Case No. RF346-00004

July 19, 2001

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Applications for Refund

Names of Firms: Anchor Gasoline Corporation/

Grand Caillou Canal, et al.

Dates of Filings: November 9, 1992, et al.

Case Numbers: RF346-4, et al.

This proceeding involves $3,600,000, plus accrued interest, which Anchor Gasoline Corporation (Anchor) remitted to the Department of Energy (DOE) under the terms of the September 22, 1988 Consent Order entered into by DOE and Anchor.(1) The Consent Order settled, except for those matters specifically excluded therein, all civil and administrative claims and liabilities regarding Anchor’s compliance with the Federal Petroleum Price and Allocation Regulations during the period August 19, 1973 through January 27, 1981 (the consent order period). On April 2, 1992, the Office of Hearings and Appeals (OHA) of the DOE instituted special refund procedures for the distribution of those funds. See Anchor Gasoline Corporation, 22 DOE ¶ 85,071 (1992)(Anchor). The special refund procedures allow purchasers of Anchor 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 Anchor consent order fund.(2) Refunds can be sought only for regulated products purchased between August 19, 1973 and January 27, 1981, the end of the period of petroleum price controls. See Anchor at 88,215.

On March 16, 1995, the DOE issued a Proposed Decision and Order (PDO) in the Anchor proceeding. In the PDO, we stated that because of Anchor’s pricing policies it was likely that all businesses that sold Anchor gasoline were in fact consignees of Anchor. The DOE determined that since Anchor consignee-agents did not assume title to the refined products they sold on behalf of Anchor, Anchor’s pricing practices could not have injured the consignees. The PDO examined four criteria for the use of potential refund applicants in determining whether they were independent retailers or Anchor consignees. In summary, those criteria addressed whether Anchor or the claimant established retail product prices, whether Anchor took pump readings at the claimant’s outlet, whether Anchor refined product was paid for upon delivery, or after the product was sold. The final criterion addressed per gallon sales commissions which Anchor paid some of its consignee operators. See “T” Paul Landry’s Canal Service Station, Case No. RF346-1, (March 16, 1995). If any of these indicia characterized the operation of a refund applicant’s outlet, that applicant was most likely an Anchor consignee, and presumably is not eligible for a refund from the Anchor escrow fund account.

The claimants listed in the Appendix to this Decision all sold Anchor refined products (primarily motor gasoline) at the retail level of distribution. Based upon the record, none of the refund applicants qualifies for a refund from the Anchor escrow fund account since these applicants were consignees of Anchor. See Anchor Gasoline Corporation/Al’s Canal Station, Case No. RF346-73 et al., (January 5, 2000)(Al’s Canal Station). Four applicants failed to respond to OHA’s written inquiry of August 29, 1994, seeking information regarding their status as likely Anchor consignees. These applicants also failed to respond to a similar set of questions contained in the Proposed Decision and Order issued to them on March 16, 1995.(3) Given the nature of Anchor’s business operations, we must assume that these claimants were Anchor consignees since this was the case with most of the outlets selling Anchor products. Consequently, we will deny their refund claims.

Regarding the remaining applicants, eight acknowledged that Anchor established their retail product prices. A number of these claimants also indicate that Anchor either paid them sales commissions, routinely read their pumps or charged them only for Anchor product actually sold, as opposed to charging them for product upon delivery. A single claimant indicated that Anchor routinely sent an employee to take pump readings at the claimant’s station.(4) This behavior by Anchor would be atypical for a supplier that does not retain ownership of product once a delivery is made but is common for a supplier tracking sales volumes sold by a consignee agent. Consequently, we must conclude that these nine applicants were also consignees of Anchor and thus will deny their Applications for Refund in the Anchor proceeding. See Al’s Canal Station.

It Is Therefore Ordered:

1) The Applications for Refund specified in the Appendix to this Decision and Order are denied.

2) This is a final Decision and Order of the Department of Energy.

George B. Breznay

Director

Office of Hearings and Appeals

Date:July 19, 2001

(1)Under the terms of the Consent Order, Anchor remitted $7,775,000 to the DOE. In addition, Anchor was required to deposit into the escrow account a percentage of its profits each year until 1994, bringing the total Consent Order funds to a minimum of $9,000,000. Our calculations for this proceeding are based on the assumption that the total refunds remitted will be the minimum of $9,000,000. These funds were then divided between Anchor’s alleged violations regarding refined product sales and crude oil sales. The crude oil portion of the Consent Order fund ($5,400,000) will be distributed in accordance with the procedures established in Anchor Gasoline Corporation, 22 DOE ¶ 85,071 (1992). See also A. Tarricone, Inc., et al., 15 DOE ¶ 85,495 (1987).

(2)For purposes of this proceeding, any reference to Anchor includes Anchor Gasoline Corporation and its wholly-owned subsidiary, Canal Refining Company. See Anchor at 88,210.

(3)West Park Canal (Case No. RF346-24), Morgan Garage (Case No. RF346-82), Bernard Canal Service Station (Case No. RF346-94) and Herbert’s Canal (Case No. RF346-84), declined OHA’s request for additional information.

(4)Washington Canal Center (Case No. RF346-113).

Appendix

Case No. Applicants Address

RF346-4 Grand Caillou Canal Floyd Bailey

1908 Paris Lane

Houma, LA 70363

RF346-24 West Park Canal Michael Stearns

3610 Euclid St.

Houma, LA 70364

RF346-33 Richard Canal Station Kurt. G. Richards

1500 St. Louis Drive

Church Point, LA 70525

RF346-64 Bertrand Canal Service Station Hugh Bertrand

1304 Maude Ave.

Abbeville, LA 70510

RF346-82 Morgan Garage H. F. Morgan

1010 N. Polk St.

Rayne, LA 70578

RF346-84 Herbert’s Canal John Craig Herbert

1708 Veteran’s Memorial

Abbeville, LA 70510

RF346-87 Semar Canal Repair Shop Clarence Semar

P. O. Box 269

Hayes, LA 70646

RF346-94 Bernard Canal Service Station Horace Bernard

2313 Moelnig

Lake Charles, LA 70601

RF346-99 Arnaudville Canal Center Lee Roy LaPorte

1277 Rue De LaPorte

Arnaudville, LA 70512

RF346-106 Bill E. Haynes Bill Haynes

1269 Stephen St.

DeQuincy, LA 70633

RF346-109 Singleton’s Canal Stella Singleton

HC 61 Box 131

Dry Creek, LA 70637

RF346-113 Washington Canal Center Emiline Robertson

113 Harold St.

Opelousas, LA 70570