Order P.941012 - Petroleum - Imperial Oil Limited - Queen's Arms Service Station

Order No. P.941012

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 Regulation 2 made thereunder in respect of QUEEN'S ARMS SERVICE STATION located at West Royalty, Prince Edward Island owned, supplied and operated by Imperial Oil Limited (Martha Penney, Agent) under Petroleum Products License No. D4085-00.

Wednesday, the 12th day of October, A.D., 1994

BEFORE

Linda Webber, Chairman
James Nicholson, Commissioner

Decision and Order

Appearances and Witnesses

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

FOR QUEEN'S ARMS SERVICE STATION - RESPONDENT:

Witnesses:
Ms. Martha Penney, Agent, Imperial Oil Limited (Operator of Queens Arms Service Station, West Royalty)
Mr. Reno Godbout, Employee, Commercial Equipment
Mr. Howard D. Bowie, Territory Manager, Imperial Oil Limited

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 15th day of September, 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 Imperial Oil Limited with Section 30 (b) of the Petroleum Products Act, supra, and with Regulation 2 made thereunder. This non-compliance was alleged in respect of the operation of the Queen's Arms Service Station located at West Royalty owned, supplied and operated by Imperial Oil Limited (Martha Penney, Agent) ("the Operator") under Petroleum Products License No. D4085-00 issued under the Petroleum Products Act, supra. This Notice indicated that a show cause hearing was to commence on Friday, the 30th day of September, 1994 at the hour of 9:30 a.m. in the Hearing Room of the Commission. This Notice of the hearing was served on Ms. Martha Penney, Manager of Queen's Arms Service Station, West Royalty, by Mr. Harry MacDonald, Commission Staff Member, on 16 September 1994, and a copy of this same Notice was served on Mr. H. D. Bowie of Imperial Oil Limited by Mr. MacDonald on 19 September 1994.

II. EVIDENCE

Six 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 on Wednesday, 31 August 1994, the price of self-serve regular unleaded gasoline at one pump at this outlet was in non-compliance with the Commission's Decision and Order No. P.910424 (regular unleaded gasoline at this self-serve pump was sold at the same price as regular unleaded gasoline was being offered for sale at the full-serve pumps). In addition, two-way communication between the self-serve pump island and the console operator was unable to be achieved at that time, as set out on his Inspection Report dated 31 August 1994 (Exhibit No. 2). Mr. MacDonald also testified that in discussions with Martha Penney a couple of days later, it became apparent that this was not the first instance of improper pricing which had been noted by the Operator--however, the cause of the pricing difficulties being experienced had not been detected.

These matters of non-compliance had been discussed with Mr. Bowie, who was also unable to offer a satisfactory explanation as to the cause of these instances of improper pricing. 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, and the Notice of Hearing above referred to and entered as Exhibit No. 4 had been prepared and served on Ms. Penney and Mr. Bowie. The Respondent in this case was represented by Ms. Martha Penney, Mr. Reno Godbout, and Mr. Howard D. Bowie, who appeared on its behalf to respond to the above-noted alleged breaches of Section 30 (b) of the Petroleum Products Act, supra and Regulation No. 2 made thereunder.

Ms. Penney took the stand and introduced a document consisting of 41 pages titled "Queens Arms Esso Pump Meter Reads at 7 a.m. Daily during August, 1994". This document was entered as Exhibit No. 7 and was made up of a summary, hand-written notes concerning instances of improper pricing and printouts of meter readings for August, 1994. Ms. Penney did not argue the facts given by the Commission's witness in the matter. She testified that a pricing problem similar to that outlined by Mr. MacDonald had first occurred on 22 August 1994, and had not been detected until the following day. As she was unaware of what caused this problem or how to fix it, an "out-of-order" sign was placed on the pump and a call was made to "Danny" at Commercial Equipment (a company now having a maintenance contract with regard to the console and other equipment at this outlet). While she was able to correct the price after receiving instructions over the telephone, she was informed at that time that there was no technical solution to this problem. In the view of the representative of Commercial Equipment, it would continue to happen if someone inadvertently pushed the pricing level button on the console prior to authorizing the pump for gasoline dispensing. A similar problem occurred on 28 August and was corrected on 29 August 1994 after being brought to the attention of the Operator. This situation did not occur again until 31 August 1994, when it was noted by Mr. MacDonald.

Ms. Penney testified that in preparation for this hearing, an investigation was carried out to determine the total number of instances of overpricing, and that this investigation revealed that there was a total over-earning of only $17.45. She further testified that on 20 September 1994, she again contacted Commercial Equipment, and upon a visit to the site by the technician called upon to testify in this hearing, it was discovered that the console had been improperly programmed to "Level 1 and Level 2" pricing mode rather than "Split-Island" mode. She indicated that after the console was properly reprogrammed, it was no longer possible for a price change to occur with the inadvertent push of a button. Ms. Penney testified that she could only assume that this improper programming took place around the end of May, 1994, when the console had been serviced by another contractor in her absence. She further testified that this console was no longer in use at the outlet, and that a new computerized system is presently being installed.

With respect to the intercom, Ms. Penney noted that it is located on what is now the full-serve island at this location--the outlet having previously been one of self-serve dispensing only. She indicated that the intercom is only able to offer two-way communication with the customer when it is turned on from inside the outlet, and due to the noise factors at this outlet, that this is impractical on an on-going basis. Ms. Penney testified that there usually is a full-serve pump attendant available in the area to assist self-serve customers when necessary. Upon questioning, however, it was noted that only the self-serve island is operated for the period 11 p.m. to 7 a.m., and therefore full-serve attendants are obviously unavailable during these hours of operation.

Mr. Reno Godbout, technician for Commercial Equipment, confirmed the testimony given by Ms. Penney, and demonstrated for those present at the hearing (using the actual console from the outlet) how this problem had come about and how it had now been rectified.

Mr. Howard D. Bowie, Territory Manager for Imperial Oil Limited, testified that an intercom capable of being customer-activated is being installed at the self-serve island of this location, and also at one other location on P.E.I. where he has discovered that an intercom similar to the one at Queen's Arms had also been installed. All self-serve outlets operated by Imperial in this Province will then have proper customer-activated types of intercom systems.

III. FINDINGS

The Commission has determined that breaches of Section 30 (b) of the Petroleum Products Act, supra have taken place at the Queen's Arms Service Station, West Royalty, operating under Petroleum Products License No. D4085-00 issued by the Commission under this Act (Exhibit No. 1).

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

1. The uncontested evidence of Mr. MacDonald substantiates that regular unleaded gasoline on one self-serve pump operated by Imperial Oil Limited (Martha Penney, Agent) at the Queen's Arms Service Station was priced the same as was the regular unleaded gasoline at the full-serve pumps (and thus above the maximum allowable price) on 31 August 1994 and that this was not the only instance of similar improper pricing which occurred at this outlet.

2. Exhibit No. 6 indicates the allowable prices for Imperial Oil Limited gasolines on the date in question.

3. The console operator in attendance on 31 August 1994 did not know how to rectify the improper pricing situation brought to his attention.

4. The Operator admitted the pricing discrepancies.

5. Exhibit No. 7 confirms overpricing instances by Imperial Oil Limited.

With regard to the breaches of Section 30 (b), the Commission has some concern with respect to the lack of appropriate action by Imperial Oil Limited. While it did take steps to rectify the instances of improper pricing when these were brought to its attention, the Company did not promptly attempt to determine the frequency or extent of these occurrences or to have this perplexing problem identified and corrected to ensure that no further situations would occur until after being served with the Notice of Hearing in this regard. This is an outlet which enjoys one of the highest volumes of motor fuels sales in the Province, and even one customer being charged above the maximum allowable price should have been sufficient to warrant immediate investigation and correction. For that reason, the Commission considers this non-compliance one which warrants some penalization.

Since the intercom system installed at the outlet was of a type approved in the past by the Commission, the issue is the adequacy of its operation. Since it can only be activated by the Operator, and is usually kept turned off because of the traffic noise nearby, it fails to provide the safety measure required. However, since this matter is being addressed by the installation of a two-way intercom system that can also be activated by customer, a warning has been determined appropriate in this instance.

Order

THE COMMISSION HEREBY ORDERS AS FOLLOWS:

1. THAT a financial penalty of One Hundred Dollars ($100.00) be paid to the Commission within fifteen days of the issuance of this Order by Imperial Oil Limited (Martha Penney, Agent), Operator of the Queen's Arms Service Station, West Royalty, for breaches of Section 30 (b) of the Petroleum Products Act, supra, and that the Company be warned that any failure in the future to provide a customer-activated intercom system could result in more severe penalties being imposed.

DATED at CHARLOTTETOWN this 12th day of OCTOBER, A.D., 1994.

BY THE COMMISSION:

Chairman

Commissioner