Institute of Social and Economic Research, University of Alaska Anchorage
Abstract
This and previous Alaska fuel price projections were developed for the Alaska Energy Authority (AEA) for the purpose of estimating the potential benefits and costs of developing renewable energy projects applied for through the Alaska Renewable Energy Fund program process. The projections are not price forecasts but a statistical estimation of potential future utility avoided fuel costs based on the relationships between historic utility fuel prices and crude oil and refinery prices reported by the Energy Information Administration (EIA). These statistically estimated relationships are used to project potential future fuel prices based on EIA’s Energy Outlook oil price forecasts.
In addition to developing these low, medium and high fuel price projections, estimates of the social cost of carbon (previously included as estimates of potential carbon taxes), a premium for low sulfur fuels, and a price differential for home heating fuel are provided and are incorporated into the Renewable Energy Fund benefit-cost model for evaluating potential projects. The settings of these parameters are public policy considerations selected for project reviews by the AEA. The fuel price projections are limited in their applicability to the modeling of project benefits and costs and should not be considered fuel price forecasts.Alaska Energy Authority.Introduction / General methods and assumptions / Natural Gas / Fuel Oil / Reference
