Order P.940907 - Petroleum - Imperial/Read's Corner Service Centre

Order No. P.940907

IN THE MATTER of Section 46 of the Petroleum Products Act, R.S.P.E.I. 1988, Cap. P-5.1

- and -

IN THE MATTER of alleged non-compliance with Section 30 (b) of the Petroleum Products Act, supra, and Regulations 2, 10 and 11 made thereunder in respect of READ'S CORNER SERVICE CENTRE located at 820 Water Street East, Wilmot owned by Imperial Oil Limited (ESSO Petroleum Canada) and leased to and operated by TRA Maritimes (Division of Sobeys Inc.) under Petroleum Products License No. D4234-00.

Wednesday, the 7th day of September, A.D., 1994

BEFORE

Linda Webber, Chairman
John Blakney, Vice-Chairman
Anne McPhee, Commissioner

Decision and Order

Appearances and Witnesses

Participants in the hearing and the parties for whom they appeared were as follows:

FOR TRA MARITIMES (DIVISION OF SOBEYS INC.) - RESPONDENT:

Witnesses:

Mr. Bill McMackin, Retail Counsellor, TRA Convenience Store Group

Ms. Jacqueline Richard, Manager, Read's Corner Service Centre

FOR THE COMMISSION:

(Mrs.) H. Doris Pursey, Director - Petroleum Division

Mr. Harry MacDonald (Witness) - Assistant to Director - Petroleum Division

RECORDING SECRETARY:

(Mrs.) Faye Weeks

Decision

I. INTRODUCTION

On the 2nd day of August, 1994, the Director of the Petroleum Division of the Island Regulatory and Appeals Commission ("the Commission") issued a Notice of Hearing with respect to alleged non-compliance by TRA Maritimes (Division of Sobeys Inc.) with Section 30 (b) of the Petroleum Products Act, supra, and with Regulations 2, 10 and 11 made thereunder. This non-compliance was alleged in respect of the operation of the Read's Corner Service Centre located at 820 Water Street East, Wilmot owned by Imperial Oil Limited (ESSO Petroleum Canada) and leased to and operated by TRA Maritimes (Division of Sobeys Inc.) under Petroleum Products License No. D4234-00 issued under the Petroleum Products Act, supra. This Notice indicated that a show cause hearing was to commence on Wednesday, the 24th day of August, 1994 at the hour of 9:00 a.m. in the Hearing Room of the Commission. This Notice of the hearing was served on Ms. Jacqueline Richard, Manager of Read's Corner Service Centre, Wilmot, by Mr. Harry MacDonald, Commission Staff Member, on 8 August 1994, and a copy of this same Notice was forwarded by certified mail on the same day to TRA Maritimes, Middleton, Nova Scotia and was served on Mr. Bowie of Imperial Oil Limited on 9 August 1994.

II. EVIDENCE

Thirteen documents were entered as Exhibits at this hearing by the Director of the Petroleum Division with regard to the matters before the Commission, and no objection was raised by the Respondent with respect to the admission of any of them. Mr. Harry MacDonald, Assistant to the Director of the Petroleum Division, gave evidence that over a period of time in July, 1994, the prices of gasoline at this outlet were in non-compliance with the Commission's Decision and Order No. P.910424 (all grades of gasoline were being offered for sale at 0.9 cpl below the minimum allowable prices for Imperial products). He also testified that invoices created by the credit card imprinter indicated prices other than those actually being charged (see Exhibit No. 5), that the mid-grade and premium product fill pipes were in non-compliance as set out on his Inspection Report dated 21 July 1994 (Exhibit No. 6). Mr. MacDonald also testified that visibility from the console to pump islands was lacking, and that on 17 and 21 July 1994, improperly trained staff was in charge of operating self-serve dispensing facilities. These matters of non-compliance had been discussed with Ms. Richard by telephone and at the outlet, and also by telephone with other representatives of TRA Maritimes. Mr. MacDonald testified that when these alleged violations were referred to the Commission, on the information then before it, the Commission decided that it would be necessary to fix a date and time for a show cause hearing. The Respondent in this case was represented by Ms. Jacqueline Richard and Mr. Bill McMackin, who appeared on its behalf to respond to the above-noted alleged breaches of the Petroleum Products Act, supra and Regulations thereunder.

Mr. McMackin took the stand and introduced three documents and requested that they be entered as Exhibits for the Respondent. Mr. McMackin did not argue the facts given by the Commission's witness in the matter. He testified that he resides in Moncton and is Retail Counsellor for a group of eleven Needs and Green Gables stores in the TRA Convenience Store Group and is responsible for ensuring that the facilities under his care are properly run and following company policies. Upon questioning, however, he clarified that only four of the current eleven stores in his territory have gasoline dispensing facilities, and that the two outlets on Prince Edward Island operated by TRA Maritimes are not included in his present territory, but are rather under the control of Michael Dugas, who was not present at the hearing. He further indicated that as he has fourteen years experience in the petroleum industry (ten of those years operating his own motor fuels outlet), he was requested to handle this situation. He clarified upon questioning that he has been in his present position for four years, and that only approximately twelve of eighty stores under the direction of Sobey's have gasoline dispensing facilities. He indicated that he had been requested by his employer to come to Prince Edward Island (which he had done on two recent occasions) to deal with and make the necessary corrections with regard to all matters of non-compliance indicated in the above-noted Notice of Hearing. He filed as Exhibit 14 a memorandum addressed to H. Doris Pursey bearing the date 24/08/94 wherein he set out the response of TRA Maritimes to each of the items of non-compliance cited by the Commission. He indicated that TRA Maritimes were willing to address any concerns with regard to the proper operation of its outlets in this Province once the matters are brought to its attention, and also filed as Exhibit 15 a training manual which has been developed since this hearing was set down for use at motor fuels outlets.

Ms. Richard was also sworn in this matter and did not argue the facts as set forth by Mr. MacDonald. In response to questions by the Commission, she indicated what steps had been taken with regard to correcting the matters of non-compliance cited and testified that she has since read the Act and made herself aware of the requirements thereof. During questioning, Ms. Richard testified that she had previously worked at the outlet in question for a period of eleven months, and for one of those months had been in a managerial position. She then noted that for the past year and a half she has managed a Green Gables store in the Charlottetown area which is not involved in the dispensing of gasoline. She testified that she had been requested by TRA Maritimes to return to Summerside to take over the position of Manager of the Read's Corner outlet early in July due to the fact that the previous Manager had left his position rather hurriedly. She noted that the site is open for business on a twenty-four hour basis, and that there are only four part-time staff members in addition to herself employed at the outlet. During the day, she and a console operator are present and during the evening hours, there is a stock person and a console operator present. She testified that weekly gasoline sales equal approximately 70,000 litres, and that there are approximately ten hours out of each twenty-four that only one person is at the outlet. The console operator during this ten-hour period must control the dispensing of gasoline plus handle all other sales and requirements of the operation of the outlet.

No representative of Imperial Oil Limited, owner and supplier of Read's Corner Service Centre, appeared at the hearing. Exhibit No. 16 filed by the Respondent in this hearing, however, was a letter dated 16 August 1994 from D. R. Schroeder, C.E.T., Facilities Specialist with Imperial Oil in Dartmouth, Nova Scotia to Read's Corner Esso, Att'n.: Mike Dugas. This letter covered an environmental assurance survey which indicated findings identified on 29 July 1994 and indicated corrective actions which are to be taken by either Esso or the lessee by 1 September 1994. These findings acknowledged several discrepancies related to the non-compliance alleged by the Commission in its discussions with representatives of TRA Maritimes and later in its Notice of Hearing dated 2 August 1994 (Exhibit No. 12).

III. FINDINGS

The Commission has determined that breaches of Section 30 (b) of the Petroleum Products Act, supra, and Regulations 2, 10 and 11 made thereunder have taken place at the Read's Corner Service Centre, 820 Water Street East, Wilmot then operating under Petroleum Products License No. D4234-00 issued by the Commission under this Act.

This determination is made based on the following findings of fact:

1. The uncontested evidence of Mr. MacDonald substantiates that the prices of gasoline on the self-serve pumps operated by TRA Maritimes (Division of Sobeys Inc.) at the Read's Corner Service Centre were below the minimum allowable prices on 13 July 1994 and continued to be in non-compliance until approximately noon on 15 July 1994.

2. Exhibit No. 7 indicates that all-three grades of product were purchased on 11 July 1994 at the approved prices (Exhibit No. 8), but that the markups taken thereon were not in accordance with the Commission's Order No. P.910424 (Exhibit No. 13).

3. The evidence of the Commission (Exhibits No. 10 and 11) indicates that the proper minimum and maximum pump prices were published in the Guardian and the Journal-Pioneer on 13 July 1994. The evidence of Mr. McMackin reveals that staff were unable to post the proper prices due to inability to properly access the console. This was determined to be the the result of lack of proper training of the Manager and support staff with respect to changing the prices at the console, the credit card imprinter, the electronic signage, etc., and assistance was not sought with regard to these matters until the Commission indicated that immediate action was required to be taken if the outlet were to continue to operate.

4. The mid-grade fill pipe was not tagged, and the premium fill pipe was not painted the appropriate color or tagged as is required by Regulation No. 10, creating a situation which could very well lead to contamination of the product contained in the underground storage tanks.

5. The visibility between the console operator and the outside of the self-serve pump island was impaired due to lack of proper positioning of the canopy mirror.

6. The console operator in attendance on 21 July 1994 did not know where the emergency shut-off switch was located.

The violations of Regulation 2, which states that every licensee shall comply with the Fire Prevention Act, and all regulations, codes and standards adopted thereunder (which includes the National Fire Protection Association Code No. 30A.), 10 and 11 are considered by the Commission as extremely dangerous, and indicates a lack of attention bordering upon gross negligence. The basic requirements in this regard had been outlined in written form by Commission staff to Read's Corner Service Centre on at least two occasions (see Exhibit No. 9). TRA Maritimes has been licensed to operate two gasoline outlets in this Province for the past three years, one offering only self-serve dispensing, and the other offering split-serve dispensing. It is therefore astonishing to the Commission that only upon the situation at Read's Corner deteriorating to the extent which required these matters to be brought before the Commission in a show cause format was any action taken by the operator to rectify these serious situations relating to inadequate staff training in the handling of these highly dangerous commodities. For that reason, the Commission considers this non-compliance an extremely serious matter.

The Commission is of the opinion that the outlet is not adequately staffed to carry on all required functions relating thereto on a twenty-four hour basis. Regulation No. 11 (2) (b) requires every retailer of motor fuels to at all times provide competent, trained console operators to control the dispensing of motor fuels at self-serve outlets. Whatever additional staff is required to properly operate a motor fuels outlet such as accepting and recording deliveries and sales, doing dip readings, maintaining inventory records, etc. is usually determined on a site-by-site basis depending on what additional services are being offered. In this particular case, a fully-stocked convenience store is being operated in conjunction with motor fuels sales at an extremely busy intersection where fuel sales of between two and three million litres are recorded annually. It is felt that there is a serious lack of sufficiently trained and competent staff at this outlet.

Overall, the impression that has been left with the Commission is that prior to being brought to task over the violations referred to in this Order, the operator has treated motor fuel sales similar to sales of any other product--such as bread, butter and soda pop. In fact, petroleum products are dangerous commodities and specifically regulated to ensure that those allowed to dispense them do so properly. The operator here has not appeared to understand or respect this distinction.

Order

THE COMMISSION HEREBY ORDERS AS FOLLOWS:

1. THAT a financial penalty of Two Thousand Dollars ($2,000.00) be paid to the Commission within fifteen days of the issuance of this Order by TRA Maritimes (Division of Sobeys Inc.), lessee and operator of the Read's Corner Service Centre, Wilmot, for breaches of Section 30 (b) of the Petroleum Products Act, supra, and Regulations 2, 10 and 11 made thereunder, and that a strict warning is hereby issued with regard to the above-noted violations in that further non-compliance of the Petroleum Products Act and/or Regulations and Commission Orders may involve suspension or cancellation of license in addition to any other penalties available under the Petroleum Products Act.

DATED at CHARLOTTETOWN this 7th day of SEPTEMBER, A.D., 1994.

BY THE COMMISSION:

Chairman

Vice-Chairman

Commissioner