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VALUE PRICING NOTES
Spring 2003

Office of Transportation Policy Studies, Highway Pricing & System Analysis Team
United States Department of Transportation - Federal Highway Administration

HEADLINE NEWS:$8 Million Rescinded from Fiscal Year 2003 Value Pricing Pilot Program Funds

  • ALSO IN THIS ISSUE
    • SR91 CHANGEOVER
  • GETTING THE WORD OUT
    • TRB PRICING SUBCOMMITTEE EVENTS
    • FAIR LANES - AN EQUITABLE ALTERNATIVE
    • HOT NETWORKS IN THE NEWS
  • PRICING ABROAD
    • LONDON IMPLEMENTS CONGESTION CHARGING
    • PRICING IN GERMANY
  • VALUE-ABLE NOTES
    • HOT LANES GUIDEBOOK - A USEFUL RESOURCE
    • SOV ISSUE RESOLVED
    • ITS AND CONGESTION PRICING
    • POSSIBLE FUNDING FOR PRICING PROJECTS
  • WORKSHOPS AND FORUMS
    • DC METRO PRICING CONFERENCE
    • PRICING PARTNERS IN PORTLAND
    • INTERNATIONAL PRICING CONFERENCE IN FL

HEADLINE NEWS

Fiscal Year 2003 Value Pricing Pilot Program Status - The FY 2003 Transportation Appropriations Act, passed by Congress on February 13, rescinds $8 million of the $11 million authorized for Value Pricing under TEA-21. In addition, the Program is subject to across-the-board rescissions and obligation limits, which further reduces FY 2003 funds to about $2.6 million. As reported in the Winter issue of VP Notes, almost $25 million worth of value pricing proposals from 12 states were received by FHWA for consideration for funding this fiscal year.

Express Lanes Sold! - The Orange County Transportation Authority (OCTA) recently completed a $207.5 million purchase that transfers the award winning SR-91 facility to public ownership. OCTA plans to use toll revenue to repay the debt and to fund additional freeway improvements that were not allowed under the non-compete agreement when the California Private Transportation Corporation (CPTC) owned the facility. Together with Riverside County, which has passed a sales tax to pay for transportation, improvements will now be possible on the congested freeway's main lanes.

This unique facility has received worldwide attention since opening in December 1995 and during its seven-year operation under a private franchise agreement. The Express Lanes dealt with congestion by moving more than 40 percent of the throughput during the afternoon peak period with only 33 percent (two of six total) of the lanes. The Express Lanes consistently operate within 90 - 105 percent of operating capacity during daily PM peak periods, with higher average vehicle occupancy than the adjacent lanes. The facility generated more than $25 million in revenues in 2002, while saving users an average of more than 30 minutes per trip.

A 10 member advisory committee, established to help guide the transition and continued operations of the Express Lanes, will review and make recommendations on such issues as toll structure, operations, maintenance, the use of toll revenues, and improvements along the 91 corridor between Interstate 15 and the State Route 55 Freeway. An updated traffic and revenue study is also planned. Some future changes with regard to the pattern of tolls may include: 3+ carpools that travel free rather than receive only a 50 percent discount; lower tolls in the off peak; and an eastbound peak toll adjustment. The private sector team that was managing the facility's operations - with a new name, Cofiroute Global Mobility - will continue to operate the Express Lanes under contract. For more information contact: Dave Elbaum at OCTA (714-560-OCTA), Greg Hulsizer at Cofiroute (ghulsizer@91expresslanes.com), or visit the Express Lanes web-site at www.91expresslanes.com.

GETTING THE WORD OUT

Pricing is a HOT Topic at TRB - Several sessions at the 81st Annual TRB Meeting in January were devoted to pricing, including a Poster Session with 16 papers presented. Among the topics covered in panel sessions were managed lanes, truck tollways, evaluation of benefits and costs of pricing, and explaining pricing strategies to the public. TRB's mid-year meeting will be in Portland, Oregon (see Workshops and Forums below) along with a special "Workshop on Pricing" to focus on recent developments.

An Alternative Pricing Strategy: FAIR Lanes Symposium Report Available - "Fast And Intertwined Regular Lanes," or FAIR lanes, may be used to overcome equity concerns about High Occupancy Toll (HOT) lanes. HOT lanes are already in use in Texas and California, but have sometimes faced opposition in other States due to perceived negative impacts on low-income groups. FAIR lanes, like HOT lanes, increase freeway throughput, speed transit service, generate funds for enhanced transportation services, and let motorists bypass congestion as they choose - especially if they run late for work or other business or social appointments. But unlike HOT lanes, FAIR lanes provide credits to those stuck in traffic on the regular lanes. FAIR lanes also allow for more than one express lane, by making it more acceptable to take an existing adjacent free lane for use as an express lane. This permits overtaking of slower vehicles, increasing capacity per lane, and allowing consideration for use of the lanes by heavy vehicles. With more capacity available for paying motorists, tolls can be kept affordable and more motorists can make use of this premium service. A conference on the role of FAIR Lanes in the New York Metropolitan Region was held in September 2001. A report on the forum was produced by the Eno Transportation Foundation, which can be downloaded from the web at http://www.hhh.umn.edu/centers/slp/projects/conpric/index.htm under "Resources".

HOT Networks in the News - On February 25, 2003, the Reason Foundation released its policy study on HOT Networks. The report claims that HOV lanes could be transformed into a more effective component of the urban transportation system. Turning HOV lanes into a network of premium lanes could provide for high-speed guideways for express buses, while providing a faster and more reliable travel option to individual motorists traveling in personal automobiles. Buses and vanpools would use the premium lanes free of charge, while other motorists would pay a variable toll. Tolls would be debited electronically from users' smart cards, thus doing away with tollbooths and cash transactions. In effect, the report's authors propose marrying two promising transportation innovations receiving growing attention in the transportation community: High Occupancy Toll (HOT) lanes and Bus Rapid Transit (BRT). See the full report on the web at: http://www.rppi.org/.

PRICING ABROAD

London Sees Value in Value Pricing - On February 17, 2003, drivers began paying £5 (approx. US $8) per day to enter London's city center during peak times. A month into the program, approximately 17 percent less traffic was on the road, which is on target to the long-term goal of 15 percent reduction. Bus service was a bigger winner with 50 percent fewer delays! If the project continues its success, other cities in the UK are likely to implement similar schemes. About 35 local authorities expressed an interest in following suit, notably Bristol and Edinburgh. See www.cclondon.com for more information.

VALUE-ABLE NOTES

Guide for HOT Lane Development - FHWA's Office of Operations in collaboration with FHWA's Office of Policy recently finalized a report entitled "Guide for HOT Lane Development." This new publication is a handbook that documents the collective experience gained from the Nation's initial implemented high occupancy toll (HOT) lane projects. The case studies and technical information presented in this guide allow the transportation community to learn from these innovative and successful projects. You can access the report on the web at http://www.hhh.umn.edu/centers/slp/projects/conpric/index.htm under "Resources."

Good News for Projects Potentially Converting from HOV to HOT Lanes - In a June 10, 2002, letter to the Congressman Randy "Duke" Cunningham, U.S. Representative from San Diego, FTA Administrator Jennifer Dorn announced that "Effective in Fiscal Year 2003, FTA will recognize, for formula allocation purposes, exclusive fixed guideway transit facilities that permit toll-paying SOVs on an incidental basis (often called high occupancy toll) (HOT Lanes) under the following conditions: the facility must be able to control SOV use so that it does not impede the free flow and high speed of transit and HOV vehicles; and the toll revenues collected must be used for mass transit purposes." The policy will go into effect beginning with the FY 2003 apportionment.

Mainstreaming Pricing - FHWA is looking at ways to include value pricing alternatives in planning and project development. Possible candidate planning processes may include: long range transportation plans, transportation improvement programs, congestion management systems, and environmental impact statements (EIS's). The key challenge is to identify the specific circumstances where it is appropriate to consider pricing and the analytical tools and techniques needed for such consideration.

FHWA's first focus has been on the EIS process. During the January 2003 TRB Conference, FHWA's Patrick DeCorla-Souza and Fred Skaer presented a paper on tools appropriate for considering pricing in EIS's. FHWA is now broadening its focus to include the longer term planning processes that occur prior to political and organizational investments in specific remedies. Informal surveys of FHWA and EPA field offices about mainstreaming pricing in planning and project decisions revealed no significant barriers to mainstreaming, although technical and political issues were usually high on respondents' lists.

The Effect of New Technologies on Congestion Pricing -The University of Texas at Austin released a report that documents an investigation of an ITS framework for congestion pricing. Analysis of the associated benefits of using the ITS framework for congestion pricing was attempted using two different computer based ITS analysis tools (SCRITS and IDAS). Review the study's results at http://swutc.tamu.edu/reports.html.

Credit Assistance for Major Projects Available from US DOT - If you have a value pricing project needing funds for construction, you may consider federal assistance available through the federal credit program known as "TIFIA." The Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) established this new US DOT program to provide three forms of credit assistance - secured (direct) loans, loan guarantees, and standby lines of credit - for surface transportation projects of national or regional significance. For more information, go to http://tifia.fhwa.dot.gov/lar_crl.htm.

WORKSHOPS AND FORUMS

ITS Technology for Managed Lanes Mr. Lee Munich of the Humphrey Institute will lead a panel session on the advantages of new ITS technologies in managing tolled facilities and generating revenue. The session is scheduled for May 20, 2003, in Minneapolis, Minnesota during ITS America's Annual Meeting and will feature presentations on existing managed lane projects. For more information, see http://www.itsa.org/annualmeeting.html

Value Pricing in the D.C. Metro Area Virginia DOT, Maryland DOT, District of Columbia DOT, the Washington Metropolitan Council of Governments, and FHWA will co-sponsor a Pricing Workshop on June 4, 2003, in Washington, DC. This workshop will bring together regional decision-makers and transportation stakeholders to review successfully implemented pricing projects and contemplate possible pricing solutions to regional traffic problems. To register on-line visit http://www.mwcog.org/home.asp.

Value Pricing events include:

Monday, July 14, 1 - 5 pm: Value Pricing Project Partners Meeting - an open forum discussion among those who have developed or are developing value pricing projects.

Tuesday, July 15, 8 - 9:45 am: Value Pricing Outreach Subcommittee

10 - noon: Joint Subcommittee on Pricing

1 - 5 pm: Value Pricing Workshop - "Getting HOT: What's New With Value Pricing?" This workshop will include presentations and discussions on recent developments in Value Pricing, including London's Pricing Scheme, Germany's GPS-based Pricing for Trucks, HOT Networks, Katy Freeway Managed Lanes extension, update on plans for SR 91 in Orange County, Truck Tollways, and the Politics of Pricing. Learn what others are doing, what is necessary for a successful value pricing project, and how to avoid the pitfalls in implementing a pricing project.

Planning for Pricing during ITE's Annual Meeting A session titled "Value Pricing in the Planning Process" will take place August 26 during the Institute of Transportation Engineers Annual Meeting in Seattle, Washington. Topics covered will include experience learned from implemented projects as well as integrating pricing into the planning and project development processes. For more information, see http://www.ite.org/AnnualMeeting/.

Sunny Florida to Host International Pricing Symposium FHWA, TRB, OECD, and the Florida Department of Transportation will sponsor an International Pricing Symposium November 20-22, 2003 at the Sonesta Beach Resort in Key Biscayne, Florida. For more information, please contact Ms. Claire Felbinger at TRB (CFelbinger@nas.edu).

Value Pricing Notes provides updates on the FHWA Value Pricing Pilot Program and summarizes recent news of interest to the value pricing community. Please feel free to distribute to any interested parties. If you have suggestions for Value Pricing Notes, contact: Value Pricing Notes Editor

Attn: Shannon Ballard
Federal Highway Administration
Value Pricing Team, HPTS
400 7th Street, S.W., Room 3324
Washington, DC 20590.

If you would like information about the Value Pricing Pilot Program, check out the VPPP website at http://www.hhh.umn.edu/centers/slp/projects/conpric/index.htm or e-mail Patrick.DeCorla-Souza@fhwa.dot.gov.


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