Final Study Executive Summary and Report:
Final Report
Appendices:
Appendix 1: Temperature Data Analysis: Refinery, Tank Farms, and Underground Tanks
Temperature Data Analysis
Appendix 2: Benefits Computations for ATC Regulatory Regimes
Benefits Computations
Appendx 3: Estimated Fuel Use: Heating and Electricity
Fuel Use
Net vs Gross Gallons
There is more than one definition of gallon, and there are two different kinds of gallons being sold in the Alaska fuel marketplace.
One is called a "net" gallon, and it is generally smaller than a "gross" gallon. The gross gallon is what consumers think of when
they see "gallon".
Learn about the difference here:
Net vs Gross Gallons
About the Project
The language below is taken from the "Request for Proposals" that was issued for contracting this study:
BACKGROUND INFORMATION
The Department of Transportation and Public Facilities, Division of Measurement Standards and Commercial Vehicle Enforcement is responsible for enforcing all regulations related to testing and inspecting all of the weight and measurement devices used in commerce, to ensure equity prevails in the marketplace.
The current method of sale of refined petroleum products from common retail motor fuel dispensers is by the US Gallon (231 cubic inches without regards to temperature and described as a gross gallon). Dispensers sold in Alaska are built to deliver gross gallons and Automatic Temperature Compensating (ATC) devices in this category will not be brought to the US market for some years if ever.
The current delivery method of sale of refined petroleum products for truck mounted meters is a mixture of gross gallons and net gallons. Net gallons are gross gallons that have been adjusted to a reference temperature of 60 degrees F. These ATC meters have been legal for use in Alaska for approximately ten years and represent approximately 30% of the meters in service. Consumers unknowingly face an inequity in the marketplace by being presented two distinctly different gallons.
In March of 2008, the Alaska Department of Transportation and Public Facilities (ADOT&PF), Division of Measurement Standards and Commercial Vehicles proposed the following regulation as a solution to rectify this inequality in the marketplace, level the playing field for jobbers competing in the retail fuel delivery business and provide a standard gallon for consumers to make value judgments:
17 AAC 90.618: Retail sales of refined petroleum products.
(a) All refined petroleum products, including all product blends of gasoline and diesel fuel oils, delivered from a retail motor fuel dispenser or a meter with a maximum rated flow rate of less than 100 gallons (378 liters) per minute, shall be sold on a gross volume basis. Volumetric measurement of the product may not be temperature compensated, or adjusted by any other factor.
(b) Retail sales of refined petroleum products, including all product blends of gasoline and diesel fuel oils, delivered from any vehicle or trailer mounted meter, shall be sold on a gross volume basis. Volumetric measurement of the product may not be temperature compensated, or adjusted by any other factor.
(c) On or after January 1, 2010, the provisions of this section will apply to temperature compensated meters previously approved for use by the division.
A varied response from the public, including responses in public meetings held on April 1, 2008, has led the Department to determine that there is a need for an independent technical assessment of the costs and benefits of selecting a single method of sale for refined petroleum products specified in the proposed regulation 17 AAC 90.618(a)&(b).
SCOPE OF WORK
The successful offeror (NERA) will conduct a comparative analysis of the costs and benefits of selecting a gross gallon vs. a net gallon as the legal method of sale for refined petroleum products as described in the proposed regulation 17 AAC 90.618(a)&(b).
This will require the contractor to independently collect the technical data necessary to clearly describe the current and historical sales practices for refined petroleum products in Alaska by region. This will include a complete description of how fuel moves from source to market including storage points and will highlight the true effects of temperature on the price per gallon at delivery in each region.
Public Meeting Jan 12
Download the power point presentation from January 12 meeting here:
Jan 12 Power Point
The first public meeting for this project was for the purpose of introducing the project publicly, collecting information and receiving input in order to address concerns by various interest groups affected by changes in the method of metering retail fuel.
This meeting was held January 12, 2009 in the Board Room Dena’ina Convention Center – 600 West 7th Avenue Anchorage, from 2:00-5:00 pm.
Jan 12 Meeting Agenda: Agenda
Public comment on the draft report may be given through June 19 by writing to:
Alaska Fuel Project
Northern Economic Research Associates
7300 Chena Hot Springs Rd
Fairbanks Alaska 99712
or by email:
email fuel project
Comment must include name and contact information.
Related Studies and Information:
California Material on Automatic Temperature Compensation
California November 2008 report: california2008
Errata: california2008Errata
Dec 9 Staff Report Overview and Findings Overview & Findings
California has been examining ATC at the retail level with a major study that has produced recent reports of interest. California is a "Hot" state with average fuel temperatures
above 60 F. Net gallons are on average larger than gross gallons in California. It contrasts with Canada, a "Cold" state, where on average retail fuels are colder than 60 F.
Net gallons are on average smaller than gross gallons in Canada. Alaska is also a "Cold" state with average retail fuel temperatures below 60 F, and net gallons on average
smaller than gross gallons.
California has permissive ATC at the retail level, but no retailers adopting it voluntarily. Canada has permissive ATC at the retail level and over 90% of retailers
have adopted it. Alaska has permissive ATC for vehicle tanks only (eg delivering home heating oil, off-road diesel and aviation fuels).
Retailers have adopted ATC voluntarily in larger retail areas of Alaska. The full extent is larger than the number of registered ATC meters because some retailers are making hand calculations for ATC.
Summary: Adopting mandatory ATC was expected to produce a net cost in the short run, but less than a penny per gallon. In the long run, zero net benefits were
expected. No benefits in price transparency were expected. To the extent that ATC meter costs (failure rates, maintenance, testing) are lower than expected,
it was possible for benefits to be positive.
National Steering Committee Recommendation on Mandatory Automatic Temperature Compensation
NCWM2008
Congress has the authority under Article I, Section 8 of the Constitution to "fix the Standard of Weights and Measures".
But Congress has not exercised that authority much. For the most part, individual states regulate the standard of weights and measures. Alaska does this through AS 45.75.050, the Weights and Measures Act. The Act automatically adopts recommendations made by
an open, voluntary national organization (The National Conference on Weights and Measures) unless contrary regulations are made.
This Conference both deliberates and recommends uniform
national standards, which has been the purpose since its establishment in 1905.
This body has for years deliberated how retail fuel should be sold. What it recommends ultimately becomes law
in Alaska when it is published by its companion organization, the National Institute of Standards and Technology, in Handbook 44. Although the NCWM indicates it does not take a position in this report it seems to favor gradual adoption of mandatory ATC after a voluntary phase-in period.
Alaska and other states can and do pre-empt what is proposed by the NCWM or what is published in Handbook 44. Alaska Statute 45.75.050 allows for that, when DOT Weights and Measures adopts regulations
such as those considered in this study.
States that do not permit ATC at the retail level include Massachusetts, Michigan, Montana, Minnesota, Iowa, Indiana, Connecticut, Nebraska, New York, Ohio, Pennsylvania, South Dakota, Tennessee, Vermont, Wyoming.
Almost all of these also prohibit ATC vehicle tank meters. Only a few prohibit ATC at wholesale.