Case No. RF346-00073
January 5, 2000
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Applications for Refund
Name of Firms: Anchor Gasoline Corporation/
Al's Canal Station, et al.
Date of Filings: August 16, 1993 et al.
Case Numbers: RF346-73 et al.
This proceeding involves $3,600,000, plus accrued interest, which Anchor Gasoline Corporation (Anchor) remitted to the Department of Energy 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 Anchors 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 of the DOE instituted special refund procedures for the distribution of those funds. See Anchor Gasoline Corp., 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. This Decision and Order considers 14 Applications for Refund filed by operators of retail service stations.
Evaluating applications in this proceeding requires that we consider the economic harm or injury suffered by that applicant. Id. at 88,216; see also Sid Richardson Carbon & Gasoline Co., 12 DOE ¶ 85,054 (1984). Firms that were not injured by Anchors pricing practices are ineligible for a refund. Firms that purchased Anchor products either for consumption or for resale are presumed to have been injured, and are eligible for refunds in this proceeding. However, consignee agents did not purchase Anchor products and are presumed to have experienced no injury as a result of Anchors alleged violations. See Anchor at 88,218. Consignee agents sold products pursuant to agreements whereby the supplier established the price to be charged by the consignee and compensated the consignee with a fixed commission based upon the volume of products that it sold. Because they could not purchase or adjust the selling price of these products, consignees could not absorb any overcharges. A consignee may rebut the presumption of non-injury by demonstrating, e.g., that its sales volumes and corresponding commission revenues declined due to the alleged uncompetitiveness of Anchors pricing practices. See Gulf Oil Corp./C.F. Canter Oil Co., 13 DOE ¶ 85,388 at 88,962 (1986).
After initial inspection of all Applications for Refund filed in the Anchor proceeding, it appeared that many applicants were consignee agents. We surveyed the Applicants by asking the following questions:
(1) Did Anchor/Canal set the retail price of the gasoline, or did you (station operator) set the price?
(2) Did Anchor/Canal send someone to take pump reading?
(3) When you paid Anchor/Canal for the gasoline, did you pay on delivery, or after the gasoline was sold? Did you pay only for the amount that had been sold, according to the pump readings, or did you pay for the entire shipment on delivery?
(4) Did you subtract a set per gallon sales commission from your payment to Anchor/Canal for gasoline?
The responses we received generally indicated that (1) Anchor set the retail price of the gasoline; (2) Anchor/Canal sent someone to take the pump readings; (3) the Applicants paid only for the gasoline actually sold; and (4) a sales commission was given for each gallon of gasoline. From these responses we have concluded that the Applicants listed in the Appendix were consignee agents for Anchor/Canal as defined in 10 C.F.R. § 212.31.(3) Our inquiries to officials at Anchor/Canal confirmed the nature of the transactions described above by the Applicants.
Consequently, in a letter dated March 16, 1995, we sent to each of the Applicants listed in the Appendix to this Decision a draft copy of a Proposed Decision and Order summarizing the findings above and concluding that the Applicants had not rebutted the presumption of non-injury for consignees. The draft Proposed Decision and Order went on to hold that these Applicants were therefore not eligible to receive refunds in the Anchor/Canal proceeding. However, we provided the Applicants with an opportunity to submit evidence to challenge the findings and conclusions made in the draft Proposed Decision and Order.
None of the Applicants listed in the Appendix to this Decision submitted any additional information responding to the draft Proposed Decision and Order. As discussed above, the information we have received from various applicants as well as Anchor/Canal officials indicates that during the refund period Anchor/Canal retained legal title of the refined petroleum products sold by their retailers and that it set the selling price for these products. Further, Anchor/Canal outlet operators were paid on a per gallon basis. Given the characteristics of their business relationship with Anchor/Canal, we find that the Applicants listed in the Appendix were consignees of Anchor/Canal. See 10 C.F.R. § 212.31 (definition of "Consignee Agent").
In establishing the Anchor proceeding, we stated the we would presume that consignees of Anchor/Canal products were not injured by the firm's alleged pricing policies since consignees received a fixed commission based upon the volume of products it sold and never took legal title to the petroleum products or set the selling price of the products. See Anchor, 22 DOE at 88,218. None of the Applicants listed in the Appendix to this Decision has offered evidence to rebut the presumption of non-injury for consignees. Consequently, we shall deny the Applications for Refund listed in the Appendix to this Decision and Order. (4)
It Is Therefore Ordered That:
(1) The Applications for Refund specified in this Decision and Order are hereby denied.
(2) This is a final Decision and Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date:January 5, 2000
(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 $9,000,000. These funds have then been divided between Anchors alleged violations regarding refined product sales and crude oil sales. The crude oil portion the Consent Order fund ($5,400,000) will be distributed in accordance with the procedures established in Anchor Gasoline Corp., 22 DOE ¶ 85,071 (1992).
(2)For purposes of this proceeding, any reference to Anchor includes Anchor Gasoline Corporation and its wholly-owned subsidiary, Canal Refining Company (Canal). See Anchor at 88,210. In this Decision we will refer to Anchor and Canal as Anchor/Canal.
(3)Section 212.31 of 10 C.F.R defines "Consignee Agent" as "a firm which distributes covered products to purchasers pursuant to a contractual arrangement with a refiner under which the refiner retains title to the covered products and specifies the prices to be paid the purchaser and under which the refiner pays the consignee agent a commission based on the volume of covered products distributed by the consignee agent." 10 C.F.R. § 212.31
(4)We note that we have already granted a number of refunds in this proceeding. We will examine each of the applicants to determine if they were in fact consignees. If we determine that they were consignees we will rescind these refunds and request repayment of the refunds granted to these applicants.
Appendix
CASE NO. APPLICANT CONTACT STREET CITY/STATE RF346-00073 AL'S CANAL STATION OR ELDRIDGE HOFFPAUIR 1805 MAY ST. CROWLEY, LA 70526 RF346-00074 ST. MARTINVILLE CANAL OR STEVEN CHAMPAGNE 382 LAWRENCE ST. BREAUX BRIDGE, LA 70517 RF346-00077 SOUTH STATE CANAL OR JIMMIE TOUCHET 404 KIBBE ABBEVILLE, LA 70510 RF346-00079 PINHOOK CANAL OR MICHAEL GUIDRY P.O. BOX 91972 LAFAYETTE, LA 70509 RF346-00080 PINHOOK CANAL OR J.C. MOORE 3005 CAPTAIN CADE RD. BROUSSARD, LA 70518 RF346-00086 HIGHWAY 14 BY-PASS CANAL OR KEITH ROMERO 3819 LONS ABBEVILLE, LA 70510 RF346-00088 WELSH I-10 CANAL OR NEAL ARCEUCAUX 410 S. ELM ST. WELSH, LA 70591 RF346-00089 DONALDSONVILLE CANAL STATION OR FOCHETTE M. HOOD 215 W. 2ND ST. DONALDSONVILLE, LA 70346 RF346-00090 PRIMEAUX SOUTH STATE CANAL OR JOYCE G. PRIMEAUX 305 W. MAGNOLIA ABBEVILLE, LA 70510 RF346-00091 PRIMEAUX SOUTH STATE CANAL OR JAMES PRIMEAUX RT. 2, BOX 1109 MAURICE, LA 70555 RF346-00092 HIGHWAY 14 BY-PASS CANAL OR DAVID ROGERS P.O. BOX 1500 ABBEVILLE, LA 70510 RF346-00095 HIGHWAY 14 BY-PASS CANAL OR KERN M. MEYERS 1800 JONES ST. WESTLAKE, LA 70669 RF346-00102 EVANS CANAL STATION OR JOSEPH E. PONTHIEUX BOX 187 MELVILLE, LA 71353 RF346-00110 WASHINGTON CANAL CENTER OR EMILINE ROBERTSON 113 HAROLD ST. OPELOUSAS, LA 70570 TOTALS: 14