Case No. RF340-00119
April 8, 1998
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Petitioner: Enron Corp./
Scurlock Permian Corporation
Date of Filing: April 23, 1992
Case Number: RF340-119
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 Scurlock Permian Corporation.
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. We established the presumption that end-users or ultimate consumers whose businesses are unrelated to the petroleum industry were injured by Enron's alleged overcharges. Therefore, end-users of Enron NGLs need only document their purchase volumes of those products to make a sufficient showing of injury. Id. at 88,960.
Scurlock Permian has submitted all of the information required of end-users in the Enron proceeding. Scurlock Permian claims that it made regular purchases of refrigeration grade propane from UPG and Northern for use as a refrigerant at its plant in Todd Ranch, Texas. Enron records in DOEs possession of some of the sales of Northern indicate that Scurlock Permians estimated purchase volume of 295,250 gallons of propane from Northern during the consent order period is reasonable. In light of the small size of this claim, and the corroborating Northern records, we believe that it is reasonable to accept Scurlock Permians explanation concerning the nature of its propane use and its Enron purchases.
Scurlock Permian has not claimed that it was disproportionately overcharged. Nor has it attempted to prove that it was injured by Enron's alleged overcharges. Therefore, as an end-user, Scurlock Permian will receive a principal refund of $1,774 (295,250 x $.00601 = $1,774). Scurlock Permian will also receive $1,312 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 Scurlock Permian, including interest, is $3,086.
It Is Therefore Ordered That:
(1) The Application for Refund submitted by Scurlock Permian Corporation (Case No. RF340-119) 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 $3,086 from the DOE deposit fund escrow account maintained at the Department of the Treasury and funded by Enron Corp., Consent Order No. 730V00221Z, to:
Scurlock Permian Corporation
Attn: Paul Almeida
Supervisor of Financial Services
P.O. Box 4648
Houston, TX 77210-4648
(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. This 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 8, 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.