US pol calls for new Virginia law for Dulles Greenway - seeks delay in considering toll cap hike

US Congressman Frank R Wolf (Repub, N VA) wants the Virginia state government to toughen its law to make toll increases on the Dulles Greenway more difficult. And he wants the state's corporation commission (VSCC) which regulates the Greenway to delay a hearing on higher toll caps. Wolf known ideologically as a RINO (Republican-In-Name-Only) frequently takes up leftwing causes and as a federal politician has no jurisdiction over the Greenway which is purely a state road. But he has the power to command newspaper space and broadcast time.

Wolf calls the Greenway's proposed toll cap in 2012 of $4.80 "exorbitant" for the 23km (14 mile) trip. He said at 34c/mile the Greenway would "become one of the most - if not the most - expensive toll roads in the country." Present tolls are $3.20 or 23c/mile weekdays. Actually the Greenway has applied to the SCC for toll caps going up to $4.00 (29c/mi) in 2012. The $4.80 (34c/mile) cap they applied for is for three peak hours in the peak direction.  California tolls are already higher (91Express in Orange County charges up to 95c/mile) and no one knows what toll increases will be there and elsewhere in five years.  

Wolf has released a two page letter to the Virginia transport secretary Pierce Homer asking the Kaine administration to request the Virginia regulators to "postpone" any decision on toll caps "until the (state) General Assembly has the opportunity to revisit the public private agreement governing the construction and operation of the Greenway."

Revisit is Wolf's euphemism for unilaterally change, and it is unclear whether Virginia's legislature would want to break a contract and if it did whether the courts would allow this to occur. PPP agreements or concessions are contracts that cannot be amended by legislatures but only by negotiation between the parties. 

Wolf taking page out of Dems playbook

Wolf is taking a leaf out of the political playbook of Democrat Congressmen James Oberstar and Pete DeFazio, chairmen of house committees who wrote a letter to state governors last week saying they would work to "undo" toll concessions of the states that they considered "not in the public interest."

A US Congressman from Brooklyn NY proposed a year or so back to legislate in the US Congress on tolling on the Verrazano Narrows Bridge, a property of New York state's Triborough Bridge and Tunnel Authority (aka MTA Bridges and Tunnels) even though that bridge has never received a cent of federal money and the federal government has never claimed any role in its management. He never produced a bill. Such talk is usually a ploy for publicity and a currying of favor with aggrieved constituencies, but it can play into the political combat on the issues and affect the confidence of investors.

The 1988 Highway Corporation Act of Virginia authorizing the Greenway concession specified that maximum toll rates would be approved by the Virginia State Corporation Commission (VSCC) which should use three criteria for tolls at a level that:
(1) is reasonable in terms of benefits received by road users that pay them
(2) does not unduly discourage the use of the toll road by the general public
(3) provides no more than a reasonable return on investment

Wolf in his letter seizes on a statement by a VSCC staffer Lawrence Oliver, an assistant director of the commission's economics and finance staff who said in testimony that there was "no statutory requirement that toll rates need to be just and reasonable, or affordable."

Verbatim from Wolf letter

His letter continues:
 
"This is disturbing.  No requirement that toll rates must be just and reasonable?  And more important, affordable?

"This is unacceptable, and must be changed.  How can the Commonwealth justify such a one-sided law that clearly benefits the Greenway owner while blatantly taking advantage of the users of the road?  So Macquarie Group International, the Australian mega-bank which owns TRIP II, is free to charge outrageous tolls on anyone who travels the Greenway?

"Nowhere else in the Commonwealth are commuters asked to pay such an exorbitant toll to get to work.  Yet for Greenway commuters it doesn't matter if the toll they pay is fair, reasonable and affordable.  The only thing that seems to matter in this case is whether or not Macquarie makes a profit, which then leaves Virginia and heads back to Australia.

"Elected officials have a responsibility to stand up for the interests of the tax paying commuters.  I have been told that Macquarie has hired the former Secretary of Transportation in Virginia, Whitt Clement, who is now at Hunton and Williams, to lobby on its behalf.  Commuters facing a $4.80 toll have no lobbyist.  All they have is their elected officials, who must represent their best interests. 

"I believe recent comments by Governor Kaine about protecting consumers from increasingly high utility prices are applicable to protecting the users of the Greenway.  The governor in
March was quoted on his monthly WTOP radio appearance as saying, "Every two years, every utility in Virginia has to go back to the SCC to justify their rates.  The SCC gets to decide if the rates are fair and what the rate of return should be."

"This is not the case for the Greenway.  As noted by SCC staff, "There is no statutory requirement that toll rates need to be just and reasonable, or affordable."  I disagree.  The Greenway works similarly as a public utility and consumers need protection which, I
believe under current law, the SCC may not be able to provide.  

"I have discussed this matter with northern Virginia members of the House of Delegates who, like myself, believe that there is no longer any "public" in the public-private agreement under which the Greenway operates.  Therefore, I call upon the state to immediately request that the SCC delay its decision on TRIP II's toll increase application until the General Assembly can meet in the next session to revisit the Greenway's public-private agreement and provide some
fairness for the users of the Greenway." (end of quotes from Wolf letter)

BACKGROUND: The Dulles Greenway is an extension of the state owned Dulles Toll Road into Loudoun County, one of the most strongly developing fringes of the greater Washington DC/Baltimore metro area (pop 7m). The transition from the DTR and the Greenway occurs at VA28 Sully Rd on the entry to Washington Dulles international Airport. The Greenway goes 23km (14mi) in a slightly north of westerly direction serving developing suburbs on either side and around Leesburg where it ends on US15.

Opening in August 1995 it was financed by TRIP II, a private company with equity held by the local family of Michael Crane, the Italian toll giant Autostrade and Brown & Root the Haliburton subsidiary. They sold to Sydney Australia based international toll operator Macquarie for about $625m on the 10th anniversary of the opening of the road in the summer of 2005.

Initially 2x2 lanes it has since been third laned (picture above is 2005 before 3rd laning) and interchanges have been added, and the toll plaza widened. Traffic is about 55k/day.

Actual toll rates are lower than nominal rates for heavy users who benefit from a "frequent rider program" called VIP miles.

For most trips on the Greenway there are alternative free routes on modern signalized arterials, though they are slower. VA28 Sully Road and VA7 Leesburg Pike are the major alternative route for those who think the Greenway tolls are too high. They are high quality access controlled and divided highways with a few grade separations but mostly with signalized intersections at major cross streets. They were the only access before investors assembled and bought the land for the road and built the Greenway.

Ralph Stanley the Greenway's pioneer

The road's principal pioneer was Ralph Stanley (1952-2001) who took the project on in the mid 1980s after a tumultuous term as federal transit administrator for President Reagan. For a decade he almost singlehandledly campaigned to enable the road to be built, getting local support, lobbying for the law in Richmond under which it was granted a concession, organizing options for land purchases, interesting and lining up the investors. He went through several failed financial closings before one succeeded, and saw construction started.

Sadly Stanley had a falling out with the lead investors, the Crane family, before the road was complete, and he left the area for Portland OR where he worked for Bechtel before finding he had malignant melanoma. The cancers took him from vibrant good health to death in a matter of a few months. He died at home in Northern Virginia in 2001 aged 49.

We met Stanley first when he was federal transit administrator in 1983 or 1984 where he was a scathing critic of taxpayer funding of loser rail projects. We spent a lot of time with him in the early 1990s talking private tollroads. A fascinating man of great energy and enthusiasm, six and half feet tall, a dog lover, and indefatigable talker he got us interested in tollroads.

TOLLROADSnews 2007-05-17