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Advancing Congestion Pricing in the Metropolitan Transportation Planning Process: Four Case Studies

C. Literature Review

The team conducted a literature review of both planning process reports and congestion pricing reports to identify important themes and trends that would form the foundation for the case study interviews.

Decision-Making Framework for Pricing Decisions

“Improved Framework and Tools for Highway Pricing Decisions, Draft Final Report Volume I: Decision-Making Framework for Highway Pricing Decisions,” Project NCHRP HR 08-57, Prepared by Parsons Brinckerhoff, Inc., July 2008.

In a review of planning for road pricing projects, Parsons Brinckerhoff, Inc. (PB) recommends four phases in the planning of road pricing projects: from 1) exploration to; 2) option development; 3) feasibility assessment; and 4) investment or finance study. PB indicates the phases follow traditional transportation planning. However, some findings and recommendations of relevance to integrating road pricing into planning:

  • Finance Phase of Planning – PB indicates the investment and finance phase of study for road pricing, while common to many transportation planning activities, entails unique tasks. For projects financed by debt backed proceeds for future tolls, an “Investment Grade Study” is needed to finalize funding arrangements in a “Financial Plan,” the formal document that details a project’s cost estimate, revenue structure, and financial resources. Projects not relying upon debt finance based on future tolls do not require this step but still require detailed finance analysis.
  • Planning by Project or Comprehensively – PB suggest “two broad approaches may be used to initiate and assess tolling and pricing, including a comprehensive approach going through the four phases identified or a project approach focusing on a specific corridor or area.” As PB notes, both approaches “are valid” and, “this research effort demonstrates that a flexible decision-making framework is likely to incorporate both approaches, capitalizing on their respective strengths” and tailored to reflect “regional transportation needs, institutional arrangements, and politics.” Examples of comprehensive approaches are cited in the SF Bay Area, Washington State, Colorado, Atlanta, and Texas.
  • From Projects to Regional Assessments – PB finds, “Many regions begin their experience with pricing as a result of low-hanging fruit situations where there is a clear logic behind the use of tolls on a new or existing facility. If pricing is implemented successfully … a region may consider embarking on a comprehensive assessment of pricing in other settings, with subsequent projects moving forward for further assessment as a result.”
  • Matching Pricing to Goals and Contexts – PB proposes road pricing planning should match up types of pricing options with appropriate goals and contexts. PB suggests HOT conversions, existing tollways, new facilities, and other concepts are best suited to varying goals and conditions and a planning approach needs to select concepts accordingly. Likewise, the exact form of pricing needs to match the congestion problem. Thus, integrating road pricing in to planning depends on how pricing strategies fit with local, regional, and state goals and priorities around congestion, finance, and the environment.
  • Environmental Review and Road Pricing – PB notes environmental reviews as part of road pricing planning vary with state law and custom suggesting integration of road pricing into planning will vary by location. They note, “In certain cases, the consideration of tolling and pricing may be introduced while the environmental process is underway or even after it has been completed.” At a minimum, this change would require a reevaluation of the analyses completed. The level of detail of the reevaluation depends on the circumstances surrounding the particular project. In situations where the introduction of tolling and pricing is determined to be “significant,” a supplemental environmental impact statement must be prepared.
  • Modeling and Road Pricing – PB finds planning for road pricing is an “intense endeavor” given “behavioral models must consider both tolled and nontolled alternatives, as well as multiple tolling scenarios. Standards can be particularly high when private sector investment is involved (to meet bonding requirements).”
  • Legal and Legislative Matters – PB notes an important stepping stone in the planning process is assessing legal and legislative requirements. Planning will vary depending in large measure on Federal aid to facilities. PB notes, “State and local jurisdictions have the greatest flexibility to implement tolling and pricing on local roads and highways that have been, or will be built without Federal funding. Greater restrictions apply when tolling and pricing are used on the Federal Aid Highway System, or on HOV lanes or busways funded with transit monies. As a result of these restrictions, the vast majority of tolling and pricing projects implemented over the past 50 years have involved either new state or county toll roads or the expansion of preexisting toll facilities that have been incorporated into the Interstate Highway System.” Likewise, “Various state and local authorities also are needed to implement tolling and pricing projects. Local legal requirements are dictated by state and local statutes and regulations, as well as pricing and toll collection policies and mechanisms used to raise financing. Policy-makers interested in pursuing tolling and pricing projects should consult with legal experts to identify the specific requirements that would apply in their regions.”
  • Screening Criteria – PB enumerates several planning screening criteria important to consider as road pricing is integrated into planning:
    • Congestion relief potential;
    • Consistency with state and regional plan goals;
    • Ability to improve the efficiency of the regional transportation network;
    • Public acceptance;
    • Institutional feasibility;
    • Safety impacts;
    • Order-of-magnitude construction cost;
    • Revenue generation potential; and
    • Financial viability.

Domestic Scan of Congestion Pricing and Managed Lanes

A Domestic Scan of Congestion Pricing and Managed Lanes, prepared for the Federal Highway Administration, U.S. DOT, DKS Associates, with PBSJ and Jack Faucett Associates, February 2009.

This recent survey by DKS Associates of selected MPOs and state DOTs in 10 metropolitan areas examined how they are planning for congestion pricing and managed lanes. Important findings for integrating road pricing into planning include:

  • From Projects to Plans –The study found initiation of congestion pricing in eight metropolitan areas with pricing projects “has started with individual projects,” versus deriving from within regional plans themselves. Specifically, “In most cases, the desirability of a congestion pricing or managed lanes project did not emerge directly from a congestion management plan (CMP) assessment of options,” and “most congestion pricing or managed lanes projects are … initiated and advocated for by agencies within the metropolitan area and are incorporated into the Metropolitan Transportation Plan (MTP) and the Transportation Improvement Plan (TIP) by the MPO as updates of these documents occur.” One example is how HOT lanes gradually developed into the regional plan as a network approach within the San Francisco Bay Area. There, “the initiative for the HOT lane projects came first from the ACCMA and the Santa Clara County CMA (the Santa Clara Valley Transportation Authority).” Thereafter, “The MPO (MTC) took the lead to develop the regional plan for a HOT lane network.” Nor did state agencies generally derive congestion pricing projects from within broad or systematic planning efforts but instead came from site-specific studies. Specifically, “The state DOT was often the initiator but survey respondents generally did not indicate that the projects proposed were part of the statewide planning effort.”

    However, the report also finds as interest has moved from individual projects to regional approaches, “integration into the metropolitan planning process also has increased.” Specifically, MPOs are making “a greater effort to provide an appropriate interagency collaborative process for identifying the need for the projects, identifying the options and alternatives to be considered, formulating an appropriate evaluation process, seeking public and stakeholder input, and identifying a preferred approach.”
  • Exemplary Approaches –The report identifies some “exemplary approaches” to planning useful for consideration in integrating road pricing into planning. The report points to the Seattle area where PSRC has updated its CMP to:

    “… identify the location where congestion is greatest and potential future locations for possible application of congestion pricing; specify pricing, demand management and system management strategies as specific options; establish a specific evaluation method (in this case, benefit/cost analysis model) as well as other more traditional performance measures such as safety, reliability, access as well as delay; coordinate with Washington DOT long-range transportation plan, to insure it incorporates outcomes of the MTP update.”
  • Revenues –Another important finding relevant to integrating road pricing into regional and state planning has to do with revenues. The report finds in Minnesota, a policy position has evolved in the MTP pertaining to road pricing revenues. Policy indicates “revenue generated from the managed lanes will be used for the cost of implementation and maintenance. The net revenue from the I‑394 MnPASS project has not been sufficiently large to warrant consideration of these revenues in the MTP financial constraint.” Likewise in Virginia with the adoption of the I‑95/I‑395 HOT lane project into the 2007 MTP, policy sets out how revenue obtained will be used to cover the costs of each project, and excess revenue will be used to fund transit improvements.
  • Air Quality –The report notes the importance of road pricing plans meeting air quality requirements, suggesting integration of road pricing into planning must take into account air quality requirements and assessment processes. The study found all HOT land projects reviewed involved assessing air quality impacts and attending to mitigation to meet National Environmental Policy Act (NEPA) and/or CEQA requirements. One MPO in Kansas City, MARC, is attempting to make environmental review and analysis integral to regional planning rather than analysis done after projects are identified. The initiative is entitled Linking Environmental and Transportation Planning.
  • Models/Analysis –Integration of road pricing into planning depends on good modeling and analysis. The analysis of congestion pricing among the metropolitan areas surveyed relied on the regional travel model for analysis. The model often is supplemented by other tools with added sensitivity to pricing and/or for analysis of costs and benefits. Microsimulation models have been used to assess the travel time and level of service associated with alternative pricing scenarios, level of service, traffic impacts on local streets and general purpose lanes, as well as the impacts to lower-income travelers. Other common performance measures include vehicle-miles traveled, emission volumes, vehicles-hours traveled, and individual and network delays savings. Proprietary toll revenue models have been used for analyses in some areas.