Case No. RF304-14414

November 8, 2000

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Applications for Refund

Names of Petitioners:Atlantic Richfield Company/Charter International Oil Co. et al.

Date of Filings:July 23, 1993 et al.

Case Numbers:RF304-14414 et al.

This proceeding involves $46,387,976, plus accrued interest, which the Atlantic Richfield Company (ARCO) remitted to the Department of Energy (DOE) under the terms of the June 27, 1985 Consent Order entered into by DOE and ARCO.(1) The Consent Order settled, except for those items specifically excluded therein, all civil and administrative claims and liabilities regarding ARCO’s compliance with the Federal Petroleum Price and Allocation Regulations during the period January 1, 1973, through January 27, 1981 (the consent order period). On January 28, 1988, the Office of Hearings and Appeals (OHA) of the DOE instituted special refund procedures for the distribution of those funds. See ARCO, 17 DOE at 88,142. The special refund procedures allow purchasers of ARCO products which were regulated during the period of price controls (e.g., motor gasoline, propane, middle distillates, natural gas liquids, and natural gas liquid products) to file Applications for Refund from the ARCO consent order fund.(2) Refunds can be sought only for regulated products purchased between March 6, 1973 and January 27, 1981, the end of the period of petroleum price controls. See ARCO, 17 DOE at 88,143 n.5. This Decision and Order concerns four Applications for Refund filed by three claimants.

I. Background

Evaluating applications in this proceeding involves both an allocation of an appropriate portion of the consent order fund to each applicant and an evaluation of economic harm or injury suffered by that applicant. Id. at 88,151; see Sid Richardson Carbon and Gasoline Co., 12 DOE

¶ 85,054 (1984). In order to determine the portion of the fund to be allocated to each claimant, we assume that any overcharges were distributed equally over every gallon of regulated products sold by ARCO during the consent order period and allocated the consent order monies accordingly, i.e., by dividing the value of the fund by ARCO’s total sales of covered products during the period. ARCO, 17 DOE at 88,151. This calculation produces a “volumetric factor” of $0.000735 per gallon. When that factor is muliplied by an applicant’s total eligible purchases, the result is a claimants allocable share of the consent order fund. Applicants may have received ARCO volume information distributed by the DOE. In such cases, applicants may rely on this data rather than submitting a schedule of ARCO purchase volumes. Unless an applicant demonstrates that it was disproportionately affected by ARCO’s alleged practices, it cannot receive a refund greater than this allocable share of the consent order fund. Id. at 88,151.

Resellers and retailers claiming refunds of less than $5,000 in principal, those who have elected to limit their refunds to $5,000, and end users are presumed to have been injured by ARCO’s alleged overcharges are not required to submit a detailed showing of injury. Mid-level resellers and retailers whose full volumetric refunds exceed $12,193 may elect to receive up to 41 percent of their full volumetric share up to $50,000 without providing detailed demonstrations of injury. Id. at 88151-2. To qualify for a refund, such an applicant must only submit either a schedule of its monthly purchases of ARCO products during the consent order period or the ARCO volume information distributed by the DOE.

II. Analysis

All of the applicants, except one, listed in the Appendix to this Decision and Order are either end users or resellers and retailers that have claimed refunds of $5,000 or less in principal.(3) Each applicant has submitted and elected to rely upon either a schedule of monthly purchases of ARCO products during the consent order period or the ARCO volume information supplied to it by the DOE.

We have reviewed these applications and have found them meritorious. Accordingly, we find that the firms listed in the Appendix to this Decision should receive refunds of their full volumetric allocation of the ARCO consent order fund. In addition, the firms should receive a proportionate share of the interest accrued on the consent order fund. The total volume granted in this Decision is 13,093,889 gallons. The total amount of refunds approved in this Decision is $23,493, representing $9,624 in principal and $13,869 in interest.

Although we have carefully examined each applicant’s claim and supporting data, the determinations reached in this Decision are based on the representations made in the applications. If the factual basis underlying any of our determinations in this Decision is later shown to be inaccurate, this Office has the authority to order appropriate remedial action, including rescission or reduction of the refunds ordered.

It Is Therefore Ordered That:

(1) The Applications for Refund specified in the Appendix to this Decision and Order are hereby 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 from the DOE deposit fund escrow account maintained at the Department of Treasury and funded by Atlantic Richfield Company (Consent Order No. 999DOE035W) the amounts specified in the Appendix to this Decision and Order to the appropriate claimants. All checks should be made payable to the applicant.

(3) The determinations made in this Decision and Order are based upon the presumed validity of the statements and documentary material submitted by the applicants. The determinations may be revoked or modified at any time upon a finding that the factual basis underlying any of the Applications 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: November 8, 2000

(1) Under the terms of the Consent Order, ARCO remitted a total of $68,035,516 to the DOE. These funds were divided between ARCO’s alleged violations regarding refined product sales and crude oil sales. The crude oil portion of the Consent Order fund ($21,647,540) will be distributed in accordance with the procedures established in Atlantic Richfield Company, 17 DOE ¶ 85,069 (1988) (ARCO). See A. Tarricone, Inc. 15 DOE ¶ 85,495 (1987).

(2)For purposes of this proceeding, any reference to ARCO includes its subsidiaries and affiliates.

(3)The remaining applicant, Charter International Oil Co. (Charter), Case No. RF304-14414, a reseller/retailer, has elected to rely upon the mid-level presumption of injury. A mid- level presumption applicant such as Charter can receive the larger of $5,000 or a refund calculated on 41 percent of its full volumetric share. In Charter’s case, the $5,000 amount is larger.

Appendix

CASE NO. APPLICANTCONTACT STREET CITY/STATEVOLUME PRINCIPAL INTEREST
RF304-14414 CHARTER INTERNATIONAL OIL CO.C/O RUSSELL CASTLEBERRY  4655 SALISBURY RD., #399 JACKSONVILLE, FL 32256 6,802,721$5,000$7,205
RF304-14482LAMBERTH OIL CO.OR CYNTHIA LAMBERTH  3102 WHITE OAKTEMPLE, TX 76502 3,999,439$2,940$4,237
RF304-15350BARGAIN OIL & GAS CO. INC. #2OR WILLIAM C. WILSON  5215 FRANKWILL AVE.CLARKSTON, MI 48346585,315$430 $620
RF304-15351BARGAIN OIL & GAS CO., INC. #3OR WILLIAM C. WILSON  5215 FRANKWILL AVE.CLARKSTON, MI 483461,706,414$1,254 $1,807
TOTALS:4 13,093,889$9,624$13,869