Virginia sees major growth in electronic tolling - new monthly transponder fees

July 10, 2012

2012-07-09: With a bunch of new toll facilities opening in the next couple of years Virginia DOT (VDOT) is looking to buy half a million new E-ZPass transponders, and has announced a new pricing scheme. The new fee schedule which takes effect September 1 will phase in a flat monthly fee of 50c for new transponders - both first-time and replacement transponders.

Greg Whirley, VDOT Commissioner is quoted in a statement today: "The fee structure was established after careful consideration of public input balanced with the need to cover VDOT's rising costs to provide Virginia's E-ZPass program. I directed VDOT to consider several options and chose the one that was the most reasonable, splitting the costs between the customers and the toll facilities. It will help manage the demand for both standard and Flex transponders without imposing the monthly fee on existing E-ZPass customers until they need a new or replacement transponder."

50c instead of $1.00 plus phase-in

Back in May  VDOT announced it was proposing a $1.00 monthly fee per transponder, but public comment was sought and there was discussion with focus groups of customers. There was considerable criticism, and many said they'd drop their transponders if the dollar a month fee was implemented.

As a result VDOT modified their scheme to reduce the monthly transponder charge to 50c  - except for switchable HOT lanes transponders for occasional carpoolers on the 495Express Capital Beltway toll lanes which remain $1.00/month.

Also the 50c monthly charge only applies to new transponders. Existing transponders will not be hit with a monthly charge.

About half the 24 E-ZPass group toll agencies now apply some kind of monthly charge. Reason is that with transponders free a proportion of motorists sign up for a transponder for just one trip or two and then rarely, if ever, use it again. (CORRECTION)

see also:

Reducing waste of unused transponders

Tamara Rollison of VDOT says there are people with several transponders for the one car!

The transponders cost VDOT about $9 each and there are handling and other costs providing the transponder to motorists, and then some ongoing costs for each account.

Previously a $25 deposit was required per transponder paid for without any automatic payment, but over 90% of transponders are set up with automatic bank replenishment of toll accounts under which there was no transponder charge.

Under the new fee scheme new customers will have to prepay $35 tolls but there will be no deposit required for the transponder. Old deposits are being credited to accounts as prepaid tolls.

With the lower and phased-in monthly charge VDOT is also covering some of its back office costs with a fee assessed against tollers of 4.26c/transaction and a revenue fee of 1.923% of toll and other revenue processed on their behalf per month.

All E-ZPass accounts in Virginia are maintained by VDOT through back office contractor Faneuil Inc at a present cost of about $10m/year. This is to maintain 560,000 accounts with 900,000 transponders and processing $223m in revenues on 137m toll transactions (2011 figures.)

17% of transactions and 31% of revenue processed is interstate E-ZPass transactions - either tolls levied against non-Virginia E-ZPass account holders traveling on Virginia toll facilities, or Virginia E-ZPass traveling out of state on E-ZPass facilities in Maryland, West Virginia or elsewhere.

VDOT itself only operates two minor toll facilities - the Coleman Bridge and the Powhite Parkway Extension.

Other toll operators in Virginia are:

- Metropolitan Washington Airports Authority operating the Dulles Toll Road  VA267

- Macquarie operating the Dulles Greenway VA267

- Richmond Metropolitan Authority operating Downtown Expressway, Powhite Parkway Boulevard Bridge in Richmond

- Transurban Pochahotas Parkway Richmond

- City of Chesapeake Chesapeake Expressway VA168 to NC Outer Banks

- Chesapeake Bay Bridge Tunnel Authority at the mouth of Chesapeake Bay

These six tollers have their E-ZPass transactions processed by VDOT's contractor Faneuil which handles all the state's electronic tolling from establishment and maintaining accounts to customer service calls and delivering transponders, plus transactions with E-ZPass out-of-state.

Major new tolling

Major new toll facility opening this year are the 495 Express Lanes in 14 miles of the Capital Beltway, built and operated by Transurban. They will be the first toller to deploy special transponders switchable between carpool (free) mode and toll mode, brandnamed Flex E-ZPass.

Also opening this year should be the privately owned South Norfolk Jordan Bridge, a grand high level span that replaces a decrepit city-owned lift bridge.

Anticipated within two or three years are:

-  I-95 Express Lanes from the Beltway south to Fredericksburg, another Transurban concession

- VA460 from Norfolk to I-95 Petersburg

- Downtown & Midtown tunnels and MLKing Extension Norfolk area

- I-95 mainline north of Richmond and south of Petersburg

New fees are being justified as supporting:

- purchase of 500,000 new transponders

- upgrading back office systems to handle more transactions

- a retail program with E-ZPass transponders available at grocery stores and DMV centers

TOLLROADSnews 2012-07-09

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