Case No. RF340-00099
March 22, 1999
DECISION AND ORDER
OF THE DEPARTMENT OF ENERGY
Application for Refund
Name of Petitioner: Enron Corp./
Clark Oil & Refining Corporation
Date of Filing: March 24, 1992
Case Number: RF340-99
On September 14, 1988, the Economic Regulatory Administration of the Department of Energy (DOE) filed a Petition with the Office of Hearings and Appeals (OHA) requesting that the OHA formulate and implement procedures for distributing funds obtained through a consent order with Enron Corp. (Enron). See 10 C.F.R. Part 205, Subpart V. The consent order resolved DOE allegations that Enron and all of its subsidiaries, affiliates, prior subsidiaries, predecessors and successors in interest violated the mandatory petroleum regulations in their sales of crude oil and refined petroleum products from January 1, 1973 through January 27, 1981 (the consent order period). On July 10, 1991, the OHA issued a Decision and Order setting forth final procedures for disbursing the portion of the Enron settlement fund attributable to various Enron entities' sales of NGLs and NGLPs. Enron Corp., 21 DOE ¶ 85,323 (1991) (Enron). These covered Enron entities are UPG, Inc., Northern Propane Gas Company, and Florida Hydrocarbons Company. In accordance with the goals of 10 C.F.R. Part 205, Subpart V, Enron implements a process for refunding the consent order funds to purchasers of Enron NGLs and NGLPs who are able to demonstrate that they were injured as a result of the covered entities' alleged overcharges. This Decision and Order renders a determination upon the merits of an Application for Refund submitted by Clark Oil & Refining Corporation, a Delaware corporation, on behalf of Clark Oil & Refining Corporation, a Wisconsin corporation (Clark-Wisconsin). Since submitting its Application, Clark Oil & Refining Corporation, a Delaware corporation, changed its name to Clark Refining & Marketing, Inc. There were no corporate or ownership changes associated with the name change. For the purposes of this decision, we will refer to the applicant as Clark-Delaware.
In Enron we adopted a presumption that the alleged overcharges attributable to NGLs and NGLPs had been dispersed equally in all sales of refined product made by the covered entities during the consent order period. Enron, 21 DOE at 88,959. We stated that, in the absence of a demonstration of a disproportionate overcharge, a claimant would be allocated a share of the consent order funds on a volumetric basis. We provided that eligible claimants would receive $.00601 per gallon of covered Enron product purchased.(1)Id. We refer to the dollar amount derived by multiplying an applicant's purchase volume by the per gallon refund amount as the applicant's allocable share.
Enron generally requires a claimant to demonstrate that it was injured by Enron's alleged overcharges in order to receive a refund equal to its full allocable share. However, in Enron, we adopted several presumptions of injury that would allow certain types of claimants to receive a refund without a detailed demonstration of injury.
In Enron, we established that a reseller, retailer or refiner whose volumetric share of the Enron consent order funds exceeds $10,000 may elect to receive as its refund the larger of $10,000 or 60 percent of its volumetric share up to $50,000. Id. Accordingly, a claimant under this mid-range presumption of injury need only establish the volume of Enron covered products that it purchased during the refund period to receive a refund of 60 percent of its allocable share up to $50,000.
Clark-Delaware has applied for a refund based on purchases of NGLs from UPG made by Clark-Wisconsin during the consent order period. Clark-Delaware submitted numerous documents showing that it acquired the business of Clark-Wisconsin, including the right to the refund. Accordingly, Clark-Delaware has adequately shown that it is the proper recipient of any refund based on Clark-Wisconsins petroleum purchases. See, e.g., Primerica Corp., 27 DOE ¶ 85,001 at 88,003 - 05 (1998).
Clark-Delaware has submitted all of the information required of applicants in the Enron proceeding under the "mid-range" presumption of injury. Clark-Delaware claims that Clark-Wisconsin made regular purchases of NGLs from Enrons affiliate UPG throughout the refund period (June 13, 1973 through January 1981) for end-use at its refineries. UPG sales records in the DOEs possession indicate that Clark-Wisconsin purchased 48,278,092 gallons of NGLs during the refund period. Clark-Delaware also submitted numerous receipts from the refund period showing Clark- Wisconsins purchases from UPG. In light of these records, we believe that it is reasonable to accept Clark-Delawares explanation concerning the nature of Clark-Wisconsins business and its Enron purchases. Therefore, the total approved gallonage claim granted to Clark-Delaware in this Decision is 48,278,092 gallons.
Clark-Delaware has not claimed that Clark-Wisconsin was disproportionately overcharged. Nor has it attempted to prove that Clark-Wisconsin was injured by Enron's alleged overcharges. Therefore, under the "mid-range" presumption of injury, Clark- Delaware will receive a principal refund of $50,000 (48,278,092 x $.00601 x 60 percent = $174,091, which is greater than the maximum mid-range refund of $50,000). Clark-Delaware will also receive $36,990 as its pro rata share of the interest that has accrued on the consent order funds since they were placed in escrow.(2) Accordingly, the total refund granted to Clark-Delaware, including interest, is $86,990.
It Is Therefore Ordered That:
(1) The Application for Refund submitted by Clark Oil & Refining Corporation, a Delaware Corporation, on behalf of Clark Oil & Refining Corporation, a Wisconsin corporation, (Case No. RF340-99) is hereby granted as specified in paragraph (2).
(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 $86,990 ($50,000 in principal and $36,990 in interest) from the DOE deposit fund escrow account maintained at the Department of the Treasury and funded by Enron Corp., Consent Order No. 730V00221Z, to (Case No. RF340-99):
Clark Refining & Marketing, Inc.
c/o M.R. Burmaster
Vice President
8182 Maryland Avenue
St. Louis, MO 63105-3721
(3) The determination made in this Decision and Order is based on the presumed validity of the statements and documentary material submitted by the applicant. The 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: March 22, 1999
(1)1/ This amount was derived by dividing the fund received from Enron allocable to refined products ($43,200,000) by the estimated volume of refined products sold by Enron from June 13, 1973 through the date of decontrol of the relevant product (7,186,265,624). Id. at n. 8.
(2)Interest is paid on Enron refunds at the rate of $0.7398 per dollar of refund.