Transportation Fuel Update

Availability and Cost Issues

Derek Graham

Section Chief, Transportation

NC Department of Public Instruction

Hurricanes Gustav and Ike

• Supply hard to come by

• No LEAs had to cancel classes due to lackof fuel for buses

• Many fuel deliveries on weekends or in thedark of night

School Bus Fuel

• Of the 14,000 school buses in use, all but10 are powered by diesel– 8 Compressed Natural Gas

• $35k premium on engine 10 years ago

– 2 Plug-In Hybrid (Diesel/Electricity)• $226,000 per bus (grant funds)

– Bio-Diesel (e.g. 80% diesel, 20% bio)• Requires no special infrastructure; usable in all

fleets

• 5-50 cent premium

• Already in use in some NC counties

Diesel Fueling of School Buses

Delivered to Bus Garageby Tanker Load

Loaded from Bulk Tanks to Fuel Trucks

Buses Fueled In Parking Areas

• Fuel taken to bus parking areas during theday and dispensed from fuel trucks

– Very efficient fuel delivery system

Remote Fueling

Remote Fueling

State Contract for Diesel

• Public schools do not pay state excise tax,resulting in a lower per gallon cost thanwhat you see at the pump

• Other than the tax exemption, there arenot tremendous price breaks on fuel

– Low profit margin for bidders

– e-procurement fee (6-7 cents/gallon) applies

Price Volatility

• Wednesday, October 1: $3.22 per gallon

• Friday, October 3: $3.03 per gallon

Diesel - 10 Yr Price Per Gallon

0

0.5

1

1.5

2

2.5

3

3.5

4

4.57/1

/1998

1/1

/1999

7/1

/1999

1/1

/2000

7/1

/2000

1/1

/2001

7/1

/2001

1/1

/2002

7/1

/2002

1/1

/2003

7/1

/2003

1/1

/2004

7/1

/2004

1/1

/2005

7/1

/2005

1/1

/2006

7/1

/2006

1/1

/2007

7/1

/2007

1/1

/2008

July 1998………………………………………………………………………..July 2008

KATRINA

10 Year Diesel CostActual vs. OSBM Allocation

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

1997-199

8

1998-1

999

1999

-2000

2000

-200

1

2001-2

002

2002

-2003

2003

-200

4

2004-2

005

2005

-2006

2006

-200

7

2007-

2008

F is c al Y ear A verage

O S B M A lloc at ion

Annual Usage

• Statewide usage:

– 25,000,000 gallons per year for to/from school

– More for activity buses, field trips, etc.

– Actual is more than 25,000,000

• Currently being re-evaluated

2007-2008 School Year

• Biennial budget allocated $1.69 per gallon

– First day of school: $2.20 per gallon

• Worked with OSBM and sent additionalallotments to LEAs

– $7.3 million ($1.69 to $2.00)

– $11.8 million ($2.00 to $2.50)

– $7 million ($2.50 to $2.80)

• Actual per gallon cost: ~$2.90

2008-2009 School Year

• Initial biennial budget: $1.83 per gallon

• Additional legislative appropriation

– $35 million

– Increases per gallon to about $3.23

• Year-to-date cost per gallon thus far: $3.48

– July 1 – August 25 high prices

Future Trends

• Continued price fluctuations appear likely

• OSBM Analysis

– $3.57 per gallon 2009-2010

– $3.61 per gallon 2010-2011

Transportation Fuel Update

Availability and Cost Issues

Derek Graham

Section Chief, Transportation

NC Department of Public Instruction