May 27, 2003
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Firm: Anchor Gasoline Corporation/
Racetrac Petroleum, Inc.
Date of Filing: December 29, 1993
Case Number: RF346-112
This proceeding involves $3,600,000, plus accrued interest, which Anchor Gasoline Corporation (Anchor) remitted to the Department of Energy under the terms of the September 22, 1988 Consent Order entered into by DOE and Anchor. (1) The Consent Order settled, except for those matters specifically excluded therein, all civil and administrative claims and liabilities regarding Anchors compliance with the Federal Petroleum Price and Allocation Regulations during the period August 19, 1973, through January 27, 1981 (the consent order period). On April 2, 1992, the Office of Hearings and Appeals of the DOE instituted special refund procedures for the distribution of those funds. See Anchor. The special refund procedures allow purchasers of Anchor 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 Anchor consent order fund. (2) Refunds can be sought only for regulated products purchased between August 19, 1973, and January 27, 1981, the end of the period of petroleum price controls. See Anchor, 22 DOE at 88,215. This Decision and Order considers an Application for Refund filed by Racetrac Petroleum, Inc. (Racetrac).
Evaluating applications in this proceeding requires that we consider the economic harm or injury suffered by each applicant. Id. at 88,216; see also Sid Richardson Carbon & Gasoline Co., 12 DOE ¶ 85,054 (1984). Firms that were not injured by Anchors pricing practices are ineligible for a refund. Firms that purchased Anchor products for consumption are presumed to have been injured, and are eligible for refunds in this proceeding.(3) Additionally, reseller claimants who seek a refund of $10,000 or less, excluding interest, are also presumed to have been injured. Anchor, 22 DOE at 88,217. Resellers whose allocable share exceeds $10,000, may also elect to use the mid-level presumption of injury. Under this presumption, a reseller whose allocable share exceeds $10,000 may elect to receive as a refund the larger of $10,000 or 40 percent of its allocable share up to $50,000. Anchor, 22 DOE at 88, 218.
In its application, Racetrac, a reseller of petroleum products, has submitted a purchase schedule indicating that it purchased 2,282,520 gallons of Anchor petroleum products. It has also elected to use the mid-level presumption of injury. See Memorandum of telephone conversation between Melissa Switters, Racetrac Petroleum, Inc. and Richard Cronin, OHA. (May 7, 2003). We have examined Racetracs application and will grant Racetrac a refund using the mid-level presumption of injury methodology. Although Racetracs allocable share is greater than $10,000, because $10,000 is greater than 40 percent of Racetracs allocable share (2,282,520 gallons x $0.006942 per gallon x 0.40 = $6,338), Racetracs principal refund amount will be limited to $10,000. Racetrac will be granted a total refund of $18,500 ($10,000 principal plus $8,500 accrued interest).
It Is Therefore Ordered That:
(1) The Application for Refund filed by Racetrac Petroleum, Inc., Case No. RF346-112, is hereby granted as set forth in Paragraph (2) below.
(2) The Director of Special Accounts and Payroll, Office of Financial Accounting and Financial Systems Development, Office of the Controller shall take appropriate action to disburse from the refined product escrow account, Consent Order No. 99DOE035W, $18,500 ($10,000 principal plus $8,500 interest) to:
Racetrac Petroleum, Inc.
c/o Melissa Switters
P.O. Box 105035
Atlanta, GA 30348-5035
(3) The Determination made in this Decision and Order is based on the presumed validity of statements and documentary materials submitted by the applicant. This determination may be revoked or modified at any time upon a determination that the factual basis underlying the Application 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: May 27, 2003
(1)Under the terms of the Consent Order, Anchor remitted $7,775,000 to the DOE. In addition, Anchor was required to deposit into the escrow account a percentage of its profits each year until 1994, bringing the total Consent Order funds to a minimum of $9,000,000. Our calculations for this proceeding are based on the assumption that the total refunds remitted will be $9,000,000. The alleged illegal violations occurred in sales of crude oil and refined products. These funds have then been allocated to the two categories. The crude oil portion of the Consent Order fund ($5,400,000) will be distributed in accordance with the procedures established in Anchor Gasoline Corp. (Anchor), 22 DOE ¶ 85,071 (1992).
(2)For purposes of this proceeding, any reference to Anchor includes Anchor Gasoline Corporation and its wholly-owned subsidiary, Canal Refining Company. See Anchor, 22 DOE at 88,210.
(3)The per gallon volumetric refund amount for the Anchor proceeding is $0.006942. An applicants allocable share (principal refund amount) is determined by multiplying the number of gallons of Anchor petroleum products it purchased by the volumetric refund amount.