaries, affiliates, prior subsidiaries, predecessors and successors in interest violated the mandatory petroleum regulations in their sales of crude oil and refined petroleum products from January 1, 1973 through January 27, 1981 (the consent order period). On July 10, 1991, the OHA issued a Decision and Order setting forth final procedures for disbursing the portion of the Enron settlement fund attributable to various Enron entities' sales of NGLs and NGLPs. Enron Corp., 21 DOE ¶ 85,323 (1991) (Enron). These covered Enron entities are UPG, Inc., Northern Propane Gas Company (Northern), and Florida Hydrocarbons Company. In accordance with the goals of 10 C.F.R. Part 205, Subpart V, Enron implements a process for refunding the consent order funds to purchasers of Enron NGLs and NGLPs who are able to demonstrate that they were injured as a result of the covered entities' alleged overcharges. This Decision and Order renders a determination upon the merits of an Application for Refund submitted by Ferrellgas, Inc., on behalf of Anchor Gas & Fuel (Anchor).
In Enron we adopted a presumption that the alleged overcharges attributable to NGLs and NGLPs had been dispersed equally in all sales of refined product made by the covered entities during the consent order period. Enron, 21 DOE at 88,959. We stated that, in the absence of a demonstration of a disproportionate overcharge, a claimant would be allocated a share of the consent order funds on a volumetric basis. We provided that eligible claimants would
receive $.00601 per gallon of covered Enron product purchased.(1)Id. We refer to the dollar amount derived by multiplying an applicant's purchase volume by the per gallon refund amount as the applicant's allocable share.
Enron generally requires a claimant to demonstrate that it was injured by Enron's alleged overcharges in order to receive a refund equal to its full allocable share. However, in Enron, we adopted several presumptions of injury that would allow certain types of claimants to receive a refund without a detailed demonstration of injury.
In Enron, we established that a reseller, retailer or refiner whose volumetric share of the Enron consent order funds exceeds $10,000 may elect to receive as its refund the larger of $10,000 or 60 percent of its volumetric share up to $50,000. Id. Accordingly, a claimant under this mid-range presumption of injury need only establish the volume of Enron covered products that it purchased during the refund period to receive a refund of 60 percent of its allocable share up to $50,000.
Ferrellgas has applied for a refund based on purchases of propane from Northern made by Anchor during the consent order period. Ferrellgas submitted numerous documents with the purpose of showing that it is entitled to a refund based on Anchors purchases. We have carefully reviewed these documents and we find that Ferrellgas has adequately shown that it is the proper recipient of any refund based on Anchors petroleum purchases.
Ferrellgas has submitted all of the information required of applicants in the Enron proceeding under the "mid-range" presumption of injury. Ferrellgas claims that Anchor made regular purchases of propane from Enrons affiliate Northern throughout the refund period (June 13, 1973 through January 1981) in order to supply its retail customers. Northern sales records from 1978 and 1979 in the DOEs possession indicate that Anchor purchased approximately 270,097 gallons of propane per month from Northern during that period. Ferrellgas also submitted an affidavit from an Enron wholesale sales manager during the refund period stating that Anchor was a regular Northern customer throughout the refund period. The affidavit also states that Ferrellgass estimate of 265,390 gallons purchased per month is accurate to the best of the managers knowledge. In light of this affidavit and the Northern records, we believe that it is reasonable to accept Ferrellgass explanation concerning the nature of its business and its Enron purchases. Therefore, the total approved gallonage claim granted to Anchor in this Decision is 24,309,724 gallons (265,390 gallons per month x 91.6 months in the refund period = 24,309,724 gallons).
Ferrellgas has not claimed that Anchor was disproportionately overcharged. Nor has it attempted to prove that Anchor was injured by Enron's alleged overcharges. Therefore, under the "mid-range" presumption of injury, Ferrellgas will receive a principal refund of $50,000 (24,309,724 x $.00601 x 60 percent = $87,661, which is greater than the maximum mid-range refund of $50,000). Ferrellgas will also receive $36,990 as its pro rata share of the interest that has accrued on the consent order funds since they were placed in escrow.(2) Accordingly, the total refund granted to Ferrellgas, including interest, is $86,990.
It Is Therefore Ordered That:
(1) The Application for Refund submitted by Ferrellgas, Inc., on behalf of Anchor Gas & Fuel (Case No. RF340-54) is hereby granted as specified in paragraph (2).
(2) The Director of Special Accounts and Payroll, Office of the Controller of the Department of Energy shall take appropriate action to disburse a total of $86,990 from the DOE deposit fund escrow account maintained at the Department of the Treasury and funded by Enron Corp., Consent Order No. 730V00221Z, to (Case No. RF340-54):
Ferrellgas, Inc.
Re: Anchor Gas & Fuel
c/o Chris Wallen, Credit Manager
One Liberty Plaza
Liberty, MO 64068
(3) The determination made in this Decision and Order is based on the presumed validity of the statements and documentary material submitted by the applicant. The determination may be revoked or modified at any time upon a determination 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: April 24, 1998
(1)1/ This amount was derived by dividing the fund received from Enron allocable to refined products ($43,200,000) by the estimated volume of refined products sold by Enron from June 13, 1973 through the date of decontrol of the relevant product (7,186,265,624). Id. at n. 8.
(2)Interest has accrued on the Enron consent order funds since July 27, 1988, the date that Enron remitted the consent order funds to the DOE. Almost all of this money earns interest at rates established in auctions of six month treasury bills. The current ratio of interest to principal in the Enron account is 0.7398.