Case No. RR272-00286
June 27, 1997
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Motion for Reconsideration
Name of Applicant:Starbuck Creamery Company
Date of Filing: December 1, 1996
Case Number: RR272-286
On December 1, 1996, Starbuck Creamery Company (Starbuck) filed a Motion for Reconsideration with the Office of Hearings and Appeals (OHA) of the Department of Energy (DOE). If the Motion were granted, the OHA would reconsider the Application for Refund filed by Starbuck in the Subpart V crude oil refund proceeding (Case No. RG272-782) that was dismissed on November 20, 1996.
On July 5, 1995, an Application for Refund was submitted by PBA Tax Accounting (PBA) on Starbucks behalf. On June 24, 1996, we sent a letter to PBA requesting a letter from Starbuck showing that PBA was authorized to file on its behalf. We requested that the letter be submitted to us by August 9, 1996. In a letter to PBA dated July 29, 1996, we extended the August 9 deadline to October 9, 1996. We did not receive the letter by October 9 and we dismissed the application on November 20, 1996. We received a letter written by Rodney Leinen, General Manager of Midwest Consolidated Coop (Midwest), on December 1, 1996 which stated that PBA was authorized to file the application.(1)
In its December 1, 1996 Motion for Reconsideration, Midwest asks us to reconsider the application submitted on Starbucks
behalf based on the authorization letter PBA sent to us. Since the information was signed and dated by Mr. Leinen on November 18, 1996, two days before we dismissed the application, we believe that a dismissal would unfairly penalize Midwest and we have decided to grant its Motion for Reconsideration. We will therefore analyze the application.
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 that we have established specify that, to receive a refund, an applicant generally must: (1) document its purchase volumes; and (2) show that it was injured by crude oil overcharges.
We have further established that an applicant is presumed to have absorbed rather than passed on crude oil overcharges if it (1) was an end-user (ultimate consumer) of petroleum products; (2) was in a business unrelated to the petroleum industry; and, (3) was not subject to the price regulations of the DOE or its predecessors. 52 Fed. Reg. 11737 (April 10, 1987); City of Columbus, Georgia, 16 DOE ¶ 85,550 (1987). Such an applicant is presumed to have been injured and does not need to provide a showing of injury.
Starbuck was an agricultural cooperative. The application is based on petroleum products that it purchased for resale to the farmers who were its members. We regard a refund application filed by a cooperative that resold petroleum products to its members as a claim filed on behalf of the members themselves. Farmers Union Oil Co., 17 DOE ¶ 85,464 (1988). A cooperative can thus claim the presumption of end-user injury to the extent that its members were end-users. Consequently, we will consider granting a refund to a cooperative based on products resold to its members on the condition that it certify that it will pass through the refund to its members.
The farmers who composed Starbucks membership are end-users. Midwest has certified that it will pass through any refund received to its members. We will therefore consider its claim under the presumption of end-user injury.
We have carefully reviewed the application. We also contacted Midwest by telephone to verify that it is still in business. We verified that the records submitted are authentic and the gallonage claim is correct. Therefore, we are satisfied that the gallonage claim is reasonable.
The total volume approved in this Decision and Order is 5,682,250 gallons of refined petroleum products. The total refund amount granted, which is calculated by multiplying the approved gallonage claim by the volumetric refund amount of $0.0016 per gallon, is $9,092.
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.
It Is Therefore Ordered That:
(1) The Motion for Reconsideration filed on behalf of Starbuck Creamery Company 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 $9,092 from the DOE deposit fund escrow account denominated Crude Tracking-Applicants 4, Account Number 999DOE010Z, maintained at the Department of Treasury to Midwest Consolidated Coop, Re: Starbuck Creamery Company, P.O. Box 129, Cyrus, MN, 56323.
(3) Midwest shall pass through to its members/patrons any refund that it receives on a dollar-for-dollar basis.
(4) To facilitate the payment of future refunds, Midwest 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 the applicant. These determinations may be revoked or modified at any time upon a finding that the factual basis underlying any 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: June 27, 1997
(1)Midwest is the result of a merger between Starbuck and two other agricultural cooperatives.