Current through Register Vol. 49, No. 2, February 2024
SECTION 1.
POLICY AND PURPOSE
A. The
following rules and regulations of the Arkansas Energy Office, a division of
the Arkansas Economic Development Commission, are promulgated pursuant to ACA
§15-702-804 (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).
B.
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:
"Act" means the Emergency Petroleum Set-Aside Act ACA §15-72-801
et. seq.
"Agricultural Activities" means commercial farming, dairy, poultry,
livestock, horticulture, forestry and aquaculture activities and services
directly related to the planting, cultivation, harvesting, milking, processing
and distribution of fiber, timber and food intended for human consumption and
animal feed.
"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.
"Blended Fuels" are mixtures composed primarily of gasoline or diesel
fuel that may have additional alternative fuels blended into the petroleum
products in varying percentages. For diesel fuel, B2, B5, B20 or similar
conventional/biodiesel blends shall be considered to be diesel fuel. For
gasoline, E10 or similar gasoline/ethanol blends shall be considered to be
gasoline.
"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.
"Bulk User" 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.
"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.
"Dealer" or "Retailer" means and includes any person or firm engaged in
the business of selling petroleum products at retail.
"Director" means the Director of the Arkansas Energy Office who serves
under the consent of the Executive Director of the Arkansas Economic
Development Commission.
"Electronic Transmission" means any process of communication that does
not directly involve the physical transfer of paper and that is suitable for
the retention, retrieval and reproduction of information by the
recipient.
"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.
"Emergency Services" means vital services, including but not limited
to, law enforcement, firefighting, medical care, sanitation, etc.
"Executive Director" means the Executive Director of the Arkansas
Economic Development Commission.
"Firm" means any association, company, corporation, estate, individual,
joint venture, partnership, or sole proprietorship or any entity however
organized, including charitable, or education institutions and the Federal
Government, including federal corporations, departments and agencies and state
and local governments.
"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.
"Jobber of Petroleum Products" means any firm or any part or subsidiary
of any firm, other than the United States Department of Defense, which
supplies, sells, transfers, or otherwise furnishes any allocated product to
wholesale purchasers or end-users.
"Petroleum Products" means propane, motor gasoline, blended fuels,
kerosene, #2 fuel oil, diesel fuel, kerosene-base jet fuel, naphtha-base jet
fuel, and aviation gasoline.
"Petroleum Wholesaler" means any firm or any part or subsidiary of any
firm, other than the United States Department of Defense, which supplies,
sells, transfers, or otherwise furnishes any allocated product to wholesale
purchasers or end-users.
"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.
"Purchaser" means a wholesale purchaser or consumer, or both.
"Reference Month" means the calendar month and year to which the
reported information on actual sales volume relates.
"Set-Aside" means, with respect to a particular prime supplier, the
amount of 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 distribution
systems.
"Supplier" means any firm or any part or subsidiary of any firm other
than the United States 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.
"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 Arkansas Energy Office personnel shall
take into account written evidence of such a burden furnished by the prime
supplier or broker involved.
"Wholesale Purchaser" means a wholesale purchaser-reseller or wholesale
purchaser-consumer, or both.
"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.
"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
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 Arkansas Energy Office reserves the right to depart from the procedure
described in subsection A (1) 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) business 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 insure 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 indicate, in the judgment of the
Arkansas Energy Office, that an emergency or hardship exists relating to the
continuation of:
a. emergency services;
or
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 and
distribution
b. aviation ground
support vehicles and equipment
c.
cargo, freight and mail hauling by truck
d. communications companies
e. emergency medical services
f. energy production and energy
suppliers
g. firefighting
units
h. government critical
maintenance activities or mission-essential Department of Defense
requirements
i. health care
facilities
j. law
enforcement
k. marine shipping
(commercial shipping on navigable state waterways)
l. public and community and school
transportation
m. public utility
services (including water and sanitation)
D. Investigations
1. In evaluating applications for assignments
from the set-aside system, the Arkansas 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.
E. Amount of Product Assigned
1. In evaluating the amount of a particular
petroleum product to be assigned, the Arkansas 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.
F. Assignment
1. Upon consideration of an application and
other relevant information, the Arkansas Energy Office shall issue an
assignment granting or denying the applicant's requests.
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) business 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.
G. Notification
1. The Arkansas 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).
2. The Arkansas Energy Office shall notify
applicants of decisions denying an application.
3. The Arkansas Energy Office may follow up
the notification process described above with additional communications in
order to expedite the delivery of product and to insure that such delivery is
made within the required ten (10) business day period.
H. Supply Lines
1. 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 Arkansas
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.
I. Suppliers Responsibilities
1. 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 Arkansas Energy Office, unless
the assignment(s) creates an undue economic burden as defined in ACA
§15-72-804 (d)(2)(B) of the Act.
2. A duly authorized assignment(s) shall
entitle the applicant to receive product from any reasonably convenient local
wholesale purchaser-reseller of the prime supplier or broker from which the
set-aside assignment has been made.
3. 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.
4. Any non-prime supplier which provides an
allocated product pursuant to an authorized assignment(s) from the Arkansas
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
Arkansas 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.
3. If the Director of the Arkansas Energy
Office is unable to conduct an administrative appeal, the authority for
conducting said administrative appeal shall revert to the Executive Director of
the Arkansas Economic Development Commission or his or her designee.
B. Who May File
1. 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 who is wholly denied or partially denied an assignment
of the requested amount may file an administrative appeal.
2. Any person, company, organization, agent
of said company or organization acting with authority of said company or
organization who has been aggrieved by a decision from the Arkansas Energy
Office who is filing an appeal under this section shall submit a signed,
written document entitled "Appeal of Order" which shall be clearly labeled as
such.
a. An appeal can be granted on the
grounds that the assignment was wholly denied, or partially denied.
b. 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 nondisclosure of such
information.
C. Where to File
1. Appeals from state set-aside orders shall
be filed with:
Director
Arkansas Energy Office
Arkansas Economic Development Commission
900 West Capitol Avenue, Suite 400
Little Rock, Arkansas 72201.
D. Notice
1. The appellant shall send, in such manner
that it shall be received within five (5) business days 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 five (5) business
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. Before the appeal is reviewed, the
Director shall give notice to the appealing party the issues upon review. These
will be the only issues that the Director will grant a decision on. The
Director may give this notice by US Postal Service or electronic
transmission.
2. 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 without a showing it was for good cause, the
Director may dismiss the appeal with prejudice.
c. A hearing will take place within five (5)
business days of granting the appeal if appealing party so requests. There the
appealing party can state their argument orally and produce additional
evidence. All other parties in interest will have a chance to be present and
give an oral argument. Notice shall be given by the Director to all persons
originally notified under D of this section. The Director may give notice by US
Postal Service or electronic transmission.
3. Criteria
a. An appeal may be summarily denied if:
i. it is not filed within ten (10) business
days from receiving notice of a judgment from the Arkansas Energy Office,
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 Arkansas 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 Arkansas Energy Office's action;
ii. the Arkansas Energy Office's action was
erroneous in fact or in law; or
iii. the Arkansas Energy Office's action was
arbitrary or capricious.
c. The denial of an appeal shall be a final
order of the Arkansas Energy Office of which judicial review may be sought by
the appellant.
G. Decision and Order
1. The possible outcomes of an appeal are:
a. reverse prior Arkansas Energy Office
decision and grant requested fuel assignment; or
b. modify prior Arkansas Energy Office
decision; or
c. affirm the prior
Arkansas Energy Office decision.
2. 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.
3. 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 Arkansas Energy Office
from which the appellant may seek judicial review.
H. Timeliness
1. 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 five (5) business days of serving such
notice.
SECTION 9.
REPORTING FORMS
A. In the event the
Governor declares an energy emergency, upon notification each prime supplier or
broker of petroleum products shall file with the director, no later than 20
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
consumption) for the reference month. This report may be filed by electronic
transmission.
B. The Arkansas
Energy Office may require that said data shall 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.
This information will be required for the duration of the declared energy
emergency and may be filed by electronic transmission.
C. Information furnished pursuant to this
section shall be treated as confidential in accordance with ACA §15-72-805
of the Act.
