Case No. RF304-13800

September 28, 2000

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Applications for Refund

Names of Petitioners: Atlantic Richfield Co./

3 S Enterprises, Inc.

Clark’s Petroleum Service, Inc.

Date of Filings: December 30, 1992

June 29, 1993

Case Numbers: RF304-13800

RF304-14413

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. Atlantic Richfield Company, 17 DOE

¶ 85,069 (1988) (ARCO). 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 two Applications for Refund filed by 3 S Enterprises, Inc., Case No. RF304-13800, and Clark’s Petroleum Service, Inc., Case No. RF304-14413.

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

These two applicants are resellers and retailers that have elected to rely upon the mid-level presumption. Each applicant has submitted and elected to rely upon either a schedule of monthly purchases of ARCO products during the consent order period or the ARCO volume information supplied to it by the DOE.

We have reviewed these applications and have found them meritorious. Accordingly, we find that both firms should receive refunds equal to 41 percent of their volumetric allocation. For the 3 S Enterprises, Inc., the calculated refund (28,045,212 gallons x $0.000735 x 0.41) equals $8,451 in principal. For the Clark’s Petroleum Service, Inc., the calculated refund (19,617,955 gallons x $0.000735 x 0.41) equals $5,912 in principal. In addition, the firms should receive a proportionate share of the interest accrued on the consent order fund as indicated in the Appendix to this Decision. The total volume granted in this Decision is 47,663,167 gallons. The total

amount of refunds approved in this Decision is $34,773, representing $14,363 in principal and $20,410 in interest.

Although we have carefully examined both of the applicant’s claims and supporting data, the determinations reached in this Decision are based on the representations made in the applications. 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 refunds ordered.

It Is Therefore Ordered That:

(1) The Applications for Refund specified in the Appendix to this Decision and Order are 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) the amounts specified in the Appendix to this Decision and Order to the appropriate claimants. All checks should be made payable to the applicant.

(3) The determinations made in this Decision and Order are based upon the presumed validity of the statements and documentary material submitted by the applicants. The determinations may be revoked or modified at any time upon a finding that the factual basis underlying any of the Applications 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:September 28, 2000

(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). See A. Tarricone, Inc. 15 DOE ¶ 85,495 (1987).

(2)For purposes of this proceeding, any reference to ARCO includes its subsidiaries and affiliates.

Appendix

CASE NO. APPLICANTCONTACT STREET CITY/STATEVOLUME PRINCIPAL INTEREST REFUND
RF304-13800 3 S. ENTERPRISES, INC.   OR LARRY SEAGOPO BOX 1366MCCOMB, MS 3964828,045,212$8,451 $12,009$20,460
RF304-14413CLARK'S PETROLEUM SERVICE INC.   C/O STEVE TORNABENE7846 OXBOW RD.CANASTOTA, NY 1303219,617,955 $5,912$8,401 $14,313
TOTALS:2 47,663,167$14,363 $20,410$34,773