COLORADO:Denver’s I-25/US-36 HOT lanes

The minimum modification scheme (l’il-HOT) involves $14m capital cost, all but $3m of which is for removal of a pinch-point in an existing 2-lanes reversible section of I-25. Operating costs would be $600k. This scheme on 9km (5.5mi) of existing and under-construction reversible carpool lanes would operate at a small loss for its first few years but break even in 2007 and be quite profitable thereafter. It is estimated to have a net present value (NPV) of $3.4m over ten years, a financial positive. Over 15 years its NPV is $12.7m, all the NPVs assuming an 8%/yr discount rate.

A maximum modification alternative (big-HOT) involves extension of the facility up US-36 and I-25 north of the split. That is construction of some 50km (30mi) of new HOT lanes and lots of ramps at a cost of $418m. On the big-HOT annual operational costs would be $5m but revenues would be much larger too - $7m in 2010 when it would open with tolls ranging 16c to 37c/mi on I-25 and 6 to 8c/mi on US-36 peakhours for a NPV over 20 years of $63m.

Average peakhour tolls on the l’il-HOT are estimated at 66c/trip (11c/mi) with $725k revenue in the first year rising to about $2.5m in 2010 with tolls then averaging 21c to 35c/mi. Slightly higher revenues are projected with variable toll rates.

The traffic forecasts were based on population growth of 1.6%/yr and percapita income growth of 5%.

The good news is both l’il-HOT and big-HOT work financially, so there is a reasonable expectation investors can be found to buy into the project and develop it in stages.

Like many HOV lanes, utilization is presently poor. The analysis says 35% to 40% of capacity is used by carpoolers (HOV2) and it would be at least 2010 to 2015 before HOV2 would fill the lanes.

The study suggests dynamic pricing like I-15/San Diego be implemented in Denver, which would make it the second to do this. The report finds a lane drop at the south end of the I-25 must be addressed to remove a chokepoint. Beyond this there is a nice Downtown Express ramp leading directly from the managed lanes into the downtown streets.

Major remaining obstacle is city government opposition to extra cars going into the downtown area, but opinion surveys show decent public support for the project. Modeling suggests 96% of the SOVs who will buy-in to the HOT lanes will be vehicles that presently travel in the free lanes, and only 4% or 180 veh/day will be new trips generated by the existence of the scheme.

Modeling showed that the HOT scheme would not work without use of the Downtown Express ramps. This is because, Otherwise, all the traffic in the managed facility would have to merge into the general purpose lanes with a LOS-F and serious damage to travel times and therefore to the tolls motorists would pay for buy-in.

The report suggests free rides for HOV2s could be phased out and only HOV3s go free after perhaps 10 years. Or SOVs could be increasingly limited. CDOT has to establish whether there is going to be a conflict between the investor desire for profitability and level of service for motorists, the study suggests. Policy options considered are (1) the dropping of tolls if level of service drops below some set level - if excess capacity in the lanes is measured below a specified threshold and (2) different tolls for different occupancy levels.

The project will probably use similar electronic toll systems to the local E-470 toll road, namely the California Title 21 standard, presently supplied by Sirit and TransCore/Amtech.

BACKGROUND: A couple of prominent independent municipal engineers Dennis Polhill and Stephen Mueller have championed HOT lanes and toll express lanes for nearly three years, working through a pro-market thinktank in Denver, the Independence Institute. It published papers and ran conferences on the idea and the proposal was taken up by state senator John Andrews who succeeded in passing legislation mandating a HOT lanes project. At the same time support built within the state DOT which saw it as a way of making better use of underused HOV lanes.

The project has financial support from USDOT under its value pricing program. Parsons Brinckerhoff, ECONorthwest and UrbanTrans have been consultants on the project. (Contact: Gregg Mugele 303 757 9936, Myron Swisher 303-757-9866, David Ungemah 303 715 9595, Stephen Mueller 303 798-8122. Excellent website on the project www.valuelanes.com)