Case No. RG272-01075
December 5, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Applicant:Philippine Airlines, Inc.
Date of Filing: July 3, 1995
Case Number: RG272-1075
This Decision and Order will consider the Application for Refund filed by Philippine Airlines, Inc. The application is based upon Philippine Airlines purchases of refined petroleum products in the United States during the crude oil price control period (August 19, 1973 through January 27, 1981). Philippine Airlines 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 Philippine Airlines, and we have determined that the information provided by it sufficiently supports its Application for Refund. Philippine Airlines claim is for 161,161,054 gallons of jet fuel it purchased during the refund period. It purchased the fuel in Honolulu, Hawaii and San Francisco, California during the course of its regular flights between the Philippines and the United States. Philippine Airlines estimated the number of gallons it purchased by completing a detailed analysis of its aircrafts fuel usage and its flight schedules from the refund period. It submitted its calculations, information about its fleet of aircrafts, and copies of the flight schedules to support its gallonage claim. Based upon this information, we find the gallonage estimate to be reasonable.
We find that Philippine Airlines was an end-user of refined petroleum products. 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 161,161,054 gallons, and the refund granted is $257,858.
Philippine Airlines fuel purchases were originally included in a refund application filed by the Philippine Government (Case No. RG272-754). Philippine Airlines submitted its application materials as supporting documents for the Philippine Government claim. However, Philippine Airlines requested that its refund check be made payable to Philippine Airlines, Inc., and sent to its office in California. The Philippine Government had requested that any refund resulting from its application be made payable to and sent to the Office of the Solicitor General in the Republic of the Philippines.
In a letter dated May 30, 1997, the Office of the Solicitor General, Republic of the Philippines, stated that the Philippine Government should receive Philippine Airlines refund because the airline was primarily government owned and controlled during the refund period.(1) However, the fact that Philippine Airlines, an extant corporation, was owned by the Philippine Government during the refund period is irrelevant.
As we have stated in previous Decisions, a corporation is an individual with its own legal personality, that is entitled to conduct business, incur liabilities, accumulate assets, and sue or be sued. As an independent entity, the corporate individual is entitled to claim a refund. See Gulf Oil Corporation/ Flame-Rite Gas, Inc., 19 DOE ¶ 85,219. Thus, as long as a corporation is still in existence, we will generally make the refund check payable to the corporation.
As a corporation, Philippine Airlines is the independent entity that is entitled to claim a refund based upon its petroleum purchases during the refund period. Therefore, we believe the refund check should be made payable to and sent to Philippine Airlines, Inc. The Philippine Government has not presented any other arguments to show that the refund should be distributed otherwise.
The final deadline for the crude oil 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.
On August 21, 1997, a copy of the determination which appears above was provided to Philippine Airlines and the Philippine Government in the form of a Proposed Decision and Order. We advised both parties that they should file any objections they may have to the Proposed Decision and Order by October 3, 1997. This deadline was ultimately extended until November 7, 1997 at the request of the Philippine Government. The November 7 deadline has now passed and no objections have been received from either party. Consequently, this Decision and Order is being issued in final form. Since Philippine Airlines and the Philippine Government had notice of the issuance of the Proposed Decision and Order, they will accordingly be deemed to consent to the issuance of the present determination.
It Is Therefore Ordered That:
(1) The Application for Refund filed by Philippine Airlines, Inc., 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 $257,858 from the DOE deposit fund escrow account denominated Crude Tracking-Applicants 4, Account Number 999DOE010Z, maintained at the Department of Treasury to Philippine Airlines, Inc., Attention: Gloria Ty, VP & Regional Controller-Americas, 447 Sutter Street, 2nd Floor, San Francisco, CA, 94108.
(3) To facilitate the payment of future refunds, Philippine Airlines 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
(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: December 5, 1997
(1)According to a Dunn & Bradstreet report the Philippine Government sold 67 percent of the airlines capital stock to a private investor in 1992.