March 17, 2004
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Supplemental Order
Names of Petitioners: Atlantic Richfield Co./
Oil Transit, Inc.
Rookwood Oil Terminals
Date of Filings: December 2, 2003
Case Numbers: RR304-00073
RR304-00074
On May 6, 1999, the Office of Hearings and Appeals (OHA) made a fifty percent partial payment on two applications for refund filed by USA Petroleum Corporation (USA) on behalf of Oil Transit, Inc. (OT) and Rookwood Terminals, Inc. (Rookwood) in the Atlantic Richfield Company (ARCO) refined product refund proceeding.(1) These partial payments were based on a finding that available refund moneys were limited as a result of Congressional revocation of portions of the Petroleum Overcharge and Restitution Act of 1986 (PODRA). The purpose of this Supplemental Order is to consider whether full payment of these refund claims is now warranted.
The Interior and Related Agencies Appropriations Act for FY 1999 amended certain provisions of the PODRA. These amendments extinguished rights that refund applicants had under PODRA to refunds for overcharges on the purchase of refined petroleum products. They also identified and appropriated a substantial portion of the funds being held by the DOE to pay refund claims. Congress specified that these funds were to be used to fund other DOE programs. As a result, the petroleum overcharge escrow accounts in the refined product area contained substantially less money than before. In fact, they may not have contained sufficient funds to pay in full all pending refund claims (including those in litigation) if they should all be found meritorious. Congress directed DOE to "assure that the amount remaining in escrow to satisfy refined petroleum product claims for direct restitution is allocated equitably among all claimants." In Enron Corp./Phillips Petroleum Company (Case No. RF340-163), 27 DOE ¶ 85,024 at 88,165 (1999)(Enron/Phillips), the OHA found that in view of this Congressional directive and the limited amount of funds available, it might become necessary to prorate the funds available among the meritorious claims. However, the OHA also found that it would be some time before the OHA could know the full value of the meritorious claims and the precise, total amount available for distribution to each claimant. Id.
The OHA therefore determined that it would be equitable to pay the remaining small claims (less than 250) in full. To require small claimants to wait several more years for their refunds would constitute an inordinate burden and be inequitable. Cf. Atlantic Richfield Co./Major Oil, Inc., 26 DOE ¶ 85,068 at 88,195 (1997) ("The principal purpose of the presumptions of injury . . . is to reduce the burden on small claimants.").
However, with respect to USA and certain other large refund claimants, the OHA found that full payment of the refund could well have a substantial impact on the ability of the OHA to make payments to other remaining claimants who were seeking large refund claims. Until other large claims were resolved, the OHA determined to limit current large refund payments to fifty percent of the total approved refund (principal and interest). Enron/Phillips, 27 DOE at 88,165; see also Atlantic Richfield Co./Oil Transit, Inc., et al. (Case No. RR304-0044), 27 DOE ¶ 85,026 at 88,188 (1999)(ARCO/OT). Pursuant to this holding, a fifty percent refund totaling $656,348 in principal and interest was paid to USA through the OT and Rookwood applications in the ARCO refund proceeding. Specifically these payments were as follows:
(1) Atlantic Richfield Company/Oil Transit, Inc. (Case No. RR304-00044), $630,094; and
(2) Atlantic Richfield Company/Rookwood Oil (Case No. RR304-00045), $26,254.
ARCO/OT at 88,189.
The OHA stated that once other pending refund claims had been resolved, the remainder of these large refunds would be paid to the extent possible through an equitable distribution of the funds remaining in the petroleum overcharge escrow accounts. Enron/Phillips, 27 DOE at 88,165. The OHA has now determined that sufficient funds remain in the refined product refund pool to pay out the remaining portions of these claims. Accordingly, this Supplemental Order provides for the full payment of the refined product refund previously granted by the OHA to USA, based on the same amounts previously granted to OT and Rookwood.
It is OHA policy to pay accrued interest on refined product refund payments whenever possible. Accordingly, the OT and Rookwood refund applications will receive additional payments, designated as interest, which approximate the interest that has accrued on the unpaid portions of their refunds from May 1999 until the present. The additional amount for OT is $114,236 and for Rookwood is $4,760.
(1) Supplemental Refunds hereby are granted to Oil Transit, Inc. (Case No. RR304-00073) and Rookwood Oil Terminals, Inc. (Case No. RR304-00074) in the Atlantic Richfield Company refund proceeding. Oil Transit, Inc. hereby is granted a refund of $744,330 ($630,094 Principal and $114,236 Interest) and Rookwood Oil Terminals, Inc. hereby is granted a refund of $31,014 ($26,254 Principal and $4,760 Interest). The recipient of both of these refund payments is USA Petroleum Corporation.
(2) The Director of Special Accounts and Payroll, Office of the Controller, of the Department of Energy shall take appropriate action to disburse a total of $775,344 ($656,348 Principal plus $118,996 Interest) from the DOE deposit fund escrow account maintained at the Department of the Treasury titled Product Tracking - Claimants, Account No. 999DOE035Z, to USA Petroleum Corporation according to instructions submitted by its counsel, Bode & Grenier, LLP on its ACH Vendor Payment System Payment Information Form.
(3) The determinations made in this Decision and Order are based on the presumed validity of the statements and documentary material submitted by the applicant. Any of those determinations may be revoked or modified at any time upon a determination that the factual bases underlying these Supplemental Refunds are incorrect.
(4) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: March 17, 2004
(1)OT was a wholly-owned subsidiary of Rookwood during the ARCO consent order period. USA purchased Rookwood in August 1979, at which point Rookwood became USAs wholly-owned subsidiary. Atlantic Richfield Co./USA Petroleum Corp., 22 DOE ¶ 85,131 (1992) at 88,371, ftnt. 3. USA submitted both the OT and Rookwood applications on its own behalf, and the two applications were consolidated for purposes of applying the OHAs policy of making partial payments on large product refunds.