HOT Credit Lanes Feasibility Study

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Executive Summary
1. Introduction
- 1.1 Background of the FAIR Lanes Concept
- 1.2 Focus on I-580 and I-680 Study
2. Existing Conditions
3. Alternatives Definition
4. Public Acceptance of HOT Credit Lanes and Value-Priced Lanes as an Equity Solution
- 4.1 Focus Groups
- 4.2 Public Opinion Survey
5. HOT Credit Policy Modeling Results
6. Revenue Estimates
- 6.1 Revenue for 20-Year Period
- 6.2 Conclusions
7. Cost Estimates
8. Operational Analysis
9. Findings and Conclusions
- 9.1 HOT/C Lanes Feasibility Considerations
- 9.2 Implementation Challenges
10. References
Appendix A. Value Pricing State-of-the-Art Review
Appendix B. Travel Demand Modeling
Appendix C. Focus Groups Moderator's Guide
Appendix D. Public Opinion Survey Questionnaire
End Notes

Executive Summary

Purpose of the Study

The Fast and Intertwined Regular (FAIR) lanes concept combines the use of pricing to manage road congestion while simultaneously addressing perceived equity issues that may arise from priced roads. One frequent criticism of the high-occupancy toll (HOT) lanes concept is that it may be inequitable to low-income users who are less able to afford tolls than higher-income users. Another concern is that the general public, regardless of income, may resist HOT lanes unless they receive some tangible benefit from them even when they do not use the HOT lanes. The basic concept of the FAIR lanes proposal, as described by Patrick DeCorla-Souza (2000) in the ITS Quarterly and subsequent articles (see articles in References dated 2000-2005), is to price previously unpriced lanes to improve freeway performance and to provide a remedy to the perceived equity issues. Those equity issues are associated with the “take away” of a previously free lane and with the concern about low-income users. A FAIR lanes scheme would provide eligible users of the general purpose (GP) lanes with a “credit” each time they use the GP lane during peak periods. This credit would be redeemable toward paying their toll on the HOT lane or, potentially, other transportation services. All high-occupancy vehicles (HOV) -- carpools, vanpools and buses -- would be able to use the HOT lanes without paying a toll under all circumstances.

FAIR lanes are an innovative and untested concept. This study, which is undertaken in cooperation with the Federal Highway Administration (FHWA), was designed to test this particular equity concept on actual freeway corridors. Due to political feasibility concerns and the physical characteristics of the corridors (especially the fact that neither freeway segment has convenient, parallel free routes), a modified version of the FAIR lanes concept is applied in this study. This version is termed “High-Occupancy Toll/Credit (HOT/C) lanes in this study to distinguish it from the original FAIR lanes concept. The study applies the HOT/C lanes proposal to two specific freeway segments in Alameda and Santa Clara counties in California: Interstate 580 (I-580) and Interstate 680 (I-680).

I-580 corridor study limits are Greenville Road to the east and the I-580/I-680 junction to the west. The facility has four GP lanes in each direction separated by a median. The length of the I-580 corridor is approximately 12-13 miles (distance varies by direction). Based on current freeway widening plans, this study assumes that I-580 will consist of four GP lanes and one HOT lane in each direction.
I-680 corridor study limits are Route 237 (Santa Clara County) to the south and Route 84 (Alameda County) to the north. It is a six-lane facility with three GP lanes in each direction. Currently, there is one interim, non-standard HOV lane in the southbound direction. The corridor is approximately 14 miles long. Based on current freeway widening plans, this study assumes that I-680 will consist of three GP lanes and one HOT lane in each direction.

These corridors were selected because they are under active consideration for HOT lane implementation, and planning and funding for the I-680 HOT lane is already well advanced. This study analyzes key aspects of the HOT/C lanes concept including: toll revenues, impact on vehicle volumes and speeds, travel forecasting, freeway operations, and public opinion.

Alternatives Analyzed

The study reviews and compares a number of alternatives, with a focus on variable tolling scenarios. The major variables that define alternatives are: (1) crediting rate, i.e., the rate at which eligible users earn a “free” trip on the HOT lane: (2) eligibility for HOT/C lanes credits, namely the low-income only vs. all users eligibility criteria; and (3) different carpool-definition policies, namely 2-person or more (2+) vs. 3-person or more (3+) definitions of an eligible carpool. Those alternatives in which only low-income persons (defined by the U.S. government’s poverty index) are eligible for HOT/C credits are termed “Limited Eligibility” in this report. Those alternatives in which all users are eligible are termed “100 Percent Eligibility.”

Both of the corridors selected for this study are characterized by a relatively affluent population, and the number of low-income users is relatively small (six percent on the I-680 and ten percent on the I-580). Although both Limited Eligibility and 100 Percent Eligibility scenarios are modeled, the study focuses more detailed analysis on Limited Eligibility, for two reasons: (1) the low-income focus addresses more directly the income equity issue, which is the most frequently raised and politically resonant “fairness” issue; and (2) the project team made a considered judgment, with concurrence from the study task force, that the 100 Percent Eligibility has no plausible chance of being enacted by policy-makers in the political and economic context of the Bay Area region, particularly due to the fact that there are no parallel roadway facilities available.

The 14 policy scenarios that met the specific purposes of the study and the screening criteria and are comparable include:

Conventional HOV Alternatives

Scenario A: HOV 2+ carpool policy, no tolling, and no HOT/C credits granted,
Scenario B: HOV 3+ carpool policy, no tolling, and no HOT/C credits granted

Scenarios A and B provide a base case of a conventional HOV lane for which there is no tolling and therefore no economic equity issue arising from tolling. It provides a point of comparison for measures such as vehicle speeds and volumes. It provides no revenues.

Limited Eligibility HOT/C Alternatives (low-income only)

Scenario C: HOV 2+ carpool policy, tolling of single-occupant vehicle (SOVs), and low-income SOVs qualify for HOT/C credits at a 1 in 3 trips rate.
Scenario D: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and low-income SOVs and HOV 2s qualify for HOT/C credits at a 1 in 3 trips rate.
Scenario E: HOV 2+ carpool policy, tolling of SOVs, and low-income SOVs qualify for HOT/C credits at a 1 in 11 trips rate.
Scenario F: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and low-income SOVs and HOV 2s qualify for HOT/C credits at a 1 in 11 trips rate.

Scenarios C through F examine the impacts of the Limited Eligibility HOT/C lanes policy. They

compare widely varying crediting rates. They also test the impact of 2+ and 3+ carpool policies.

These scenarios are the most relevant to the concept of “fairness” as defined by providing a

special benefit to low-income corridor users.

100 Percent Eligibility HOT/C Alternatives (all users eligible, regardless of income)

Scenario G: HOV 2+ carpool policy, tolling of SOVs, and 100 Percent HOT/C credit eligibility at a 1 in 11 trip rate.
Scenario H: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and 100 Percent HOT/C credit eligibility at a 1 in 11 trip rate.
Scenario I: HOV 2+ carpool policy, tolling of SOVs, and 100 Percent HOT/C credit eligibility at a 1 in 26 trip rate.
Scenario J: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and 100% HOT/C credit eligibility at a 1 in 26 trip rate.
Scenario K: HOV 2+ carpool policy, tolling of SOVs, and 100% HOT/C credit eligibility at a 1 in 51 trip rate.
Scenario L: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and 100% HOT/C credit eligibility at a 1 in 51 trip rate.

Scenarios G through L examine the impact of providing a credit to all GP lane users who have a transponder. In order to assure free-flow conditions on the HOT lane while crediting all users of the GP lanes, the crediting rates need to be very low, so the credit may be viewed by users as almost negligible.

Conventional HOT Lane Alternatives

Scenario M: HOV 2+ carpool policy, tolling of SOVs and no HOT/C credits.
Scenario N: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and no HOT/C credits.

Scenarios M and N are “pure” HOT lanes and also provide a basis for comparison with the HOT/C lanes scenarios. They provide a “zero credit” to GP lane users of any income and represent the conventional HOT lane. They are useful alternatives in terms of comparing revenue generation as well as traffic conditions.

Ingress/egress to the HOT lanes on the I-580 and I-680 corridors would be limited to certain locations, at the beginning and end of the HOT lane and at several intermediate access locations along the corridor. Access locations were dictated by factors such as traffic demand, distance from key interchanges, and operational and safety considerations.

Public Opinion and Acceptance

In order to assess public and stakeholder attitudes towards both the HOT/C lanes concept and value-priced lanes, the study team conducted focus groups with frequent users of I-580 and I-680. In addition, a public opinion survey of residents in Alameda County and the surrounding communities was also conducted.

Findings from both the focus group research and the public opinion survey suggest that the single most important factor determining support or opposition to HOT lanes is the context in which they are presented to the public. When presented as a toll lane, designed to manage congestion, give commuters choices and fully utilize carpool lanes, respondents were generally skeptical. When presented as a carpool lane with a revenue enhancing element designed to deliver desirable transportation improvements, most notably completing carpool lanes and expanding express bus service, residents strongly support the idea. Once a desirable context is set, residents were much more likely to accept and embrace the other beneficial outcomes of the project (e.g., more choices, congestion relief and full utilization of the carpool lane).

The public opinion research in this study strongly suggests that concerns about income equity are not a major determinative factor in public acceptance of HOT lanes. To the degree that fairness is an issue at all, it is defined as a concern that the wealthy would be able to buy their way out of traffic rather than that the poor would not be able to buy their way into the lane. For the average resident, allowing poor residents into the lanes for a discount only makes the plan less equitable, as it appears that exceptions are being made for everyone but them. Most importantly, the research suggests that most residents are willing to accept that not everyone will be able to access the HOT lanes, if the outcome is a better transportation system for all.

Cost

The total estimated incremental capital cost to implement HOT/C lanes on I-680 is $1,177,500, and the estimated incremental annual Operations & Maintenance (O&M) cost is $155,340. The total estimated incremental capital cost to implement HOT/C lanes on I-580 is $1,603,125, and the estimated incremental annual O&M cost is $189,125. Capital and O&M costs for both corridors are estimated on the basis of Limited Eligibility alternatives; capital costs for both corridors include a 25 percent contingency factor. The I-580 capital costs are higher, because I-580 will have four GP lanes in each direction (requiring more antennas, readers and structure for reading transponders in the GP lanes), while there are three GP lanes on I-680. The I-580 O&M costs are higher than I-680, due to maintenance of more equipment and a somewhat higher number of transactions.

The total capital cost for implementing Limited Eligibility HOT/C Lanes for both I-580 and I-680 corridors combined is $2,630,625. The total annual O&M cost for both corridors combined is $345,194. (Note: the HOT facilities on both corridors are assumed to be in place for this estimate).

HOT/C Policy Modeling Results

The economic and performance impacts of various HOT/C Lane policy scenarios are analyzed in terms of revenue generated and several traffic measures, such as vehicle speeds and volumes.

The key findings are:

There would be a significant opportunity cost to the public, in the form of forgone HOT lane revenues, associated with HOT/C lane credits that are redeemed. This result may differ from the original FAIR Lanes concept, because that concept priced an additional HOT lane and, therefore, revenue potential could be higher.
There are modest improvements in overall travel time savings (unweighted by the value of time) that would accompany adoption of HOT/C lane policy.
The eligibility and HOT/C crediting policies adopted influence the operating characteristics of the overall facility. A low-income-based eligibility criterion severely limits the number of eligible users, by definition (especially in these relatively affluent corridors) and permits a more generous crediting policy, everything else being equal. Adoption of a 100 Percent Eligibility policy necessitates severely limiting the accrual rate of HOT lane credits provided for each GP lane trip.
The relative generosity of the HOT/C credit policy, as well as the choice of carpool policy, has a significant impact on revenues and facility speed performance. For example, in the 100 Percent Eligibility scheme, an HOV 2+ carpool policy with a 1 in 11 trip HOT/C credit policy is essentially inoperable, due to overloading by free riders, on I-580 in both horizon years and marginally operable on I-680.
There is also a high risk that users who have accumulated HOT/C credits may wish to utilize them during the same peak period on the same day, thereby nullifying their practical value to users.
The amount of equity value that can be offered by a HOT/C lanes policy is limited substantially by the need to limit crediting rates in order to maintain satisfactory service on the HOT lane.

Revenue Estimates

Even under the most conservative assumptions, HOT lane tolling generates significant revenues over a 20-year period. The results, however, reveal the great sensitivity of revenues to both HOT/C and carpool policy. HOT lane revenues are produced most prolifically when there is substantial HOT lane capacity to be sold - when there is a 3+ carpool policy in place and there are no “free riders” as a result of the HOT/C policy. The addition of HOT/C users and a generous 2+ free carpool policy has significant negative effect on HOT lane revenues. Both policies have the effect of reducing the capacity that is available to sell, the volume of paying users, and therefore the total revenue generated. The assumed Real Discount Rate also has a significant effect on total revenues. Under the most diverse scenarios and assumptions tested in this study, yielding the highest and lowest revenues, the Limited Eligibility alternatives for I-680 yield a range of 20-year revenues from approximately $120 million to $331 million, and for I-580 a range from $18 million to $167 million. The 100 Percent alternatives for I-680 yield a range of revenues from $76 million to $309 million, and for I580 a range from $10 million to $159 million. The low end of the revenue ranges is characterized by these assumptions: most generous crediting policies (100 Percent Eligibility), HOV2+ carpool policy, and highest real discount rate. The high end of the revenue ranges is characterized by the opposite assumptions: least generous crediting policies (Limited Eligibility), HOV3+ carpool policy, and lowest real discount rate.

Revenues are also significantly affected by the assumed sensitivity of total facility usage with tolls in place and whether or not increases in real household purchasing power are assumed. The revenue estimates depend upon the extent to which SOV and carpool volumes are sensitive to the tolls. If there is little total response of traffic to the presence of tolls, and real income growth is assumed, total revenues could be substantially more than derived under the more conservative assumptions that are provided.

Operational Analysis

A qualitative evaluation and limited quantitative evaluation of two of the 14 scenarios is provided for I580 and I-680. The two alternatives selected for study of each facility represent the extremes, the least and most HOT/C lane impacts among the proposed Limited Eligibility scenarios under consideration. The rationale for selecting the two extreme scenarios is to establish a range of impacts for analytical purposes. The 100 Percent HOT/C lane was not included in this operational analysis, because it is deemed highly unlikely to be implemented. The two selected scenarios are:

Scenario M is a conventional HOT lane with a 2-person carpool policy and no HOT/C policy. Year 2000 conditions are evaluated. This is the scenario with no impact of HOT/C policy.
Scenario C of the alternatives in this study is a Limited Eligibility HOT/C lane with a 2-person policy and a 1 in 3 trips crediting rate. This concept has the highest volume of traffic that would use the HOT/C lane. Under this scenario, drivers can pay to use the lane, ride free if they are a 2+ carpool, or if they qualify as low-income they can be credited for one usage of the lane for every three trips of the GP lanes. Year 2025 conditions are evaluated.

Scenario C (maximum usage) demand volumes appear to be close to or slightly over capacity for I580, but not for I-680, while Scenario M (minimum usage) demand volumes seem to be well below capacity. It is reasonable to assume that ramp metering will be in place by the time any such lane is constructed, so it is likely the volumes could be controlled enough to keep actual volumes within capacity.

One key element to successful operations would be the physical construction of the lane, particularly the type of buffer separating the HOT lane from the adjacent lanes and the width of shoulders, both of which would increase the capacity if designed optimally. Another element would be the locations of the access points relative to the access interchanges. The location of entry points should be as far as feasible from the interchange that nominally serves the lane, but upstream enough from the next interchange’s on-ramp.

By focusing the operational analysis on the two alternatives representing the extremes of the proposed lane configurations (least usage and most usage by vehicles using HOT/C credits), the analysis brackets the range of potential impacts. The analysis shows that the concepts studied in the report would function adequately for all the Limited Eligibility scenarios. Some of the scenarios, specifically 2025 with HOV-2 free and generous HOT/C crediting may strain the lane and produce service levels worse that LOS D, but this performance would still be better than the freeway mainline GP lanes.

HOT/C Lanes Feasibility Considerations

The findings of the HOT/C lanes alternatives and conclusions are:

There is a cost to the public, in the form of forgone HOT lane revenues, by adopting a HOT/C lane policy, whether Limited Eligibility or 100 Percent. Because addition of nonpaying vehicles using their HOT/C credits results in a decline in the performance of the HOT lane and a smaller capacity to “sell” to paying vehicles, the number of paying vehicles and the amount they are willing to pay are reduced. In addition to the loss of revenue due to less capacity to sell, there is a direct loss of revenue associated with HOT/C Lane participants who would have otherwise paid to use the HOT lane.
The 3+ carpool policy performs much better in terms of revenue than does the 2+ policy, under all HOT and HOT/C policy scenarios.
The opportunity costs are particularly high on the I-580 HOT lane under the 2+ carpool policy because of the projected high utilization of the lane by non-paying users.
The Limited Eligibility criterion for HOT/C credits does not have a major impact on the facility operations when crediting levels are not generous (i.e., 1-in-11 trips for free), because so few users meet the criterion and it takes numerous trips to build up enough credits for a “free” trip. However, the relatively generous crediting policy (1-in-3 free trips) does make a significant dent in revenue, especially in the context of the 20-year revenue stream. The 100 Percent Eligibility criterion, on the other hand, has a major impact on the operation of the facility and on revenues in both the short-and long-term. Therefore, the crediting rates must be very low (1-in-26 or lower), so the credits are almost negligible and may not be worth the administrative or public relations difficulties entailed.
The incremental capital cost for implementing HOT/C lanes system on I-580 and I-680 HOT lanes would be approximately $2.8 million. The incremental annual O&M cost of implementing the HOT/C lane policy on HOT lanes in both corridors is $345,140. While not insignificant, these costs may be deemed worthwhile, if they truly address a public perception of inequity that would otherwise be a major obstacle to adoption of HOT lanes. As noted above, the major cost of adopting a HOT/C lanes policy on HOT lanes is the forgone revenue.
HOT/C lanes alternatives provide modestly lower speeds on the HOT lane as compared to the pure HOT Lane alternatives.
The HOT/C lane alternatives are characterized by fewer toll-paying customers on the HOT lanes.
There are modest improvements in overall net time savings for the entire freeway that accompany the HOT/C lane policy. On the margin, moving a vehicle off of the congested GP lane to the less congested HOT lane reduces facility-wide vehicle hourstraveled. However, the net gain per HOT/C lane user is small and the losses to HOVs and paying HOT lane users must be weighed in light of California’s policy to favor HOVs.
There is also a high risk that users who have accumulated HOT/C lanes credits may wish to utilize them during the same peak period on the same day. For example, an incident causing serious traffic congestion on the GP lanes would provide an incentive for users with accumulated HOT/C lanes credits to use them simultaneously. Hence, the performance of the HOT lane may deteriorate very sharply as a result of high demand. In this sense, the value of the HOT/C lane credits may evaporate under precisely the operational conditions under which users may wish to redeem them.

Implementation Challenges

The implementation of HOT/C lanes on I-580 and I-680, as an additional feature of a HOT lanes program, faces several major challenges. A HOT/C lanes system on both freeways would need to satisfactorily address the following issues.

Agency and stakeholder consensus. Numerous local and state official decision-makers and other stakeholders would need to reach consensus that a HOT/C lanes concept, which has never been tried elsewhere, is an experiment worth implementing. If undertaken, it would be an attempt to address a perceived equity problem with HOT lanes that would otherwise be a serious obstacle to gaining their acceptability with the public.
Equity concerns. Equity concerns, as they pertain to low-income users, may be important to elected officials, transit advocates, and other leaders, but they do not appear to be as important to the general public, as found in this study. Decision-makers would need to determine that this equity concern is significant enough as an impediment to adoption of HOT lanes that it warrants introducing a complication into the toll structure, operation, and administration into the HOT lanes. They may also wish to consider other ways to address this perceived equity issue.
Corridor travel impacts. Because HOT/C lanes customers, when they use their accumulated credits, will to some degree take space that would otherwise be available for regular carpools or toll-payers, they will have an impact on corridor performance. Decision-makers will need to assess whether the benefits for some outweigh the adverse impacts for others, including toll-payers who will be confronted with the higher toll rates needed to balance scarce supply with the demand.
Use of revenues. Because a meaningful HOT/C lanes credit means forgone revenue, there will be less revenue available to fund other purposes, such as paying for bonds to build the HOT lanes, other corridor capital improvements, or improved transit service on the corridor. This represents a challenging policy decision, because it requires balancing different sets of values, such as equity, that are difficult to quantify.

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1. INTRODUCTION

1.1 Background of the FAIR Lanes Concept

The basic concept of FAIR lanes is to provide eligible users of the general purpose (GP) lanes with a “credit” each time they use the GP lane during peak periods. The original concept is outlined in an article by Patrick DeCorla-Souza in a series of articles and papers. As described by DeCorla-Souza (2000) in an article in the ITS Quarterly¹ the FAIR lanes concept attempts to maximize priced lane throughput, speed, safety, driving comfort and revenue by allocating two lanes to “fast” lane use, one or both of which would be taken from GP use. To compensate those currently using the GP lanes for the lane “take away,” credits would be given to all GP lane users with transponders for each use during peak periods; these credits would be redeemable toward paying the toll on the “fast” or HOT lanes, or potentially for other transportation purposes. The proposal subsequently evolved to also provide for “toll and transit fare credits or refunds for low income commuters to address equity impacts and reduce the incentive for them to divert to an alternative free route.”² All high-occupancy vehicles (HOVs) would be able to use the HOT lanes without paying a toll.

In August 2001 the ENO Transportation Foundation conducted focus groups in New York City to test commuters’ response to the FAIR lanes concept, as well as HOT lanes. The focus group participants were solo-driver commuters from the outer boroughs of New York City into Manhattan (clearly, a very different context from the corridors that are the subject of this present study). The majority indicated overall support for FAIR lanes, also described in this setting as “Fast Lanes,” in which HOVs would ride for free and low-occupancy vehicles paid a toll. However, the solo drivers indicated that, unless there are unusually pressing needs, they would normally ride the free lanes to avoid the toll. Although the participants understood credits in terms of accumulation, several participants had difficulty understanding that the credits were compensation for the conversion of an existing free regular lane into a fast HOV alternative. After having the concept explained in detail and being told that their credit would be equivalent to 25 percent of the toll at the time they are traveling, the participants’ reaction was “generally positive.” Thus, for the clear majority who would ride the free lanes on a normal basis, the credits were regarded as “getting something for nothing.”³

1.2 Focus of I-580 and I-680 Study

This study modifies the FAIR Lanes concept in three significant ways:

There is no GP lane “take away” involved, for reasons described below.
Examines use of the credits only for paying tolls on the HOT lanes, because that is considered by far the most likely use by commuters in these suburban corridors. The project task force made a judgment at the outset that there is no practical or foreseeable opportunity to establish a program of parking charges, neither at park-and-ride lots nor for taxi/limousine in the corridor. The team also determined that using the credits for transit fares in corridors without any realistic opportunity for robust transit service, while theoretically possible, would result in negligible behavioral change and impacts on the corridor and would be impossible to capture in the travel and economic modeling.
Considers two definitions of GP lane users eligible for credits: all users and low-income users only. The low-income definition is meant to specifically target and address the socioeconomic equity concerns that are often raised in HOT lane discussions. In this study the alternatives with eligibility based on low-income only are termed “Limited Eligibility and apply the definition of low-income used by the Metropolitan Transportation Commission (MTC), i.e., 200 percent of the U.S. government’s official poverty index. The alternatives with eligibility for all users are termed “100 Percent Eligibility.”

I-580 corridor study limits are Greenville Road/Altamont Pass Road to the east and the I580/I-680 junction to the west. The facility has four GP lanes in each direction separated by a median. The length of the I-580 corridor is approximately 12-13 miles. Based on current freeway widening plans, this study assumes that I-580, at the time of implementation of potential HOT lanes, will consist of four general purpose (GP) lanes and one HOT lane in each direction.
I-680 corridor study limits are Route 237 (Santa Clara County) to the south and Route 84 (Alameda County) to the north. It is a six-lane facility with three GP lanes in each direction. Currently, there is one interim, non-standard high-occupancy vehicle (HOV) lane in the southbound direction. The corridor is approximately 14 miles long. Based on current freeway widening plans, this study assumes that I-680, at the time of implementation of potential HOT lanes, will consist of three general purpose lanes and one HOT lane in each direction.

This study analyzes key aspects of the HOT/C lanes concept including: toll revenues, impact on vehicle volumes and speeds, travel forecasting, freeway operations, and public opinion.

The study reviews and compares 14 policy scenarios in all. These scenarios meet the purposes of the study and the screening criteria. The scenarios include the following categories:

Conventional high-occupancy-vehicle (HOV) lanes, with no tolling and no HOT/C credits.
Conventional high-occupancy-toll (HOT) lanes, with free passage for HOVs, tolling for non-HOVs, but no HOT/C credits.
HOT lanes with HOT/C credits for low-income users only (Limited Eligibility).
HOT Lanes with HOT/C credits to all users regardless of income (100 Percent Eligibility).

Furthermore, the study further explores variations of these scenarios in order to test the sensitivity to different factors. These factors include different carpool eligibility policies, different horizon years, and variable crediting rates for HOT/C-eligible vehicles.

The chapters that follow first place the study in its physical and policy context, and then proceed to analyze systematically these various scenarios. The study is the first comprehensive application of the HOT/C adaptation of the FAIR lanes concept as a potential way to address one aspect of the equity concerns often raised in connection with HOT lanes proposals. The equity issue is only one challenge faced by value pricing or road pricing proposals: a survey of the value pricing “state-ofthe-art” appears as Appendix A of this report.

While this study includes analysis of both the low-income (Limited Eligibility) and the all-users (100 Percent Eligibility) HOT/C lanes crediting schemes, the analysis is more detailed for the Limited Eligibility options. This focus is a result of the deliberate and considered judgment of the project study task force, which concluded that the low-income scheme (Limited Eligibility) has a far greater likelihood of being implemented by the policy-makers in this region than does an all-users scheme. The political unacceptability of the 100 Percent Eligibility scheme, arising from concerns about both income equity and about excessive loss of revenue, led to this conclusion.

Finally, the study task force also concluded that the prospect of converting existing free lanes into priced lanes on these corridors is remote that it would not merit consideration. Both of these freeway corridors lack convenient, parallel route alternatives. Furthermore, local and state elected officials have indicated strong opposition to any pricing or “take away” of existing free facilities.

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2. EXISTING CONDITIONS

This section describes the physical and operational characteristics of the Interstate 580 (I-580) and Interstate 680 (I-680) corridors. This summary of existing conditions relies on currently available data.

2.1 Physical Characteristics

Interstate 580

The study limits for I-580 are Greenville Road/Altamont Pass Road to the east and the I-580/I-680 junction to the west. The facility has four GP lanes in each direction separated by a median. The median varies in width between 36 and 42 feet.⁴ BART operates along I-580 in the median and terminates at the Dublin-Pleasanton BART station at the west end of the I-580 study area.

The length of the I-580 corridor between I-680 and Greenville Road is approximately 12 miles. This section is contained entirely within Alameda County.

Figure 1

Project Location (map)

Interstate 680

The study limits in the I-680 corridor are Route 237 (Santa Clara County) and Route 84 (Alameda County). It is a six-lane facility with three GP lanes in each direction. Currently, there is one interim, non-standard HOV lane in the southbound direction. This lane opened in December 2002 and the plan is to have it completed to full freeway standards by 2008. The corridor is approximately 14 miles long. Approximately 80 percent of this section is located in Alameda County and the remainder in Santa Clara County.

The size of medians, the design of overcrossings and the placement of columns within the medians varies throughout the corridor. The northbound and southbound directions of the roadway have different elevations in almost half of the corridor.⁵

2.2 Operational Characteristics

Peak Hour and Daily Traffic Volumes

The California Department of Transportation (Caltrans) provided mainline and ramp 24-hour count data for both corridors. Most of the data was collected in 2003 and reflects all days of the week. To summarize the data, the most recent weekday counts were used. Generally, the most recent data was counted between May and October, which is typically when the highest counts are collected. For each hour, the highest value was identified. From these numbers, the highest morning value (midnight to noon) value and the highest evening value (noon to midnight) were identified as the AM and PM peak hours.

Interstate 580

Figures 2 and 3 show weekday eastbound and westbound daily mainline volumes for I-580. Both figures show distinct peak levels of activity. In the westbound direction, the peak occurs in the morning indicating most jobs are west of this corridor. In the eastbound direction, peak traffic occurs in the afternoon. Both figures show smaller peaks in the reverse commute direction.

Congestion in this corridor has consistently increased over time. In 2001, the segment of eastbound I-580 between Hopyard Road and El Charro Road was the fifth most congested freeway in the Bay Area in the afternoon; it was ranked 13^th in 2000. Today it is the third most congested freeway in the Bay Area in the PM.^6,7

Interstate 680

Figures 4 and 5 show daily weekday northbound and southbound daily mainline volumes for I-680. Both figures show a large peak and a small peak. In the northbound direction, the large peak occurs in the afternoon with a smaller peak in the morning. The large peak occurs in the morning in the southbound direction. Therefore, the peak commute direction is towards jobs in Santa Clara County and southern Alameda County. These figures also indicate that although there is a predominant commute direction southbound (AM peak period) and northbound (PM peak period). The northbound AM and southbound PM reverse commute is also significant. These volumes include both GP and HOV lane traffic volumes.

The southbound segment of I-680 between Sunol Road and Route 262 also has consistently placed in the “top 10” of the locations with the worst congestion in the Bay Area. However, over the past few years, its position has improved, possibly due to a reduction in traffic due to the economic downturn.

In 2000, the segment was ranked second. In 2001, it improved to third, and in 2002 it was ranked eighth.

Caltrans also collects information on the usage of HOV lane versus GP lanes. For the I-680 southbound lane (between Route 84 and Route 237) during the AM peak hour, seven percent of all vehicles used the HOV lane and 11 percent of all persons traveling southbound in the corridor used the HOV lane.⁸

Prior to the introduction of the HOV lane, there were rapid increases in delays on I-680 due to high peak period travel demand, especially between 1990 and 2001. Since then, the slow economy has resulted in reduced travel times and congestion levels.

Figure 2

Weekday traffic - I-580 Westbound (line graph)

Figure 3

Weeday traffic - I-580 Eastbound (line graph)

Figure 4

Weekday traffic - I-680 Southbound (line graph)

Figure 5

Weekday traffic - I-680 Northbound (line graph)

Table 1 summarizes average daily traffic (ADT) volumes data for each facility.

Table 1
Average Daily Traffic

Location	Date	ADT
*I-580*
Eastbound
Livermore – Greenville Road	July 2002	77,700
Jct Rte 84	July 2002	92,600
Westbound
Livermore – Greenville Road	July 2002	64,300
Jct Rte 84	July 2002	91,200
Both Directions
Livermore – Greenville Road		142,000
Jct Rte 84		183,800
*I-680*
Northbound
East Warren/Scott Creek	July 2002	78,400
Fremont Jct Rte 238 North	August 2003	77,200
Santa Clara/Alameda Co Line	August 2000	82,000
Southbound
East Warren/Scott Creek	July 2002	109,500
Fremont Jct Rte 238 North	July 2003	97,100
Sheridan Road I/C	January 2004	75,400
Both Directions
East Warren/Scott Creek		187,900
Fremont Jct Rte 238 North		174,300
Sheridan Road I/C		157,400

Source: Caltrans District 4 Highway Operations, Traffic Volumes Counts.

Traffic volumes in these corridors have risen steadily over time. Table 2 shows the increase in average daily traffic volumes (ADT) since 1994.

Table 2
Historical Change in Average Daily Traffic Volumes

Location	1994 ADT	Current ADT	Annual Increase	Overall Increase
*I-580*
Livermore – Greenville Road	102,000	142,000	3%	28%
Jct Rte 84	126,000	183,800	4%	31%

I-680
East Warren/Scott Creek	114,000	187,900	5%	39%
Fremont Jct Rte 238 North	109,000	174,300	5%	37%
Sheridan Rd I/C	109,000	157,400	4%	31%

Source: Caltrans District 4 Highway Operations, Traffic Volumes Counts (2000-2004).
“1994 Traffic Volumes on California State Highways,” Caltrans Division of Traffic Operations.

Figures 6, 7, 8 and 9 show peak hour ramp volumes for each facility.

Figure 6

Peak hour volumes by ramp - Eastbound I-580

Figure 7

Peak hour volumes by ramp - Westbound I-680

Figure 8

Peak hour volumes by ramp - Southbound I-680

Figure 9

Peak hour volumes by ramp - Northbound I-680

Traffic Operations

Caltrans monitors freeway conditions by collecting data on the magnitude, extent and duration of congestion. To characterize typical weekday conditions, speed and travel time data were collected using “floating car” runs. Caltrans District 4 summarized conditions for several representative locations on I-580 and I-680 in the Year 2002 Bay Area Freeway Congestion Data report. During the AM peak hour, vehicles on westbound I-580 between Vasco Road and Airway Boulevard experienced 3,910 vehicle hours of delay and the congestion lasted for more than three hours (6:15AM – 9:30AM). At El Charro Road vehicles experienced 250 hours of delay, and congestion lasted between 6:45AM and 9:15AM.

Table 3 summarizes congestion delay and duration data.

Table 3
Year 2002 Congestion Delay and Duration

Facility	Direction	Location	Delay (vehicle hours)	Duration
AM Peak Hour
I-580	WB	Vasco Road to Airway Boulevard	3,910	6:15 – 9:30AM (3 hrs, 15 mins)
I-580	WB	At El Charro Road	350	6:45 – 9:15AM (2 hrs, 30 mins)
I-680	SB	Sunol Road to Route 262	3,600	5:55 – 10:45AM (4 hrs, 50 mins)
PM Peak Hour
I-580	EB	At Route 84	260	3:35 – 7:05PM (3 hrs, 30 mins)
I-580	EB	Hopyard Road to w/o of El Charro Road	7,040	2:55 – 6:40PM (3 hrs, 45 mins)
I-680	NB	At Scott Creek Road and At Route 262 to Washington	660	3:15 – 6:15PM (3 hours)
I-680	NB	Calaveras Road to Scott Creek Road	810	4:00 – 6:00PM (2 hours)

Source: Information Memorandum: Year 2002 Bay Area Freeway Congestion Data, Caltrans District 4, Office of Highway Operations.

Caltrans ranks locations based on delay where there is continuous stop and go conditions. Eastbound I-580 between Hopyard Road and west of El Charro Road during the PM peak hour was ranked number three based on the duration of total delay. Southbound I-680 (AM peak hour) between Sunol Road to south of Route 262 was ranked number eight.

Table 4 summarizes the results of “floating car” runs for I-580 and I-680, representing typical conditions. Each speed profile shows variations in speeds by location for a typical run. It also summarizes, over several runs, travel times for the entire corridor. The travel times and average speeds shown in the table represent conditions with typical levels of congestion as well as conditions with no congestion.

Table 4 shows that travel times when conditions are the most congested are at least twice as long as under free-flow conditions for both I-580 and I-680. Correspondingly, average speeds under congested conditions are about half as fast under free-flow conditions. Close inspection of the speed profiles shows where the variations in speeds occur within each corridor. In the AM peak hour on westbound I-580, speeds begin to decrease east of Greenville Road, dropping to below 10 mph between Vasco Road and Route 84. Speeds continue to stay low until Airway Boulevard. At this point, speeds begin to increase, resulting in free flow conditions through the end of the study area at I-680.

Table 4
Corridor Travel Times and Average Speeds

Highway	Direction	Peak Hour	Travel Time Congested (Free Flow) (minutes)	Avg. Speed Congested (mph)
I-580	EB	PM	42.5 (18.9)	29
I-580	WB	AM	40 (18.7)	30
I-680	NB	PM	37 (19.6)	35
I-680	SB	AM	42 (19.4)	30

Source: Caltrans District 4, Highway Operations, fax from R. Kyutoku, March 28, 2004.

Notes: I-580 speed and travel time data was collected between N. Flynn Road and I-680. I-680 data was

collected between Bernal Avenue and Capitol Avenue.

Conditions were considered to be free-flow when average speeds were about 65 mph.

In the eastbound direction during the PM peak hour, speeds decrease briefly east of the I-680 interchange. Speeds then increase but decrease sharply at the Hopyard Road interchange, resulting in stop-and-go conditions. After the Tassajara Road interchange, speeds begin to increase again, continuing until the Livermore Avenue interchange. Speeds decrease as traffic approaches the Route 84 interchange.

On southbound I-680 during the AM peak hour, conditions are generally free flowing or only slightly impeded south of Bernal Avenue until Andrade Road. At this point, speeds decrease and traffic flow becomes unstable. Large variations in speeds, sometimes dropping below 10 mph, continue until Mission Boulevard/Route 262. Traffic flow becomes free-flowing after this point, continuing through the end of the corridor.

In the PM peak hour on northbound I-680, speeds begin to become unstable north of Scott Creek Road where there is a lot of variation. Although traffic flow remains free flowing after Mission Boulevard/Route 262, speeds drop north and south of the truck scales between Sheridan Road and Andrade Road. Speeds then climb back to allow free flow conditions.

The segment between Scott Creek Road and Capitol Expressway was also surveyed in the non-predominant direction during the peak hours (this segment extends beyond the study area). During the PM peak hour in the northbound direction, the speed profile shows speeds fluctuating between 0 and 30 mph between Scott Creek Road and Calaveras Boulevard/Route 237.

Truck Percentage

Caltrans compiles the percentage of trucks on California highways.⁹ For I-580 within the study area, the average percentage of trucks on a daily basis was ten percent. For I-680, it was seven percent.

Vehicle Occupancy and Vehicle Classification

Caltrans compiles information on vehicle occupancy for facilities with existing HOV lanes only. Therefore, only data on vehicle occupancy is available for I-680.

Table 5 shows vehicle occupancy and classification data for I-680.

Table 5
I-680 (Southbound AM) Vehicle Occupancy and Classification

	Peak Period (4)		Peak Hour
	6:00 to 9:00 AM		7:00 to 8:00 AM
	HOV Lane	GP Lanes	HOV Lane	GP Lane
Vehicles
Motorcycles	57	189	23	2
Buses	0	21	0	8
Carpools (1)	989	856	371	495
Vanpools	4	0	1	0
Single Occ. (2)	-	15,040	-	5,323
Violators	48	-	25	-
TOTAL	1,098	15,936	420	5,828

Persons
Motorcycles	57	19	23	2
Buses	0	735	0	280
Carpools (1)	2,008	1,764	764	1,018
Vanpools	40	0	10	0
Single Occ. (2)	-	15,040	-	5,323
Violators	48	-	25	-
TOTAL	2,153	17,558	822	6,623

Rates
HOV Lane Occupancy Rate	2.0 persons/veh		2.0 persons/veh
GP Lane Occupancy Rate	1.1 persons/veh		1.1 persons/veh
Overall Occupancy (incl. Buses)	1.2 persons/veh		1.2 persons/veh
Violation Rate (HOV Lane) (3)	4.4%		6.0%

Source: “HOV Lanes in the Bay Area,” Caltrans District 4, 2002.

Notes:

Two or more persons per vehicle.
General purpose lanes only.
Violation rate =
no. of violators in HOV lane x 100%
Total no. of vehicles in HOV lane
HOV lane in operation from 5:00 to 9:00AM
Observations conducted 12/05/02 at Washington Boulevard I/C

2.3 Travel Patterns

Interstate 580

In 2000, the San Joaquin Council of Governments (SJCOG) and the San Joaquin Partnership sponsored a study to examine commute patterns in the Altamont Pass region. They surveyed drivers traveling westbound over the Altamont Pass via a mail-in survey. Responses were received from 3,950 drivers. Table 6 shows the results of the survey for drivers.

Table 6
Origins and Destinations by County for Drivers

County	Percent
Trip Origins
San Joaquin	71
Stanislaus	23
Contra Costa	1
Sacramento	1
Other	3

Trip Destinations
Alameda	60
Santa Clara	21
Contra Costa	8
San Mateo	3
San Francisco	3
Other	5

Source: “Altamont Pass Commuter Survey,” San Joaquin Partnership & San Joaquin Council of Governments, October 2000.

Table 7 provides additional information on destination by city.

Table 7
San Joaquin I-580 Destinations, AM Peak Period, Westbound Drivers

City	Percent
Livermore	16.1
Pleasanton	14.0
San Jose	9.7
Fremont	6.9
Hayward	5.8
Oakland	5.2
San Ramon	5.0
Dublin	4.0
Berkeley	3.6
San Francisco	3.4
Santa Clara	3.3
San Leandro	2.7
Emeryville	2.6
Milpitas	2.4
Sunnyvale	2.1
Mountain View	1.4
Palo Alto	1.3
Newark	1.1
Union City	1.0
Walnut Creek	0.9
Redwood City	0.8

Source: “Altamont Pass Commuter Survey,” San Joaquin Partnership and San Joaquin Council of Governments, October 2000.

Interstate 680

Travel in the I-680 corridor is oriented towards jobs in southern Alameda County and Santa Clara County.¹⁰ To find affordable housing, many of these workers reside in southern and eastern Contra Costa County, eastern Alameda County and the San Joaquin Valley. The only major route linking jobs in Silicon Valley with the housing in these areas is the I-680 corridor.

2.4 Transit

Livermore Amador Valley Transit Authority (LAVTA)

This agency operates fixed route, express service and shuttle service in the Tri-Valley area, serving the cities of Dublin, Pleasanton and Livermore. Two bus routes operate on I-580. Route 12X (Livermore Transit Center/Las Positas College/BART) operates express service in both the eastbound and westbound directions during the morning and afternoon via the Dublin-Pleasanton BART station. Route 20X is also connected to the Dublin-Pleasanton BART station. It connects the BART station with Lawrence Livermore National Laboratory. The service operates for about a three-hour period in both the AM and PM peak periods (6:00AM to 9:00AM, 3:00PM to 6:00PM). There are five runs in the morning and six runs in the evening.

Santa Clara Valley Transportation Authority (VTA)

VTA operates four routes that operate on I-680 in southern Alameda County and northern Santa Clara County. All of the routes terminate at the Fremont BART station. Route 180 (Fremont BART – San Jose/Diridon Station) operates seven days a week with half-hour headways in both directions. Two of the routes, Route 520 (Fremont BART-Lockheed Martin/Moffett Park) and Route 140 (Fremont BART-Sunnyvale Caltrain), offer peak hour directional service of six and ten trips a day, respectively. The fourth route (Route 141) offers only weekend and holiday service between Fremont BART and Great America. All of these routes are considered express service.

The County Connection

This transit agency serves central Contra Costa County including the San Ramon Valley. Four of its bus routes serve the Dublin-Pleasanton BART station. To get to the station, these routes use I-580 between I-680 and the Hacienda Boulevard interchange.

Altamont Commuter Express (ACE) Trains

The ACE corridor extends from Stockton in San Joaquin County to San Jose. There are ten stations, including Livermore, Pleasanton and Fremont. There are three morning westbound trains and three afternoon eastbound trains. Average daily ridership in April 2004 was about 1,300 riders. The Livermore station averaged 130 riders and the Pleasanton station averaged 170 riders.¹¹

Bay Area Rapid Transit (BART)

This segment of the I-580 corridor is served by the Dublin-Pleasanton BART station. This station is located south of I-680 at Hacienda Boulevard. There is direct service between this station and Daly City. The rest of the BART system is accessible from this line by transferring to other trains at the Bayfair station. The average weekday volume of exits from the Dublin-Pleasanton station is 5,957 exits.¹²

Table 8 shows the origins of riders boarding at the Dublin-Pleasanton station.

Table 8 Rider Origins – Dublin Pleasanton Station

City	Percent
PLEASANTON	25.8%
LIVERMORE	21.2%
DUBLIN	15.8%
SAN RAMON	15.8%
TRACY	4.9%
DANVILLE	3.1%
MODESTO	2.8%
STOCKTON	2.2%
OTHER (<=0.01%)	1.8%
Unspecified	1.3%
MANTECA	1.1%
BYRON	0.9%
BRENTWOOD	0.6%
DISCOVER	0.5%
CERES	0.4%
OAKDALE	0.4%
WALNUT CREEK	0.3%
SALIDA	0.2%
SUNOL	0.2%
TURLOCK	0.2%
DIAMOND	0.2%
PITTSBURG	0.2%
SAN LORENZO	0.2%
WESTLEY	0.2%

Source: “Patron Survey,” BART, 1998.

For riders boarding at the Dublin-Pleasanton Station, almost 60 percent exit at downtown San Francisco stations. About ten percent of riders exit in downtown Oakland. Another nine percent get off at the other Oakland stations. The remaining 20 percent exit throughout the BART system.¹³

Back to Table of Contents

3. ALTERNATIVES DEFINITION

This chapter defines the range of potential alternatives for the study. It consists of four sections: (1) Discussion of alternative compensation schemes; (2) uniform characteristics for all alternatives; (3) variable features (major features which will have variations distinct enough to constitute separate consideration and separate travel forecasting runs); and (4) the rationale for selection of alternatives to analyze.

3.1 Alternative Compensation Schemes

The basic notion underlying HOT/C lanes is that revenue from a HOT lane facility could be used to subsidize the travel of those who do not benefit directly from the HOT lane itself. In offering such compensation, the aim is to address the public perception that HOT lanes benefit only travelers who can afford the access. In so doing, the political feasibility of the HOT lane project may be improved. Although a new HOT lane, in fact, benefits all corridor users by increasing capacity and reducing travel times, the perception that HOT lanes are luxury or "Lexus lanes" that selectively benefit the affluent is not uncommon. This is particularly important in places like the Bay Area where the new lanes proposed for I-680 are being paid for by general highway funds, rather than dedication of HOT lane revenues.

There are several ways in which such compensatory cross-subsidies could be implemented. Those remaining in the general purpose lanes could earn: (1) unrestricted cash credits, useable for any purpose; (2) credits that are redeemable only for a variety of transportation services in the corridor; or

(3) redeemable only for access to the HOT lane. The unrestricted cash policy makes sense only in the case in which there are no transportation alternatives of value and, in any case, would be extremely difficult to justify to the public and policy-makers. The transportation services policy makes sense only if there are likely to be substantial options to HOT lane that a significant number of travelers can and will use. The third option – redeemable only for HOT lane tolls – is most appropriate for suburban corridors, where park-and-ride parking is free and transit and paratransit options are sparse, due to the highly dispersed patterns of residences and employment centers.

As an empirical matter, the subsidization of the HOT lane trip is the most practical compensation option to model. This is because the GP lane users are, by definition, drivers before the HOT lane is implemented; hence, the closest substitute for their current means of travel is the HOT lane. Paying the HOT lane toll is the most likely use to be made of any cash credit restricted to transportation services by the corridor user. In contrast, the use of the credits to buy down transit fares is unlikely to be empirically important, because transit use is generally inelastic with respect to the level of fares. Similarly, paratransit services, such as taxi or limousine service, also are unlikely to be viewed as a substitute because the out of pocket costs of such service are very high relative to the level of compensation available from the HOT/C policy. This severely limits the influence that the HOT/C subsidies would have on the use of such services, and the impact of such policies will be difficult to detect in a modeling or real-world context.

This logic suggests that the use of HOT/C subsidies to underwrite the tolls for occasional HOT lane trips by GP lane users constitutes a best-case HOT/C policy, from the standpoint of both the fairness and effectiveness of the HOT/C compensation policy. Therefore, on these corridors in the Bay Area policy context, the assumption that credits earned by HOT/C lane users would subsidize HOT lane access is employed in this study.

3.2 Uniform Characteristics for all Alternatives

Because the specific focus of the study is primarily to address equity issues, particularly as they pertain to lower-income corridor users, the focus is on comparing alternatives is on the economic features -- who receive the “credits,” in what form, in what carpool policy context and how much. That requires a consistent “base case” in which other potential variables are held constant. For the purposes of this study, the analysis findings and recommendations arising from the Interstate 680 Variable Pricing Feasibility Study, completed in 2003, were used to inform the base case. That proposal, which has been adopted and is being implemented by the Alameda County Congestion Management Agency (ACCMA) and other local entities, is presumed to be the basic model for both I680 and I-580 HOT lanes. Uniform assumptions and parameters include that apply to this study:

The corridor segments for I-680 (approximately 14 miles) is deemed to consist of three GP lanes and one HOV/HOT lane in each direction, and I-580 (approximately 12-13 miles, east and westbound directions respectively) was deemed to consist of four GP lanes and one HOV/HOT lane in each direction. These configurations are consistent with current plans to expand the freeways, and implementation of HOT lanes is contingent upon these improvements. The hours/days of week for HOT lane operation of the designated lanes are the same for all alternatives studied.
The lane separation treatment would be solid striping, consisting of two sets of yellow lines with a buffer of between two and four feet apart.
Ingress/egress to the HOT lanes on the I-580 and I-680 corridors would be limited to certain locations and designated by breaks in the solid yellow striping and by signage. Vehicles could enter or exit the HOV/HOT lanes only at designated locations, in both cases at the beginning and end of the HOT lane and at intermediate access locations along the corridor. Access locations were dictated by factors such as traffic demand, distance from key interchanges, and operational and safety considerations. For I-580, intermediate access/egress locations would be at Vasco Road, Isabel Avenue, and Tassajara/Santa Rita Road; for I-680 the intermediate access/egress location would be at Auto Mall Parkway (see Appendix B for a more detailed explanation).
Electronic toll collection would use the Bay Area’s existing FasTrak transponders and administrative systems. Application and eligibility for HOT/C lanes credits would also be linked to transponder accounts administration. The toll pricing would be variable in order to maintain free-flow traffic conditions on the HOT lanes. Tolls would be adjusted periodically or “dynamically” (immediately to reflect actual, current traffic conditions) to assure that traffic equilibrium is maintained in the HOT lane.
Enforcement would be accomplished by enhanced California Highway Patrol (CHP) surveillance and potential new enforcement technologies, including the technologies now being tested on a Minnesota I-394 HOT lane in the Minneapolis region. These technologies would permit a mobile CHP unit to randomly check whether a mobile vehicle in the HOT lane had recently paid a toll.
Two horizon years available in the MTC model - 2000 and 2025 - were used for travel demand modeling and economic forecasting purposes.
Crediting rates are the amount of credit received by an eligible vehicle when using the GP lanes. Several different crediting rates are considered in order to maintain high service levels on the HOT lanes and assure that they would not be overwhelmed by vehicles using their credits on the HOT lane. The crediting rates that were analyzed range from 1-in-3 (i.e., two rides in GP lanes provide credit for one free trip on the HOT lane) as the most generous, up to 1-in-51 (50 rides in GP lanes provide credit for one free trip on HOT lane) as the least generous. The user must own and use a valid account and transponder to receive the credit.
The time of day for HOT/C lanes credit would be the peak periods in the morning and afternoon in both directions.
Two alternative carpool policies are modeled in the study, namely 2+ and 3+ definitions of carpools. The current policy on most HOV lanes in the region is 2+ are eligible; however, because the study includes analysis of the long-term future (horizon year 2025), the possibility of eventually moving to the 3+ policy is also considered.
MTC’s definition of “low-income households,” 200 percent of the federal poverty level, was adopted.
As points of comparison, conventional HOV lanes (no tolling, no HOT/C policy) and conventional HOT lanes (no HOT/C policy) were also modeled.

A simple low-income toll discount alternative (i.e., low-income users would pay a lower toll than other users, but there would be no crediting for their use of GP lanes) was briefly considered but discarded, because this alternative was deemed to be outside the scope of the study. Nevertheless, such an alternative may be considered at a later date as a different way to deal with the income equity issue. It is presumed that the low-income toll discount scheme, similar to all of the FAIR lane alternatives (both Limited Eligibility and 100 Percent Eligibility), would have impacts in proportion to the magnitude of the subsidy, because the discount would increase the number of HOT lane users paying a discounted toll. The impacts would be felt in both the revenues and in the performance of the HOT lanes and the GP lanes. One alternative that was also briefly considered but screened out early in the study was tolling the entire I-580 and I-680 corridors, i.e., turning them into complete toll roads on all lanes. This alternative was eliminated due to a lack of adequate, alternate parallel routes in the corridors and the presumed political infeasibility of converting a traditional freeway (with no alternative routes) into a toll road. It is highly unlikely that decision-makers and the public would find this acceptable.

3.3 Variable Features

Variable features for the study include the following.

Amount of the credit. The amount of credit for each use could be a flat amount per trip varying by time of day, or a percentage of the toll at any given time (e.g., if the toll is $3.00 and the crediting rate is 20 percent, then the credit is $0.60). For the sake of streamlining the analysis, the percentage methodology is used. There are several iterations of toll levels, and the most consistent way to test the impact of different tolls is to hold constant the relationship of the credit to the toll. The testing of crediting rates ranges from a modest level to a significant one.
Eligibility for credit. The crediting system considered two different scenarios of who would be eligible for HOT/C Lane credits: (1) only low-income users (defined as 200 percent of federal poverty level income), known as the Limited Eligibility scenarios; (2) all GP lane users, namely 100 percent of those using the GP lanes and who have transponders, known as the 100 Percent Eligibility scenarios. This is a complex and critical variable, because it affects demand and usage on both GP and HOT. For alternatives where only low-income I580 and I-680 corridor users are selected as the sole recipients of FAIR credits, these credits, or subsidies, would be provided to users of the GP lanes of a freeway that also contains a HOT lane. The credits would be accumulated by the GP lane user, recorded through electronic toll collection equipment, and be useable toward the toll on the HOT lane. For example, if the crediting ratio were 2:1, an eligible GP lane user would earn a “free” trip on the HOT lane by taking two trips on the GP lanes; if the crediting ratio were 10:1, an eligible GP lane user would earn a “free” trip by taking ten trips on the GP lane. Several other crediting rates are used for comparative purposes.
Carpool Policy. Two carpool policies, HOV 2+ and HOV 3+, are studied in conjunction with the above HOT/C credit rates and eligibility criteria.
Horizon Years. To be consistent with MTC modeling capabilities, the years 2000 and 2025 are the horizon years for this study.

3.4 Selection of Alternatives

The objective of selecting alternatives to study is to devise a series of roughly comparable alternatives that meet the primary objective of the study in examining a toll-crediting system as a potential solution to a perceived equity problem. The alternatives need to capture the variables described above and be distinct enough from one another to yield meaningful results to test the HOT/C lanes concept.

The 14 policy scenarios that meet the specific purposes of the study and are comparable in terms of travel and economic forecasting and operational analysis include the following:

Conventional HOV Alternatives

Scenario A: HOV 2+ carpool policy, no tolling, and no HOT/C credits granted,
Scenario B: HOV 3+ carpool policy, no tolling, and no HOT/C credits granted

Scenarios A and B provide a base case of a conventional HOV lane for which there is no tolling whatsoever and therefore no economic equity issue arising from tolling. It provides a point of comparison for measures such as vehicle speeds and volumes. It, of course, provides no revenues.

Limited Eligibility HOT/C Alternatives (low-income users only)

Scenario C: HOV 2+ carpool policy, tolling of SOVs, and low-income SOVs qualify for HOT/C credits at a 1 in 3 trips rate.
Scenario D: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and low-income SOVs and HOV 2s qualify for HOT/C credits at a 1 in 3 trips rate.
Scenario E: HOV 2+ carpool policy, tolling of SOVs, and low-income SOVs qualify for HOT/C credits at a 1 in 11 trips rate.
Scenario F: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and low-income SOVs and HOV 2s qualify for HOT/C credits at a 1 in 11 trips rate.

Scenarios C through F examine the impacts of the HOT/C lanes policy. They compare widely varying crediting rates. They also test the impact of 2+ and 3+ carpool policies. These scenarios are the most relevant to the concept of “fairness” as defined by providing a special benefit to low-income corridor users.

100 Percent Eligibility HOT/C Alternatives (all-user eligible, regardless of income)

Scenario G: HOV 2+ carpool policy, tolling of SOVs, and 100% HOT/C credit eligibility at a 1 in 11 trip rate.
Scenario H: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and 100% HOT/C credit eligibility at a 1 in 11 trip rate.
Scenario I: HOV 2+ carpool policy, tolling of SOVs, and 100% HOT/C credit eligibility at a 1 in 26 trip rate.
Scenario J: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and 100% HOT/C credit eligibility at a 1 in 26 trip rate.
Scenario K: HOV 2+ carpool policy, tolling of SOVs, and 100% HOT/C credit eligibility at a 1 in 51 trip rate.
Scenario L: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and 100% HOT/C credit eligibility at a 1 in 51 trip rate.

Scenarios G through L examine the impact of providing a credit to all GP lane users who have a transponder. Drivers are rewarded for using the GP lane and enduring the congestion by allowing them to accumulate credits useable to pay their toll. It does not target low-income users, but instead seeks to make the HOT lane concept more attractive to all corridor users and therefore potentially more acceptable to the general public, because they would always receive a benefit. However, in order to assure free-flow conditions on the HOT lane, the crediting rates are expected to be very low, so the credit may be viewed by many users as almost negligible.

Conventional HOT Lane Alternatives

Scenario M: HOV 2+ carpool policy, tolling of SOVs and no HOT/C credits.
Scenario N: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and no HOT/C credits.

Scenarios M and N represent “pure” HOT lanes and also provide a point of comparison. They provide a “zero credit” to GP lane users of any income and represent the pure HOT lane. They are useful in terms of comparing revenue generation as well as traffic conditions.

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4. PUBLIC ACCEPTANCE OF HOT CREDIT LANES AND VALUE-PRICED LANES AS AN EQUITY SOLUTION

“Equity” in the transportation pricing context generally refers to distribution of impacts (benefits and costs) and the degree to which this distribution is considered fair and appropriate. For this study, transportation equity impacts fall into the following two categories.

“Horizontal equity (also called fairness and egalitarianism¹⁴) is concerned with the distribution of impacts between individuals and groups considered equal in ability and need. According to this definition, equal individuals and groups should receive equal shares of resources, bear equal costs, and in other ways be treated the same” (Litman, 2005).
Vertical equity (also called social justice, environmental justice¹⁵ and social inclusion) with regard to income is concerned with the distribution of impacts between individuals and groups that differ in abilities and needs, in this case, by income or social class. According to this definition, transport policies are equitable if they favor economically and socially disadvantaged groups, therefore compensating for overall inequities (Litman, 2005).

Horizontal equity often requires that users bear the full costs of their transport facilities and services, but vertical equity often requires subsidies for disadvantaged people. Therefore, transportation planning often involves making tradeoffs between different types of equity.

Horizontal equity requires that people pay, as much as possible, the costs imposed by their travel activities. Pricing reforms such as road pricing, distance based fees, and fuel tax increases can increase equity by charging according to use, taking into account factors such as vehicle type, time and location.

In order to assess public and stakeholder attitudes towards both the FAIR lanes concept and value-priced HOT lanes, the study team conducted two focus groups with frequent users of I-580 and I-680 and a public opinion survey of residents in Alameda County and the surrounding communities.

4.1 Focus Groups

On August 24, 2004 two focus groups were conducted in Dublin, California. Participants in the groups consisted of Alameda and Contra Costa County residents, as well as residents from the towns of Castro Valley, Dublin, Hayward, Livermore, Pleasanton and San Ramon. All participants were I580 and I-680 users, and they were screened during the recruiting process to ensure as much diversity in income level and commute patterns as possible. The first group consisted of ten female participants, and the second group consisted of ten male participants. The groups were professionally moderated. The Focus Group Moderator’s Guide is Appendix C.

Focus groups are qualitative research, not quantitative. To this end, focus groups explore how people talk and think about a specific topic and what is important to them, rather than measuring levels of support for particular points of view or positions. Votes taken within a focus group are not statistically valid, and they may not be representative of the population at large.

Summary

The focus groups for the study were designed to further explore and build upon the findings from focus groups that had been conducted for the ACCMA in July of 2003 on the subject of HOT lanes. Those earlier focus groups explored attitudes towards HOT lanes on I-680 over the Sunol Grade and found that participants were generally uncomfortable with the HOT lane concept as presented in those focus groups. In particular, participants were disinclined to accept the congestion relief benefits of HOT lanes and concerned about implementation issues. On a more promising note, participants in these groups expressed strong support for carpooling and carpool lanes and were most likely to support the HOT lane approach because it would finance construction of the northbound carpool lane over Sunol Grade. However, as noted below, the public opinion survey indicated strong support for HOT lanes, but a substantial reduction in support when the HOT/C lanes component is added.

Using those findings as a starting point, the focus groups were designed to present HOT lanes in the context of completing the regional carpool lane network, and to then further test support for the HOT/C lanes concept as a means to address fairness concerns. It should also be noted that the terminology used to describe the concept was modified and labeled as “Smart Carpool Lanes” to be consistent with the revised and publicly-known name of the ongoing I-680 HOT lanes implementation project.

The HOT lanes were described as HOV lanes which single-occupant vehicles (SOVs) could use in exchange for paying a fee, and that the fee would be collected by electronic transponders such as those in use for the region’s bridges. There would be striped separation between the HOV lanes and the rest of the freeway. The revenues that would be collected would be used to expand the region’s HOV lane network and regional express bus service.

In contrast to the 2003 focus groups, the 2004 participants were generally supportive of the Regional Smart Carpool Lane proposal, a full network of interconnected carpool lanes spanning the region. In the context of an ambitious effort to complete the regional carpool lane network, participants accepted HOT lanes as a fair and reasonable way to pay for completion of the network, strongly suggesting that while Bay Area residents may not be ready to accept HOT lanes primarily as a congestion relief strategy in and of themselves, they are ready to accept them as a means to pay for transportation improvements that they want. The Limited Eligibility HOT/C lanes concept, providing benefits to low-income users, was less popular than was the simple HOT lane with no HOT/C credits. While some participants continued to raise fairness concerns about the Regional Smart Carpool Lane proposal, those concerns do not appear to be equity issues concerned with fairness toward low-income users.

Equity Considerations
Findings

1. Context and presentation are critical.

How HOT lane proposals are framed has an enormous impact on how they are perceived. In the August 2003 focus groups, when HOT lanes were presented as toll roads designed to better utilize carpool lanes, relieve congestion, and give commuters better choices, participants believed that HOT lanes were both unfair (in the sense that rich people could buy their way out of traffic while everyone else was stuck in it) and unworkable. When HOT lanes were presented first as a program to expand carpooling and carpool lanes, with a toll component to pay for the improvements, however, participants were much less concerned about either fairness or implementation issues.

In this context, pricing became largely a non-issue, and perhaps an asset, because participants perceived it as a method to raise money for the completion of the regional carpool lane network. Participants liked the idea that solo drivers paying to drive in the carpool lane could finance the completion of the regional network of carpool lanes, with an emphasis on revenues generated in a given commute corridor being used to fund improvements in that same corridor area. Once the goal was defined as one that was both desirable and believable, participants were also more open to other arguments for HOT lanes, particularly that it would result in improved and expanded bus service and that it would give commuters better choices.

2. Projects, not congestion pricing, are what people support.

As in the earlier groups, residents and commuters by and large do not understand or accept the concepts of marginal pricing or the dramatic impacts that marginal reductions in traffic have on traffic flow. Nonetheless, they supported the proposal because they wanted to see the carpool lane system completed. While congestion pricing and the physics of traffic flow are abstractions that most participants do not grasp, building carpool lanes are a concrete transportation improvement that participants understand, know that they want, and believe will benefit them. Although this contingency was not tested in the focus groups, it is reasonable to expect that support for HOT lanes would be reduced in the event that revenues were to prove insufficient to help pay for expansion of the carpool lane system.

3. Fairness concerns are not necessarily income equity concerns.

Discussions of fairness did not prompt participants to suggest or volunteer anything like the HOT/C lanes concept. Unfairness as an issue is conceptualized not as a problem of poor people being excluded from the HOT lane. Rather, for a few participants, it was articulated as a way for rich people to “buy” their way out of traffic. In other words, participants weren’t concerned that poor people wouldn’t be able to use the lanes, they were concerned that they wouldn’t be able to use the lanes, because they would be too expensive for them. Making special exemptions or creating special programs for the low-income drivers received virtually no support. If poor people were given a credit, then rich people and poor people could use the lane, but the focus group participants still could not. Participants emphatically disliked the idea of classifying people by income, making statements such as “if it wasn’t a class issue before, this would make it one.” Even the lower income participants shared the general dislike for HOT/C lanes solutions and discounted tolls, and were among the strongest supporters of the SMART Lanes concept.

In particular, the women in the groups saw the idea of solo drivers paying to use the carpool lane as an issue of choice and control, not unfairness or discrimination. They saw it as something “I would use,” and felt it could benefit anyone, especially since traffic relief would be a net benefit for everybody. Furthermore, low-income commuters still have access to the carpool lane by carpooling or taking the bus.

4. Smart Lanes must not be seen as a threat to the carpool lane.

The strongest argument made by participants against the Smart Carpool Lanes concept is not, as might be expected, fairness. Rather, it is the idea that solo drivers will bring the carpool lane to a standstill. Both groups had visions of stalled traffic in carpool lanes as virtually every commuter on the freeway attempted to buy their way into a faster commute. Participants did not imagine, or necessarily believe when the concern was addressed, that pricing of the lane could successfully regulate use and ensure free flowing conditions.

Drivers are already enthusiastic about completing the carpool system throughout the region; they do not need to be talked into it. They are also supportive of expanded and improved bus service, (even though they acknowledge that it would have to be significantly faster, more well-connected, and more convenient for the average commuter to start taking the bus). While HOT lanes are perceived as a reasonable way to fund these popular projects, the proposal must also explicitly assure people that doing so will not lead to congestion in the carpool lanes and a reduced incentive to carpool.

5. Completing the regional carpool lane network is a potent way to introduce HOT lanes to the region

The focus group participants’ responses make it clear that the proposal is most attractive if introduced as a carpool lane network, not as a HOT lane network.

6. Efforts to address equity issues should be addressed to opinion leaders, not the general public

Based on the focus group participants’ responses, it appears that equity concerns, as they pertain to low-income users, are not particularly important to the public, even though they may be important to some elected officials, transit advocates and social justice activists. Concepts like HOT/C lanes elevate the profile of the fairness issue without actually addressing the concern as the public views it. Fairness concerns appear to be addressed more effectively by emphasizing the ways in which the proposal benefits everyone by increasing carpooling, improving express bus service, and giving commuters more choices.

4.2 Public Opinion Survey

From October 11-14, 2004, the study team conducted a telephone survey of 400 randomly selected Alameda County residents. The public opinion survey was conducted by trained, professional interviewers by telephone and it has a margin of error of + 4.9 percentage points. The questionnaire and results for the survey is Appendix D.

Findings

Alameda County residents strongly favor completion of a Bay Area area-wide regional Smart Carpool Lane system, issues of fairness notwithstanding.

Support for the proposal is driven by continuing concern about traffic – traffic is volunteered by 27 percent of respondents as the number one problem in the county – and the high regard in which residents hold carpool lanes – 91 percent of surveyed county residents have a favorable opinion of carpool lanes.

Prior to testing a specific description of the Smart Carpool Lanes concept, the survey tested potential names for the project. Of these, Express Lanes (68 percent favorable, 10 percent unfavorable) and Smart Carpool Lanes (54 percent favorable, 10 percent unfavorable) were most well received. HOT/C lanes (25 percent favorable, 19 percent unfavorable) and High Occupancy Toll Lanes (40 percent favorable, 33 percent unfavorable) were received far less favorably.

Respondents were then read the following description of a regional Smart Carpool Lane system:

“There is a proposal under consideration to create a regional Smart Carpool Lane system that would complete and connect carpool lanes on every major highway in the nine county Bay Area region and significantly expand the regional express bus network to utilize the complete system of carpool lanes and provide frequent and reliable express bus service that won’t get stuck in traffic. The system would be financed by allowing people who drive alone to use the Smart Carpool lanes for a fee using the same FasTrak pass currently used to pay tolls on Bay Area bridges.”

Based upon this description, 57 percent supported the project, 30 percent opposed the project, and 13 percent remained neutral or undecided (see Figure 10). Respondents were then asked about specific elements of the proposal. The strongest elements tested were completing the regional carpool lane system, providing frequent express bus service, and continuing to encourage carpools (which would still use the lanes for free), all garnering support from 75 percent or more of Alameda County residents. It is important to note, however, that all of the elements of the proposal, including allowing solo drivers to use carpool lanes for a fee, were supported by significant majorities of residents, with all elements of the proposal receiving over 50 percent support and no element seeing opposition from as much as 40 percent of County residents. After hearing about the individual elements of the Smart Carpool Lanes proposal, support for the overall proposal increased by 10 to 67 percent.

Respondents were then given additional information about Smart Carpool Lanes, both positive and negative. Examples of positive statements include: “A guarantee of a minimum speed” and “Better separation of HOV lanes from the rest of the roadway.” Examples of negative statements include: “Allow rich people to buy their way out of traffic” and “Cost too much for poor people to use them.” After hearing more information, support declined to 63 percent who said they were “more likely to support.” However, it should be noted that this is still six percent higher than the initial level of support. The survey then asked respondents about several proposals to address concerns about fairness. The first was a system of earned credits for solo-driver low-income drivers to use the carpool lane for a fee (the Limited Eligibility concept). As illustrated in Figure 11, this proposal garnered more opposition than support, with 39 percent supporting the proposal and 45 percent opposing it.

Figure 10

Alameda County residents' opinion of SMART lanes (bar graph)

Alameda County residents' opinion of fairness proposals(bar graph)

The second proposal would simply give a discount on the toll to solo-driver low-income people who want to use the carpool lane. While this proposal received more support (45 percent support, 39 percent opposition) it is important to note that both proposals were significantly less popular among Alameda County residents than was the Smart Carpool Lane proposal initially tested in the survey. It is also important to note that these findings are consistent across all income levels. While low-income residents are slightly more supportive of the two FAIR lanes proposals tested and slightly less supportive of the Smart Carpool Lane proposal, they are still significantly more supportive of the Smart Carpool Lane proposal than they are of either crediting proposal.

Conclusions

Findings from both the focus group research and the public opinion survey suggest that the single most important factor determining support or opposition to Smart Carpool Lanes is the context in which they are presented to the public. When presented as a toll lane, designed to manage congestion, give commuters choices, and fully utilize carpool lanes, Alameda County residents are generally skeptical. When presented as a carpool lane with a revenue enhancing element designed to deliver desirable transportation improvements, most notably completing carpool lanes and expanding express bus service, residents strongly support the idea. Once a desirable context is set, residents are much more likely to accept and embrace the other beneficial outcomes of the project (e.g., more choices, congestion relief, and full utilization of the carpool lane).

The research strongly suggests that concerns about income equity are not a major determinative factor in public acceptance of Smart Carpool Lanes. To the degree that “fairness” is an issue at all, it is defined as a concern that the wealthy would be able to buy their way out of traffic rather than that the poor would not be able to buy their way into the lane. For the average resident, allowing poor residents into the lanes for a discount only makes the plan less equitable, as it appears that exceptions are being made for everyone but them. Most importantly, the research suggests that most Alameda County residents are willing to accept that not everyone will be able to access the Smart Carpool Lanes if the outcome is a better transportation system for all.

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5. HOT CREDIT POLICY MODELING RESULTS

In this chapter the economic and performance impacts of various policy scenarios are analyzed, including both Limited Eligibility and 100 Percent Eligibility HOT/C lanes schemes. Specifically, the effects of HOT/C policy scenarios are measured on speeds, volumes, travel times and toll revenues. These results are derived by implementing ECONorthwest’s Toll Optimization Model (TOM©)—a special model designed to determine equilibrium toll levels and lane volumes in the presence of HOT lane type tolling.

The methodology for the forecasting of HOT/C lanes followed a two-phase approach that included both travel demand modeling and economic/performance analysis. The first phase, travel demand modeling, provided input to the economic analysis; this phase defined the alternatives with the uniform features and assumptions described in Chapter 3 (Alternatives Definition) and also defined the exact access locations. A complete description of the travel demand modeling methodology is found in Appendix B. The second phase, the economic and performance analysis, resulted in toll structures that were tested using the demand model. The remainder of this chapter presents the results of that analysis.

5.1 Modeling Approach

The modeling of HOT/C policy impacts for both Limited Eligibility and 100 Percent Eligibility requires developing a consistent means of characterizing HOT/C policy and implementing that characterization in the regional and TOM models. The general approach is as follows:

HOT/C policy is defined by linking GP lane volumes to the number of vehicles that will gain access to the HOT lane as HOT/C users. This is achieved by defining a HOT/C Crediting Rate that is equal to the number of GP lane trips that it takes for an eligible user to earn a free HOT lane trip. For example, if a user would earn one free HOT lane access credit trip for every two GP lane trips, this is identified as a “1 in 3” HOT lane crediting policy. Hence, the number of HOT/C vehicles in the HOT lane at any given time would be a fraction of the total facility volumes of eligible vehicles.
The total number of HOT lane credits that would be redeemed during a given peak period depends on the Crediting Rate and the volume of traffic associated with the eligible users. In this analysis, two different eligibility criteria are examined. The first employs a Limited Eligibility approach, wherein only vehicles associated with defined low-income households are eligible to earn HOT/C lane credits. The ceiling income in this policy is twice (200 percent) the official poverty income level set by the federal government, which is the standard definition used by the San Francisco Bay Area’s Metropolitan Transportation Commission (MTC) in its modeling and other research. When making projections over time, it is assumed that the share of such eligible vehicles in the traffic stream remains constant. The share of qualifying vehicles under the poverty criterion was derived from 2000 US Census data.
The second eligibility approach assumes that all vehicles in the GP lanes in the corridor are eligible to receive credit towards a future use of the HOT lane. This is referred to as the 100 Percent Eligibility policy. This is the approach that addresses the proposition that all facility users, not only those with low-income, should derive some benefit from HOT lanes, even on those occasions when they do not use them.
There are two definitions of HOT/C eligibility and four different assumed Crediting Rates. In addition, there are two variations of each policy under two different assumptions about prevailing carpools-ride-free policy: 2+ versus 3+ occupants, as the definition of a carpool. Finally, there are two additional reference alternatives for comparative purposes: (1) a No Toll alternative, essentially, a pure HOV lane policy in which carpools go for free and no other vehicles are allowed; and (2) a pure HOT Lane alternative (with no HOT/C policy overlay), where carpools go for free and all non-carpools must pay a toll. Each of these alternatives is also modeled under the two carpool definition policy alternatives, 2+ and 3+. A total of 14 policy scenarios reflecting these variables, labeled A to N, are modeled.

For each of the toll alternatives, tolls are optimized using the TOM model. Toll optimization can be performed to achieve a variety of different performance objectives. In this case, toll optimization is guided by revenue maximization. Optimizing HOT lane tolls with the objective of toll revenue maximization tends to result in slightly lower HOT lane volumes than some other objectives, such as a policy of setting tolls to exactly satisfy a minimum level of service (LOS) criterion. Revenue maximization is particularly appropriate, however, to settings in which the dual goals of maintaining adequate service levels and generating revenue to fund the facility are both important. HOT lane toll revenue potential falls sharply with even small reductions in the level of service. This is especially appropriate in the California policy context wherein 2+ carpools generally are able to use an HOV facility for free, thus limiting the amount of capacity to sell under a HOT lane policy.

Tolls are optimized for individual links or tolled segments of the facility, on the assumption that tolls must be allowed to vary link by link to properly optimize tolls across variable load conditions. A constant toll per mile policy would yield, undesirably, both lower revenues and more variable levels of service from segment to segment of the HOT lane. The toll optimization process is “seeded” using segment level data, and vehicle mixes, derived from MTC’s regional travel demand model, as implemented by the study team.¹⁶ Only the AM peak is modeled explicitly, because that is the only diurnal period modeled by the MTC regional model. Separate runs were performed for the years 2000 and 2025.

The effects of likely real income growth in determining the nominal, current (2004) value of the optimal tolls are also incorporated. The purpose of doing so is to correct for the compression in the income distribution that occurs in future years in the regional travel demand model. Specifically, most regional travel demand models, including the MTC model, implicitly assume that value of time increases only at the general rate of inflation. Since the models also assume fixed quartiles of the income distribution, this means that the household income rendered in the regional model tends to compress users into the higher income categories progressively over time. The effect of this is to narrow the income distribution unrealistically. In fact, however, regional incomes tend to grow in real terms, after inflation adjustment and, thus, so do values of time. Hence, the income distribution tends to maintain a greater spread over time than the regional models implicitly recognize. For HOT lane analysis in general, and HOT/C policy in particular, it is important to portray the distribution of incomes and values of time as accurately as possible; therefore, real income is considered in the toll optimization modeling.

The effect of assuming real income growth in the TOM analysis is that tolls per mile are somewhat higher than they would be if this trend in income were ignored. For the purposes of revenue estimation, this effect can be ignored, if desired, to impart extra conservatism regarding facility revenue prospects. However, in the analysis of alternative HOT/C policies, the failure to include real income effects may cause the impact of HOT/C policy alternatives in future years to be mismeasured. Consequently, this effect is included in the HOT/C policy analysis. This effect is removed, for conservatism, in the projections of revenue estimates over a 20-year period.

In other implementations of the TOM model, the tolls derived from the seed run are fed back to the regional model for further refinement. In this case, due to the large number of alternatives being modeled and the policy comparisons that are the focus of the study, no feedbacks to the regional model were employed. Such feedbacks would affect absolute toll levels, volumes and speeds to some degree, but would not alter the relative performance of the various HOT/C policy alternatives. Given the purpose of the research, the cost associated with so many additional runs, and the inherent natural “noise” in the regional model equilibration process, avoidance of the feedback process is a reasonable compromise. In Chapter 6, where total 20-year revenues are estimated, the impact of the feedback process on aggregate revenues is estimated for sketch planning purposes.

5.2 Analysis of Alternatives

In this section, model results for 14 different policies affecting the HOT lane performance are presented in the base year, 2000, and 2025. The policy scenarios investigated are as follows:

Conventional HOV Alternatives

Scenario A: HOV 2+ carpool policy, no tolling, and no HOT/C credits granted,
Scenario B: HOV 3+ carpool policy, no tolling, and no HOT/C credits granted

Limited Eligibility HOT/C Alternatives

Scenario C: HOV 2+ carpool policy, tolling of SOVs, and low-income SOVs qualify for HOT/C credits at a 1 in 3 trips rate.
Scenario D: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and low-income SOVs and HOV 2s qualify for HOT/C credits at a 1 in 3 trips rate.
Scenario E: HOV 2+ carpool policy, tolling of SOVs, and low-income SOVs qualify for HOT/C credits at a 1 in 11 trips rate.
Scenario F: HOV 3+ carpool policy, tolling of SOVs and HOV 2s, and low-income SOVs and HOV 2s qualify for HOT/C credits at a 1 in 11 trips rate.

100 Percent Eligibility HOT/C Alternatives

Scenario G: HOV 2+ carpool policy, tolling of SOVs, and 100% HOT/C credit eligibility at a 1 in 11 trip rate.
Scenario H: HOV 3+ carpool policy,

HOT Credit Lanes Feasibility Study

CONTENTS:

Executive Summary

Purpose of the Study

Alternatives Analyzed

Public Opinion and Acceptance

Cost

HOT/C Policy Modeling Results

Revenue Estimates

Operational Analysis

HOT/C Lanes Feasibility Considerations

Implementation Challenges

1. INTRODUCTION

1.1 Background of the FAIR Lanes Concept

1.2 Focus of I-580 and I-680 Study

2. EXISTING CONDITIONS

2.1 Physical Characteristics

Interstate 580

Interstate 680

2.2 Operational Characteristics

Peak Hour and Daily Traffic Volumes

Interstate 580

Interstate 680

Traffic Operations

Truck Percentage

Vehicle Occupancy and Vehicle Classification

2.3 Travel Patterns

Interstate 580

Interstate 680

2.4 Transit

Livermore Amador Valley Transit Authority (LAVTA)

Santa Clara Valley Transportation Authority (VTA)

The County Connection

Altamont Commuter Express (ACE) Trains

Bay Area Rapid Transit (BART)

3. ALTERNATIVES DEFINITION

3.1 Alternative Compensation Schemes

3.2 Uniform Characteristics for all Alternatives

3.3 Variable Features

3.4 Selection of Alternatives

4. PUBLIC ACCEPTANCE OF HOT CREDIT LANES AND VALUE-PRICED LANES AS AN EQUITY SOLUTION

4.1 Focus Groups

Summary

Equity Considerations Findings

4.2 Public Opinion Survey

Findings

Conclusions

5. HOT CREDIT POLICY MODELING RESULTS

5.1 Modeling Approach

5.2 Analysis of Alternatives

Equity Considerations
Findings