Case No. RF272-89302
November 1, 1996
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Applications for Refund
Names of Petitioners:Tri State Gas & Appliance Co., Inc.
Rogers Texaco Service Station
Dates of Filing:April 29, 1991
April 30, 1991
Case Numbers:RF272-89302
RF272-89303
This Decision and Order considers the Applications for Refund filed by Tri State Gas & Appliance Co., Inc. (Tri State) and Rogers Texaco Service Stations (Rogers), firms that purchased and then resold refined petroleum products during the period August 19, 1973, through January 27, 1981 (the crude oil price control period). Tri State and Rogers request refunds from crude oil monies available for disbursement by the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE) under 10 C.F.R. Part 205, Subpart V. Because these Applicants are resellers(1)of the gallons for which they are claiming a refund, for the reasons stated below, we will deny their claims.
Pursuant to current DOE policy, purchasers of refined petroleum products may apply to the OHA for a refund from crude oil overcharge funds collected by the DOE. Statement of Modified Restitutionary Policy To Be Implemented in Crude Oil Cases, 51 Fed. Reg. 27899 (August 4, 1986). We have established refund procedures for these funds, which have been made available through consent orders entered into by the DOE and a number of firms that sold crude oil during the crude oil price control period. Berry Holding Co., 16 DOE ¶ 85,405 (1987); A. Tarricone, Inc., 15 DOE ¶ 85,495 (1987) (Tarricone); Mountain Fuel Supply Co., 14 DOE ¶ 85,475 (1986). The refund procedures set forth in these cases 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. Specifically, applicants who are resellers or retailers must demonstrate that they did not pass the overcharges through to their own customers.
In certain refined product refund proceedings, we have established injury presumptions for certain classes of resellers and retailers. See, e.g., Marathon Petroleum Co., 14 DOE ¶ 85,269 (1986); Mobil Oil Corp., 13 DOE ¶ 85,339 (1985). Because those overcharges were confined to purchasers of refined products from a specific consent order firm, these purchasers were likely to have been placed at a competitive disadvantage relative to purchasers who were not overcharged.
In contrast, no such injury presumptions are appropriate, and none have been adopted, for resellers or retailers participating in the Subpart V crude oil refund proceeding. The Entitlements Program spread crude oil overcharges evenly throughout the industry. Because crude oil overcharges equally affected all resellers and retailers, regardless of supplier, we believe that resellers and retailers selling prices generally increased. See Tarricone, 15 DOE at 88,896. It would be unreasonable to presume, therefore, that any reseller or retailer applicants in Subpart V crude oil proceedings were injured. Instead, a reseller or retailer must provide a detailed demonstration that it was unable to pass through the effects of crude oil overcharges to its own customers.(2) Because the Applicants in this Decision and Order are resellers they must therefore make this type of injury showing in order to be eligible for a refund.
Tri State and Rogers have not demonstrated that they absorbed the effects of crude oil overcharges rather than passing the overcharges through to their customers. Accordingly, we cannot find that Tri State or Rogers suffered injury as a result of crude oil overcharges. See Borst Oil Corp., 17 DOE ¶ 85,232 (1988). Because they did not submit any reasoned argument or specific information showing that they were injured by crude oil overcharges, the Applications for Refund must be denied.
It Is Therefore Ordered That:
(1) The Applications for Refund filed by Tri State Gas & Appliance Co., Inc. Case No. RF272-89302, and Rogers Texaco Service Station, Case No. RF272-89303, are hereby denied.
(2) This is a final order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: November 1, 1996
(1)1/ Tri State is a residential and Agricultural propane retailer. Rogers is a retail service station.
(2)2/ Resellers and retailers were permitted to participate and recover monies in the Stripper Well refund proceedings. The Stripper Well refund proceedings refer to the eight escrow accounts created by the U.S. District Court for the District of Kansas to implement the terms of a Settlement Agreement approved in In Re: The Department of Energy Stripper Well Exemption Litigation, M.D.L. 378, reprinted in 6 Fed. Energy Guidelines ¶ 90,509 (D. Kan. 1986). The courts action and subsequent order of disbursement issued on August 7, 1986, established a framework to refund a portion of $1.4 billion in crude oil overcharges to eight enumerated groups of petroleum product purchasers: Refiners, Retailers, Resellers, Airlines, Agricultural Cooperatives, Surface Transporters, Rail and Water Transporters, and Utilities.