WILLIAM P. CLEMENTS, JR. GOVERNOR OFFICE OF THE GOVERNOR STATE CAPITOL AUSTIN, TEXAS 78711 October 12, 1982 The Honorable James B. Edwards Secretary of Energy U.S. Department of Energy Room 74-257 Forrestal Building 1000 Independence Avenue, S.W. Washington, D.C. 20585 Dear Jim: Texas continues to be very interested in the distribution by DOE of settlement funds collected from oil companies because of alleged violations of petroleum price and allocation controls. It is-my understanding that you are now considering a plan proposed by the Economic Regulatory Administration for the distribution of a considerable portion of the overcharge funds that DOE has collected and is now holding in escrow. I am informed that this proposal has three major components providing for: (1) reimbursement to individual claimants who have been able to prove actual injury; (2) distributing the unclaimed amount of the funds attributable to refined product violations to the states for use in energy-related activities; and (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. As indicated by my March 10, 1982 letter to you urging DOE to distribute overcharge funds to states, it is my feeling that state governments represent the most appropriate entities to handle overcharge funds not legitimately claimed by injured parties so as to best provide restitution to petroleum consumers. I hope that you will carefully consider and approve this plan within the next few weeks in order to provide a timely resolution of this important aspect of the overcharge proceedings. Sincerely, William P. Clements, Jr. Governor WPCJr:dmw