CA/91-X:Pioneer of HOT lanes sees

Calif Private Transp Company (CPTC) owner of the the 91-Express Lanes (91-X) reported Aug 5 that their toll express business reached breakeven in cash flow terms in the first six months of this year. Toll revenue was running at an annual $20m against operating costs of $9m and debt service of $11m, according to general manager Greg Hulsizer. In a press release he called it a “significant milestone” as indeed it is.

91-X is only the second investor-built toll facility in the US in the automobile era and it is the first in the world to implement the toll express lane idea in which toll rates are varied according to a schedule to reflect the value to patrons in avoiding congestion in the free lanes alongside. 91-X adopted the phrase “value pricing” to describe its toll rate policy and the term has since been embraced by the Fed Hwy Admin and the US Congress to describe demonstration projects being supported by the US govt in San Diego and elsewhere.

Although 91-X works to a published schedule of toll rates stepped in hourly blocks, it has revised its toll rates 4 times (1/97, 9/97, 1/98, 4/98) since it began operations in the last days of 1995. The adjustments, mostly upward to choke off excess traffic and anticipate overloading of the lanes, have been to apply the principle of congestion pricing and also to maximize revenues. In addition on two public holidays now (Memorial and Independence Day) CPTC has altered toll rates independently of a published schedule in order prevent clogging of its lanes.

Pricing them out of peaks

Management emphasizes that apart from safety, its primary commitment is to price on such a way as to encourage drivers to shift trips to the shoulders of the peaks, or off-peak, because it has to maintain free flow conditions. 91-X has succeeded in doing that except for some occasional backups from heavy traffic downstream. Unless it delivers on its promise of a quick ride through it has little to sell as compared with the free lanes.

Hulsizer made this plug for his project: “In addition to its financial success, the 91 Express Lanes continues to improve the quality of life for all 91-freeway commuters day in and day out. Our customers reach their destinations more quickly and more relaxed without having to battle traffic. Researchers have testified to the 91-X role in improving travel for all commuters through the Santa Ana Canyon.”

Patron Holder and his $6,550 toll

In an interview Hulsizer told us 91-X has made improvements to customer service, which resulted earlier in strong complaints in the local press. They are now making routine exchanges of license plate numbers of account holders with their fellow electronic tollsters at Transp Corridors Agencies in order to avoid automatically accumulating penalties against one another’s patrons when there is a transponder malfunctioning — the cause of a highly publicized $6,550 toll bill sent to Thomas Holder, a now famous TCA patron whose case made quite a splash in the local media (see TRnl#26 Apr 98 p10.)

CPTC was also under the gun for keeping patrons waiting on the telephone line too long and has installed a new improved telephone system which has brought maximum waits by customers to below a minute, Hulsizer says. 91-X is putting up a new website (www.91expresslanes.com) which has the toll schedules and other information. It will allow patrons to find their account balance and, when security arrangements are made, to make transfers into their account by creditcard. Bunched mailings of quarterly accounts had caused an umanageable concentration of customer inquiry calls, and the mailings are now being spread out.

Hulsizer emphasized that the formal accounts for the first half of this year have not been completed and that the break-even so far is strictly cash-flow (omitting depreciation and inventory changes etc).

“By the time the accountants get to it (doing the accounts) I am sure they will show we still have red ink there. But we are very pleased that we are now at this stage, where at least the cash flow is good.”

Previously the operation has had to call on its partners to pony up cash to fully pay debt service payments as they came due.

The Eastern cloud —

sprinkle or deluge?

Hulsizer told us he expects the opening of the partially competitive Eastern Transp Corridor toll road by the TCA will produce a “slight dip” in 91-X revenues. The Eastern is due to open Oct 18 and will provide an alternative to the 91 and 91-X patrons who are headed for southern Orange Co and at present go from 91 left down CA-55 and are headed to Irvine or points south from San Bernardino or Riverside cos (and of course the reverse trips.) It will not affect traffic for points due west on 91 or traffic going north beyond the X-lanes.

Hulsizer said that the 91-X business plan allowed for the opening of the Eastern though it has occurred earlier than expected.

The 91-X manager thinks there is sufficient latent demand in the corridor that traffic losses to the Eastern will be replaced before very long. Others are less sanguine. A Caltrans official said he personally thought the Eastern might take 35% of 91’s traffic. If there is serious relief in the free lanes from the Eastern pike there will be little reason to pay tolls at all on 91. So a worst-case scenario would see a major collapse in 91-X revenues.

The Eastern forms a 3-level T-interchange with I-91 a third of the way from the eastern end of the 91-X lanes. The ramps go to the unrestricted lanes only, and cover all four movements. (See map TRnl#26 Apr 98 p11)

TCA staff are proposing an introductory week of No Tolls on the Eastern Oct 18 to 25 to promote their new road. Opening is 29km (18mi) of 2x3-lane roadway denoted as CA-231 through a mountain area. The road has grades of 6% which will make it a slow climb for trucks (which have extra climbing lanes.) The new ‘h’-shaped pike hooks in to the Foothill (also CA-241) toll road which was the first to be opened by TCA, and also (via CA-133) to the giant I-5 fwy near the El Toro marine base. Another so-called western leg (CA-261) going under I-5 without an interchange and leading into Jamboree Rd, a wide signalized arterial, is due to open early next year, providing further competition with the 91/55 routing. The proposed toll on the Eastern will be a shade under the present 91-X toll at the peak but being flat rate will be more expensive than 91-X off peak.

Signs

Hulsizer says 91-X has no plans to further adjust its tolls this year, but many think it may have to make adjustments once the strength of the Eastern competition becomes clear. TCA is installing 6 variable message signs on the various approaches to the Eastern to be able to dynamically advise motorists of their options. Two variable message signs recently operational on the approaches to the San Joaquin toll road have helped garner considerable extra traffic, according to spokesman Michele Miller. The SJ Hills toll road (now running up to 85k veh/weekday) offers tolled competition to the busy I-5/I-405 north-south route through the county. The message signs report congestion and incidents and advise motorists they can avoid those by taking the toll road. By introducing such dynamic signing at the beginning on the Eastern pike the TCA hopes to draw more traffic from I-91/CA-55.

91-X has considered signage which would tell motorist their likely time savings in minutes in the toll express lanes but rejected this for fear that feedbacks into motorist behavior might make the signs’ messages self-negating. If enough motorists read that 91-X will save them, say 40mins over the free lanes — this reasoning goes — even if that is accurate given traffic conditions at the start, the very posting of the message may cause so many to take the toll lanes that it might end up with those ignoring the sign getting the time savings in the free lanes, leaving a horde of steaming angry toll payers bumper to bumper in the toll “so-called express” lanes swearing never to believe “that goddamed stupid sign again,” and denouncing the 91-X management as “a bunch of lying sharks” to TV reporters and demanding that the state “immediately cancel their toll concession.”

91-X is running 32k vehs/day on 4-lanes 16km (10mi) long that cost investors $130m to build during 1995. HOV3s started free according to the terms of the franchise but now pay a half toll. If the Eastern were not opening, 91-X’s financial prospects would look quite bright given growth in revenues from $7m in its first year to $14m last year to $20m this year, but the competition from Eastern is bound to dampen its prospects.

Sale

We had a small STOP PRESS item last issue reporting an ORANGE COUNTY REGISTER report that the county was considering the purchase of 91-X. That seems to have been a “beat-up.” The truth is that one or two county politicians like the idea of a county takeover in principle when asked by a reporter. But they are not actively working on any takeover because there is little sentiment for it, and noone has suggested where the money would come from. CPTC’s owners are not actively trying to sell the road, but they say they’ll always listen to anyone with offers. A sale would have to be approved by Caltrans which signed a concession agreement with CPTC. (See TRnl#27 May 98 p14 for report on last official accounts of 91-X) (Contact Greg Hulsizer CPTC 714 637 9191 www.91expresslanes.com)