Managing traffic is like pouring sand through a funnel. Pour at the right rate, and you’ll get a good flow. Dump the whole bag in at once, and the funnel clogs up.
“Until now, we’ve been dumping the whole bag,” said Jack Finn, HNTB senior vice president and national director of toll services. “Interstate use has been a transportation free-for-all. Everyone goes at the same time, the lanes get jammed and nobody moves.”
According to Finn, there’s a more efficient way to use existing infrastructure. Speaking recently at the White House and at both the Democratic and Republican Governors Conferences, Finn said departments of transportation must begin treating their clogged interstates like utilities and charging users according to demand.
This utility concept is commonly referred to as value pricing, and it’s catching on among state departments of transportation (DOTs). Meant to manage demand for road space—just as market pricing helps regulate demand for other consumer goods and services—value pricing charges motorists a toll that varies with congestion levels.
Currently, there are fewer than one dozen value-priced facilities in the U.S., but Finn said we will see many more in the coming years as DOTs struggle to build their way out of congestion.
Unpopular demand
The Georgia Department of Transportation (GDOT) may be one of the next to adopt value pricing. The target is 15 miles of Atlanta’s I-75/I-575 corridor, a major commuting route and a state and national transportation artery. As Georgia’s population grows, so do traffic volumes, tying up sections of the corridor for several hours a day. The massive bottlenecks have prompted GDOT to mount an aggressive campaign to identify solutions that would offer more reliable mobility through the corridor. Unfortunately, adding free lanes won’t be among them.
An obvious solution only a decade or so ago, free lanes are quickly becoming less of a realistic option for two reasons. First, shrinking budgets, skyrocketing construction and right-of-way costs make free lanes nearly impossible financially, not just for Georgia, but for most states.
“Of course, revenue for the project is a significant consideration,” said GDOT’s Darryl VanMeter, assistant state urban design engineer. “There’s also the matter of transportation system efficiency. You need to integrate efficient options for all traffic streams, and free lanes aren’t as efficient as managed lanes when it comes to ensuring that mobility is preserved.”
The inefficiency stems partly from a phenomenon called “latent demand.” With traffic growing at nearly 8% annually on its busiest corridors, Atlanta can’t build its way out of congestion. Traffic eventually will fill in any newly created lanes. Widening corridors becomes a costly, temporary fix. The I-75/I-575 corridor is a perfect example. During the past 50 years, it has undergone a series of improvements—including expansions—only to become congested again.
Using the unused
With free lanes nearly out of the question, GDOT turned its attention to managed lanes, specifically high-occupancy vehicle (HOV) lanes, which would restrict lane use to vehicles with two or more passengers. A grant to Georgia’s State Road and Tollway Authority (SRTA) from the Federal Highway Administration’s (FHWA) Value Pricing Pilot Program was the seed for an initial study deeming HOV lanes a viable option.
“The initial SRTA study was part one,” VanMeter said. “It enabled us to later move forward on a comprehensive value pricing study.”
Members of GDOT’s public-private initiative (PPI) team sparked the comprehensive study by taking the existing HOV concept one step further and presenting a list of options based on selling unused capacity in those lanes.
“The PPI team came along at a time when we were looking at different options,” VanMeter said. “They did exactly what PPIs are intended to do: They delivered innovative ideas, like truck-only lanes, and financial options that hadn’t been considered previously. And, from an implementation perspective, they presented a way for us to build a project in an accelerated fashion.”
One of the PPI team’s proposed options was high-occupancy toll (HOT) lanes. These value-priced lanes charge single-occupancy vehicles (SOVs) a toll, while HOVs are allowed to use the lanes for free. Under this proposal, vehicles that do not meet HOV requirements buy the right to travel in the HOV lanes.
In addition to its list of options, the PPI team also submitted a complex finance package, including toll revenue financing, grant anticipation revenue vehicles (GARVEE) bonds and Transportation Infrastructure Finance and Innovation Act (TIFIA) loans. To determine how much public money would go toward such a project, GDOT hired HNTB to conduct a comprehensive study about the impact of value pricing in the corridor. The 12-month study, “Value Pricing on the I-75/I-575 HOV/BRT Project,” found that value pricing would be effective in providing an uncongested alternative to HOVs, mass transit and SOVs willing to pay a toll.
“The value pricing study validates the concept of lane management as a real option for guaranteeing mobility,” VanMeter said. “It also provided an objective assessment of the lanes’ true revenue potential.”
For GDOT, objectivity was key.
“Whenever you have new concepts in an impassioned environment, you are obligated to separate hype from fact,” VanMeter said. “It was critical for us to have an objective assessment in order to make good decisions that will advance the I-75/I-575 project.”
The study presented traffic and revenue analyses of 12 managed lane scenarios. The 12 scenarios were presented in three groups:
Group 1 (Scenarios 1-4)
- HOT2+ lanes: Vehicles with two or more passengers ride for free. SOVs pay a fee;
- HOT3+ lanes: Vehicles with three or more passengers ride for free. Vehicles with fewer than three passengers pay;
- HOT4+ lanes: Vehicles with four or more passengers ride for free. Vehicles with fewer than four passengers pay; and
- Express toll lanes: Everyone pays regardless of occupancy.
Group 2 (Scenarios 5-8)
The second group of value pricing scenarios takes each of the original four options listed above and adds two voluntary truck-only lanes (TOLs) in both directions. For example, HOT2+ plus TOLs, HOT3+ plus TOLs, and so on.
Group 3 (Scenarios 9-12)
The third group replaces the TOLs with two mandatory truck-only lanes (TOTs) in each direction.
The idea was to supply GDOT with as much information as possible to guide policy decisions. The 1,000-page study showed cumulative gross revenues could range from $300 million to $2 billion (in current year dollars), depending on which of the 12 scenarios GDOT employed. The amount GDOT could borrow against toll revenue bonds would vary, too. For the first scenario, HOT2+ lanes, GDOT would be able to borrow anywhere from $20 to $24 million during a 30-year period. To finance the 12th scenario—where everyone pays regardless of vehicle or occupancy—GDOT could finance anywhere from $796 million to $1.16 billion.
The study goes on to show that motorists’ willingness to use managed lanes depends on the amount of time saved and the toll charged. For example, if a trip on general-purpose lanes takes 37 minutes but a HOT lane charging a $1.50 toll would save 12 minutes, half of the population would consider using the HOT lane.
However, not every trip is 37 minutes long. As the variables of trip length and toll amounts change, so does the percentage of those willing to pay.
And, if motorists paid, how much time would they save on average? That varies, too. For motorists traveling from Sixes Road south to I-285 (nearly the entire 15-mile span, including a stretch of I-575), HOT lanes would shave 28 minutes off commutes during peak travel times. From I-575 south to I-285, drivers could save 13 minutes. And from Hickory Grove south to I-285, commutes could be as much as 17 minutes shorter.
Upping management
In conducting the study, GDOT learned a great deal about managed lanes, but the greatest lesson of all resulted in a paradigm shift, according to VanMeter.
“In the past, when we have been faced with congestion in a major thoroughfare, GDOT has focused largely on demand and how to accommodate it.
This project, which originally focused on extending our HOV system northward, is now focused on providing a managed lane system with guaranteed mobility, which will provide options for the users as opposed to just providing lanes,” he said.
Other lessons emerged as well—ones that will help manage GDOT’s expectations of what managed lanes can and cannot do:
1. In developing a managed lane policy, DOTs should be prepared to make concessions. For example, GDOT may have to go with one of the lower-revenue scenarios for the program to be supported politically.
2. It seems counterintuitive, but restricting the number of vehicles that enter a lane actually will improve traffic flow.
3. In maximizing the use of the I-75/I-575 corridor, all drivers will benefit, not just the ones in the HOT lanes.
4. Motorists will use HOT lanes once they understand the concept. When Rte. 91 opened in California in 1995, the peak-hour toll rate was $2.50. In 2003, the rate had risen to $4.50. Today, motorists pay $9.25 to travel the 10-mile road. The rate has basically quadrupled in 10 years, yet motorists aren’t blaming the public sector for the increase. They understand cost is driven by demand.
5. Public education is essential to success. If GDOT decides to implement HOT lanes on the corridor, motorists will need to understand that the department isn’t taking anything away from them. Instead, GDOT will be offering them a choice that didn’t exist before.
6. HOT lanes may not serve the same drivers every day. Some days, drivers will choose to sit in traffic. Other days, they will pay the toll to get to their destinations faster because they have a meeting, they need to catch a flight or they want to attend their child’s soccer game, for example.
7. Revenue should not be the primary motivation for implementing HOT lanes. In most cases, they are not revenue generators. Their main purpose is to ensure mobility and improve efficiency.
8. HOT lanes work most effectively when there is a significant amount of congestion in adjacent lanes. That means HOT lanes aren’t the ultimate congestion-relief solution, but they are a viable alternative when building free lanes isn’t.
9. Value pricing will give Atlanta’s buses and emergency vehicles the opportunity to travel on uncongested roadways, which could mean more dependable mass transit and quicker response times.
10. As a result of just-in-time delivery and to avoid congestion, most of Atlanta’s trucks travel during off-peak hours and therefore would not be motivated to use TOLs since much of the transportation system is not congested during nonpeak travel periods. However, as system congestion increases outside the traditional peak times, so would truck lane use.
11.Atlanta’s freight community is not pressing policy makers to construct TOLs, which could indicate that TOLs, while innovative, are not yet needed. Some speculate that once supply chain innovations are exhausted and congestion threatens mobility, the freight community will begin to demand protected mobility.
HOT lanes in Hotlanta?
Leaders in metropolitan Atlanta have embraced the concept of managed lanes in what VanMeter called an unprecedented collaboration between transportation agencies.
“The I-75/I-575 HOV/BRT project has broken ground on several fronts, one of which is the level of partnership between the FHWA, Federal Transit Administration, GDOT and the Georgia Regional Transportation Authority, as well as SRTA, the Atlanta Regional Commission and, with a successful PPI implementation, the private sector, too,” he said.
The question now is what form those lanes will take: HOV? HOT? TOL? Much work remains to be done before a decision about configuration can be made. Currently, GDOT has a draft environmental impact statement (EIS) for the corridor. The final EIS is expected in 2008. Until then, the department will continue to refine its analysis of each option and eventually pursue an investment-grade traffic and revenue study, part of the overall financial plan for the project. After the EIS is complete and an option has been selected, GDOT will negotiate a design-build contract with the PPI team. According to VanMeter, the contract could be executed as early as 2009.
“In theory, we could construct and open the new managed lanes to traffic by 2015,” he said, “making more dependable travel times a reality for thousands of Atlanta motorists.”
