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VALUE PRICING NOTES |
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No. 5, Fall 2000 |
Federal Highway Administration |
Value Pricing Notes (VPNotes) is prepared by the Highway Pricing and System Analysis Team of the Federal Highway Administration's (FHWA) Office of Transportation Policy Studies, with the objective of providing periodic updates on the FHWA Value Pricing Pilot Program and summarizing recent news of interest to the value pricing community. Formerly known as Congestion Pricing Notes, this issue of the newsletter adopts the terminology used in the legislation authorizing the current Pilot Program. For more information about any of the articles published in this issue, or for general information about the Pilot Program, please see the Value and Congestion Pricing Homepage described in the last section of this newsletter, or contact the FHWA pricing team:
400 Seventh Street, S.W., Room 3324
Washington, D.C., 20590
(202) 366-0570
Patrick.DeCorla-Souza@fhwa.dot.gov
THE VALUE PRICING PROGRAM
The Value Pricing Pilot Program, authorized by the Transportation Equity Act for the 21st Century (TEA-21) is supporting operating pricing projects and pre-project studies and is actively seeking new projects. Two new operating projects have been approved under the TEA- 21 program, joining the 3 operating projects approved under the predecessor ISTEA pricing program. Twelve pre-project studies are currently underway, 11 of them approved under the TEA-21 program. This issue of VPNotes will provide brief snapshots of all active projects and studies included in the Pilot Program.
OPERATING PROJECT UPDATES
San Diego, California
The I-15 FasTrak Express Lanes are still going strong in San Diego. Under the FasTrak program, customers in single-occupant vehicles pay a per-trip fee each time they use the I-15 HOV lanes. Tolls are collected using using vehicle transponders and overhead readers. The normal toll varies between $0.50 and $4.00. During very congested periods, the toll can be as high as $8.00. The unique feature of this pilot project is that tolls vary dynamically with the level of congestion on the HOV lanes. Fees can vary in 25-cent increments as often as every six minutes to help maintain free-flow traffic conditions on the HOV lanes. Toll revenues are supporting express bus service in the corridor. Recently enacted State legislation allows the I-15 FasTrak program to continue in operation until at least January 1, 2002.
With its third year of operation completed, the I-15 value pricing program has successfully met its primary goals of making better use of excess capacity on the I- 15 HOV lanes and improving transit services along I-15. The project is fully self-sufficient, generating $1.2 million in revenue annually. Daily traffic volumes on the Express Lanes averaged 15,800 in February 2000, an increase of 4,100 daily vehicles since the FasTrak program began. In August 1998, the FasTrak toll schedule was modified with a reduction in the toll during off-peak hours. This had the desired effect of shifting some traffic out of the peak into off-peak periods.
Lee County, Florida
Lee County’s pricing strategy on two toll bridges has caused drivers to shift trips out of the peak congestion period into the shoulders of the peak, leading to more efficient use of available bridge capacity and improved service for bridge users. The County created a peak/ off-peak pricing structure by providing bridge users with a discount toll during selected off-peak hours. Under the pricing plan, a 50 percent toll discount is provided for trips made during the half-hour period before the morning peak (7:00-9:00 a.m.) and in the 2-hour period following the morning peak. In the evening, the discount period is two hours before the evening peak (4:00-6:30 p.m.) and ½-hour after the peak. Local support for the project has been favorable, since the program has been successful in moving traffic out of the peak congestion period and improving service to bridge users.
Houston, Texas
Houston’s “QuickRide” pricing project on an existing HOV lane of the Katy Freeway (Interstate 10) allows a limited number of HOV-2 carpools to buy into the reversible HOV-3 lane during the peak-travel periods (between 6:45 - 8:00 a.m., and 5:00 - 6:00 p.m.). During this time period, participating HOV-2 vehicles pay a $2.00 per trip fee while HOV-3+ vehicles continue to travel free. Single-occupant vehicles are not allowed to use the HOV lane. Like the State Route 91 Express Lanes project and the I-15 FasTrak projects which came before it, the QuickRide project is completely automated (e.g., no cash transactions are handled on the facility).
The traffic effects of the QuickRide program have been less pronounced than the other pricing projects, perhaps because of the smaller scale of the project and the limitation of the availability of “entry for a fee” access to vehicles with two or more passengers. Still HOV usage has shown modest improvement during the peak traffic period. Daily use by participants has been between 150 and 200 vehicles for both peak periods combined. Most QuickRide participants were persons who formerly traveled in single-occupant vehicles on the freeway main lanes. The vast majority of users are occasional users, with about one in four transponders being used in a given week, and about one in 20 transponders being used five or more times per week.
State Route 91, California
The private sector road pricing project in Orange County, California is not formally part of the Pilot Program, but FHWA has joined with the State of California to fund a continuing monitoring study of the project to generate information about traffic and travel behavior responses to variations in time-of-day toll levels, as well as on public acceptance of variable tolling.
The SR91 Express Lanes opened in December 1995 as a four-lane toll facility in the median of a 16 kilometer section of one of the most heavily congested highways in the U.S. The toll lanes are separated from the general purpose lanes by a painted buffer and plastic pylons. As of March 26, 2000, tolls on the Express Lanes varied between $0.75 and $3.75, with the tolls changing by time of day to reflect the level of congestion delay avoided in the adjacent free lanes, and to maintain free-flow traffic conditions on the toll lanes. All vehicles must have a FasTrak transponder to travel on the Express Lanes. Vehicles with three or more occupants pay a reduced toll.
The initial study of the operation of the Express Lanes has yielded a number of important observations:
NEW OPERATING PROJECTS
San Francisco Car-sharing Pilot Test
Car-sharing, already well-established in Europe and Canada, now has the potential of improving mobility in a major U.S. city. Car-sharing makes vehicles available to people on a per-use basis, with fees based on how much the car is used. Cars are kept in small neighborhood lots, within easy walking distance of employment or other high activity sites.
The Pilot Program, with the City of San Francisco and the State of California, is supporting a pilot test of carsharing in San Francisco. The test is expected to commence by the end of 2000, with the City and County of San Francisco working with a car-sharing cooperative to establish a car-sharing system. Participants in the program will pay for car use based on a combined hourly and per-mile charge, and will receive monthly bills, similar to a utility bill. It is expected that this option will reduce demand for autos being driven into the city, and thereby reduce parking demand and traffic congestion. The Pilot Program grant includes funding for a comprehensive evaluation by an independent researcher.
Houston Metro QuickRide Extension
The pricing project in Houston will continue the existing QuickRide program on I-10, extend QuickRide to the Northwest HOV lane (early Fall, 2000), and examine pricing strategies for the North HOV lane. As part of this project, attention will be given to converting some of the current visual enforcement tasks on I-10 to electronic technology, and simulations of innovative lane pricing models will be examined for the ongoing redesign of the Katy freeway corridor. Dynamic pricing, such as that employed on the San Diego pricing project, will also be studied.
State-of-the-art toll collection technologies will be installed as part of this project, and advanced modeling tools will be employed. Experienced universities will be responsible for detailed design studies, project evaluation and documentation of all phases of study and implementation.
PRE-PROJECT STUDY UPDATES
Alameda County, California Study
The Alameda County Congestion Management Agency, through an agreement with Caltrans and the Metropolitan Transportation Commission, is conducting two HOT-lane pre-project studies in the County. One is examining the feasibility of a subscription service that would allow light-duty commercial vehicles to pay a fee to enter an existing HOV lane on I-880. The second study is examining the feasibility of a HOT-lane on I- 680. The study consultant has completed a “state-ofthe- art review of value pricing, and has examined preliminary pricing alternatives focusing on I-880. A key issue in the I-880 study is the “willingness to pay” for time saved by commercial vehicle operators.
California-Transportation Corridor Agencies
The initial study being conducted by the Transportation Corridor Agencies (TCA) in Orange County, California focuses on the San Joaquin Hills Corridor. The study will establish a monitoring and evaluation framework, define a baseline of traffic information, examine peak/off-peak charging alternatives and the revenue implications of variable tolling. The study plan also calls for public outreach and marketing, and interagency review. The TCA expect to implement variable tolling by July 1, 2001, or sooner for some entrances. Upon completion of the pre-implementation phase, it is expected that the TCA will move into Phase II and request Pilot Program funding to support the implementation of variable tolling. It is also likely that funding will be requested to support the extension of peak-period pricing to other TCA facilities.
Denver, Colorado Study
The State of Colorado is examining the feasibility of converting existing HOV lanes on I-25 and US-36 into High Occupancy Toll lanes as part of an overall study of a regionwide HOT-lane system. The study is scheduled for completion by December, 2000. The Colorado DOT is under a legislative mandate to offer a HOT lane opportunity for private investment by July 2001.
Any pricing project to be implemented as a result of this study will use an electronic toll collection system that is compatible with the existing ETC system on E-470, a privately-run toll road in the region. This study is also reviewing other road pricing possibilities on major highways in the region. The study will include outreach activities targeted to stakeholders in the I-25 and US-36 corridors, focus groups, public attitude assessment, peer review panels, and traffic simulation studies.
Maryland Study
The objectives of the Maryland study are to investigate the potential of a range of value pricing strategies to reduce congestion, improve the use of existing and planned capacity, and optimize system operations in the Washington-Baltimore region. Several currently untolled corridors have been identified for consideration for value pricing, as have the region’s tolled facilities.
The first phase of the study considered a broad range of value pricing strategies for all the corridors/facilities, using sketch planning techniques and information from other value pricing studies to narrow down the range of pricing options. Initial screening of currently un-tolled corridors narrowed the options to facilities where there is excess capacity on existing or proposed HOV lanes, or where new capacity is being added.
A steering committee consisting of representatives of federal, state, and local government agencies has been established to provide regular input into the study. A Stakeholder Group, which includes a cross-section of public interest groups, community organizations and citizens, has been formed to review, comment, and provide feedback to guide the study’s progress. Public workshops and outreach activities have been used to help determine the feasibility of study alternatives.
In Phase II, the study team will undertake a more detailed analysis of corridors and pricing strategies recommended for further investigation. The study is designed to set the stage for final planning and design of appropriate pricing strategies for implementation. The study and implementation recommendations are scheduled for completion in November 2000.
Minnesota Study
Previous studies in Minnesota have shown that value pricing in the Minneapolis-St. Paul region could greatly reduce peak-period congestion, reduce the need for future highway capacity expansion, and generate new sources of transportation revenue. However, attempts to implement pricing projects on a pilot basis have not yet been successful. The current study is designed to include value pricing in the broad framework of the region-wide planning process for the Twin Cities in order to present the costs and benefits of pricing strategies alongside other alternatives for responding to the region’s congestion problems. It is believed that this presentation of value pricing may enhance prospects for implementation of a pilot project.
The study includes extensive public participation activities, both to serve local needs and to supplement national efforts. The San Diego Project Partners’ Forum and the FHWA/Humphrey Institute webpage described elsewhere in this newsletter are outgrowths of this aspect of the Minnesota study.
Portland, Oregon Study
A key feature of this study by Portland Metro and the State of Oregon was the critical role played by study review committees. The committees successfully represented all relevant agencies and interests, provided a mechanism for strong technical input, and afforded ample opportunity for public participation in developing and evaluating pricing options. The study approach was to begin with a broad range of options which were then narrowed to a small number of specific pricing projects for detailed analysis.
The models used in analyzing the detailed effects of pricing options included a demand model to estimate the number of trips by origin and destination, mode, and time of day, a traffic assignment model to estimate the effects of pricing options on travel time, toll revenue, vehicle operating costs, equity, air quality, and energy use. The Portland study was the first regional analysis of peak-period pricing that was able to project trip activity on specific road segments.
Over the course of this 3-year study effort, a number of conclusions were drawn and important lessons learned about the study process itself and about value pricing implementation issues. The final report on the study is currently being prepared and is expected to be released soon.
NEW PRE-PROJECT STUDIES
San Diego I-15 Extension Study
The San Diego Association of Governments is undertaking a study to evaluate the feasibility of using pricing to manage the use of capacity on new lanes to be constructed on I-15 just north of the existing I-15 express lane project. The new managed lane facility will be 20-miles in length and will consist of four HOV lanes with a movable barrier to allow three lanes of traffic flow in the peak direction. The new lanes will be barrier separated from the general purpose lanes and will have seven intermediate access points (at-grade openings in the barrier) and five direct access ramps. The project will also include a bus rapid transit system with park-and-ride lots located adjacent to the I-15 corridor.
A number of innovative features make this study and potential project a very interesting and challenging addition to the Pilot Program. Use of movable barriers for modifying the number of lanes in each direction, pricing of traffic in both directions, and use of a number of access points along the planned facility should all present challenges to the design and operation of a pricing program. The proposed use of distance-based pricing, in combination with dynamic time-of-day pricing, and the commitment to examine a variety of toll methods and schedules promise to make this a study that can add greatly to the value pricing state of practice.
Santa Cruz, California Study
The Santa Cruz County Regional Transportation Commission and Caltrans are sponsoring a study of the feasibility of HOT lanes on State Route 1 in Santa Cruz. The study is assessing design, operational, and financial aspects of HOT lane operation, as well as questions of public acceptance of the concept. The HOT lanes would be part of the proposed widening of a 6.5 mile segment of Route 1.
Lee County Q-jump and Freight Discount Studies
Officials in Lee County, Florida are continuing their interest in variable pricing with two new studies, one designed to examine a pricing strategy involving queuejumps to relieve congestion at specific points in the County, the other to extend the existing variable bridge pricing program to heavy vehicles. The queue-jump strategy would allow vehicles to avoid a congested location (e.g., intersection) by diverting to a priced bypass facility, lane, or route. Fees would be collected electronically. The study will examine options that would provide free or discounted access to high occupancy vehicles.
The second Lee County study will examine the feasibility of extending to heavy vehicles the existing off-peak toll discount program on the Cape Coral and Midpoint bridges. Monitoring and evaluation of the response of heavy vehicle drivers to the toll discount program will allow comparisons with responses of twoaxle vehicle drivers.
Florida Turnpike Study
The study by Florida’s Turnpike District will focus on the Homestead Extension of Florida’s Turnpike in Miami- Dade County, although the study is expected to provide information that can be used to evaluate value pricing alternatives on toll facilities throughout the State. The study will take a comprehensive look at congestion in the study area, obtain public and agency input, and examine the feasibility of value pricing responses to congestion problems.
Market and travel behavior research surveys will be conducted, and models will be selected or developed to allow comparison of travel demand assuming current and potential alternative value pricing strategies. A number of value pricing toll rate strategies will be analyzed. The study will begin with and build on ITS technology already being implemented in Florida, but technology options in use in other locations will also be examined. This 18-month study will conclude with recommendations for next steps for implementing feasible value pricing options.
Seattle, Washington Study
The study by King County Metro will examine parking cash-out as part of a combined demand management program which includes other parking management strategies and HOV incentives. The first phase of the study includes development of an extensive public participation campaign, review of the social and economic effects of parking strategies, and development of cash-out alternatives.
The study’s second phase, to commence in Spring, 2001, will move to cash-out implementation by negotiating and testing parking cash-out strategies with up to 10 building owners. The implementation program will provide for HOV and other modal incentives, and will include monitoring and evaluation of the role that parking cash-out can play as part of a value pricing strategy.
SOME THOUGHTS ON PILOT PROGRAM GOALS
The FHWA pricing team is supporting the Value Pricing program goals of demonstrating, testing, and evaluating a broad range of market-based approaches for reducing traffic congestion by directing its efforts at encouraging pilot tests of a variety of value pricing concepts. Included are pricing of new or existing HOV lanes, conversion of existing free lanes to priced express lanes, and use of peak/off-peak toll differentials on existing or new toll roads, especially projects involving an increase in peak-period tolls.
The Pricing Team is also trying to elicit projects that involve areawide or corridor-based pricing approaches, including pricing of multiple facilities in a corridor, cordon tolls, parking pricing and parking “cash-out,” market-based car sharing, pricing targeted at expediting truck movement, and projects involving innovative pricing technologies. We are also encouraging grant applicants to seek involvement of Historically Black Colleges and Universities/Minority Institutions of Higher Education.
Although we are encouraging both pre-project studies and implementation projects, it may be useful to emphasize that project implementation is the single most important objective of the Pilot Program. The pricing team will always encourage and give priority to proposals that promise to lead to near-term project implementation.
We have accomplished much in the first two years that funding has been available for the reauthorized Pilot Program (FY1999 and FY2000), and we expect much more in the remaining TEA-21 years. We look forward to working with present and potential future project partners to explore the role that pricing can play in improving transportation performance and efficiency.
Patrick DeCorla-Souza, Manager
FHWA Value Pricing Pilot Program
WORKSHOPS AND FORUMS
FHWA’s value pricing outreach program has been expanded in 2000, with local issues workshops now joining the regional workshop and project partners’ forum series. The kick-off for this year’s outreach program was a project partners’ forum held in San Diego on July 9-11. A local issues workshop is scheduled for Minneapolis in November, 2000. Plans are also being made for a local issues workshop in Atlanta and a regional workshop in Denver to be held in the near future.
Project Partners’ Forum Held in San Diego
San Diego was the site of the second project partners’ forum. The forum series is designed to bring together current and prospective partners in the value pricing program to discuss key technical and political issues associated with project implementation. This year’s forum coincided with the Transportation Research Board’s summer meetings in San Diego, which immediately preceded the project partners’ meeting.
The forum was highlighted by a discussion of the reasons for value pricing, led by Randy Pozdena, a leading consultant on value pricing. Short reports from project partners on the status of their projects provided an overview of the state of the art in value pricing, and Patrick DeCorla-Souza, FHWA’s new Team Leader for the Value Pricing Program, discussed the goals and objectives of the Pilot Program. Other sessions covered “value pricing and political realities,” “what we’ve learned from projects to date,” a forthcoming “reference guide on HOT lanes,” and a discussion on “where we go from here.” Also featured were panel discussions on the San Diego pricing project and the SR91 HOT lane extension feasibility study. Tours of both facilities were provided.
A number of “Toolbox Sessions” allowed participants to move into smaller group settings to discuss topics such as “generating public support,” “HOT Lanes: Issues and Design,” “New Ideas, and Some Not So New,” “Technology and Enforcement,” “the Project Plan, Tools & Techniques,” and “Funding Issues: Costs and Revenues.” A popular feature of this forum was a concluding “Value Pricing Chat Room,” where participants could meet with project partners and other experts to discuss topics of interest in an informal basis. A summary report on the forum will be published on the Value/Congestion Pricing Homepage in the near future (see below).
Upcoming Local Workshop in Minneapolis
A local issues value pricing workshop, “Congestion in the Twin Cities: Who’s Paying the Price,” is scheduled for November 29, 2000, in Minneapolis. The workshop will be hosted by FHWA and the Humphrey Institute. The workshop will provide an opportunity to explore the growing congestion problem in the Twin Cities, examine the role of market-based solutions in a regional context, and set an action agenda for market-based efforts in the Twin Cities metropolitan area. In addition to discussing local transportation issues, the national Value Pricing Project Partners will engage in a roundtable discussion about their successful pricing projects. Project Partners will also be available throughout the day to talk about their pricing efforts in more detail. Speakers include federal, state, and local government leaders as well as University of Minnesota faculty and staff and local community group leaders. Registration for the Workshop is $75. For further information, please contact Marit Enerson at (612) 625-8575.
VALUE PRICING ON THE WEB
The Value and Congestion Pricing Homepage
The leading website on value and congestion pricing is sponsored by FHWA and the Minnesota Department of Transportation and is operated by the State and Local Policy Program of the University of Minnesota’s Humphrey Institute. The pricing homepage helps to explain the theory and practice behind value pricing, with regular updates on value pricing projects, studies, reports and news stories.
The address for the Homepage is :
http://www.hhh.umn.edu/centers/slp/conpric/conpric.htm
Value Pricing Discussions On-line
For those who are interested in discussing value pricing and congestion pricing topics on-line, or who want to share news, opinions, or questions on pricing, the FHWA Value Pricing Team sponsors a free on-line discussion group, the Congestion Pricing LIST-SERV. The site is managed by the University of Minnesota’s State and Local Policy Program through a contract with the Minnesota Department of Transportation. This electronic mail-based discussion group lets you stay up to speed on the latest activities in road pricing. It's a convenient way to directly inform, update, and discuss projects and concepts with other interested parties throughout the world. Posts concerning pricing projects and studies in all countries are welcome.
Here's how it works: once you subscribe to the list, any message you send to the mailing list is automatically transmitted to all other members. You can also expect to receive messages from other members of the list. All you need is Internet access, usually through your department/office E-mail system or through a commercial Internet service provider, so that you can register on the Value and Congestion Pricing Homepage (see above). Once at this website, click on the icon for the LIST-SERV, and follow the subscription instructions.
