Case No. RG272-00738
January 20,1998
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Applicant:City of Provo
Date of Filing: July 3, 1995
Case Number: RG272-738
This Decision and Order will consider the Application for Refund filed by the City of Provo, Utah (Provo). The application is based upon Provos purchases of refined petroleum products in the United States during the crude oil price control period (August 19, 1973 through January 27, 1981). Provo has requested a refund from crude oil funds available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) under the provisions of 10 C.F.R. Part 205, Subpart V.
In the past, purchasers of refined petroleum products were allowed to apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. 51 Fed. Reg. 27899 (August 4, 1986). We have established refund procedures for these funds, which have been made available through consent orders between the DOE and numerous firms that sold crude oil during the price control period. E.g., Berry Holding Co., 16 DOE ¶ 85,405 (1987); A. Tarricone, Inc., 15 DOE ¶ 85, 495 (1987); Mountain Fuel Supply Co., 14 DOE ¶ 85,475 (1986).
The refund procedures specify that in order to receive a refund, an applicant generally must: (1) document its purchase volumes and (2) show that it was injured by alleged crude oil overcharges. Applicants who were end-users of petroleum products, however, and whose businesses were unrelated to the petroleum industry are presumed to have absorbed the crude oil overcharges. These applicants need not submit proof of injury to receive a refund in the Subpart V proceeding. City of Columbus, Georgia, 16 DOE ¶ 85,550 (1987).
In general, an applicant is eligible for a refund equal to the number of gallons it purchased multiplied by the volumetric refund amount. Currently, the volumetric refund amount is $.0016 per gallon.
We have carefully reviewed the information submitted by Provo. Provo estimated its gallonage claim using records from the refund period when available as well as more recent records of petroleum purchases. We find that the gallonage estimate submitted by Provo is reasonable.
Provos gallonage claim consists of 1,112,503 gallons of gasoline, 637,176 gallons of diesel fuel, 231,300 gallons of asphalt, and 7,770 gallons of tack oil. The gallonage claim also consists of 5,037,300 gallons of asphalt and 62,750 gallons of tack oil used by road paving contractors. The Office of Hearings and Appeals has adopted a standard for considering the products for which an applicant can claim a refund in this proceeding. In a Notice published in the Federal Register on July 10, 1992, we announced that we would accept applications based on products that were either (a) designated as covered products in regulations promulgated pursuant to the Emergency Petroleum Allocation Act of 1973 (EPAA), 15 U.S.C. §§ 751-760; (b) purchased from a crude oil refinery; or (c) originated in a crude oil refinery and purchased from a reseller who did not substantially change the products' form. Both gasoline and diesel fuel are considered covered products under the EPAA. Tack oil is an asphalt emulsion. We have previously found that the asphalt component of asphalt emulsions is produced in a crude oil refinery and is therefore eligible for a refund in this proceeding. Eau Clare County, 17 DOE ¶ 85,326 (1988). Therefore Provo is eligible for a refund based on its purchases of gasoline, diesel, and tack oil.
Provo purchased asphalt in the form of bituminous concrete. Provo stated that the bituminous concrete it purchased contained between 6.75 and 7 percent liquid asphalt. We have previously found that liquid asphalt, when purchased in its unblended state, is an eligible product in the crude oil refund proceeding. Dane County Highway & Transportation Department, 17 DOE ¶ 85,249 (1988). However, we have also found that purchases of bituminous concrete are not eligible for a refund because the firm that blended the bituminous concrete substantially changed the form of the liquid asphalt. City of Annapolis, 17 DOE ¶ 85,774. Therefore, we will not grant a refund to Provo for any purchases of bituminous concrete.(1)
We will also not grant Provo a refund for the 62,750 gallons of tack oil used by road paving contractors. The information in the application indicates that these gallons were purchased by the contractors, not by Provo. Since Provo did not purchase these gallons, we do not consider it an end-user of these gallons. Therefore, it must prove injury in order to receive a refund for them. Provo has not shown that it was injured by the contractors purchases and therefore cannot receive a refund for those gallons.
We find that Provo was an end-user of gasoline (1,112,503 gallons), diesel fuel (637,176 gallons), and tack oil (7,770 gallons). Accordingly, it is presumed injured by the crude oil overcharges and is entitled to receive its full allocable share of the crude oil funds. The total volume approved in this Decision is 1,757,449 gallons, and the refund granted is $2,812.
The final deadline for the crude oil refund proceeding was June 30, 1995. It is the current policy of the DOE to pay eligible crude oil refund applicants at the rate of $0.0016 per gallon. We will decide whether sufficient crude oil overcharge funds are available for additional refunds for this and other successful applicants when we are better able to determine how much additional money will be collected from firms that have either outstanding obligations to the DOE or enforcement cases currently in litigation.
It Is Therefore Ordered That:
(1) The Application for Refund filed by the City of Provo 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 $2,812 from the DOE deposit fund escrow account denominated Crude Tracking-Claimants 4, Account Number 999DOE010Z, maintained at the Department of Treasury to City of Provo, c/o Robert D. West, 351 W. Center, P.O. Box 1849, Provo, UT, 84601.
(3) To facilitate the payment of future refunds, Provo shall notify the Office of Hearings and Appeals in the event that there is a change of address, or if an address correction is necessary. Such notification shall be sent to:
Director of Management InformationOffice of Hearings and Appeals
Department of Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585-0107
(4) The determinations made in this Decision and Order are based upon the presumed validity of the statements and documentary materials submitted by the applicant. Any of these determinations may be revoked or modified at any time upon a finding that the basis underlying any Application for Refund is incorrect.
(5) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: January 20, 1998
(1)The OHA has granted a refund to an applicant that purchased paving asphalt (bituminous concrete) for the liquid asphalt portion of the product. In this case, the paving asphalt was purchased under contracts that contained price escalation clauses. These clauses allowed the seller to pass through immediately in the form of higher paving asphalt prices all increases in the price of its liquid asphalt content. State of Montana, 21 DOE ¶ 85,209 (1991). According to David Gunn, Director, Department of Public Services, Provos contracts did not contain any such escalation clauses. Telephone Conversation between Mr. Gunn and OHA, June 24, 1997.