Current through Register Vol. 49, No. 2, February 2024
SECTION
1.
POLICY AND PURPOSE
The following rules and regulations of the Arkansas Energy Office, a
division of the Arkansas Economic Development Commission, are promulgated
pursuant to ACA §15-72-804 (a) (1)-(2) of the Arkansas Emergency Petroleum
Set-Aside Act (ACA 15-72-801 et. seq.) and the Arkansas Administrative
Procedure Act (25-15-201 et. seq. as amended).
It is the purpose of these rules and regulations, and it is hereby
declared to be the policy of the Arkansas Energy Office (1) to provide for the
orderly operation of the state authorized program; (2) to implement said
set-aside program whenever the Governor, in his discretion, finds that such a
program is necessary to manage a shortage of petroleum products which threatens
the continuation of emergency services and essential industrial or agricultural
activities; (3) to prevent duplication of state and federal regulatory
requirements; (4) to implement only that portion of the set-aside program (with
regard to the number of petroleum products covered) as is deemed necessary by
the Governor to manage the existing shortage; and (5) to terminate the
set-aside program as soon as the Governor finds that it is no longer necessary
to manage a shortage.
SECTION
2.
DEFINITIONS
When used in these regulations:
(A) "Act" means the Emergency Petroleum
Set-Aside Act ACA 15-72-801 et. seq.
(B) "Agricultural Activities" means
commercial farming, dairy, poultry, livestock, horticulture, forestry and
fishing activities and services directly related to the planting, cultivation,
harvesting, processing and distribution of fiber, timber and food intended for
human consumption and animal feed.
(C) "Assignment" means an action taken by the
Arkansas Energy Office, designating that a prime supplier or broker of
petroleum products supply them to an authorized consumer, dealer, wholesale
purchaser-consumer or wholesale purchaser-reseller to facilitate relief of
emergency or hardship needs pursuant to ACA § 15-72-804 of the
Act.
(D) "Blended fuels" are
mixtures composed of gasoline or diesel fuel and another liquid (other than a
minimum amount of a product such as carburetor detergent) that can be used as a
fuel in a highway vehicle. Blended fuels are not designated as a product
covered by the set-aside program, however they can supplement available
petroleum supplies on a case-by-case basis.
(E) "Broker" means a marketer of petroleum
products who performs none of the basic marketing functions but normally brings
buyer and seller together and receives a fee or commission for his
services.
(F) "Consumer" or "End
User" means any individual, trustee, agency, partnership association,
corporation, company, municipality, political subdivision or other legal entity
which purchases petroleum products for ultimate consumption in
Arkansas.
(G) "Dealer" or
"Retailer" means and includes any person or firm engaged in the business of
selling petroleum products at retail.
(H) "Director" means the Director of the
Arkansas Energy Office.
(I)
"Emergency" or "Hardship" means any situation which, in the judgment of the
Arkansas Energy Office, presents a threat to the economic, social or personal
welfare of the areas, regions or individual users for which an assignment from
the state set-aside is requested.
(J) "Emergency Services" means vital
services, including but not limited to, law enforcement, fire fighting, medical
care, sanitation, etc.
(K) "Firm"
means any association, company, corporation, estate, individual, joint venture,
partnership, or sole proprietorship or any entity however organized, including
charitable, or educational institutions and the Federal Government, including
federal corporations, departments and agencies and state and local
governments.
(L) "Industrial
Activities" means all industrial activities which create or change materials
into another form as well as commercial activities involving the sale of goods
and services.
(M) A "Jobber" of
petroleum products is a person or company that purchases quantities of refined
fuel from refining companies for sale to retailers. The jobber sometimes owns
the gasoline being sold, and the station to which it is being sold.
(N) "Petroleum Products" means propane, motor
gasoline, blended fuels, kerosene, #2 fuel oil, on and off-road diesel fuel,
kerosene-base jet fuel, naphtha-base jet fuel, and aviation gasoline.
(O) "Prime Supplier" means the supplier which
makes the first sale of any petroleum product subject to the state set-aside
into the state distribution system for consumption within the state.
Notwithstanding the above, "prime supplier" shall not include any firm, or any
part or subsidiary of any firm, which supplies, sells, transfers or otherwise
furnishes any allocated product exclusively to utilities for generation of
electric energy.
(P) "Purchaser"
means a wholesale purchaser or consumer, or both.
(Q) "Reference Month" means the calendar
month and year to which the reported information on actual sales volume
relates.
(R) "Set-Aside" means,
with respect to a particular prime supplier, the amount of a petroleum product
which is made available from the total supply of a prime supplier, pursuant to
the provisions of ACA § 15-72-804 of the Act, for utilization by the
Arkansas Energy Office to resolve emergencies and hardships due to shortages or
other dislocations in petroleum products distribution systems.
(S) "Supplier" means any firm or any part or
subsidiary of any firm other than the Department of Defense, which supplies,
sells, transfers or otherwise furnishes any allocated product to wholesale
purchasers or end-users, including but not limited to refiners, importers,
resellers, brokers, jobbers and retailers. Notwithstanding the above,
"supplier" shall not include any firm, or any part or subsidiary of any firm,
which supplies, sells, transfers or otherwise furnishes any allocated product
exclusively to utilities for generation of electric energy.
(T) "Undue Economic Burden" means, as used in
ACA § 15-72-804 (d)(2)(B) of the Act, any assignment which, in the
judgment of the Arkansas Energy Office, creates an extraordinary and
financially prohibitive burden on a prime supplier or broker. Such judgments by
Energy Office personnel shall take into account written evidence of such a
burden furnished by the prime supplier or broker involved.
(U) "Wholesale Purchaser" means a wholesale
purchaser-reseller or wholesale purchaser-consumer, or both.
(V) "Wholesale Purchaser-Consumer" means any
firm that is an ultimate consumer which, as a part of its normal business
practices, purchases or obtains a product subject to the state set-aside from a
supplier and receives delivery of that product into a storage tank
substantially under the control of that firm at a fixed location.
(W) "Wholesale Purchaser-Reseller" means any
firm, including dealers, which purchases, receives through transfers or
otherwise obtains, as by consignment, a product subject to the state set-aside
and resells or otherwise transfers it to other purchasers without substantially
changing its form.
SECTION
3.
ESTABLISHMENT OF STATE SET-ASIDE
SYSTEM
A. Percentage of
Products Set-Aside
The monthly set-aside percentages applicable to prime suppliers and
brokers for petroleum products subject to the set-aside program shall be as
follows:
|
Motor Gasoline
............................................................... |
5 percent |
|
Diesel Fuel
..................................................................... |
4 percent |
|
Kerosene
......................................................................... |
4 percent |
|
#2 Fuel Oil
...................................................................... |
4 percent |
|
Aviation Gas
................................................................... |
5 percent |
|
Jet Fuel (kerosene base)
................................................. |
5 percent |
|
Jet Fuel (naphtha base)
.................................................. |
5 percent |
|
Propane
.......................................................................... |
3 percent |
B. Volume in
Set-Aside System
The set-aside volume available to the Arkansas Energy Office for any
particular month when the program is in effect shall be calculated as the
product of the monthly set-aside percentage multiplied by each prime supplier's
or broker's reported delivery for the most recent Reference Month.
C. Notification of Prime Suppliers
and Brokers by State Energy Office
The Director shall notify each prime supplier or broker of the adoption
of these rules and regulations and of the set-aside percentage applicable to
each product by mailing them a copy thereof.
D. Designation of Representative by Prime
Suppliers and Brokers
Each prime supplier or broker subject to the state set-aside program
shall designate a regional manager or equivalent person to act for and in
behalf of the prime supplier or broker, with respect to the set-aside program.
Each prime supplier or broker shall notify the Arkansas Energy Office in
writing of that designation within 14 days of notification (or actual notice)
of the adoption of these rules and regulations.
SECTION 4.
APPLICATIONS
FOR ASSIGNMENTS
A. Who
May Apply
A wholesale purchaser-consumer, dealer or end-user seeking an
assignment from the state set-aside system to meet a qualifying hardship or
emergency requirement, and a wholesale purchaser-reseller seeking an assignment
to enable him to supply dealers, wholesale purchaser-consumers and end-users to
meet qualifying hardship or emergency requirements, may apply for an assignment
from the state set-aside program when the program is in effect.
B. What to File
1. Each applicant for an assignment from the
state set-aside program must submit a completed and signed Application
to State for Petroleum Product Hardship or Emergency Relief (Form
AEO-8-07).
2. Each application
submitted may request only one type of petroleum product and shall apply only
for the month specified.
C. Where to File
Applications must be filed with the Arkansas Economic Development
Commission, Energy Office, One Capitol Mall, Little Rock, Arkansas
72201.
SECTION
5.
PROCEDURES FOR
ASSIGNMENTS
A. Order and
Timing for Processing of Applications
1. Each
application shall be dated and assigned a case number indicating the order in
which it has been received and will be processed.
2. The Energy Office reserves the right to
depart from the procedure described in subsection A(l) above when required by
extraordinary circumstances.
3. As
a general rule, all applications will be processed, and orders will be issued,
as quickly as possible. In no event shall a decision on an order be delayed
more than ten (10) days from the date assigned to it unless:
(a) additional information is required for
any reason;
(b) no product is
available from the state set-aside system; or
(c) the applicant is a dealer with an
allocation from his regular supplier, in which case such decision may take
longer to ensure that needs of priority users can be met.
B. Records
1. Records shall be maintained in which the
numbered applications, names of suppliers, brokers, distributors, and
applicants, as well as the type and amount of petroleum products requested,
will be stored.
C.
Evaluation
1. No assignment shall be made to
applicants who can obtain sufficient amounts of petroleum products through
normal supply channels, but are unwilling to pay the selling price.
2. No assignment shall be made unless the
justification and product end-use stated on the application indicate, in the
judgment of the Energy Office, that an emergency or hardship exists relating to
the continuation of:
(a) emergency
services;
(b) essential
agricultural activities; or
(c)
essential industrial activities, as defined herein.
3. If at any time during a given month
applications are expected to exceed remaining product in the set-aside system,
applicants may be granted relief based upon a pro-rata share of the remaining
product and in consideration of the following priority uses (without regard to
order listed below):
(a) agricultural
production including perishable agricultural commodity transport
(b) energy production
(c) emergency police, fire or medical
services
(d) government critical
maintenance activities or mission-essential Department of Defense
(e) public utility services (including water
and sanitation)
(f) health care
facilities
(g) telecommunication
services
(h) marine shipping
(commercial shipping on navigable state waterways)
(i) aviation ground support vehicles and
equipment
(j) surface mass
transportation (busses, taxis, etc.)
(k) passenger transportation services
(including ride-sharing vehicles such as carpools and vanpools)
(l) cargo, freight and mail hauling by
truck
4. Investigations
In evaluating applications for assignments from the set-aside system,
the Energy Office may initiate an investigation of any statement or
justification made therein and may take into account any relevant information
obtained from such investigation in its decision-making process.
5. Amount of Product Assigned
In evaluating the amount of a particular petroleum product to be
assigned, the Energy Office may consider, among other things, the
following:
(a) amount of a particular
product available in the total set-aside system for the month;
(b) number of applications received to date
for that particular supplier or broker;
(c) amount requested;
(d) historical demand;
(e) growth factors;
(f) daily consumption; and
(g) storage capacity.
D. Assignment
1. Upon consideration of an application and
other relevant information, the Energy Office shall issue an assignment
granting or denying the applicant's requests (Form AEO-7-07 entitled
State Action on Application for Hardship or Emergency
Relief).
2. The assignment
shall include the following:
(a) a brief
statement summarizing the action taken, including comments;
(b) a statement indicating that it is
effective for ten (10) days from date of issuance;
(c) a statement indicating the process by
which a person aggrieved by the order may appeal it; and
(d) a statement directing the prime supplier
or broker to furnish the product assigned through the distributor (if
identified) or the applicant named therein.
3. Notification
(a) The Energy Office shall serve a copy of
an assignment authorizing an application upon the applicant, the prime supplier
or broker, and the distributor (if identified).
(b) The Energy Office shall notify applicants
of decisions denying an application.
(c) The Energy Office may follow up the
notification process described above with additional communications in order to
expedite the delivery of product and to ensure that such delivery is made
within the required ten (10) day period.
4. Supply Lines
To the maximum extent possible, historic supply lines will be honored.
If it becomes necessary for supply lines to be crossed in order to assist an
otherwise qualified applicant, the Energy Office may require any supplier or
broker having product in the state set-aside system to supply said applicant
(provided that said applicant can satisfy the existing credit insurance, or
other reasonable requirements, of the prime supplier or broker involved). This
provision shall apply in extraordinary cases only.
5. Suppliers Responsibilities
(a) Suppliers shall provide the assigned
amount of a product subject to the set-aside program to an applicant upon
receipt of a duly authorized assignment from the Energy Office, unless the
assignment(s) creates an undue economic burden as defined in ACA §
15-72-804 (d)(2)(B) of the Act.
(b)
A duly authorized assignment(s) shall entitle the applicant to receive product
from any reasonably convenient local wholesale purchase-reseller of the prime
supplier or broker from which the set-aside assignment has been made.
(c) Wholesale purchaser-resellers of prime
suppliers or brokers shall, as non-prime suppliers, honor such duly authorized
assignment(s) upon presentation, and shall not, without good cause, delay
deliveries required by said authorized assignment(s). Such deliveries should be
confirmed with the prime supplier or broker.
(d) Any non-prime supplier which provides an
allocated product pursuant to an authorized assignment(s) from the Energy
Office shall in turn receive from its supplier or broker an equivalent volume
of the allocated product which shall not be considered part of its allocation
entitlement.
SECTION 6.
APPEAL
A. Purpose and Scope
1. This section establishes the procedure for
the filing of an administrative appeal of state set-aside orders issued by the
Energy Office.
2. A person has not
exhausted the administrative remedies until an appeal has been filed and an
order granting or denying the appeal has been issued.
B. Who May File
1. A person filing an appeal under this
section shall submit a signed, written document entitled "Appeal of Order"
which shall be clearly labeled as such.
2. If the appellant wishes to claim
confidential treatment for any information contained in the appeal, the
appellant shall file together with the appeal a second copy of the document
from which has been deleted the information for which such appellant wishes to
claim confidential treatment. The appellant shall indicate in the original
document that it is confidential or contains confidential information and shall
file a statement specifying the justification for non-disclosure of such
information.
C. Where to
File
Appeals from state set-aside orders shall be filed with the Director of
the Arkansas Energy Office, One State Capitol Mall, Little Rock, Arkansas
72201.
D. Notice
1. The appellant shall send, in such manner
that it shall be received as soon as possible after the filing of an appeal, a
copy of the appeal and any subsequent amendments or other documents relating to
the appeal, or a copy from which confidential information has been deleted in
accordance with this section and 10 CFR 205.9(f), to each person who is
reasonably ascertained by the appellant as a person who will be aggrieved by
the action sought, including those who participated in the prior proceedings.
The copy of the appeal shall be accompanied by a statement that the person may
submit comments regarding the appeal to the Director within 3 days from the
time of receipt.
2. The appeal
shall include certification that the appellant has complied with the
requirements of this section and shall include the names and addresses of each
person to whom a copy of the appeal was sent.
3. Notwithstanding the provision of Section
6(D) (1) and (2) above, if an appellant determines that compliance with Section
6(D) (1) and (2) would be impracticable, the appellant shall:
(a) Comply with Section 6(D) (1) and (2)
above with regard to those persons whom it is reasonable and possible to
notify;
(b) Include with the appeal
a description of the persons or classes of persons to whom notice was not sent;
and
(c) The appellant may be
required to provide additional or alternative notice if it is determined that
the notice required by Section 6(D) (1) and (2) above is not
practicable.
E. Contents
1. The appeal shall contain a concise
statement of the grounds upon which it is brought and a description of the
relief sought.
2. A copy of the
order that is the subject of the appeal shall be submitted with the
appeal.
F. Evaluation of
Appeal
1. Processing
(a) The Director may initiate an
investigation of any statement in an appeal and utilize in its evaluation any
relevant facts obtained by such investigation. The Director may solicit and
accept submissions relevant to any appeal provided that the appellant is
afforded an opportunity to respond to all submissions. In evaluating an appeal,
the Director may consider any other source of information.
(b) If the Director determines that there is
insufficient information upon which to base a decision and if, upon request,
the necessary additional information is not submitted, the Director may dismiss
the appeal with leave to amend within a specified time. If the failure to
supply additional information is repeated or willful, the Director may dismiss
the appeal with prejudice. If the appellant fails to provide the notice
required under this section, the Director may dismiss the appeal with
prejudice.
2. Criteria
(a) An appeal may be summarily denied if:
(i) It is not filed in a timely manner,
unless good cause is shown; or
(ii)
It is defective on its face for failure to state, and to present facts and
legal arguments in support thereof, that the Energy Office's action was
erroneous in fact or in law, or that it was arbitrary or capricious.
(b) The Director may deny an
appeal if the applicant does not establish that:
(i) The appeal was filed by a person
aggrieved by the Energy Office's action;
(ii) The Energy Office's action was erroneous
in fact or in law; or
(iii) The
Energy Office's action was arbitrary or capricious.
(c) The denial of an appeal shall be a final
order of the Energy Office of which judicial review may be sought by the
appellant.
G.
Decision and Order
1. Upon consideration of
the appeal and other relevant information received or obtained during the
proceeding, the Director shall enter an appropriate order, which may include
the modification of the order that is the subject of the appeal.
2. The order shall include a written
statement setting forth the relevant facts and the legal basis of the order.
The order shall state that it is a final order of the Energy Office from which
the appellant may seek judicial review.
H. Timeliness
When the Director has received all substantive information deemed
necessary to process any appeal filed under this section, the Director shall
serve notice of that fact upon the appellant and shall take action on the
appeal within one week of serving such notice.
SECTION 8.
TERMINATION OF
SET-ASIDE PROGRAM
A. The
set-aside program shall remain in effect for a period of 120 days from the date
the Governor directs the Energy Office to implement it, and shall automatically
terminate thereafter, unless:
1. The Governor
directs that the program should be extended for an additional 30 days because
it is still necessary to manage a shortage of petroleum products; or
2. The Governor finds that the program is no
longer necessary to manage a shortage of petroleum products and directs that
the program be terminated prior to the expiration of said 120-day
period.
B. The Arkansas
Energy Office shall be responsible, in consultation with other state agencies,
representatives of the petroleum industry, appropriate legislative committees,
and other interested parties, for providing the Governor with timely data on
the status of the supply and distribution of petroleum products in this state
in order to assist in the decision-making process described in Sub-section 8(A)
above.
SECTION 9.
REPORTING FORMS
A. Each prime supplier and broker of
petroleum products shall file with the director, no later than 30 calendar days
after the close of each reference month, a report providing the actual sales
(the total volume sold and delivered into the state) for the reference
month.
B. As a general rule, no new
state reporting forms will be required of prime suppliers or brokers as long as
the data is being made available to the Arkansas Energy Office on a regular
monthly basis.
C. In the event that
such data is no longer available to the Arkansas Energy Office, as described in
Sub-section (B) above, the Energy Office may require that said data be provided
by each prime supplier and broker on an on-going monthly basis regardless of
whether or not the set-aside program has been implemented, using form EIA 782C
or equivalent.
D. Information
furnished pursuant to this section shall be treated as confidential in
accordance with ACA § 15-72-805 of the Act.
