VALUE PRICING NOTES Summer 2003 Office of Transportation Policy Studies, Highway Pricing & System Analysis Team
HEADLINE NEWS: Eight New Projects from Seven States Awarded FY2003 Value Pricing Pilot Program Funds
ALSO IN THIS ISSUE SAFETEA GETTING THE WORD OUT FAIR LANES - AN EQUITABLE ALTERNATIVE FAST ACT; 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

Interest was High for Fiscal Year 2003 Value Pricing Pilot Program Funds - Sixteen proposals from ten states, including four new states, requested funding under FHWA's FY2003 Value Pricing Pilot Program (VPPP). A total of $23.3 million in funding requests competed for $4.5 million in VPPP funds available this fiscal year. In addition, four new states competed for three available "slots" since 12 states are already in the Program and there is a limit of 15 states that can be funded under TEA-21.

See our updated website http://www.fhwa.dot.gov/policy/otps/valuepricing.htm for more information on the FY03 VPPP proposals that were funded:

• The Colorado DOT has been funded to implement the first HOT lane project into a downtown location, with multiple ingress and egress points.
  
• The Port Authority of New York and New Jersey, in conjunction with New Jersey DOT, will study ways to increase the service level for buses through more reliable travel times. The proposal will potentially increase bus ridership by converting a general purpose tolled lane to a premium priced lane.
  
• The Virginia DOT will conduct a study to evaluate the feasibility of value pricing concepts across the Northern Virginia portion of the Washington, DC metropolitan area.

• Lee County DOT in conjunction with Florida DOT will undertake the first test of value priced Queue Jump lanes.
  
• By adding a new reversible HOT lane in the median, Florida DOT's HOT lanes project expects to provide a 20% increase in peak hour, peak direction capacity without having to widen I-95.
  
• Texas DOT's HOT Lane study is expected to show congestion reducing benefits of HOT lanes on a 15-mile stretch of the Northeast Corridor in San Antonio.

• The Illinois State Toll Highway Authority, in conjunction with Illinois DOT, will employ variable pricing incentives to shift traffic out of peak travel periods and encourage use of electronic toll payment.
  
• The Ohio Turnpike, in conjunction with Ohio DOT, will develop a pricing structure to alleviate truck-caused arterial roadway congestion, with minimal construction of new bypass routes and without substantially increasing turnpike congestion.

Surface Transportation Reauthorization under SAFETEA - The Administration's proposed Safe, Accountable, Flexible and Efficient Transportation Equity Act of 2003 represents the largest surface and public transportation investment in U.S. history. The proposal will improve safety, create jobs, sustain economic growth, protect the environment, reduce congestion, minimize project delays, increase funding flexibility, and improve public transit efficiency.

It is a $247 billion proposal for six years. Of particular interest to VPNotes readers, is the proposed Variable Toll Pricing Program. This program would alleviate congestion and reduce emissions; mainstream the value pricing concept; and permit tolling on highway, bridge, or tunnel facilities (including Interstate). The program would still require an agreement that identifies goals and performance measures as well as a toll that varies according to the time of day. States may permit vehicles with fewer than two occupants onto HOV lanes with payment of a variable toll. No special discretionary funds are provided, but Federal funds allocated to states may be used. For more information see http://www.fhwa.dot.gov/reauthorization/safetea.htm.

GETTING THE WORD OUT

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 have sometimes faced opposition 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. 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. With more capacity available for paying motorists, tolls can be kept affordable and more motorists can make use of this premium service.

The Eno Transportation Foundation produced a report on the role of FAIR Lanes in the New York Metropolitan Region, which can be downloaded from the web at http://www.hhh.umn.edu/centers/slp/projects/conpric/index.htm under "Resources".

Get Where You're Going FAST - Sen. Mark Kennedy (R-MN) and Rep. Adam Smith (D-WA) introduced the FAST (Freeing Alternatives for Speedy Transportation) Act, which aims to reform America's transportation system by adopting fee-based financing on the interstate highways. The FAST Act requires that (1) all fees are collected electronically -- no tolls, no tollbooths; (2)revenue can be collected only on new lanes and spent only on those new lanes; and (3) once the revenue collected pays for the new lanes, the fees expire. See http://www.theorator.com/billsl08/hr1767.html for the bill's full text.

HOT Networks in the News - On February 25, 2003, the Reason Foundation released its policy study on HOT Networks. The report suggests 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. In its most recent report, Transport for London (TfL) reported broad success with public acceptance and congestion reduction. TfL notes that charging is delivering more than the expected reduction in congestion inside the charging zone and that traffic levels inside the charging zone have reduced by some 16 percent. Car journeys to and from the charging zone are quicker and more reliable, with the majority of ex-car users transferring to public transport. While not the most advanced technology, the cameras, telecommunications, and number plate reading systems are all working effectively as are the various payment systems. See www.cclondon.com for more information.

Pricing in Germany - Germany's Pällman-Commission recommended and the government endorsed partial user charging on its highway system. At midnight on August 31, 2003, a distance-based truck tolling system will be put into effect. All freight vehicles with a permissible gross weight of 12 or more tons will be charged electronically using GPS. Net toll revenues will go toward transportation infrastructure. Calculation of the tolls will be based on distance traveled, number of axles and the emissions class of the vehicle. See www.toll-collect.de 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" or contact Wayne Berman at wayne.berman@fhwa.dot.gov for a hard copy.

Good News for Projects Potentially Converting from HOV to HOT Lanes - FTA Administrator Jennifer Dorn announced in a June 10, 2002 letter 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 went into effect with the FY 2003 apportionment.

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/167529-1.pdf.

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 the Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA). For more information, go to http://tifia.fhwa.dot.gov/lar_crl.htm.

WORKSHOPS AND FORUMS

Value Pricing in the D.C. Metro Area - Virginia DOT, Maryland DOT, District of Columbia DOT, the Washington Metropolitan Council of Governments, and FHWA co-sponsored a Pricing Workshop on June 4, 2003, in Washington, DC. This workshop brought together regional decision-makers and transportation stakeholders to review successfully implemented pricing projects and contemplate possible pricing solutions to regional traffic problems. To download a summary report, speakers' presentations, and attendee roster, please see http://www.mwcog.org/pricingconference/.

Pricing Partners in Portland - Value Pricing Project Partners met in Portland, Oregon, July 14-15 in conjunction with TRB's Joint Summer Meeting of the Planning, Economics, Finance, Freight, and Management Committees. Partners and interested guests reviewed existing pricing projects and discussed topics such as enforcement, financing, incorporating pricing into the planning process, and project evaluation techniques. The TRB Subcommittees on Pricing and Pricing Outreach also met to discuss reauthorization, new and existing pricing projects, and plans for future meetings. A workshop was held that included presentations and discussions on recent developments in value pricing (including London's Pricing Scheme, HOT Networks, Katy Freeway Managed Lanes, SR91 in Orange County, and Truck Tollways) and the Politics of Pricing. Participants actively engaged the presenters on these topics to 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. Meeting minutes and presentations will soon be posted at http://www.hhh.umn.edu/centers/slp/projects/conpric/index.htm.

Sunny Florida to Host International Pricing Symposium - The Florida Department of Transportation, the Organization for Economic Cooperation and Development (OECD), and the Transportation Research Board (TRB), in collaboration with FHWA, will conduct an international symposium on road pricing in Key Biscayne, Florida, November 19-22, 2003. The symposium will provide a synthesis of current practice to assist in implementing future pricing projects. For more details see http://gulliver.trb.org/conferences/RoadPricing/.

The Joint Planning Committee will evaluate the current state of pricing practice, and determine future directions, opportunities, and research and information needs. Committee members will also help shape conclusions and recommendations to be included in the formal proceedings. Recommendations may include policy and technical initiatives to facilitate pricing implementation and to identify needed research. The proceedings will also include relating current practice to the conclusions and recommendations offered by TRB's 1994 publication: Curbing Gridlock. Peak Period Fees to Relieve Traffic Congestion.