Case No. RF304-14479

January 09, 2001

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Application for Refund

Name of Petitioner:Atlantic Richfield Company/Pulver Gas & Oil Co., Inc.

Date of Filing:August 13, 1993

Case Number: RF304-14479

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 an Application for Refund filed by Virginia Frink, the widow of the owner of Pulver Gas & Oil Co., Inc.

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

Pulver Gas & Oil Co., Inc. (Pulver) is a reseller and retailer that has claimed a refund less than $5,000 in principal. In its application for refund, Pulver elected to rely upon the ARCO volume information supplied to it by the DOE.

We have reviewed Pulver’s application and have found it meritorious. Because Ms. Frink is the widow of the sole owner of Pulver, she is the appropriate party to whom the refund should be granted. See e.g. Eason Oil Company/M&M Gas Company, 26 DOE ¶ 85,011 (1996). Accordingly, we find that Ms. Frink should receive a refund of that applicant’s full volumetric allocation of the ARCO consent order fund. In addition, Ms. Frink should receive a proportionate share of the interest accrued on the consent order fund. The total volume approved in this Decision is 3,124,803 gallons. The refund granted to Ms. Frink in this Decision is $5,627, representing $2,296 in principal and $3,331 in interest.

Although we have carefully examined the applicant’s claim and supporting data, the determinations reached in this Decision are based on the representations made in the application.

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 refund ordered.

It Is Therefore Ordered That:

(1) The Application for Refund specified in this Decision and Order is 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) $5,627 ($2,296 in principal plus $3,331 in interest) to Pulver Gas & Oil Co., Inc. The check should be made payable to Ms. Virginia Frink, the widow of the owner of Pulver Gas & Oil Co., Inc. and sent to the address below:

Virginia Frink

11 Becraft Avenue

Hudson, NY 12534

(3) The determinations made in this Decision and Order are based upon 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 finding that the factual basis underlying any of 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: January 09, 2001

(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.