Case No. RR340-00008
February 09, 2001
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Motion for Reconsideration
Name of Petitioner: Enron Corporation/
MAPCO, Inc.
Date of Filing: May 11, 1999
Case Number: RR340-00008
On August 3, 1998, the Office of Hearings and Appeals (OHA) issued a Decision and Order granting a refund of $4,101,244 to MAPCO, Inc. (MAPCO) in the Enron Corporation (Enron) refund proceeding. On May 11, 1999, MAPCO filed a Motion for Reconsideration of the 1998 Order. The details of the original MAPCO refund claim and the overall Enron refund proceeding are set forth in Enron Corp./MAPCO, Inc., 27 DOE ¶ 85,018 (1998)(hereinafter Enron/MAPCO) and Enron Corp., 21 DOE ¶ 85,323 (1991) (hereinafter Enron).
For purposes of the instant Motion for Reconsideration, the relevant facts are as follows. In our 1998 Order, the OHA approved a substantial refund from the Enron pool based on MAPCOs purchases of NGL products. In approving this refund, the OHA found as an initial matter that MAPCO was a reseller and retailer of large quantities of propane, natural gasoline and butane that it purchased from Enron. The OHA then determined that MAPCO's NGL purchases from Enron were not discretionary in nature, and were dictated by the firms need to supply its regular customers and maintain the flow of product in its pipeline system, in part by utilizing its base period allocation from Enron. However, the OHA excluded from MAPCOs claim ethane that it purchased from Enron in 1973 and 1974 because these purchases were insufficiently documented and may have been made pursuant to a fixed price contract that was established prior to price controls. The OHA also excluded from MAPCOs claim a portion of its natural gasoline purchases from Enron that appear to have been purchased pursuant to such a fixed price contract. The OHA then found that MAPCO had shown that it was injured by its purchases of propane from Enron to some extent, but limited the firms refund to approximately 85.5% of its full volumetric refund for that product. With respect to its purchases of Enron natural gasoline and butane, the OHA limited
MAPCOs refund to the firms allocable share for volumes of those products that it purchased at above market prices.
In its Motion for Reconsideration, MAPCO asks that we reconsider whether the firm is eligible for a full volumetric refund based upon its showing of injury, rather than limiting the firms refund in the manner described above. It also challenges certain actions taken in Enron that resulted in our establishing the volumetric refund amount of $.00601 for refined product purchasers of Enron products. As discussed below, we find that the issues MAPCO attempts to raise concerning our 1991 Enron implementation order are not timely and should not be considered. We also find that the objections raised by MAPCO concerning our analysis of its refund claim are substantively without merit.
II. Analysis.
A. MAPCOs Challenge to the 1991 Allocation of Enron Consent Order Funds to the Stripper Well Refund Program is not Timely.
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. 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 gallons). Id. at n. 8. 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.
In its Motion for Reconsideration, MAPCO objects to our determination in Enron to allocate ninety percent, or $43,200,000, of the Enron Consent Order fund to purchasers of NGLs and NGLPs and ten percent of the fund, or $4,800,000, to a refund pool available to purchasers of crude oil. MAPCO contends that even more of the Consent Order fund should have been allocated to purchasers of Enron NGLs and NGLPs. It states that sales data recently obtained from Enron affiliate UPG, Inc. indicates that, during the refund period, crude oil resales by Enron constituted far less that ten percent of Enrons sales volume for all petroleum products.
We do not believe that MAPCOs contentions concerning the allocation of the Enron Consent Order funds should be considered at this time. In making its arguments, MAPCO proposes to alter an aspect of the Enron refund proceeding which was a fundamental premise underlying the DOEs final determination on July 20, 1991. Enron, 21 DOE at 88,954-55. These contentions should have been presented to the OHA when it solicited comments to its proposed implementation order in the Enron proceeding on April 20, 1990. 55 Fed. Reg. 15006 (April 20, 1990). We carefully considered all of the evidence available to us at that time in making the allocation between the Enron refund pools. However, MAPCO did not provide any information concerning Enrons resales of crude oil at that time, nor did MAPCO include this information when it submitted its original refund application filed in 1992. Rather, MAPCO submitted this request almost eight years after our final implementation order in the Enron proceeding was issued, more than two years after the December 2, 1996 deadline for the filing of refund claims in the Enron proceeding, and well after the great majority of Enron refund claims had been decided.
The OHA may summarily dismiss refund applications filed after the deadline date. 10 C.F.R. § 205.285; Exxon Corp./Georgia-Pacific Corp., 20 DOE ¶ 85,173 at 88,380 (1990). It is reasonable and efficient to reject late applications, because it allows money to be transferred quickly to indirect restitution programs as directed by the Petroleum Overcharge Distribution and Restitution Act of 1986, Pub. L. No. 99-509, Title III, §§ 3003-3004, 100 Stat. 1881, 1882-84, in Omnibus Budget Reconciliation Act of 1986, Pub. L. No. 99-509, 100 Stat. 1874 (1986), codified at 15 U.S.C. §§ 4502-03 (PODRA). By this means, the refund process and price control-type regulation of petroleum may be drawn to a close in accord with DOE policy. Conoco, Inc./Dons Conoco, 22 DOE ¶ 85,117 (1992). Similarly, MAPCOs attempt at this late date to revise the parameters established for the Enron refund proceeding clearly would interfere with the objectives established by the PODRA. Accordingly, we reject as untimely the contentions made by MAPCO concerning our 1991 allocation Enron Consent Order funds.
B. Regulatory Standard for Consideration of MAPCOs Objections to Enron/MAPCO.
The Motion for Reconsideration (also titled Application for Modification (or Rescission)) is a vehicle that permits the OHA to correct errors in and make appropriate adjustments to prior Decisions and Orders. See Oceana County Road Commission, 20 DOE ¶ 85,081 (1990). Under the DOE regulations at Part 1003, Subpart E, motions for the reconsideration and modification of OHA decisions and orders may be considered where the applicant demonstrates the existence of significantly changed circumstances. 10 C.F.R. § 1003.55(b)(1)(I). Significantly changed circumstances generally encompasses a previously unknown material fact or an existing point of law not previously considered by the agency, or a substantial change of circumstances affecting the applicant which was beyond the control of the applicant and upon which an outstanding and continuing order of the agency was issued. 10 C.F.R. § 1003.55(b)(2).
This standard makes clear that a motion for reconsideration and modification of a DOE order is not intended to allow a party to reargue its position on issues where the OHA has issued a determination based on its interpretation of appropriate regulatory standards or upon the appropriate exercise of its regulatory discretion. Rather, a motion for reconsideration is appropriate only where the OHA has patently misapprehended the issues presented. Aminoil U.S.A., Inc/Behm Family Corp., 22 DOE ¶ 85,236 at 88,631 (1993), citing Behm Family Corp. V. DOE, Civil No. A4-88- 164 (D.N.D. March 9, 1989) affd 903 F.2nd 830 (Temp. Emer. Ct. App. 1990)(Behm).
As discussed below, we believe that MAPCO simply cannot make any of these showings in this proceeding.
C. MAPCOs Objections to OHAs Use of Platts Price Data Are Not Appropriate for Reconsideration.
In its Motion for Reconsideration, MAPCO argues that the OHAs use of the Platts Oklahoma Group 3 postings in MAPCOs propane price comparison do not provide an accurate measure of the price of propane at the producer/wholesale marketer level of the propane market. Motion at 1, 5-10. Our experience in numerous refund proceedings has led us to conclude that Platts is generally the most reliable source of market data available. See Allied Materials Corporation and Excel Corporation/Great Plains Corporation, 13 DOE ¶ 85,289 at 88,732 (1985). In Eason Oil Company/Koch Hydrocarbon Company, 26 DOE ¶ 85,065 (1997) (Eason/Koch), we rejected that firms attempt to use national propane pricing data rather than Platts data, indicating our preference for regional data and our general reliance on Platts as the best source of regional average market price data for the purpose of determining the months in which an applicant purchased refined products at prices higher than the regional average. Id., at 88,186-87, citing Atlantic Richfield Co./Phillips Petroleum Co., 22 DOE ¶ 85,217 (1992)(ARCO/Phillips), and cases cited therein at 88,575. Similarly, in Enron/MAPCO, we rejected the firms use of the Energy Information Administration's (EIA) Monthly Petroleum Product Price Report (MPPPR) in favor of Platts. In doing so, we indicated our belief that price information assembled on a nationwide basis (like the EIA prices) does not adequately reflect competitive conditions characterizing the regional product markets. Enron/MAPCO, 27 DOE at 88,117, citing Atlantic Richfield Company/BTU Energy Corp., 22 DOE ¶ 85,074 at 88,231 (1992)(ARCO/BTU). Accordingly, we substituted appropriate Platt's postings for the MPPPR data used by MAPCO in its analysis of competitive disadvantage concerning the propane and natural gasoline that it purchased from Enron, finding that Platts postings covering the Kansas/Oklahoma area are the most appropriate to use in the analysis.
As described above, MAPCO purchased most of its Enron propane from Enrons Bushton Kansas plant to supply Thermogas retail outlets in the Midwest. In addition, Oklahoma/Kansas was an active area of operation for the MAPCO pipeline system. We will therefore use the Platt's postings for Oklahoma (Group 3) in our revised analysis of MAPCO's Enron purchases.
Id.
Our reasoned reliance on Platts data for evaluating comparative market prices in refund proceedings has been upheld by the U. S. Temporary Emergency Court of Appeals in Behm, 903 F.2nd at 833-36. In a supplement to its refund application, MAPCO argued that EIA price data rather than Platts data should be used in evaluating MAPCOs competitive disadvantage. November 21, 1997 Submission, Exhibit 5 at 1-2. For the reasons indicated above, we rejected these arguments and conducted our analysis using the appropriate Platts data. MAPCO has presented no new arguments that would require us to re-examine this issue. Accordingly, this request for reconsideration is rejected.
D. MAPCOs Objections to OHAs Use of Imputed Platts Price Data for Butane and Natural Gasoline Are Without Merit.
For the products butane and natural gasoline, where Platt's prices are not available, we have extrapolated regional prices from the nationwide data compiled by the EIA, based on our belief that butane follows a regional pricing pattern similar to propane, the most widely used NGL product. Enron Corp./Moon Scott Joint Venture, 27 DOE ¶ 85,014 at 88,079-80 (1998); Eason/Koch, 26 DOE ¶ 85,065 at 88,187; ARCO/BTU, 22 DOE at 88,231 and cases cited therein. In its November 21, 1997 submission, MAPCO challenges our use of propane prices to extrapolate a regional price for natural gasoline and butane, noting that the price relationship between propane and these products varied dramatically during the refund period.
In the early 1970's, propane, butane and natural gasoline were very close in price but by 1979 the value of natural gasoline was probably 100% more than propane and the value of butane 50% to 75% higher. These price increases paralleled crude oil price increases more closely than any other product....
November 3, 1997 letter of Mr. Thomas at 10, attachment 2 to MAPCOs November 21, 1997 submission. In Enron/MAPCO, we rejected the argument that these variations in relative prices created significant distortions in our calculations based on the following analysis.
Our estimation method takes the known monthly ratio between national prices for propane and natural gasoline and uses that ratio in conjunction with a regional propane price to estimate the regional price for natural gasoline. Thus, any potentially divergent pricing patterns between propane and natural gasoline will be accounted for through the use of this ratio between national propane and natural gasoline prices. Also, the impact of any regional, seasonal divergences in pricing patterns will be neutralized by our summation of price differences over the entire refund period. We therefore conclude that regional natural gasoline prices calculated according to our established methodology are reasonably accurate measures of the difference in prices over the refund period.
Enron/MAPCO, 27 DOE at 88,117-18. Accordingly, in Enron/MAPCO, we extrapolated comparative regional prices for natural gasoline and butane using the Platt's wholesale propane price postings for "Oklahoma Group 3," and available EIA nationwide data. In our analysis of MAPCO's natural gasoline and butane purchases, we multiplied the monthly Platt's propane price by the ratio of EIA natural gasoline to EIA propane or EIA butane to EIA propane prices for that month to arrive at extrapolated monthly regional prices for natural gasoline and butane.(1)
For these reasons, we believed that it was reasonable and appropriate to conduct our competitive disadvantage analysis of MAPCOs Enron purchases using extrapolated Platts prices for natural gasoline and butane. MAPCO has presented no new arguments that would require us to re-examine this issue. Accordingly, the firms request for reconsideration on this ground also is rejected.
E. MAPCOs Contention that the OHA Erred in Awarding MAPCO Less than Its Full Volumetric Refund for its Enron Propane Purchases Is Without Merit.
MAPCO next contends that it should have received a full volumetric refund for the propane that it purchased from Enron, and that the OHAs decision to limit the Enron refund for this product was improper. MAPCO argues that it is required to receive a full refund because it has demonstrated a level of competitive disadvantage (based on a comparison of Enron and Platts prices) in excess of its full volumetric Enron refund for its propane purchases. It contends that the OHAs standard and established rule is that if an applicants net and gross excess costs [of Enron products] exceed its allocable share, it is entitled to a full refund. Motion for Reconsideration at 14.
We do not agree that the OHA has such a rule. Our competitive disadvantage analysis is designed to assess the level of injury experienced by each particular refund applicant. As we have stated in innumerable refund determinations, we apply a three part competitive disadvantage analysis in order to determine the degree to which market conditions forced an applicant to absorb the alleged overcharges.(2) Under this methodology, we infer that purchases made at above average market prices indicate that the firm was unable to pass through the alleged overcharges. Conversely, we infer that purchases made at prices below the market average placed a firm at a competitive advantage and did not injure the firm. The analysis produces three measures which the OHA uses as guidelines in determining the claimant's level of injury. The first measure, "gross excess cost," is the sum of the amounts by which an applicant's monthly purchase costs exceeded the market average. The second measure, "net excess cost," equals an applicant's gross excess cost minus the sum of the amounts by which its purchase costs were below the market average. This measure provides an indication of the cumulative impact of the alleged overcharges, balancing the adverse effect of the comparatively expensive purchases against the positive effect of comparatively inexpensive purchases. The third measure, the "above-market volumetric share," is the number of gallons purchased at prices which exceed market prices multiplied by the volumetric factor. This measure is indifferent to the magnitude of the excess costs incurred, accounting only for the number of gallons of uncompetitively priced product purchased by the applicant. We consider all of these indicators of competitive disadvantage in determining whether, and to what extent, an applicant was injured by its purchases, and thereby we calculate an appropriate refund amount. Enron/MAPCO at 88,116, n. 4, citing Texas Oil and Gas Corp./Gulf Oil Corp., 13 DOE ¶ 85,135 (1985) and Texaco Inc./Oakwood Oil Co., 22 DOE ¶ 85,262 (1993).
As we stated in Enron/MAPCO, this Office has granted only partial refunds to firms whose competitive disadvantage analyses fail to indicate a substantial and consistent competitive disadvantage. For example, in several previous instances where an applicant's net excess cost for covered product is less than 100 percent of its allocable share for that product, we have granted a refund only for the gallons of covered product that the competitive disadvantage analysis indicates were purchased by the applicant at above-market prices. 27 DOE at 88,118-19, citing Atlantic Richfield Company/Coast Gas, Inc., 24 DOE ¶ 85,136 (1995) (analysis of natural gasoline purchases); Total Petroleum/Mid States Petroleum, Inc., 19 DOE ¶ 85,665 (1989) (analysis of No. 2 Oil purchases); Marathon Petroleum Co./Acme Oil Co., 17 DOE ¶ 85,634 (1988); Mobil Oil Corp./Perry Oil Co., 17 DOE ¶ 85,074 (1988). Also, in several instances where even the applicant's gross excess cost of covered product was less than 100 percent of the volumetric refund for its above market purchases, we have limited the applicant's refund to its gross excess cost. See Eason Oil Company/Presidio Exploration, Inc., 26 DOE ¶ 85,046 (1997) (analysis of propane purchases); Aminoil U.S.A., Inc./Mornes, Walter J., 18 DOE ¶ 85,564 at 88,924 (1989); see also Kansas-Nebraska Natural Gas Co., Inc./Cities Service Oil and Gas Corp., 14 DOE ¶ 85,231 at 88,434-35 (1986) (in a case involving a large, negative, net excess cost and a gross excess cost much smaller than the firm's allocable share, the applicant's refund was limited to 50 percent of the gallons that it purchased at above market prices multiplied by the per gallon refund rate).
In Enron/MAPCO, we found that the competitive disadvantage analysis for the firms purchases of Enron propane was indicative of some level of injury. However, we concluded that these cost figures did not clearly establish that MAPCO experienced the level of substantial and consistent competitive disadvantage resulting from its purchases of Enron propane that would justify a refund based on MAPCOs full volume of Enron propane purchases. With respect to these propane purchases, we noted that MAPCOs net excess cost was 2.2 times its full allocable refund share and its gross excess cost was 3.3 times its full volumetric refund, whereas the gross and/or net excess costs of refund applicants has frequently been more than ten times an applicants full allocable refund share. Id., at 88,119; see Enron Corp./Unocal Corp., 26 DOE ¶ 85,041 at 88,104 (1997); Atlantic Richfield Co./Coast Gas, Inc., 24 DOE ¶ 85,136 (1995) (analysis of propane and butane purchases); Total Petroleum/Mid States Petroleum, Inc., 19 DOE ¶ 85,665 (1989) (analysis of motor gasoline purchases); Conoco, Inc./Power Pak Co., Inc., 17 DOE ¶ 85,016 (1988); Marathon Petroleum Co./Acme Oil Co., 17 DOE ¶ 85,634 (1988); Mobil Oil Corp./Hughes Oil Co., 17 DOE ¶ 85,510 (1988). We therefore found it appropriate to grant MAPCO a refund for its Enron propane purchases based on approximately 85.5 percent of the gallonage of those purchases (318,806,508 gallons), the average of its total allowable Enron propane purchases (100 percent or 372,731,026 gallons) and its above market Enron propane purchases (71 percent or 264,881,989 gallons).
The OHA had previously reached a similar conclusion to limit a refund in Enron Corp./Solar Gas, Inc., 27 DOE ¶85,007 at 88,051 (1998)(applicant granted a refund based on 81.5 percent of its Enron purchases, the average of its total Enron purchases (100 percent) and its above market Enron purchases (63 percent)), and in Eason/Koch, 26 DOE at 88,188-89 (applicant granted a refund based on 79.5 percent of its Eason purchases, the average of its total Eason purchases (100 percent) and its above market Eason purchases (59 percent)). Subsequent to the Enron/MAPCO determination, the OHA reached a similar conclusion to limit a refund in Enron Corp./Richardson Products Co., Ltd., 27 DOE ¶ 85,040 at 88,276 (2000)(applicant granted a refund based on 82.5 percent of its Enron purchases, the average of its total Enron purchases (100 percent) and its above market Enron purchases (65 percent)). At the same time, the OHA continued to grant full volumetric refunds for large volumes of product in the Enron proceeding, where the applicant has demonstrated gross and net excess costs that are both in the range of ten times the applicants full volumetric refund amount. Enron Corp./Sheila Brown, David Stillings, 27 DOE ¶ 85,036 (2000); Enron Corp./Amoco Corp., 27 DOE ¶ 85,035 (1999); Enron Corp./Phillips Petroleum Co., 27 DOE ¶ 85,024 (1999); Enron Corp./Ferrellgas, Inc., 27 DOE ¶ 85,002 (1998). Our determination in Enron/MAPCO was part of a line of cases fully in accord with these principles. Moreover, contrary to MAPCOs claim, these determinations clearly indicate that our analysis of gross and net excess costs has not established an unreasonable standard for showing injury that cannot be met by purchasers of Enron products.
MAPCO has done extensive research, and it points to several prior determinations by the OHA where we granted full refunds where the gross and net excess costs barely exceeded the applicants full volumetric refund for a particular product. We do not think our determinations in those cases warrant a different result from our determination in Enron/MAPCO. Those determinations did not establish a binding rule that the OHA was required to follow in all future determinations, but were specific to the facts and issues raised in each particular refund application. Restitution in refund cases involves a fair measure of equitable discretion, and various factors come into play in individual cases. The determinations MAPCO cites involved far smaller refunds than those sought by Solar Gas, Koch, MAPCO and Richardson in the determinations discussed above. Where a large monetary refund is sought (which may significantly impact our ability to pay other valid refund claims), the analysis must be tailored accordingly. As a result, while a lesser evidentiary showing may warrant a full refund if the refund is relatively small, the fact that the refund requested is large means that our analysis is more extensive, and that allows us to fine tune our study of the precise level of the firms competitive disadvantage. In such instances, it is reasonable and proper for us to distinguish between a convincing showing of substantial and consistent competitive disadvantage and some lesser showing that merits an award of sixty or eighty percent of the applicants full volumetric refund. Accordingly, we believe that MAPCOs arguments in this regard must be rejected.
F. The OHA Correctly Determined that MAPCO has not shown that Certain Purchases of Enron Natural Gasoline and Ethane Qualify for a Refund.
In Enron/MAPCO, we found that the information submitted by firm indicated that its 1973 and early 1974 purchases of natural gasoline from Enron were fixed price purchases that did not result in injury to MAPCO. In its refund application, MAPCO stated generally that it entered into long term, fixed price contracts with Enron for the purchase of NGL products prior to 1973 and that these contracts continued into the refund period. The UPG price data summarized in MAPCOs cost comparison for natural gasoline indicated that from June 1973 through January 1974, MAPCO consistently paid UPG $.08250 per gallon for natural gasoline. November 21, 1997 MAPCO submission, attachment 7. It therefore appears that throughout 1973 and in January 1974, Enron (via UPG, Inc.) sold natural gasoline to MAPCO at a price negotiated prior to the period of price regulations. Accordingly, we concluded that this information indicated that MAPCO was not overcharged by Enron for its 1973 and January 1974 natural gasoline purchases, and we subtracted this volume of MAPCO's purchases (21 million gallons) from its refund claim. Enron/MAPCO at 88,114, citing Enron Corp./Unocal Corp., 26 DOE ¶ 85,041 at 88,101-02 (1997).(3)
In its Motion for Reconsideration, MAPCO argues that it is entitled to the presumption that Enrons overcharges for natural gasoline were spread over all its natural gasoline purchases. With respect to the OHAs findings, MAPCO agrees with the OHA that Enrons consistent price of $.0825 for its natural gasoline sales to MAPCO in the months from June 1973 through January 1974 suggests a fixed-price contract.(4) However, it notes that an increase in gallons purchased by MAPCO in September 1973 suggests an agreement that ended in August and was continued or replaced with another contract at a higher level of purchases. Also, MAPCO contends that even if a long-term agreement between Enron and MAPCO was in effect through January 1974, it was in all likelihood negotiated in January 1973 and made effective on February 1, 1973 which MAPCO asserts was within the period of price regulations and therefore not subject to any presumption of non-injury. Motion at 16-18. We do not accept these arguments. MAPCO offers no proof for its assertion that its fixed price contracts with Enron were always 12 month contracts. Motion at 16. Two and three year purchase agreements were not uncommon in the petroleum industry in the period immediately prior to price regulations. Nor do we agree that a contract instituted in February 1973 cannot raise a presumption of non-injury. Although the period covered by Enrons Consent Order with the DOE begins on January 1, 1973, we determined in Enron
that price controls on Enrons sales of petroleum products would have begun on June 13, 1973, the effective date of the Cost of Living Council Freeze Regulations, 38 Fed. Reg. 15768 (June 15, 1973). Accordingly, no claim [for a refund based on pricing overcharges] can be made for Enron products made prior to June 13, 1973.
Enron, 21 DOE at 88,958. We therefore believe that any pricing agreement between Enron and MAPCO that was established prior to June 13, 1973, raises a strong presumption of non-injury concerning purchases of Enron product made pursuant to that agreement. This conclusion is based on the fact that prices established prior to the effective date of product price controls cannot, by definition, contain overcharges that violate those provisions.
Finally, MAPCO argues that the uniform price paid by MAPCO for Enron natural gasoline through January 1974 does not constitute sufficient evidence of a fixed price contract to disqualify the MAPCO purchases. MAPCO maintains that it is entitled to the presumption that Enrons overcharges for natural gasoline were spread over all its natural gasoline purchases. Enron, 21 DOE at 88,959. MAPCO contends that OHA should hold itself to the same evidentiary standard that it requires of applicants who attempt to rebut the volumetric presumption, i.e., there must be clear and convincing evidence that MAPCO was not overcharged. Motion at 16. MAPCO contends that OHAs findings in Enron/MAPCO concerning the likelihood of a fixed price contract for natural gasoline amounts to no more than speculation and that
[s]ince OHA did not have sufficient evidence to rebut the presumption that all of Enrons overcharges were spread evenly over all covered products, its finding that MAPCO was not overcharged in these natural gasoline purchases was misguided and unreasonable.
Motion at 19.
We believe that MAPCOs reliance on this presumption is misplaced. MAPCO cannot use this presumption to avoid the requirement that each refund claimant demonstrate that it was injured by the alleged overcharges in order to qualify for a full volumetric refund. Enron, 21 DOE at 88,960. In the present instance, price information supplied by MAPCO suggests the strong likelihood that MAPCO purchased natural gasoline from Enron at a contract price established prior to the period of price controls. Such purchases would contain no potential overcharges. Accordingly, we do not believe that MAPCO has shown that it was overcharged by Enron for the 21,000,000 gallons of natural gasoline that it purchased from Enron in the period from June 1973 through January 1974, much less that it was injured by these non-existent overcharges. We therefore conclude that it was reasonable and proper to exclude these gallons of Enron natural gasoline from MAPCOs refund claim.
Accordingly, for the reasons presented above, we find that MAPCO has failed to provide new information or argument that would lead us to revise the determinations that we made concerning the firms refund claim in the Enron Refund Proceeding.
It Is Therefore Ordered That:
(1) The Motion for Reconsideration filed by MAPCO, Inc. on May 11, 1999 (Case No. RR340-00008) be and hereby is denied.
(2) This is a final order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: February 09, 2001
(1)In Enron Corp./Phillips Petroleum Company, 27 DOE ¶ 85,024 (1999), we used the same method to extrapolate monthly regional prices for natural gasoline and butane. In that case, we noted that our use of these extrapolated Platts prices benefitted Phillips because it indicated a greater level of competitive disadvantage from the purchase of Enron products than the Phillips analyses based on Groppe, Long & Littell compilations of spot market prices. 27 DOE at 88,162.
(2)This three part analysis has been upheld by the courts. See Behm, 3 Fed. Energy Guidelines at 27,103; Atlantic Richfield Co. v. DOE, 618 F. Supp. 1199 (D. Del. 1985).
(3)MAPCO also has included in its refund claim 1,076,000 gallons of ethane that Enron/UPG sales records indicate were sold to MAPCO in 1973 and 1974. We also concluded that these volumes should be excluded from MAPCOs claim, based in part on our finding that their purchase may have been subject to a fixed price contract, but also because (1) MAPCO has not established that any of these purchases occurred during the period from June 1973 through March 1974 when ethane was subject to the price regulations and (2) MAPCOs competitive disadvantage analysis for ethane was inadequate. Enron/MAPCO at 88,115. In its Motion for Reconsideration at 2, MAPCO makes one reference to this excluded ethane gallonage in the context of its objection to our exclusion of its 1973-74 natural gasoline purchases. However, MAPCO provides no specific assertions in this regard concerning its ethane purchases, nor does it address the other grounds presented in Enron/MAPCO for excluding the ethane volumes. Accordingly, MAPCO has provided no basis for us to reconsider our decision to deny an Enron refund for the ethane volumes.
(4)MAPCO states that it has lost - i.e. no longer has - its purchase contracts with Enron, and so cannot directly refute or validate the OHAs finding that a fixed price contract probably existed. Motion at 15.