Case No. RF272-69293
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Motion for Discovery
Name of Applicant:Asphalt Products Corporation
Dates of Filing:June 30, 1988
December 1, 1988
Case Numbers:RF272-69293
RD272-69293
This Decision and Order will consider an Application for Refund submitted by Asphalt Products Corporation (APC). APC is engaged in the production and sale of asphaltic concrete. In its Application, APC has requested a refund from crude oil overcharge funds. These funds are 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. During the crude oil price control period, APC purchased liquid asphalt to produce asphaltic concrete.(1)
Formerly, purchasers of refined petroleum products during the price control period could apply for a refund from crude oil overcharge funds. 51 Fed. Reg. 27899 (August 4, 1986). The DOE collected the crude oil overcharge funds through consent orders with certain 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, to receive a refund, an applicant generally must document its purchase volumes and show that it suffered injury from crude oil overcharges. If an applicant is an end-user, however, it does not have to make a showing of injury. We found it reasonable to presume that an end-user absorbed rather than passed through the crude oil
overcharges.(2)52 Fed. Reg. 11737 (April 10, 1987); City of Columbus, Georgia, 16 DOE ¶ 85,550 (1987).
Nevertheless, the presumption of end-user injury is rebuttable. If a party produces evidence of sufficient weight to rebut the presumption, we will require the applicant to provide evidence of injury. Berry at 88,797. A group of States and Territories of the United States (the States) has filed an objection to APC's Application, attempting to rebut the presumption of injury.
The States argue that APC suffered little injury because it could pass through most or all of its crude oil overcharges to its customers. The argument is based on an economic analysis of the asphalt industry. The States do not provide any evidence specific to APC's pricing practices during the price control period.
We find that the Objections are insufficient to rebut the presumption of end-user injury. A party may rebut an applicant's use of the presumption only by showing that the particular applicant passed through a specific amount of crude oil overcharges. W.H. Johns, Inc., 18 DOE ¶ 85,574 (1989); see also In re: the Department of Energy Stripper Well Exemption Litigation, 746 F. Supp. 1446 (1990) (Stripper Well). In contrast, "a description of the general economic climate of an industry presents no direct evidence that a specific applicant was able to pass through its increased energy costs to its customers, and is therefore insufficient to rebut the end-user presumption of injury." Parker Drilling Co., 20 DOE ¶ 85,480 at 89,099 (1990). The States have not given us evidence that APC passed through any specific amount of crude oil overcharges. We will therefore deny the Objection and presume that APC, as an end-user, was injured by crude oil overcharges.
The States have also submitted a Motion for Discovery. The States seek to discover, through interrogatories and the production of documents, APC's petroleum costs and pricing policies during the price control period. Such general requests for information are inappropriate where the States have presented insufficient evidence to rebut the presumption of injury. Christian Haaland A/S, 17 DOE ¶ 85,439 (1988). The U.S. District Court for the District of Kansas has explained that "OHA's decision to forego discovery and other litigation methods is rational given the equitable nature of the Subpart V refund process." Stripper Well at 1450. We will therefore deny the States' Motion for Discovery.
We have carefully reviewed APCs Application. APC determined its gallonage figures by preparing an estimate based on contemporaneous records. In support of its gallonage claim, APC has submitted copies of asphalt production records from recent years. After examining these records, we find that APCs gallonage claim is reasonable.
As an end-user, APC is entitled to receive its full allocable share of crude oil overcharge funds. We calculated the refund amount by multiplying an applicant's approved gallonage claim by the volumetric refund amount of $.0016 per gallon. The total volume that we have approved for APC is 51,821,576 gallons of refined petroleum product. The total refund that we will grant APC is therefore $82,915.
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 claimants 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 Asphalt Products Corporation (Case No. RF272-69293) is hereby approved as set forth in Paragraph (2) below.
(2) The Motion for Discovery and Request for the Issuance of a Special Report, and for Stay of Proceedings, filed by a group of States and Territories of the United States (Case No. RD272-69293) is hereby denied.
(3) 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 a total of $82,915 from the DOE deposit fund escrow account denominated Crude Tracking Claimants 4, Account No. 999DOE010Z, maintained at the Department of the Treasury, to:
Asphalt Products Corporation
c/o Denny West
P.O. Box 817
Novi, MI 48376
(4) To facilitate the payment of future refunds, Asphalt Products Corporation 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 Information
Office of Hearings and Appeals
Department of Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585-0107
(5) The determinations made in this Decision and Order are based upon the presumed validity of the statements and documentary materials submitted by Asphalt Products Corporation. These determinations may be revoked or modified at any time upon a finding that the factual basis underlying the Application for Refund is incorrect.
(6) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: November 1, 1996
(1)The crude oil price control period extended from August 19, 1973 through January 27, 1981.
(2)We define an end-user as the ultimate consumer of the petroleum products, who was in a business unrelated to the petroleum industry, and who was not subject to the price regulations of the DOE or its predecessors.