Congestion Pricing - A Primer: Evolution of Second Generation Pricing Projects

Introduction

The Primer Series

States and local jurisdictions are increasingly discussing congestion pricing as a strategy for improving transportation system performance. In fact, many transportation experts believe that congestion pricing offers promising opportunities to cost-effectively reduce traffic congestion, improve the reliability of highway system performance, offer added choice for drivers and transit users, and improve the quality of life for residents, many of whom are experiencing long delays due to traffic congestion in regions across the country.

When the primer series originated, congestion pricing was still a relatively new concept in the United States. The Federal Highway Administration (FHWA) embarked on an outreach effort to introduce the various aspects of congestion pricing to decision makers and transportation professionals. One element of FHWA's congestion pricing outreach program is this Congestion Pricing Primer series. The aim of the primer series is not to promote congestion pricing or to provide an exhaustive discussion of the various technical and institutional issues one might encounter when implementing a particular project; rather, the intent is to provide an overview of the key elements of congestion pricing, to illustrate the multidisciplinary aspects and skill sets required to analyze and implement congestion pricing, and to provide an entry point for practitioners and others interested in engaging in the congestion-pricing dialogue.

The concept of tolling and congestion pricing is based on charging for access and use of our roadway network. It places responsibility for travel choices squarely in the hands of the individual traveler, where it can best be decided and managed. The car is often the most convenient means of transportation; however, with a little encouragement, people may find it attractive to change their travel habits, whether through consolidation of trips, car-sharing, by using public transportation, or by simply traveling at less-congested times. The use of proven and practical demand-management pricing that we freely use and apply to every other utility is needed for transportation.

The application of tolling and road pricing to solve local transportation and sustainability problems provides the opportunity to solve transportation problems with substantially fewer resources. It could mean that further gas tax, sales tax, or motor vehicle registration fee increases are not necessary now, or in the future. The idea of congestion pricing is a conceptual first step, not a complete plan of action. It has to be coordinated with other policy measures and environmental measures for sustainability.

The Purpose of this Volume

While pricing of managed lanes has been in place for over 20 years, most of the projects have been conversions of existing high-occupancy vehicle (HOV) lanes into high-occupancy-toll (HOT) lanes. These are the first generation projects.

This primer explores the evolution of first-generation pricing strategies into more complex express toll lanes using new or expanded capacity. For purposes of this primer, the second-generation pricing projects refer to variably priced lanes and variable tolls on entire roadways. Pricing changes throughout the day, either on a variable daily schedule or dynamically based on the level of congestion and demand for the managed lanes.

The second generation movement also includes the implementation of integrated networks of priced roadways within urban regions. The primer explains these differences and provides insights from case studies around the United States. The primer concludes with guidance for agencies looking to develop second-generation pricing projects.