1. California Energy Commission Crude Oil and Transportation Fuel Price Cases For the 2015 IEPR Inputs and Assumptions for Transportation Energy Demand Forecasts Rosenfeld Hearing Room March 19, 2015 Ysbrand van der Werf Demand Analysis Office Energy Assessments Division Ysbrand.vanderWerf@energy.ca.gov / 916-651-4531 1

2. California Energy Commission 2 Process and Methods Assess other crude oil price forecasts from the Energy Information Administration (EIA), International Energy Agency (IEA), and other organizations Staff proposes to use EIA Annual Energy Outlook (AEO) 2015 projections: reference, high oil price, low oil price Used historical data on West Coast (PADD 5) composite Refiner Acquisition Cost (RAC) of crude oil and state petroleum retail fuel price relationships Consult with Commission experts on prices for natural gas and hydrogen, as well as electricity rates for electric vehicles and plug-in-hybrids Solicit expert advice from workshop participants 2

3. California Energy Commission 3 Source: California Energy Commission and U.S. Energy Information Administration 3

4. California Energy Commission 4 Source: California Energy Commission and U.S. Energy Information Administration 4

5. California Energy Commission 5 Petroleum Transportation Fuel Price Projection Methodology Use forecast of RAC in cents per gallon Establish and add a margin for regular grade gasoline, diesel, and jet fuel prices Add California and federal taxes and fees (excise and sales) 5

6. California Energy Commission 6 Assumptions Fuel margins are held constant in real terms California and federal excise taxes and fees are held constant in real terms Current gasoline and diesel formulations remain constant throughout the projection Includes carbon prices and other government regulation influencing prices 6

7. California Energy Commission 7 Proposed RAC and RAC-to-Retail Price Margins Source: California Energy Commission and U.S. Energy Information Administration 7

8. California Energy Commission 8 California Petroleum Transportation Fuel Price Taxes (Cents per Gallon) Source: California Energy Commission and Board of Equalization Projection uses fuel tax rates posted by the Board of Equalization effective July 2015 (see table to left) Gasoline and Diesel price projections include a 2 cent underground storage fee State Sales Tax includes 1% for local taxes for gasoline and 0.75% for diesel Federal Excise Tax State Excise State Sales Tax Regular Gasoline 18.428.53.25% Diesel24.41110% Jet Fuel Common Carrier Jet Fuel is tax exempt 8

9. California Energy Commission 9 Source: California Energy Commission 9

10. California Energy Commission 10 Source: California Energy Commission 10

11. California Energy Commission 11 E85, B5, and Propane Price Projection Methodology E85 and B5 cases based on gasoline and diesel cases Propane has no forecast at this time due to lack of price data 11

12. California Energy Commission 12 Price Cases for Transportation Natural Gas, Electricity, and Hydrogen Staff continue to use the fixed margin methodology established in the 2009 Integrated Energy Policy Report CNG and Hydrogen fuels will use natural gas projections provided by the Natural Gas Unit of the Supply Analysis Office, but are not yet updated Electricity prices will be based on rate projections from the Demand Analysis Office, but are not yet updated 12

13. California Energy Commission 13 Source: California Energy Commission 13

14. California Energy Commission 14 Source: California Energy Commission 14

15. California Energy Commission 15 Cost per Mile Projections for New Vehicles Cost per mile traveled is one of the main determinants of vehicle choice and travel Some fuels that are more expensive than gasoline in energy terms become less expensive in cost per mile terms Not assuming any fuel efficiency improvements in hydrogen fuel cell or electric vehicles 15

16. California Energy Commission 16 Source: California Energy Commission and U.S. EIA 16

17. California Energy Commission 17 Mid Demand Common Case Source: California Energy Commission and U.S. EIA 17

18. California Energy Commission 18 High Energy Demand Common Case Source: California Energy Commission and U.S. EIA 18

19. California Energy Commission 19 Low Energy Demand Common Case Source: California Energy Commission and U.S. EIA 19

20. California Energy Commission 20 Questions? Comments? Ysbrand van der Werf Demand Analysis Office Energy Assessments Division Ysbrand.vanderWerf@energy.ca.gov / 916-651-4531 20