Michael Replogle Environmental Defense March 2007 CFEE Public Private Partnerships Conference

1. Tolling and Public Private Partnerships:HowCan They Help California AchieveHigh Performance Transportation? Michael Replogle Environmental Defense March 2007 CFEE Public Private Partnerships Conference Napa, California

2. A Means To What End? • Tolls and PPPs are tools not outcomes • Outcomes depend on how tools are applied

3. Tolls and PPP Deals Can Be Designed To: • Finance transportation • Save motorists time • Improve reliability & customer service • Boost transit choices • Curb fuel use and emissions • Reduce harm to communities and the environment

4. But Tolls and PPP Deals Can Alternatively: • Increase congestion on existing roads • Spur pollution, fuel use, GHG emissions • Facilitate sprawl • Spur public backlash against tolls and PPPs

5. Will California Use Tolls and PPPs to: • Build more roads faster? • Increase short-term cash flow? Or to • Manage transportation systems for high performance: mobility, travel choices, environment, public health? • Develop profitable strategies to respond to climate change challenges facing road industry

6. Build and Sustain Public Support for PPPs With: • Timely public review, input, oversight of PPP goals and frameworks • Performance-focused contracts that avoid non-compete agreements • Independent monitoring, performance oversight • Tolls set but not retained by operator - deposited to public fund

7. Build and Sustain Public Support for PPPs With: • Use of toll and concession proceeds to finance integrated metropolitan transportation networks for better performance, expanded choices • Fix-it-first planning comparing cost-effectiveness of O&M and capital investment alternatives meeting goals • Public equity in project deals

8. Can We Reframe Tolls to Emphasize Performance Not Revenue? • Toll-managed lanes carry 2x more traffic at 3x higher speed vs. unmanaged “free” lanes • Investors could unlock more asset value by managing existing lanes than building new lanes

9. HOT Lanes Help, But Toll Management of Entire Motorways is Cheaper, More Effective Full motorway tolling delivers greater congestion relief with much lower toll rates compared to median HOT lanes

10. Singapore in the 70’s…before road pricing Source: LTA

11. Singapore today…after 30 years of road pricing CBD and motorway toll rates adjusted 4x/year to keep traffic speeds at peak system performance

12. Approve 88% Disapprove 11% Don’t Know 1% Tolling Existing Lanes: Acceptable When It Boosts Performance, Choices Public has approved of tolls on formerly free roads when used to improve public transport, cut congestion, boost travel speeds: • London • Singapore • Oslo Popular opinion on cordon charge in Stockholm for- against: Before tolling (12/05): 31% - 62% After tolling (6/06): 52%- 40% February 2007: 67%-31% • Trondheim • Bergen • Stockholm San Diego’s I-15 HOT Lane is Popular Source: Kristian Wærst, Norwegian Public Roads Administration

13. Toll Rate Caps Can Affect Performance Payment Mechanisms and Toll Increases • Rigid toll caps limit ability to manage road capacity for high performance and improved travel choices • Apply toll rate caps to average daily toll collections -- not to the peak hour tolls for individual road segments

14. Contract for System Performance Base concessionaire payment on how effectively they move vehicles, people, and goods, with incentives for superior congestion relief Congestion Management Payment Contract Darrington to Dishforth A1 Highway in Yorkshire, UK Payment based on speeds and volumes by 2km road segment

15. Get to Yes With Performance Agreements LAX International Airport • Enforceable Community Benefits Agreement • Groups agreed to support airport expansion plan San Pedro Bay Clean Air Plan • Expansion of ports while cutting emissions with health standard London • Emission-based tolls encourage clean vehicles TXU Buyout • Environmental agreements helping to secure deal

16. Making Environmental Performance Matter for Public or Private Financed Transportation • Establish environmental performance goals- • Curb air pollution hotspots • Cut corridor greenhouse gases • Curb thermal and pollution loads to streams • Cut noise near roads • Establish independent performance monitoring • Use performance payments/penalties to reward superior performance and ensure targets are met, re-tendering the agreement should operator/contractor default

17. 3 M’s of Pollution Hotspots: Measure, Monitor, Mitigate • Large local health impacts from fine particle vehicle emissions • PPPs should ensure good monitoring • Regional, corridor, local strategies can cut this pollution, including: • Emission-based truck tolls • Truck lanes, new clean rail services • Diesel retrofits/cleanup • Cleanest construction equipment • Put roads in tunnels and filter air • Exposure management Link level benzine emissions Philadelphia Source: Richard Cook, US EPA

18. For More Information Michael Replogle Transportation Director Environmental Defense 1875 Connecticut Ave. NW Washington, DC 20009 mreplogle@ed.org 202-387-3500 www.environmentaldefense.org/go/transportation