Mr. Chairman, my name is R. Timothy Columbus. I am with the law firm of Collier, Shannon, Rill, Edwards, & Scott, and I am appearing today on behalf of our client, the Society of Independent Gasoline Marketers of America (SIGMA). SIGMA is a trade association comprised of 186 member companies which are primarily engaged in the private brand marketing of motor gasoline at the retail level. As such, SIGMA is the largest trade association representing this segment of the motor gasoline marketing industry. While there are a number of aspects of the Department of Energy's [DOE] operations which SIGMA believes should be of concern to the Subcommittee, my testimony today will be limited to two specific areas: the inordinate and unnecessary burden imposed upon independent resellers by DOE's enforcement effort, and DOE's information gathering activities. These two areas represent substantial and immediate problems which are capable and worthy of correction at the earliest possible time. As noted in the Sporkin Report, enforcement of the Mandatory Petroleum Price Regulations (the regulations) has been focused primarily upon the independent marketing segment of the petroleum industry. SIGMA does not oppose an equitable and well-reasoned enforcement effort. However, SIGMA does object to a continuation of the unduly burdensome and illogical enforcement effort being implemented by DOE with regard to independent marketers and retailers. Repeated audits of companies whose sales activities have been previously reviewed, coupled with continual and unreasonable alterations in the interpretation afforded portions of the regulations, have resulted in the imposition of an inequitable, and SIGMA believes, unintended burden on this segment of the industry. Many independent marketers have been audited three, even four times. These multiple audits are applicable to the same time period, and each audit results in findings of increased "violations." It is essential to note that these increased "violations" are usually the result of new interpretations of what the regulations allegedly always meant. Perhaps the best example of this phenomenon is the "multiple inventories" rule. The Federal Energy Administration's [FEA] May 1976 declaration that prior to that time firms were required to calculate their cost of inventory on a "firm-wide" basis, i.e. were required to ignore their historic and consistently applied accounting practices, threatens many resellers with DOE's finding huge violations without any allegation that these companies received, on a per unit basis, more than permitted by law. Some SIGMA members, in reliance upon FEA representations, have executed programs of voluntary refunds and price rollbacks in order to resolve FEA alleged violations. Subsequently, they have been informed that FEA's initial conclusions were incorrect and that an additional audit, based on different assumptions, must be performed. In light of the substantial administrative and financial burden which this type of agency behavior imposes on businesses with limited resources, it is not surprising that the independent marketing segment of the petroleum industry believes that it has been unfairly and unnecessarily abused. The second specific area of concern to which SIGMA directs the Subcommittee's attention is DOE's information gathering activities. SIGMA recognizes that DOE has legitimate needs for information. In fact, SIGMA has been among the leading proponents of DOE's obtaining and evaluating useful information relevant to market shares in the petroleum industry. However, it is essential that this information be gathered in a manner which minimizes the administrative burden imposed on small companies and which assures that the data obtained accurately reflects market realities. To date, DOE's information gathering efforts have achieved neither of these goals. SIGMA believes that a good example of an information gathering effort "gone bad" is provided by Form ETA-8, the Retail Motor Fuels Service Station Survey. Form ETA-8 has been explained informally to SIGMA as an attempt to trace distribution patterns for motor gasoline and to gather information relevant to market prices and market shares. It is SIGMA's opinion that this form simply does not accomplish these purposes. The categories relevant to ownership and operation do not distinguish adequately between the different types of participants in the market and, thus, will result in the aggregation of data provided by different types of participants within one category. Further, the time frame for supplying the requested information is unreasonably short. Ten days is not sufficient for most recipients of the form to compile data relevant to total revenues, sales volumes, average selling prices, and taxes. Moreover, because the forms are sent to retail outlets directly, many of them are not forwarded to the individuals who are responsible ultimately for their completion. These problems could have been avoided had the Energy Information Administration [ELA] consulted with industry representatives prior to the form's dissemination. SIGMA believes that a part of ELA's standard operating procedure should be early and effective consultation with representatives of the entities which will be required to provide the information which it seeks. On behalf of SIGMA, I wish to thank the Subcommittee for this opportunity to participate in these proceedings. I will be happy to attempt to answer any questions which my testimony may have raised. DEPARTMENT OF ENERGY FISCAL YEAR 1979 AUTHORIZATION (Energy Conservation) FRIDAY, APRIL 14, 1978 U.S. SENATE, SUBCOMMITTEE ON ENERGY CONSERVATION AND REGULATION, Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 6226, Dirksen Office Building, Hon. J. Bennett Johnston, presiding. Present: Senators Johnston and Hansen. Also present: Benjamin S. Cooper, professional staff member; James T. Bruce, counsel; and Charles Trabandt, deputy minority counsel. OPENING STATEMENT OF HON. J. BENNETT JOHNSTON, A U.S. SENATOR FROM THE STATE OF LOUISIANA Senator JOHNSTON. Good morning. Today's Subcommittee on Energy Conservation and Regulation will examine the budget request of the Department of Energy for the Assistant Administrator for Energy Conservation and Solar Applications and for energy conserving improvements in DOE buildings. Conservation and Solar Applications has requested $905 million to support a broad range of programs including research, development, and demonstration for energy conservation and solar applications, grants for State energy conservation programs, weatherization grants to States for energy conservation in residences of low-income persons, and grants for schools, hospitals, and local government for energy audits and energy conservation improvements. The DOE Director of Administrtaion, William Heffelfinger, will testify on the Department's plans to spend $37.4 million to improve the energy efficiency of its own buildings. I expect several issues to be discussed in today's hearings: First, what should be the roles of DOE and of the Community Services Administration in low-income weatherization? What programs does the Department have to respond to the $98 million authorization in the pending energy legislation to purchase photoelectric devices for use by the Federal Government in remote installations or other appropriate applications? Does the administration still plan to spend funds for a Federal van pooling program? (311) |