Case No. RF304-15519
April 5, 1999
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Supplemental Order
Name of Petitioner: Atlantic Richfield Co./
Major Oil, Inc.
K.C. Distributing, Inc.
Dates of Filing: February 19, 1999
February 22, 1999
Case Number: RF304-15519
RF304-15520
On December 2, 1997, we issued a Supplemental Order modifying refunds previously granted to Major Oil Inc. (Major) and KC Distributing, Inc. (KC). As adjusted, the firms were granted a total refund of $5,630 for purchases of 16,684,147 gallons of Atlantic Richfield Company (ARCO) petroleum products Major and KC purchased from March 1973 through December 1979. (1) See Atlantic Richfield Co./Major Oil Inc. & K.C. Distributing Inc., Case Nos. RF304-15508 and RF304- 15509 (December 2, 1997) (KC). Recently, we have been made aware of facts which require us to rescind an additional portion of Major and KC's refund.
In its original application, the owners of Major informed us that there had been no change in ownership of the firm during the consent order period. However, we have discovered that Major was not incorporated until September 1977. Additionally, we also discovered that the current owners of Major did not acquire Major's corporate stock until June 1, 1979. We have generally presumed that
the owner during the price control period should receive the refund. To refute this presumption, the current owner must show that either (a) the owner during the price control period was a corporation whose stock was purchased by the current owner or (b) the business was transferred under a contract that specified potential refunds as one of the assets being transferred. See, e.g., Texaco Inc./Tenbarge Oil Company, Inc., 21 DOE ¶ 85,121 at 88,412 (1991). In the present case, Major was not incorporated during the period March 1973 through September 1977. It is clear that the current shareholders of Major are eligible for a refund with respect to Major's purchases made after the date of incorporation. However, there is no evidence before us which indicates the pre-incorporation owners of Major intended to transfer their right to a refund to the shareholders of Major. Id. (new corporate owners not entitled to refund for purchases prior to incorporation). Consequently, Major's refund should have been only based upon ARCO purchases made by it after September 1977. After subtracting the pre-September 1977 gallonage from Major and K.C.'s claim, the firms should only have received a principal refund of only $5,000.(2)
In the decision granting the refund, we stated that the determinations reached in that Decision were based upon the representations made by the applicants. We further stated that if the factual basis underlying any of our determinations was later shown to be inaccurate, the OHA could order appropriate remedial action, including rescission or reduction of any refund. Because the current owners of Major were incorrectly granted a refund for purchases made by Major during period March 1973 through September 1977, such action is appropriate here. Accordingly, we shall require Major, K.C. and their counsel who filed the original application, Bassman, Mitchell & Alfano, Chartered (Bassman), to repay the excess refund with interest. (3) The total repayment obligation is $1,399. This comprises the $630 overpayment of principal, $215 in interest included with the refund payment, and $554 in interest to date that the overpayment would have earned had it remained on deposit in the ARCO escrow account.
It Is Therefore Ordered That:
(1) The Decisions and Orders issued to K.C. Distributing, Inc., on January 18, 1989 (Case No. RF304-2137, formerly redesignated as RF304-15509, now redesignated as RF304-15520), and to Major Oil, Inc. on November 30, 1989 (Case No. RF304-6551, formerly redesignated as RF304- 15508, now redesignated as RF304-15519) are hereby rescinded in part.
(2) Major Oil, Inc., K.C. Distributing, Inc., and Bassman, Mitchell and Alfano, Chartered, are hereby directed to remit $1,399 to the Department of Energy at the following address:
U.S. Department of Energy
Office of the Controller
P.O. Box 500
Germantown, MD 20874-0500
Payment should be made by check payable to the U.S. Department of Energy and should refer to Case No. RF304-15519. In the event that payment is not made within 30 days of the date of this Decision and Order, interest shall accrue on the amount due at the rate generally assessed by the Department of Energy on overdue receivables. Other charges generally assessed on overdue DOE receivables shall also apply.
(3) Upon receipt of the payment specified above, the Director of Special Accounts and Payroll, Office of chief Financial Officer, shall take appropriate action to deposit these funds into the DOE deposit fund escrow account funded by Atlantic Richfield, Inc., Consent Order No. RARH00001Z. For purposes of this account, this payment shall consist of $630 principal and $769 interest.
(4) This is a final Order of the Department of Energy.
George B. Breznay
Director
Office of Hearings and Appeals
Date: April 5, 1999
(1)In the ARCO proceeding, resellers and retailers whose full volumetric shares exceed $12,193 (16,589,116 gallons x $0.000735 per gallon) could elect to receive a refund the larger of 41 percent of their full volumetric share or $5,000 (the maximum small claims refund amount). See Atlantic Richfield Company, 17 DOE ¶ 85,069 at 88,152 (1988).
(2)In the ARCO proceeding, resellers and retailers whose full volumetric shares exceed $12,193 (16,589,116 gallons x $0.000735 per gallon) could elect to receive a refund the larger of 41 percent of their full volumetric share or $5,000 (the maximum small claims refund amount). See Atlantic Richfield Company, 17 DOE ¶ 85,069 at 88,152 (1988).
(3)Major and KC's reduced gallonage claim totals 9,727,710 gallons. Major and KC's full volumetric share is $7,150 (9,727,710 gallons x $0.000735). Resellers with a volumetric share of less than $12,193 may not receive more than $5,000 under the small claims presumption without a demonstration of injury. See Atlantic Richfield Co., 17 DOE ¶ 85,069 at 88,153 (1988).
(4)Because Bassman has an obligation to exercise due diligence to ensure that filings before this Office are accurate, it is jointly and severally responsible along with Major and KC for this repayment. See KC slip op. at 3.