Austin, Texas 78711 Office of the Governor Phone (512) 475-3021 MEMO TO: William P. Clements, Jr. FROM: David Herndon DATE: October 12, 1982 RE: Distribution of Oil Overcharges As you know, James Edwards, Secretary of Energy, is expected to step down in the immediate future. An issue which could be resolved before he leaves is the distribution of oil overcharge funds now held in escrow by DOE. The Economic Regulatory Administration (ERA) has prepared a recommended distribution plan, which has not been publicly circulated. The plan is for the $300 million in escrow to be distributed as follows: 1. Reimbursement to individual claimants who have been able to prove actual injury. (approximately $20 million) 2. Distributing the unclaimed amount of the funds attributable to refined product violations to the states for use in energy-related activities. (approximately $202 million) 3. Using the funds resulting from crude oil violations in one of three ways, either to purchase oil for the Strategic Petroleum Reserves (SPR), placing funds in the United States Treasury, or for distribution to the states. (approximately $67 million) Secretary Edwards is in the process of reviewing the plan. The National Governor's Association urges you to voice your support of the ERA plan by personal call and by letter to Secretary Edwards. TENRAC staff and the State-Federal Office concurs. A letter is attached for your signature. 0.00 vtorwl DAVID HERNDON General Counsel