Final Procedures for Distribution of Remaining Crude Oil Overcharge Refunds, 2195-2198 [E6-373]
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Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
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hsrobinson on PROD1PC70 with NOTICES
DEPARTMENT OF ENERGY
Final Procedures for Distribution of
Remaining Crude Oil Overcharge
Refunds
Office of Hearings and Appeals,
Department of Energy.
AGENCY:
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Notice of final procedures for
distribution of remaining crude oil
overcharge refunds.
ACTION:
SUMMARY: In a May 21, 2004 Notice, the
Department of Energy (DOE) Office of
Hearings and Appeals (OHA)
announced procedures for making one
final round of refund payments in this
proceeding. However, there is ongoing
litigation that could affect the amount of
crude oil monies available for
distribution, thus making it unworkable
at this point to have a single, last round
of payments that would exhaust the
remaining crude oil refund monies. We
instead announce here that we will
issue refunds amounting to
approximately 90% of the money due
each eligible claimant.
ADDRESSES: Inquiries should be
addressed to: Crude Oil Refund
Proceeding, Office of Hearings and
Appeals, Department of Energy,
Washington, DC 20585–1615, and
submitted electronically to
crudeoilrefunds@hq.doe.gov.
FOR FURTHER INFORMATION CONTACT:
Steven Goering, Staff Attorney, or
Richard Cronin, Assistant Director,
Office of Hearings and Appeals,
Department of Energy; telephone: 202–
287–1449, e-mail:
steven.goering@hq.doe.gov,
richard.cronin@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
OHA published a notice of proposed
procedures for the distribution of
remaining crude oil overcharge refunds
in the Federal Register on September
30, 2005 (‘‘the September 30 notice’’),
and requested comments from
interested parties. 70 FR 57274. The
September 30 notice explained that
events and proliferating litigation
affecting the windup of this crude oil
refund proceeding have precluded the
Department from proceeding with the
calculation of the per-gallon
‘‘volumetric’’ refund amount that is
necessary to make a single, final
payment of refunds to all qualified
applicants. Calculating the volumetric
amount requires two fixed numbers: (1)
The amount of funds available for
distribution (‘‘the numerator’’), which is
divided by (2) the number of gallons of
eligible petroleum products purchased
during the controls period by eligible
claimants (‘‘the denominator’’).
However, as explained in the September
30 notice, the increasing litigation that
has been brought to bear on the
proceeding may affect both the
numerator and the denominator of the
volumetric calculation. As a result, the
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2195
plan to make a single, final round of
refunds to eligible persons is
unworkable and cannot be achieved.
We therefore announced a provisional
volumetric refund amount and defined
that portion of the crude oil monies that
would be reserved pending the
resolution of the litigation. Specifically,
we proposed to make refunds to
claimants based upon a volumetric
calculated using as a numerator
approximately 90% of all available
funds, and as a denominator the number
of gallons of eligible petroleum products
purchased during the controls period by
eligible claimants plus the number of
gallons claimed in an application
denied by OHA that is currently the
subject of pending litigation.
We also proposed in the September 30
notice that we not distribute funds to 73
claimants, listed in the notice, whose
refunds are currently being challenged
by third parties in pending litigation.
We proposed that, upon the conclusion
of litigation and a final upholding of our
refund awards, we would promptly
release the funds to the affected
claimants.
II. Summary and Response to
Comments on Proposed Procedures
In response to the September 30
notice DOE received seven comments
submitted by a State government, a
member of the public, and law firms
and filing services that represent eligible
claimants. This section of the
SUPPLEMENTARY INFORMATION
summarizes the issues raised in the
comments, and gives DOE’s response, as
follows:
Comment: Two commenters disagree
with our proposal not to disburse at this
time funds that are currently the subject
of litigation in which a U.S. District
Court awarded plaintiffs attorney’s fees
in the ‘‘amount of thirty percent (30%)
of the fund derived from the amount of
the increase in the per million-gallon
distribution over the $670 [per million
gallons] initially proposed by DOE.’’
Consolidated Edison v. Abraham, Civil
Action No. 03–1991, slip op. at 12
(January 26, 2005). The Department has
filed Notices of Appeal regarding this
decision, and plaintiffs have filed
appeals of the order insofar as it denied
the full amount of attorney’s fees they
sought, which would have amounted to
10% of the entire ‘‘Subpart V’’ crude oil
fund, i.e., about $28 million. See DC Cir.
Docket Nos. 05–5089, 05–5090, 05–
5223, and Fed. Cir. Docket Nos. 05–
1309, 05–1310, 05–1450.
Neither commenter disagreed with the
withholding of the amount of the
attorney’s fee already awarded by the
District Court, approximately 4% of the
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funds to be disbursed. Rather, they
object to the withholding of amounts
representing the additional attorney’s
fees sought by plaintiffs on appeal in
that case, an additional 6% of the funds
at issue. The commenters question the
necessity of withholding funds for the
possible success of claims that have
become ‘‘increasingly questionable’’ and
‘‘been repeatedly found to be meritless.’’
Similarly, one commenter, a State
government, took issue with our
proposal not to disburse refunds at this
time to those claimants, including the
commenter, whose refunds are currently
being challenged by third parties in
pending litigation. The State
government notes that it ‘‘decided to
earmark the supplemental crude refund
to supplement the Low Income Energy
Assistance Program’’ and that if it does
not receive its refund at this time, it
‘‘will be forced to reduce the 2005–2006
available funding for heating assistance
benefits.’’
Response: While we are sympathetic
to the expressed concerns that
continued litigation is delaying refunds
that otherwise could be paid, we
nevertheless cannot disburse funds now
based on the assumption of a favorable
outcome in these cases, given the
enormous complications that would
result should that assumption turn out
to be wrong. Instead, fiscal prudence
requires that we reserve sufficient funds
to pay the appropriate parties whatever
the outcome of this and other pending
cases. In the meantime, these funds are
being held in an interest-bearing
account, the effect of which will be to
compensate claimants for the delay in
disbursement.
Comment: One commenter, the
attorney for the private parties in all of
the pending litigation at issue, suggests
that, before making any disbursement,
we calculate a volumetric that
represents ‘‘the full amount per gallon
available if DOE is successful in all
pending litigation, * * *.’’ The
commenter then suggests that nearly
99.5% of this volumetric, ‘‘prior to the
10% reduction’’ for the pending
attorney’s fee claim, should be paid to
clients of the commenter ‘‘as to whom
he has waived any common fund fee.’’
Another commenter contends that
‘‘[s]uch a differentiated payment cannot
be justified, either legally or equitably,’’
arguing that the commenter proposing
this scheme ‘‘has no authority to decide
which claimants pay and which do not
for the alleged benefit conferred on the
entire group of claimants.’’
Response: We agree with the
commenter quoted above that there is
simply no basis for paying a higher
refund amount to the clients of the
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attorney for the private parties in the
pending litigation. As a matter of basic
fairness, we intend to pay all claimants
at the same volumetric rate. Moreover,
the January 26, 2005 order of the U.S.
District Court, currently being appealed,
states that a certain amount of the funds
at issue (representing 30% of the
volumetric amount exceeding $0.00067/
gallon) be paid out as attorney’s fees,
thus reducing the volumetric refund
amount paid to all claimants, without
exception. We are reserving funds, in
part, so that we can comply with this
order should it ultimately be upheld. In
that event, the funds will be paid to the
attorney as attorney’s fees, i.e., we will
not pay a portion of any attorney fee
award directly to his clients.
Comment: One commenter also
proposes that ‘‘the volumetric should be
rounded down to the seventh decimal
place, rather than the fifth as proposed,
in order to better accomplish the goal of
distribution of all available funds to the
extent practicable.’’
Response: Because there is
theoretically no limit to the number of
decimal places we could use in the
volumetric, whatever number of
decimal places we choose can always be
faulted for not being great enough. In
this sense, there is no ‘‘correct’’ choice.
On the other hand, there is no
compelling reason why we should not
round to a greater number of decimal
places. In fact, in prior announcements
regarding this proceeding, we have
already proposed adding a decimal
place to the four used in all prior refund
distributions. We therefore calculate the
volumetric refund amount below by
rounding to the ninth decimal.
Comment: The commenter who
represents the private parties in the
pending litigation also suggests that six
additional claimants ‘‘be added to the
list of those from whom distribution is
to be withheld pending conclusion of
the litigation.’’
Response: In his court filings, the
commenter has repeatedly stated that
his clients are challenging the refunds of
‘‘fewer than 75 claimants.’’ Our
September 30 notice listed 73 claimants
whose refunds we identified as
potentially being challenged. The
commenter, who is the one challenging
these refunds on behalf of his clients
and who has ready access to the entire
list of eligible claimants, is clearly in the
best position to identify the particular
claims that he is challenging.
In this connection, the commenter
identifies six claimants that we did not
list in our September 30 notice. These
six claimants will be added to the list
of those to whom we will not disburse
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refunds until the litigation challenging
their claims is resolved.
Comment: Several commenters
addressed the procedures for the
distribution of whatever funds remain
after the resolution of pending litigation.
One comment proposes that the
remaining funds be paid without ‘‘any
further action or submissions by
claimants.’’ Another commenter asks
OHA to consider further interim
distributions upon the resolution of
each of the pending court cases, and
seeks confirmation that the remaining
funds would be paid ‘‘only to those
individual verified claimants of record
as of December 31, 2004.’’ Finally, one
commenter states that OHA should
commit ‘‘to distribute to claimants any
remaining funds after the conclusion of
litigation.’’
Response: If the DOE prevails in all of
the pending litigation at issue, there
would likely be sufficient remaining
funds to warrant a final distribution.
However, with six pending lawsuits,
there are literally dozens of hypothetical
possible combinations of outcomes,
each resulting in a potentially different
amount of funds available for
distribution. In view of the uncertainties
posed by the outstanding litigation, we
are not in a position to commit
ourselves to any course of action until
all pending litigation is resolved.
Similarly, the administrative expense
of each distribution of funds also makes
impractical further interim distributions
to all eligible claimants as each pending
case is resolved. However, we plan to
make prompt initial distributions to
those individual claimants whose
refunds we are withholding in their
entirety at this time, as soon as each
case in which the refunds are being
challenged is resolved.
We also can confirm that all further
distributions will be made only to those
eligible claimants who filed verification
information with our office by the
December 31, 2004 deadline, and that
we will require no additional
submission or verification from those
claimants beyond that which is required
to determine eligibility for the initial
distribution. We remind each claimant
of its continuing obligation to promptly
inform us of any changes to its payment
address or bank account deposit
information, as required in the
Decisions and Orders by which each
claimant was originally granted a refund
in this proceeding.
Comment: One commenter suggests
that ‘‘every claim about which no
further questions remain unresolved
should be paid as soon as possible.
* * * [W]here the funds can be
transferred electronically, the OHA can
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and should make all the disbursements
immediately. Then, as OHA works
through the cases in which questions
remain, we encourage administrative
choices premised on completing the
maximum number of disbursements,
rather than distributing the maximum
number of dollars. The rough justice
required in equitable proceedings favors
an administrative course that assures
that the maximum number of
participants receive as much of their
final refund as possible before they lose
touch with the proceeding.’’
Response: We agree with the
commenter, and share his desire that
refunds be paid as soon as possible.
Over the past months, we have worked
to resolve pending issues that would
delay refunds in particular cases, such
as gathering necessary documentation in
order to demonstrate that a successor-ininterest to a prior refund recipient
should now receive the refund. In doing
so, our goal has always been and will
continue to be to resolve as many claims
as possible, as soon as possible,
irrespective of the size of the claims.
hsrobinson on PROD1PC70 with NOTICES
III. Final Refund Procedures
Based on our discussion of the
comments above, OHA will adopt the
following final refund procedures. First,
we will use the method set forth in our
September 30 notice for calculating the
volumetric refund amount, as follows:
We will use as the numerator,
$254,738,494.09, i.e., approximately
90% (or $255,714,292.20) of all funds
available as of December 28, 2005
($284,126,991.33) 1 minus the amount of
an initial refund claimed in one
application that was denied by OHA but
is currently the subject of pending
litigation ($975,798).2 As the
denominator, we will use
366,324,981,322 gallons, i.e., the
number of gallons of eligible petroleum
products purchased during the controls
period by eligible claimants
(365,715,107,505 gallons) plus the
number of gallons claimed in the
application denied by OHA that is
currently the subject of pending
litigation (609,873,817 gallons). This
produces a volumetric refund of
1 One commenter suggests that the ‘‘volumetric
should be calculated, reflecting all interest earned
through a date not more than 15 days prior to
distribution.’’ The volumetric refund amount
announced here reflects the most disbursement of
refunds as soon as possible after publication of this
notice.
2 As noted by one commenter, were the claimant
whose application was denied by OHA to prevail
in litigation, that claimant wuold not only be
entitled to the supplemental refund calculated
using the volumetric announced here, but also in
the initial refund that has already been paid to other
successful claimants, i.e. $0.0016/gallon of
approved petroleum product purchases.
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$0.000695389 and distributes
approximately 90% of the money due to
over 99.75% of all eligible claimants.3
Also as proposed in our September 30
notice, we will not distribute refunds at
this time to certain claimants whose
refunds are currently being challenged
by third parties in pending litigation.
Below is a list of these claimants:
RF272–00011 DEFENSE LOGISTICS
AGENCY;
RF272–00350 WISCONSIN DEPT.
TRANSPORTATION;
RF272–00512 STATE OF WEST
VIRGINIA;
RF272–04416 STATE OF
CONNECTICUT;
RF272–08074 STATE OF
CONNECTICUT;
RF272–09853 WASHINGTON STATE
PATROL;
RF272–11717 WASHINGTON STATE
DEPT. TRANS.;
RF272–12181 NEBRASKA PUBLIC
POWER DIST.;
RF272–12588 STATE OF
CONNECTICUT;
RF272–17487 KENTUCKY DEPT. OF
EDUCATION;
RF272–18164 STATE OF NORTH
DAKOTA;
RF272–18963 STATE OF NEW
MEXICO;
RF272–19364 STATE OF MISSOURI;
RF272–19386 STATE OF VERMONT;
RF272–19457 STATE OF SOUTH
DAKOTA;
RF272–20947 LUBRIZOL
CORPORATION;
RF272–23229 DISTRICT OF
COLUMBIA;
RF272–23790 HERCULES, INC.;
RF272–25793 OHIO DEPT. OF
TRANSPORTATION;
RF272–28260 WASHINGTON STATE
FERRIES;
RF272–35431 MARYLAND STATE
AVIATION ADMIN.;
RF272–44094 OHIO STATE HWY.
PATROL;
RF272–44344 STATE OF SOUTH
CAROLINA;
RF272–45477 ILLINOIS STATE TOLL
HWY. AUTH.;
RF272–49283 COMMONWEALTH OF
KENTUCKY;
RF272–49892 NEBRASKA ENERGY
OFFICE;
RF272–49898 STATE OF KANSAS;
RF272–50638 WASHINGTON STATE
DEPT. OF TRANS.;
RF272–51829 WASHINGTON STATE
PARKS & REC.;
3 We round down the volumetric refund amount
to the ninth decimal place. As explained in the
September 30 notice, rounding down ensures that
there will be sufficient funds to pay refunds at a
given volumetric refund amount.
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RF272–54955 U.S. POSTAL SERVICE;
RF272–56597 STATE OF
OKLAHOMA;
RF272–59085 STATE OF UTAH,
ENERGY OFFICE;
RF272–59907 STATE OF COLORADO;
RF272–60251 STATE OF
WISCONSIN;
RF272–61569 STATE OF
MINNESOTA;
RF272–61591 ARKANSAS HWY. &
TRANS. DEPT.;
RF272–62009 STATE OF NEW
HAMPSHIRE;
RF272–62522 STATE OF NEW YORK;
RF272–63433 STATE OF DELAWARE;
RF272–63623 MARYLAND STATE
HWY. ADMIN.;
RF272–63624 MARYLAND DEPT.
GENERAL SERVICE;
RF272–64195 STATE ARIZONA
DEPT. OF TRANS.;
RF272–64288 STATE OF ARKANSAS;
RF272–64986 STATE OF FLORIDA;
RF272–65199 STATE OF IOWA;
RF272–65200 IOWA DEPT. OF
TRANSPORTATION;
RF272–65398 STATE OF NEVADA;
RF272–65470 STATE OF MICHIGAN;
RF272–65524 ILLINOIS DEPT. OF
COMMERCE;
RF272–65526 ALASKA DEPT. OF
TRANS. & PUB. FAC.;
RF272–66878 NEW YORK TRANSIT
AUTHORITY;
RF272–67007 COMMONWEALTH OF
PENNSYLVANIA;
RF272–67187 STATE OF INDIANA;
RF272–67248 STATE OF
CALIFORNIA;
RF272–67313 STATE OF TEXAS;
RF272–67507 STATE OF VERMONT
DEPT. OF COR.;
RF272–67509 STATE OF
VERMONT—TRANSPORTATION;
RF272–67563 OREGON DEPT. OF
GEN. SERVICES;
RF272–67586 STATE OF ALABAMA;
RF272–68243 NEW JERSEY TRANSIT
CORP.;
RF272–68934 NEW YORK STATE
THRUWAY AUTH.;
RF272–69744 STATE OF NEW
JERSEY;
RF272–69948 WEST VIRGINIA HWY.
DEPT.;
RF272–71331 STATE OF
TENNESSEE;
RF272–72465 COMMONWEALTH OF
MASSACHUSETTS;
RF272–74169 STATE OF MAINE;
RF272–75269 VIRGINIA DEPT. OF
STATE POLICE;
RF272–75775 R.I. DEPT. OF
ADMINISTRATION;
RF272–76126 U.S. DEPT. OF
AGRICULTURE;
RF272–87985 STATE OF
MARYLAND;
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Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
RF272–97101 CHESEBROUGH–
POND’S USA CO.;
RF272–98890 COMMONWEALTH OF
VIRGINIA;
RG272–00507 STATE OF OHIO;
RK272–00147 STATE OF MONTANA;
RK272–00362 STATE OF KANSAS;
RK272–03404 WYOMING DEPT. OF
TRANSPORTATION.;
RK272–03418 STATE OF GEORGIA—
ENERGY RES.;
RK272–04041 STATE OF NORTH
CAROLINA;
RR272–00207 STATE OF
TENNESSEE.
DEPARTMENT OF ENERGY
We note that six of the claimants
listed above were not listed in our
September 30 notice. Thus, while the
general public, including these six
claimants, has been given notice and an
opportunity to comment on our
proposal to withhold payment on claims
currently being challenged in court,
these six claimants were not put on
notice that this decision would directly
and adversely impact them. Thus, each
of these claimants should be given an
opportunity to show that, in fact, its
claim should not be included in the
list—i.e., is not among those currently
being challenged in pending litigation.
If such a showing is made by any of the
six claimants within 30 days of the date
of this notice, we will not delay the
distribution of a refund to that claimant.
In any event, upon the conclusion of
any of the litigation challenging
particular refund claims, if our refund
award is upheld we will promptly order
the disbursement of refunds to the
affected claimant(s).
It is imperative that all refund
recipients immediately inform OHA in
the event of any change of payment
address or bank account deposit
information. DOE will not attempt to
locate payees of returned refund
payments, and the associated funds will
be divided equally between the States
and the Federal Government.
SUMMARY: Today’s notice publishes a
petition for waiver for Liebherr
¨
Hausgerate (Liebherr). The Liebherr
petition requests a waiver to modify the
refrigerator test procedure for the
Liebherr line of combination wine
storage-freezer products. The
Department of Energy (DOE or
Department) is soliciting comments,
data, and information respecting the
petition for waiver.
DATES: The Department will accept
comments, data, and information not
later than February 13, 2006.
ADDRESSES: DOE will accept comments
on this petition, identified by case
number RF–006, and submitted by any
of the following methods:
• Mail: Ms. Brenda Edwards-Jones,
U.S. Department of Energy, Building
Technologies Program, Mailstop EE–2J,
1000 Independence Avenue, SW.,
Washington, DC, 20585–0121.
• Telephone: (202) 586–2945. Please
submit one signed paper original.
• Hand Delivery/Courier: Ms. Brenda
Edwards-Jones, U.S. Department of
Energy, Building Technologies Program,
Room 1J–018, 1000 Independence
Avenue, SW., Washington, DC 20585.
Docket: For access to the docket to read
copies of public comments received,
this notice, and the petition for waiver,
go to the U.S. Department of Energy,
Forrestal Building, Room 1J–018
(Resource Room of the Building
Technologies Program), 1000
Independence Avenue, SW.,
Washington, DC, (202) 586–9127,
between 9 a.m. and 4 p.m., Monday
through Friday, except Federal holidays.
Please call Ms. Brenda Edwards-Jones at
the above telephone number for
additional information regarding
visiting the Resource Room. Please note:
The Department’s Freedom of
Information Reading Room (formerly
Room 1E–190 at the Forrestal Building)
is no longer housing rulemaking
materials.
hsrobinson on PROD1PC70 with NOTICES
Issued in Washington, DC, on January 6,
2005.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. E6–373 Filed 1–12–06; 8:45 am]
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Office of Energy Efficiency and
Renewable Energy
[Case No. RF–006]
Energy Conservation Program for
Consumer Products: Publication of the
Petition for Waiver of Liebherr
¨
Hausgerate From the DOE Refrigerator
and Refrigerator-Freezer Test
Procedure
Office of Energy Efficiency and
Renewable Energy, Department of
Energy.
ACTION: Notice of petition for waiver and
solicitation of comments.
AGENCY:
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Dr.
Michael G. Raymond, U.S. Department
of Energy, Building Technologies
Program, Mail Stop EE–2J, Forrestal
Building, 1000 Independence Avenue,
SW., Washington, DC 20585–0121, (202)
586–9611; e-mail:
Michael.Raymond@ee.doe.gov; or
Francine Pinto, Esq., or Thomas
DePriest, Esq., U.S. Department of
Energy, Office of General Counsel, Mail
Stop GC–72, Forrestal Building, 1000
Independence Avenue, SW.,
Washington, DC 20585–0103, (202) 586–
9507; e-mail:
Francine.Pinto@hq.doe.gov, or
Thomas.DePriest@hq.doe.gov.
SUPPLEMENTARY INFORMATION: Title III of
the Energy Policy and Conservation Act
(EPCA) sets forth a variety of provisions
concerning energy efficiency. Part B of
Title III (42 U.S.C. 6291–6309) provides
for the ‘‘Energy Conservation Program
For Consumer Products Other Than
Automobiles’’ which requires, among
other things, that DOE prescribe
standardized test procedures to measure
the energy consumption of certain
consumer products, including
refrigerators and refrigerator-freezers.
The relevant DOE test procedure for
purposes of today’s decision and order
is ‘‘Uniform Test Method for Measuring
the Energy Consumption of Electric
Refrigerators and Electric Refrigeratorfreezers’’ (current test procedure). The
current test procedure is set forth in 10
CFR part 430, subpart B, Appendix A1.
It prescribes a method for characterizing
the energy requirements of all types of
refrigerators and refrigerator-freezers
and yields model-specific energy
efficiency information that can aid
consumers in their purchasing
decisions.
The Department’s regulations contain
provisions allowing a person to seek a
waiver from the test procedure
requirements for covered consumer
products. These provisions are set forth
in 10 CFR 430.27. The waiver
provisions allow the Assistant Secretary
for Energy Efficiency and Renewable
Energy (Assistant Secretary) to waive
temporarily the test procedure for a
particular basic model when a petitioner
shows that the basic model contains one
or more design characteristics that
prevent testing according to the
prescribed test procedures, or when the
prescribed test procedures may evaluate
the basic model in a manner so
unrepresentative of its true energy
consumption as to provide materially
inaccurate comparative data. (10 CFR
430.27(a)(l)) Waivers generally remain
in effect until final test procedure
amendments become effective, thereby
FOR FURTHER INFORMATION CONTACT:
E:\FR\FM\13JAN1.SGM
13JAN1
]]>Agencies
[Federal Register Volume 71, Number 9 (Friday, January 13, 2006)]
[Notices]
[Pages 2195-2198]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-373]
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DEPARTMENT OF ENERGY
Final Procedures for Distribution of Remaining Crude Oil
Overcharge Refunds
AGENCY: Office of Hearings and Appeals, Department of Energy.
ACTION: Notice of final procedures for distribution of remaining crude
oil overcharge refunds.
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SUMMARY: In a May 21, 2004 Notice, the Department of Energy (DOE)
Office of Hearings and Appeals (OHA) announced procedures for making
one final round of refund payments in this proceeding. However, there
is ongoing litigation that could affect the amount of crude oil monies
available for distribution, thus making it unworkable at this point to
have a single, last round of payments that would exhaust the remaining
crude oil refund monies. We instead announce here that we will issue
refunds amounting to approximately 90% of the money due each eligible
claimant.
ADDRESSES: Inquiries should be addressed to: Crude Oil Refund
Proceeding, Office of Hearings and Appeals, Department of Energy,
Washington, DC 20585-1615, and submitted electronically to
crudeoilrefunds@hq.doe.gov.
FOR FURTHER INFORMATION CONTACT: Steven Goering, Staff Attorney, or
Richard Cronin, Assistant Director, Office of Hearings and Appeals,
Department of Energy; telephone: 202-287-1449, e-mail:
steven.goering@hq.doe.gov, richard.cronin@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
OHA published a notice of proposed procedures for the distribution
of remaining crude oil overcharge refunds in the Federal Register on
September 30, 2005 (``the September 30 notice''), and requested
comments from interested parties. 70 FR 57274. The September 30 notice
explained that events and proliferating litigation affecting the windup
of this crude oil refund proceeding have precluded the Department from
proceeding with the calculation of the per-gallon ``volumetric'' refund
amount that is necessary to make a single, final payment of refunds to
all qualified applicants. Calculating the volumetric amount requires
two fixed numbers: (1) The amount of funds available for distribution
(``the numerator''), which is divided by (2) the number of gallons of
eligible petroleum products purchased during the controls period by
eligible claimants (``the denominator''). However, as explained in the
September 30 notice, the increasing litigation that has been brought to
bear on the proceeding may affect both the numerator and the
denominator of the volumetric calculation. As a result, the plan to
make a single, final round of refunds to eligible persons is unworkable
and cannot be achieved.
We therefore announced a provisional volumetric refund amount and
defined that portion of the crude oil monies that would be reserved
pending the resolution of the litigation. Specifically, we proposed to
make refunds to claimants based upon a volumetric calculated using as a
numerator approximately 90% of all available funds, and as a
denominator the number of gallons of eligible petroleum products
purchased during the controls period by eligible claimants plus the
number of gallons claimed in an application denied by OHA that is
currently the subject of pending litigation.
We also proposed in the September 30 notice that we not distribute
funds to 73 claimants, listed in the notice, whose refunds are
currently being challenged by third parties in pending litigation. We
proposed that, upon the conclusion of litigation and a final upholding
of our refund awards, we would promptly release the funds to the
affected claimants.
II. Summary and Response to Comments on Proposed Procedures
In response to the September 30 notice DOE received seven comments
submitted by a State government, a member of the public, and law firms
and filing services that represent eligible claimants. This section of
the SUPPLEMENTARY INFORMATION summarizes the issues raised in the
comments, and gives DOE's response, as follows:
Comment: Two commenters disagree with our proposal not to disburse
at this time funds that are currently the subject of litigation in
which a U.S. District Court awarded plaintiffs attorney's fees in the
``amount of thirty percent (30%) of the fund derived from the amount of
the increase in the per million-gallon distribution over the $670 [per
million gallons] initially proposed by DOE.'' Consolidated Edison v.
Abraham, Civil Action No. 03-1991, slip op. at 12 (January 26, 2005).
The Department has filed Notices of Appeal regarding this decision, and
plaintiffs have filed appeals of the order insofar as it denied the
full amount of attorney's fees they sought, which would have amounted
to 10% of the entire ``Subpart V'' crude oil fund, i.e., about $28
million. See DC Cir. Docket Nos. 05-5089, 05-5090, 05-5223, and Fed.
Cir. Docket Nos. 05-1309, 05-1310, 05-1450.
Neither commenter disagreed with the withholding of the amount of
the attorney's fee already awarded by the District Court, approximately
4% of the
[[Page 2196]]
funds to be disbursed. Rather, they object to the withholding of
amounts representing the additional attorney's fees sought by
plaintiffs on appeal in that case, an additional 6% of the funds at
issue. The commenters question the necessity of withholding funds for
the possible success of claims that have become ``increasingly
questionable'' and ``been repeatedly found to be meritless.''
Similarly, one commenter, a State government, took issue with our
proposal not to disburse refunds at this time to those claimants,
including the commenter, whose refunds are currently being challenged
by third parties in pending litigation. The State government notes that
it ``decided to earmark the supplemental crude refund to supplement the
Low Income Energy Assistance Program'' and that if it does not receive
its refund at this time, it ``will be forced to reduce the 2005-2006
available funding for heating assistance benefits.''
Response: While we are sympathetic to the expressed concerns that
continued litigation is delaying refunds that otherwise could be paid,
we nevertheless cannot disburse funds now based on the assumption of a
favorable outcome in these cases, given the enormous complications that
would result should that assumption turn out to be wrong. Instead,
fiscal prudence requires that we reserve sufficient funds to pay the
appropriate parties whatever the outcome of this and other pending
cases. In the meantime, these funds are being held in an interest-
bearing account, the effect of which will be to compensate claimants
for the delay in disbursement.
Comment: One commenter, the attorney for the private parties in all
of the pending litigation at issue, suggests that, before making any
disbursement, we calculate a volumetric that represents ``the full
amount per gallon available if DOE is successful in all pending
litigation, * * *.'' The commenter then suggests that nearly 99.5% of
this volumetric, ``prior to the 10% reduction'' for the pending
attorney's fee claim, should be paid to clients of the commenter ``as
to whom he has waived any common fund fee.'' Another commenter contends
that ``[s]uch a differentiated payment cannot be justified, either
legally or equitably,'' arguing that the commenter proposing this
scheme ``has no authority to decide which claimants pay and which do
not for the alleged benefit conferred on the entire group of
claimants.''
Response: We agree with the commenter quoted above that there is
simply no basis for paying a higher refund amount to the clients of the
attorney for the private parties in the pending litigation. As a matter
of basic fairness, we intend to pay all claimants at the same
volumetric rate. Moreover, the January 26, 2005 order of the U.S.
District Court, currently being appealed, states that a certain amount
of the funds at issue (representing 30% of the volumetric amount
exceeding $0.00067/gallon) be paid out as attorney's fees, thus
reducing the volumetric refund amount paid to all claimants, without
exception. We are reserving funds, in part, so that we can comply with
this order should it ultimately be upheld. In that event, the funds
will be paid to the attorney as attorney's fees, i.e., we will not pay
a portion of any attorney fee award directly to his clients.
Comment: One commenter also proposes that ``the volumetric should
be rounded down to the seventh decimal place, rather than the fifth as
proposed, in order to better accomplish the goal of distribution of all
available funds to the extent practicable.''
Response: Because there is theoretically no limit to the number of
decimal places we could use in the volumetric, whatever number of
decimal places we choose can always be faulted for not being great
enough. In this sense, there is no ``correct'' choice. On the other
hand, there is no compelling reason why we should not round to a
greater number of decimal places. In fact, in prior announcements
regarding this proceeding, we have already proposed adding a decimal
place to the four used in all prior refund distributions. We therefore
calculate the volumetric refund amount below by rounding to the ninth
decimal.
Comment: The commenter who represents the private parties in the
pending litigation also suggests that six additional claimants ``be
added to the list of those from whom distribution is to be withheld
pending conclusion of the litigation.''
Response: In his court filings, the commenter has repeatedly stated
that his clients are challenging the refunds of ``fewer than 75
claimants.'' Our September 30 notice listed 73 claimants whose refunds
we identified as potentially being challenged. The commenter, who is
the one challenging these refunds on behalf of his clients and who has
ready access to the entire list of eligible claimants, is clearly in
the best position to identify the particular claims that he is
challenging.
In this connection, the commenter identifies six claimants that we
did not list in our September 30 notice. These six claimants will be
added to the list of those to whom we will not disburse refunds until
the litigation challenging their claims is resolved.
Comment: Several commenters addressed the procedures for the
distribution of whatever funds remain after the resolution of pending
litigation. One comment proposes that the remaining funds be paid
without ``any further action or submissions by claimants.'' Another
commenter asks OHA to consider further interim distributions upon the
resolution of each of the pending court cases, and seeks confirmation
that the remaining funds would be paid ``only to those individual
verified claimants of record as of December 31, 2004.'' Finally, one
commenter states that OHA should commit ``to distribute to claimants
any remaining funds after the conclusion of litigation.''
Response: If the DOE prevails in all of the pending litigation at
issue, there would likely be sufficient remaining funds to warrant a
final distribution. However, with six pending lawsuits, there are
literally dozens of hypothetical possible combinations of outcomes,
each resulting in a potentially different amount of funds available for
distribution. In view of the uncertainties posed by the outstanding
litigation, we are not in a position to commit ourselves to any course
of action until all pending litigation is resolved.
Similarly, the administrative expense of each distribution of funds
also makes impractical further interim distributions to all eligible
claimants as each pending case is resolved. However, we plan to make
prompt initial distributions to those individual claimants whose
refunds we are withholding in their entirety at this time, as soon as
each case in which the refunds are being challenged is resolved.
We also can confirm that all further distributions will be made
only to those eligible claimants who filed verification information
with our office by the December 31, 2004 deadline, and that we will
require no additional submission or verification from those claimants
beyond that which is required to determine eligibility for the initial
distribution. We remind each claimant of its continuing obligation to
promptly inform us of any changes to its payment address or bank
account deposit information, as required in the Decisions and Orders by
which each claimant was originally granted a refund in this proceeding.
Comment: One commenter suggests that ``every claim about which no
further questions remain unresolved should be paid as soon as possible.
* * * [W]here the funds can be transferred electronically, the OHA can
[[Page 2197]]
and should make all the disbursements immediately. Then, as OHA works
through the cases in which questions remain, we encourage
administrative choices premised on completing the maximum number of
disbursements, rather than distributing the maximum number of dollars.
The rough justice required in equitable proceedings favors an
administrative course that assures that the maximum number of
participants receive as much of their final refund as possible before
they lose touch with the proceeding.''
Response: We agree with the commenter, and share his desire that
refunds be paid as soon as possible. Over the past months, we have
worked to resolve pending issues that would delay refunds in particular
cases, such as gathering necessary documentation in order to
demonstrate that a successor-in-interest to a prior refund recipient
should now receive the refund. In doing so, our goal has always been
and will continue to be to resolve as many claims as possible, as soon
as possible, irrespective of the size of the claims.
III. Final Refund Procedures
Based on our discussion of the comments above, OHA will adopt the
following final refund procedures. First, we will use the method set
forth in our September 30 notice for calculating the volumetric refund
amount, as follows: We will use as the numerator, $254,738,494.09,
i.e., approximately 90% (or $255,714,292.20) of all funds available as
of December 28, 2005 ($284,126,991.33) \1\ minus the amount of an
initial refund claimed in one application that was denied by OHA but is
currently the subject of pending litigation ($975,798).\2\ As the
denominator, we will use 366,324,981,322 gallons, i.e., the number of
gallons of eligible petroleum products purchased during the controls
period by eligible claimants (365,715,107,505 gallons) plus the number
of gallons claimed in the application denied by OHA that is currently
the subject of pending litigation (609,873,817 gallons). This produces
a volumetric refund of $0.000695389 and distributes approximately 90%
of the money due to over 99.75% of all eligible claimants.\3\
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\1\ One commenter suggests that the ``volumetric should be
calculated, reflecting all interest earned through a date not more
than 15 days prior to distribution.'' The volumetric refund amount
announced here reflects the most disbursement of refunds as soon as
possible after publication of this notice.
\2\ As noted by one commenter, were the claimant whose
application was denied by OHA to prevail in litigation, that
claimant wuold not only be entitled to the supplemental refund
calculated using the volumetric announced here, but also in the
initial refund that has already been paid to other successful
claimants, i.e. $0.0016/gallon of approved petroleum product
purchases.
\3\ We round down the volumetric refund amount to the ninth
decimal place. As explained in the September 30 notice, rounding
down ensures that there will be sufficient funds to pay refunds at a
given volumetric refund amount.
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Also as proposed in our September 30 notice, we will not distribute
refunds at this time to certain claimants whose refunds are currently
being challenged by third parties in pending litigation. Below is a
list of these claimants:
RF272-00011 DEFENSE LOGISTICS AGENCY;
RF272-00350 WISCONSIN DEPT. TRANSPORTATION;
RF272-00512 STATE OF WEST VIRGINIA;
RF272-04416 STATE OF CONNECTICUT;
RF272-08074 STATE OF CONNECTICUT;
RF272-09853 WASHINGTON STATE PATROL;
RF272-11717 WASHINGTON STATE DEPT. TRANS.;
RF272-12181 NEBRASKA PUBLIC POWER DIST.;
RF272-12588 STATE OF CONNECTICUT;
RF272-17487 KENTUCKY DEPT. OF EDUCATION;
RF272-18164 STATE OF NORTH DAKOTA;
RF272-18963 STATE OF NEW MEXICO;
RF272-19364 STATE OF MISSOURI;
RF272-19386 STATE OF VERMONT;
RF272-19457 STATE OF SOUTH DAKOTA;
RF272-20947 LUBRIZOL CORPORATION;
RF272-23229 DISTRICT OF COLUMBIA;
RF272-23790 HERCULES, INC.;
RF272-25793 OHIO DEPT. OF TRANSPORTATION;
RF272-28260 WASHINGTON STATE FERRIES;
RF272-35431 MARYLAND STATE AVIATION ADMIN.;
RF272-44094 OHIO STATE HWY. PATROL;
RF272-44344 STATE OF SOUTH CAROLINA;
RF272-45477 ILLINOIS STATE TOLL HWY. AUTH.;
RF272-49283 COMMONWEALTH OF KENTUCKY;
RF272-49892 NEBRASKA ENERGY OFFICE;
RF272-49898 STATE OF KANSAS;
RF272-50638 WASHINGTON STATE DEPT. OF TRANS.;
RF272-51829 WASHINGTON STATE PARKS & REC.;
RF272-54955 U.S. POSTAL SERVICE;
RF272-56597 STATE OF OKLAHOMA;
RF272-59085 STATE OF UTAH, ENERGY OFFICE;
RF272-59907 STATE OF COLORADO;
RF272-60251 STATE OF WISCONSIN;
RF272-61569 STATE OF MINNESOTA;
RF272-61591 ARKANSAS HWY. & TRANS. DEPT.;
RF272-62009 STATE OF NEW HAMPSHIRE;
RF272-62522 STATE OF NEW YORK;
RF272-63433 STATE OF DELAWARE;
RF272-63623 MARYLAND STATE HWY. ADMIN.;
RF272-63624 MARYLAND DEPT. GENERAL SERVICE;
RF272-64195 STATE ARIZONA DEPT. OF TRANS.;
RF272-64288 STATE OF ARKANSAS;
RF272-64986 STATE OF FLORIDA;
RF272-65199 STATE OF IOWA;
RF272-65200 IOWA DEPT. OF TRANSPORTATION;
RF272-65398 STATE OF NEVADA;
RF272-65470 STATE OF MICHIGAN;
RF272-65524 ILLINOIS DEPT. OF COMMERCE;
RF272-65526 ALASKA DEPT. OF TRANS. & PUB. FAC.;
RF272-66878 NEW YORK TRANSIT AUTHORITY;
RF272-67007 COMMONWEALTH OF PENNSYLVANIA;
RF272-67187 STATE OF INDIANA;
RF272-67248 STATE OF CALIFORNIA;
RF272-67313 STATE OF TEXAS;
RF272-67507 STATE OF VERMONT DEPT. OF COR.;
RF272-67509 STATE OF VERMONT--TRANSPORTATION;
RF272-67563 OREGON DEPT. OF GEN. SERVICES;
RF272-67586 STATE OF ALABAMA;
RF272-68243 NEW JERSEY TRANSIT CORP.;
RF272-68934 NEW YORK STATE THRUWAY AUTH.;
RF272-69744 STATE OF NEW JERSEY;
RF272-69948 WEST VIRGINIA HWY. DEPT.;
RF272-71331 STATE OF TENNESSEE;
RF272-72465 COMMONWEALTH OF MASSACHUSETTS;
RF272-74169 STATE OF MAINE;
RF272-75269 VIRGINIA DEPT. OF STATE POLICE;
RF272-75775 R.I. DEPT. OF ADMINISTRATION;
RF272-76126 U.S. DEPT. OF AGRICULTURE;
RF272-87985 STATE OF MARYLAND;
[[Page 2198]]
RF272-97101 CHESEBROUGH-POND'S USA CO.;
RF272-98890 COMMONWEALTH OF VIRGINIA;
RG272-00507 STATE OF OHIO;
RK272-00147 STATE OF MONTANA;
RK272-00362 STATE OF KANSAS;
RK272-03404 WYOMING DEPT. OF TRANSPORTATION.;
RK272-03418 STATE OF GEORGIA--ENERGY RES.;
RK272-04041 STATE OF NORTH CAROLINA;
RR272-00207 STATE OF TENNESSEE.
We note that six of the claimants listed above were not listed in
our September 30 notice. Thus, while the general public, including
these six claimants, has been given notice and an opportunity to
comment on our proposal to withhold payment on claims currently being
challenged in court, these six claimants were not put on notice that
this decision would directly and adversely impact them. Thus, each of
these claimants should be given an opportunity to show that, in fact,
its claim should not be included in the list--i.e., is not among those
currently being challenged in pending litigation. If such a showing is
made by any of the six claimants within 30 days of the date of this
notice, we will not delay the distribution of a refund to that
claimant. In any event, upon the conclusion of any of the litigation
challenging particular refund claims, if our refund award is upheld we
will promptly order the disbursement of refunds to the affected
claimant(s).
It is imperative that all refund recipients immediately inform OHA
in the event of any change of payment address or bank account deposit
information. DOE will not attempt to locate payees of returned refund
payments, and the associated funds will be divided equally between the
States and the Federal Government.
Issued in Washington, DC, on January 6, 2005.
George B. Breznay,
Director, Office of Hearings and Appeals.
[FR Doc. E6-373 Filed 1-12-06; 8:45 am]
BILLING CODE 6450-01-P
