Congestion Pricing

A PRIMER:

EVOLUTION OF SECOND GENERATION 

PRICING PROJECTS
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Congestion Pricing - A Primer:

Evolution of Second Generation Pricing Projects

COTM: Ms. Angela Jacobs, Federal Highway Administration

While pricing of managed lanes has been in place for over 20 years, most of the projects have been conversions of existing 

high-occupancy vehicle (HOV) lanes into high-occupancy-toll (HOT) lanes. These are the first generation projects. 

This primer explores the evolution of first-generation pricing strategies into more complex express toll lanes using new or 

expanded capacity. For purposes of this primer, the second-generation pricing projects refer to variably priced lanes and 

variable tolls on entire roadways. Pricing changes throughout the day, either on a variable daily schedule or dynamically 

based on the level of congestion and demand for the managed lanes. 

The second generation movement also includes the implementation of integrated networks of priced roadways within urban 

regions. The primer explains these differences and provides insights from case studies around the United States. The 

primer concludes with guidance for agencies looking to develop second-generation pricing projects. 

Leidos

11251 Roger Bacon Drive, 3rd Floor

Reston, VA 20190

United States Department of Transportation

Federal Highway Administration

1200 New Jersey Ave., SE

Washington, DC 20590

Donald Samdahl,Fehr & Peers

Myron Swisher, Leidos

Road pricing, congestion pricing, priced managed lanes No restrictions.

Unclassified Unclassified 52 N/A

September 2015

DTFH61-12-D-00050

HOTM

2. Government Accession No. 3. Recipient’s Catalog No.

Primer

CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | iii

Contents

Introduction 01

THE PRIMER SERIES 01

THE PURPOSE OF THIS VOLUME 02

What are Second Generation Congestion Pricing Projects? 03

HOW ARE FIRST AND SECOND GENERATION PRICED LANES DIFFERENT? 05

TYPES OF SECOND GENERATION PRICING PROJECTS 05

New Roadway Capacity 05

Networks of Priced Managed Lanes 06

Priced Managed Roadways 06

Case Studies 09

Southeast Florida 11

Northern Virginia 15

Puget Sound, Washington 19

Minneapolis/St. Paul, Minnesota 23

Houston, Texas 27

San Diego, California 32

Summary 37

Acknowledgments 39

References 41

Photo source: Thinkstock
iv | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

LIST OF TABLES

Table 1. Characteristics of Priced Lane Projects. 4

Table 2. Challenges and Opportunities moving to Second Generation Pricing Projects. 7

Table 3. Case Studies and Highlights. 10

Table 4. Evolution of Southeast Florida Managed Lanes. 12

Table 5. Southeast Florida Challenges and Opportunities. 14

Table 6. Evolution of Northern Virginia Managed Lanes. 16

Table 7. Northern Virginia Challenges and Opportunities. 18

Table 8. Evolution of Puget Sound Managed Lanes. 21

Table 9. Puget Sound Challenges and Opportunities. 22

Table 10. Evolution of Minneapolis Managed Lanes. 24

Table 11. Minneapolis Challenges and Opportunities. 25

Table 12. Evolution of Houston Managed Lanes. 30

Table 13. Houston Challenges and Opportunities. 31

Table 14. Evolution of I-15 Managed Lanes. 34

Table 15. San Diego Challenges and Opportunities. 34

LIST OF FIGURES

Figure 1. Illustration.Timeline Depicting the Evolution of Roadway Pricing 

from the 1960s through Today. 4

Figure 2. Photo. I-95 Express Toll Lanes in Florida. 9

Figure 3. Map. The Current and Planned Express Toll Lane Network in the 

Greater Miami Area. 13

Figure 4. Map. The Northern Virginia Managed Lanes Facilities. 17

Figure 5. Photo. Construction of the I-495 Express Lanes in Northern Virginia. 18

Figure 6. Map. Existing and Proposed Priced Managed Lanes for SR 167 and I-405 

in the Puget Sound Region. 20

Figure 7. Photo. Existing SR 520 Bridge in Washington Prior to Replacement. 21

Figure 8. Photo. I-35W MnPass Express Lanes in Minnesota. 24

Figure 9. Map. The Existing and Future Managed Lanes in the 

Minneapolis/St. Paul Region. 27

Figure 10. Diagram. The Katy Freeway Managed Lane Facility in Houston. 29

Figure 11. Photo. Gulf Freeway High-Occupancy Vehicle and High-Occupancy Toll 

Lanes at the Eastwood Transit Center in Texas. 30

Figure 12. Screenshot. The San Diego I-15 Corridor Express Lanes. 33

Figure 13. Photo. I-15 Express Lanes in California. 35
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | v

LIST OF ACRONYMS

BRT bus rapid transit

CPPP Congestion Pilot Pricing Program

EIS Environmental Impact Statement

ETL express toll lane

FDOT Florida Department of Transportation

FHWA Federal Highway Administration

HCTRA Harris County Toll Road Authority

HOT lanes high-occupancy toll lanes

HOV lanes high-occupancy vehicle lanes

MnDOT Minnesota Department of Transportation

MPO metropolitan planning organization

MTC Metropolitan Transportation Commission (Bay Area)

PSRC Puget Sound Regional Council

SANDAG San Diego Association of Governments

TSP Transit Signal Priority

TXDOT Texas Department of Transportation 

UPA Urban Partnership Agreement

VDOT Virginia Department of Transportation

VPPP Value Pricing Pilot Program

WSDOT Washington State Department of Transportation

CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 01

Introduction

THE PRIMER SERIES

States and local jurisdictions are increasingly discussing 

congestion pricing as a strategy for improving 

transportation system performance. In fact, many 

transportation experts believe that congestion pricing 

offers promising opportunities to cost-effectively reduce 

traffic congestion, improve the reliability of highway 

system performance, offer added choice for drivers and 

transit users, and improve the quality of life for residents, 

many of whom are experiencing long delays due to traffic 

congestion in regions across the country. 

When the primer series originated, 

congestion pricing was still a relatively new 

concept in the United States. The Federal 

Highway Administration (FHWA) embarked 

on an outreach effort to introduce the 

various aspects of congestion pricing to 

decision makers and transportation 

professionals. One element of FHWA’s 

congestion pricing outreach program is this 

Congestion Pricing Primer series. The aim 

of the primer series is not to promote 

congestion pricing or to provide an 

exhaustive discussion of the various 

technical and institutional issues one might 

encounter when implementing a particular 

project; rather, the intent is to provide an 

overview of the key elements of congestion 

pricing, to illustrate the multidisciplinary 

aspects and skill sets required to analyze and 

implement congestion pricing, and to 

provide an entry point for practitioners and 

others interested in engaging in the 

congestion-pricing dialogue. 

The concept of tolling and congestion 

pricing is based on charging for access and 

use of our roadway network. It places 

responsibility for travel choices squarely in 

the hands of the individual traveler, where it 

can best be decided and managed. The car 

is often the most convenient means of 

transportation; however, with a little 

encouragement, people may find it attractive 

to change their travel habits, whether 

About this Primer Series

The Congestion Pricing Primer Series is part of Federal 

Highway Administration’s outreach efforts to introduce 

the various aspects of congestion pricing to decisionmakers and transportation professionals in the United 

States. The primers are intended to lay out the 

underlying rationale for congestion pricing and some of 

the technical issues associated with its implementation in 

a manner that is accessible to non-specialists in the field. 

Titles in this series include:

• Congestion Pricing Overview.

• Economics: Pricing, Demand, and Economic 

Efficiency.

• Non-Toll Pricing.

• Technologies That Enable Congestion Pricing.

• Technologies That Complement Congestion Pricing.

• Transit and Congestion Pricing.

• Income-Based Equity Impacts of Congestion 

Pricing.

• Congestion Pricing Institutional Issues.

• Evolution of Second Generation Pricing Projects.

• Congestion Pricing: Effective Approaches to 

Streamlining Back Office Operations.
02 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

through consolidation of trips, car-sharing, by 

using public transportation, or by simply 

traveling at less-congested times. The use of 

proven and practical demand-management 

pricing that we freely use and apply to every 

other utility is needed for transportation. 

The application of tolling and road pricing to 

solve local transportation and sustainability 

problems provides the opportunity to solve 

transportation problems with substantially fewer 

resources. It could mean that further gas tax, 

sales tax, or motor vehicle registration fee 

increases are not necessary now, or in the future. 

The idea of congestion pricing is a conceptual 

first step, not a complete plan of action. It has to 

be coordinated with other policy measures and 

environmental measures for sustainability. 

THE PURPOSE OF THIS VOLUME

While pricing of managed lanes has been in 

place for over 20 years, most of the projects have 

been conversions of existing high-occupancy 

vehicle (HOV) lanes into high-occupancy-toll 

(HOT) lanes. These are the first generation 

projects. 

This primer explores the evolution of firstgeneration pricing strategies into more complex 

express toll lanes using new or expanded 

capacity. For purposes of this primer, the 

second-generation pricing projects refer to 

variably priced lanes and variable tolls on entire 

roadways. Pricing changes throughout the day, 

either on a variable daily schedule or 

dynamically based on the level of congestion and 

demand for the managed lanes. 

The second generation movement also includes 

the implementation of integrated networks of 

priced roadways within urban regions. The 

primer explains these differences and provides 

insights from case studies around the United 

States. The primer concludes with guidance for 

agencies looking to develop second-generation 

pricing projects. 
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 03

What are Second Generation Congestion 

Pricing Projects?

Second generation congestion pricing projects had 

their genesis over 40 years ago, when highoccupancy vehicle (HOV) lanes were created on 

urban freeways. These projects aimed at 

maximizing vehicle occupancy and person 

throughput on freeways by restricting use of a lane 

or lanes for buses, carpools and vanpools. HOV 

lanes became a “relied upon approach to lane 

management.” (1) Over the years, HOV lanes 

became either too successful or not successful 

enough. The result was a situation where the lanes 

were either over-crowded or under-utilized, both of 

which created dilemmas for decision makers. 

The emergence of electronic tolling offered the 

ability to “better manage dedicated lanes through 

both eligibility restrictions and pricing.” The term 

high-occupancy toll (HOT) lane was introduced as 

the first generation of priced managed lanes, in 

which HOVs continue to travel free with ineligible 

vehicles paying for the privilege of using the lane. 

The HOV to HOT conversions have helped to blunt 

criticism of HOV lanes and have opened new 

opportunities to manage travel demand. Since the 

1990s, pricing has become a preferred strategy by 

states and regions for efficiently managing the 

available capacity in the lanes. 

First-generation HOT lanes offered a solution: 

convert the existing HOV lanes into priced 

facilities, keeping the HOV priority but selling any 

unused capacity to users willing to pay for the 

privilege of saving time within the HOT lanes. 

This worked well for HOV projects where the HOV 

lanes were under utilized, since there was plenty of 

capacity to sell and nobody was inconvenienced. 

By charging a fee for other vehicles, pricing could 

help ensure that demand would not exceed capacity.(1) 

The implied “win-win” solution would 

demonstrate that:

The Federal Highway Administration Role in 

Roadway Pricing

Since 1992, the Value Pricing Pilot Program (VPPP, 

formerly Congestion Pricing Pilot Program) has played 

an essential role in the development and deployment of 

road pricing throughout the United States. As 

congestion pricing was being introduced and proposed 

on projects (mostly high-occupancy toll (HOT) lane 

conversions) in major cities, it was perceived as a 

radical concept. Sponsors of early projects were faced 

with opposition regarding several key issues that were 

common across the country. It is likely that several of 

the initial projects that were supported by the VPPP 

may not have occurred, had there not been this national 

focus and shared research.

Grant funding from VPPP provided support for State 

and local transportation agencies to test the concept of 

congestion pricing in their regions. The early projects 

performed essential research into critical issues such as 

equity, privacy, enforcement, outreach, and revenue 

generation potential that were common to many of the 

projects. These projects also examined potential threats 

that would potentially derail them. 

The Congestion Pricing program’s most important 

contribution to the industry is its continuing support for 

early research on these issues and testing of operational 

schemes and technology. The same projects that 

experienced several setbacks due to these critical issues 

(up to a decade to complete) set the stage for far more 

significant priced roadway facilities and networks 

(second generation projects) in their regions.
04 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

• Free flow could be maintained.

• High-occupancy vehicles (HOVs) would receive

the highest priority.

• Revenues would be available to help cover a

portion of the operations costs and possibly 

some of the project costs, including subsidies 

to transit service.

At the other extreme, over-used HOV lanes faced a 

situation where the HOV occupancy definition 

needed to be raised, usually from 2+ to 3+, in order 

to maintain acceptable travel speeds. Changing the 

occupancy definition to 3+ would fix the HOV lane 

operational problems, but the pendulum could 

quickly swing to an empty-lane syndrome with too 

few HOV 3+ vehicles. Pricing offers the 

opportunity to shift to an HOV 3+ operation while 

allowing other vehicles, including HOV 2 vehicles, 

to buy into the lane capacity and maintain more 

optimal freeway lane operations. While 

operationally efficient, the decision to charge new 

tolls to HOV 2 users has been a difficult process in 

several regions.

First Generation Priced Lanes1 Second Generation Priced Lanes2

Features:

• Conversion of HOV lanes to HOT

• Typically one lane in each direction

• Limited additional capacity provided

Features:

• Added capacity provided to existing HOV lanes or 

previously unmanaged roadways

• Targeted capacity expansion of existing roadways

• Networks of priced lanes 

Typical Objectives:

• Maximize HOV and transit users

• Encourage growth of alternative modes

• Optimize use of lanes 

• Manage overused HOV lanes through pricing

• Provide congestion free choices for drivers and 

transit users

Typical Objectives:

• Maximize lane efficiency

• Balance vehicle and person throughput with revenue 

generation 

1 Eligible HOVs use the facility free and unregulated by price.

2 Efficiency is gained by fully regulating access to the priced lanes. Second generation priced lane facilities could have the option to charge all 

 vehicles.

HOT = high-occupancy toll, HOV = high-occupancy vehicle

Source: Adapted from D. Ungemah, “HOT Lanes 2.0- An Entrepreneurial Approach to Highway Capacity,” Presentation Slides for 

National Road Pricing Conference in Houston, TX, June 2010

Table 1. Characteristics of Priced Lane Projects.

Second Generation 

Pricing Projects Bus and HOV Lanes First Generation Pricing Projects

1960s

BUS-only Allow High Occupancy Vehicles (HOVs)

New HOV Lanes throughout country Convert HOV to HOT Lanes

Convert HOV to HOT Lanes

New Construction 

and Networks

Reconstructed and 

expanded HOT lanes

Reconstruct with HOT lanes

Regional priced lanes network

1970s 1980s 1990s 2000s 2010s

Carpools added I-5 San Diego (California)

KATY Freeway (Houston)

495 Express (Virginia)

El Monte Busway (Los Angeles)

Shirley Highway (Virginia)

EXAMPLES

I-405 Seattle (Washington)

I-95 Miami HOV (Florida)

ELECTRONIC 

TOLLING

Figure 1. Illustration. Timeline Depicting The Evolution of Roadway Pricing from the 1960s through Today.
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 05

HOW ARE FIRST AND SECOND 

GENERATION PRICED LANES 

DIFFERENT?

As the first generation high-occupancy vehicle 

(HOV) to high-occupancy toll (HOT) conversion 

projects have matured, there has been a movement 

to “second generation” priced lanes. Secondgeneration projects include one or more of the 

following features: the extension of existing HOT 

lanes, provision of newly constructed priced lanes, 

and the development of priced lane networks. 

The Federal Highway Administration (FHWA) 

Priced Managed Lane Guide (4) provides a good 

summary of this evolution (see chapter 1, page 1-11): 

While the [first-generation HOT lanes were relatively] 

simple facilities with limited points of access and 

egress, many newer priced managed lane projects 

include multiple access points that integrate them with 

multiple activity centers. Projects like the I-15 Express 

in San Diego also include transit centers and parkand-ride lots serving new bus rapid transit (BRT) 

service operating on the managed lanes. 

Several regions with existing priced managed lanes 

and others with keen interest in developing new priced 

managed lane capacity have begun to incorporate 

significant focus on this model into long-range 

Regional Transportation Plans and separate 

Managed Lane Network Plans. The movement 

toward coordinating the implementation of priced 

managed lanes at a regional scale rather than one 

corridor at a time stems from a desire to improve 

regional connectivity and improve travel options. It 

also fosters broader regional goals of improved transit 

connectivity and rideshare program participation 

levels. Cities that have adopted regional Managed 

Lane plans include Atlanta, Charlotte, Houston, 

Miami, Northern Virginia, Minneapolis-St. Paul, 

Phoenix, San Diego, San Francisco, and Seattle.1

Table 1 contrasts some of the major characteristics 

between the first and second-generation projects. 

1 Since 2012, Dallas has also adopted a regional managed lane 

plan.

TYPES OF SECOND GENERATION 

PRICING PROJECTS 

The second-generation projects have been 

implemented on the following facility types: 

1. New roadway capacity.

2. Networks of priced managed lanes.

3. Priced managed roadways.

New Roadway Capacity

Recognizing the limited capacity of a single HOV/

HOT lane to accommodate future travel demands, 

projects have emerged that have added roadway 

capacity to create a dual-lane priced facility. The 

extension of the I-15 HOT lanes in San Diego2 is a 

good example of a facility that was designed to meet 

the growing travel demands in the corridor while 

maintaining priority for HOVs and transit. 

Other regions were faced with the need to add 

roadway capacity and determined that building 

managed lanes provided better freeway operations 

and gave them the flexibility to manage the facility 

to meet changing demands. These projects to add 

capacity have needed to address directly the 

tradeoffs between user eligibility (e.g. transit, 

carpools, vanpools, and single occupant vehicles), 

pricing levels, and funding opportunities. 

2 SR 91 in Orange County, CA was actually the first HOT lane (1995), 

but it was not designed with HOV and transit priority in mind.

Challenges of a Priced Managed Lane Network

• Coordinating among multiple State, regional and 

local agencies.

• Reconciling these agencies’ differing operating 

rules.

• Coordinating funding.

• Communicating to a wider set of users.

• Designing corridor connections.
06 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Adding pricing to the equation enhances agencies’ 

ability to manage demand while providing needed 

funding to cover a portion of the costs. Typically, 

priced managed lanes have provided funds to cover 

all or a portion of the operations and maintenance 

costs. Unlike fully tolled roadways, managed lanes 

do not usually provide pricing revenues sufficient to 

fully fund the construction costs of the lanes. 

Second-generation “express toll lanes” (ETLs)3 

offer greater revenue generation potential, but are 

also more expensive to construct. 

Networks of Priced Managed Lanes

Another defining feature of second-generation 

projects is the ability to create networks of priced 

managed lanes. Over the years, regions have 

developed high-occupancy vehicle (HOV) lane 

systems to provide continuous priority treatments 

for carpools and transit. Many transit agencies rely 

on a network of HOV lanes to provide reliable 

freeway bus rapid transit (BRT) service. Major 

investments in HOV direct access ramps, transit 

centers, and park-and-ride facilities usually augment 

the HOV lanes. 

As the HOV lanes have become more crowded, the 

reliability of bus service has diminished in several 

regions, creating a need to better manage demand in 

the lanes. Regions have responded by converting 

the HOV lanes to networks of priced managed 

lanes. In the San Francisco Bay Area, a network of 

priced managed lanes was adopted as the regional 

strategy by the Metropolitan Transportation 

Commission (MTC). Other examples include 

HOT-networks underway in Atlanta, Dallas, 

Minneapolis, Seattle, San Diego, South Florida, 

Houston, Northern Virginia and Los Angeles. 

Agencies have found that creating a priced managed 

lane network is more complex than converting 

existing HOV lanes to HOT lanes. 

While some regions are turning HOV networks into 

3 The Priced Managed Lane Guide distinguishes HOT lanes, where 

qualified vehicles travel at no cost, and ETLs, where all vehicles pay 

a variably priced toll to use the lanes. In practice, there are projects 

that are using the term “express toll lane” or “express lane” more 

generically to denote a priced managed lane that may or may not 

charge a toll to HOVs.

HOT networks, other regions are building on the 

success of single-facility priced managed lanes. 

Experience has shown that once a priced lane has 

been in operation and is understood by the public, it 

has created opportunities to either extend the 

managed lanes on the existing facility (e.g. I-15 in 

San Diego; SR 91 in Orange County, I-95 in Miami) 

or to connect two or more HOT/ETL facilities (e.g. 

I-495 and I-95 in Northern Virginia). While 

geographical expansion does create technical 

challenges, more often it is the institutional issues 

that become the most complex, since more agencies 

and interest groups become involved. 

Priced Managed Roadways

As multiple-lane priced managed lanes become part 

of the mainstream, it is not difficult to envision a 

future of fully priced roadways where total demand 

is managed through a combination of pricing and 

operational strategies. Fully priced facilities are 

different than toll roads, which are priced for the 

purpose of generating revenues and usually are not 

focused on managing demand. Conversely, fully 

priced managed roadways would have two 

functions: managing demand and generating 

revenue. These two functions can conflict with each 

other, but the concept of priced managed roadways 

would be to balance the desire for generating needed 

transportation funds with ensuring that the 

roadways are operating as efficiently as possible. 

The policy framework for priced managed roadways 

is being established in some regions. For example, 

the Puget Sound Regional Council (PSRC) in 

Seattle has adopted its 2040 transportation vision 

that assumes that all major freeways would be 

actively managed and priced. Currently, the region’s 

extensive HOV lane network is being transformed 

into a HOT network, but the ultimate plan is to fully 

price and manage the freeways. One starting point 

is the SR 520 Bridge, which is currently tolled and 

managed using variable pricing. The bridge is tied 

to HOV lanes on one end, but HOVs (except transit 

and vanpools) do not receive any toll discount.4

 

4 The SR 520 bridge project was the recipient of FHWA funds through 

the Urban Partnership Agreement (UPA) program.
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 07

Topic Summary of Key Challenges and Opportunities

Technology • Most second-generation projects are not constrained by technology. Advancements 

in vehicle detection and ability to employ dynamic pricing options allow flexibility in 

design and operations.

• Differences in operations among regional corridors (e.g. eligibility rules, time-of-day, 

variable versus dynamic pricing) complicate how transponders (with switchable features 

as appropriate) should be designed.

Institutional • Project champions are needed to build and maintain political support moving from first 

to second generation priced roadways.

• Existing organizational structures may not be adequate to oversee implementation and 

coordination among agencies as a network expands.

Planning/Policy • Regional transportation plans that include roadway pricing help to ease the 

implementation of priced facilities in a phased manner over time. 

• Planning becomes more complex due to network-scale decisions related to legal, 

financial and regulatory issues.

• Complications can be reduced by deciding up-front who plans, designs and operates 

the facilities.

Design • Providing a consistent design within and among corridors is important for public 

understanding and safety. This can be difficult where roadway pricing projects have 

evolved over time. 

• Priced roadways may be most effective in corridors that use Intelligent Transportation 

Systems (ITS) for traffic flow management and traveler information. 

Operations • Expansion of roadway pricing in a region is dependent on having a clear policy for 

priced lane user eligibility and toll rates. 

• Standard operating procedures for the organization(s) responsible for running the 

facilities may not be adequate as tolling expands within the region. For example, back 

office operations, may need to be substantially revamped. 

Financial • Expanding roadways or developing priced lane networks is more expensive and 

complex than high-occupancy vehicle to high-occupancy toll conversion projects. 

However, multiple-lane priced roadways offer greater revenue potential and funding 

flexibility. 

• Be clear up-front on how and to whom revenues will be allocated.

Communications • Projects with early public education lead to smoother implementation. 

• Clear communications among the partner agencies is essential as the pricing projects 

become more complex and regional.

Table 2. Challenges and Opportunities Moving to Second Generation Pricing Projects.

As second-generation projects mature, new challenges and opportunities have emerged, as summarized in 

Table 2. These issues are explored further using case study examples. Each case study also includes text 

boxes that note the evolution of managed lanes and one that defines the FHWA role. 

CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 09

Case Studies

Several projects around the country exemplify the 

opportunities and challenges facing second 

generation pricing projects. Six case studies were 

selected to highlight projects that are in different 

stages of development and illustrate a wide range of 

topics. The case studies are generally organized 

starting with those that have made some progress, 

gradually building to the states/regions that have 

progressed the farthest. 

Each of these six regions has achieved successful 

second generation pricing projects through very 

different means. There is a spectrum of successful 

approaches, ranging from Minneapolis, which is 

using minimal new infrastructure, to Houston, 

which has built substantial capacity increases. One 

common feature in each case study is the emphasis 

on providing more reliable transit service within the 

corridor or region. 

Each of the following case studies describes the 

evolution of managed lanes, highlights key lessons 

learned, and defines the Federal Highway 

Administration (FHWA) role in implementing 

the projects.

Photo source: Florida DOT

Figure 2. Photo. I-95 Express Toll Lanes in Florida.
10 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Case Study Highlights

Southeast 

Florida

• The region developed a common vision and established project champions.

• The project created dual express toll lanes by converting an HOV lane to a HOT lane and 

added a lane.

• The focus was on building a managed lanes network with an innovative concept of 

operations.

• The region instituted Express Buses and TSP as part of the project.

• Multiple agencies and FDOT districts coordinated successfully.

• Early successes resulted in an extension of HOT lanes in the corridor and new I-595 ETLs.

Northern 

Virginia

• The region is one of first to have HOV lanes, including systems that have been operational 

for over 40 years.

• An unsolicited private proposal to build dual express toll lanes in median of I-495 created 

the impetus for the project. 

• Successful implementation of the I-495 project resulted in a new public-private express toll 

lane project on I-95/395.

• The process required extensive reorganization and leadership within VDOT to adapt to the 

public-private partnership paradigm.

Puget Sound • An initial HOV to HOT lanes conversion evolved into a dual HOT lane system and full 

roadway tolling.

• The region tied the regional managed lane system plan to the 2040 vision for managed 

roadways.

• The region’s managed lanes also function as key transit corridors.

• Developing the initial portion of the network required extensive coordination within 

WSDOT and among 20 agencies. 

• The regional partners needed to deal with different operating rules on each facility.

• The project resulted in expanded vanpool and bus services.

Minneapolis/

St. Paul

• The initial conversion from HOV to HOT lanes on one project led to acceptance of pricing 

in other corridors.

• The region instituted the innovative use of shoulders for bus travel.

• The new corridor managed lane includes an HOV conversion and sections of new lanes.

• Implementation of a vision for a regional HOT network is underway.

Houston • Katy Freeway represents a full evolution from reversible HOV lane to HOT lane 

conversion to dual express toll lanes within rebuilt freeway.

• Strong partnerships grew among State and regional agencies for planning, implementation 

and operations.

• Partnership and strong leaders contributed to effective public communication.

San Diego • I-15 started as reversible HOV lanes, then became HOT, and is now operated as a 

dynamically priced by-the-mile system on a 20-mile, bidirectional managed lanes facility.

• The region’s emphasis is on new transit service and use of toll revenues to help support 

transit operations.

• The successes have led to an express toll lane network expansion to I-5, I-805, and SR 52.

Table 3. Case Studies and Highlights.

ETL = express toll lane

FDOT = Florida Department of Transportation

HOT = high-occupancy toll

HOV = high-occupancy vehicle

TSP = transit signal priority

WSDOT = Washington State Department of Transportation
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 11

The Federal Highway Administration Role

Florida was awarded congestion pricing funds under the 

original program to vary the toll on two bridges in Lee 

County. That original project led to several follow-on 

studies in Lee County in addition to other parts of the 

state. Miami’s first project was a project on the Florida 

turnpike in 2000. In 2003, the Florida Department of 

Transportation (FDOT) was awarded Value Pricing Pilot 

Program (VPPP) funds to evaluate HOT lanes on I-95 in 

Miami-Dade County. In 2004, they received additional 

VPPP funding to conduct outreach. Fort Myers and 

Orlando have also been awarded VPPP funds to examine 

pricing-related strategies.

SOUTHEAST FLORIDA

Florida’s first managed lane (1976) was a 14-mile 

segment of I-95 that operated as a concurrent flow 

high-occupancy vehicle (HOV) lane during peak 

periods. It was eventually expanded to 21 miles 

between I-395 and I-595. Over the years, this lane 

struggled with performance due to the high level of 

HOV 2+ vehicles, high violation rates in the HOV 

lanes, and congestion on the I-95 general purpose lanes. 

In 2002, the Florida Department of Transportation 

(FDOT) began to study the idea of converting the 

HOV lanes on I-95 to high-occupancy toll (HOT) 

lanes. The study estimated the project would be 

feasible, so FDOT received a grant from the Value 

Pricing Program for funds to conduct public 

outreach and a tolling and revenue study, which was 

finalized in 2006. This ultimately led to FDOT’s 

successful proposal under the Urban Partnership 

Agreement.

The resulting 7-mile I-95 express facility converted 

a single HOV lane each way into two HOT lanes 

in each direction. The extra lane was created by 

narrowing the travel lanes from 12 feet to 11 feet 

and narrowing the shoulders. Additionally, the 

existing HOV lane buffer was reduced to 1 foot of 

separation between the general use lanes and the 

proposed managed lanes. Construction also 

included some bridge and interchange 

improvements to maintain continuity of the dual 

managed lane facility. The design included pylon 

separation rather than concrete barriers, because of 

limited right of way. Innovative operational aspects 

of the project included shifting from HOV-2 to 

HOV-3 eligibility and requiring eligible carpools to 

register with the local ride-sharing agency. These 

characteristics differentiate I-95 from a conventional 

HOV to HOT conversion project. 

The I-95 project was the first step in creating a 

two-county network of express toll lanes. Phase 

1-A of the project, the southern half of northbound 

lanes, opened in 2008. Phase 1-B opened in 2010. 

Phase 2, extending the lanes 14 miles northward, 

will be opened in 2015.

Given the success of the 95 Express project, FDOT 

and its partners developed a plan to construct 

multiple Express Lane (EL) corridors across the 

Southeast Florida region to create an EL network. 

Four entities – FDOT District 4, FDOT District 6, 

FDOT Florida’s Turnpike Enterprise (FTE) and the 

Miami-Dade Expressway Authority (MDX) – will 

be involved in the EL network deployment. The 

roles and responsibilities of these agencies and 

specific design and operational guidance were 

prepared during the Southeast Florida Express 

Lanes Network Regional Concept for Transportation 

Operations (RCTO) project. The RCTO that was 

developed using Value Pricing Pilot Program 

(VPPP) funding is one of the first of its kind and has 

Highlights

• Developed common vision and project 

champions.

• Created dual express toll lanes by converting 

an HOV lane to a HOT lane and adding 

a lane.

• Focus on building a priced managed lane 

network with innovative concept of 

operations.

• Successfully coordinated among multiple 

agencies and FDOT districts.
12 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

been instrumental in making it possible for the 

region to move ahead with future corridors.

The I-95 express lanes serve as an important part of 

the growing Bus Rapid Transit (BRT) network. 

Additional BRT vehicles were purchased as part of 

the project. The service network operates on the 

managed expressway lanes as well as on special-use 

lanes on three major arterials: Biscayne Boulevard, 

Flagler Street, and Kendall Drive. The buses also 

have transit vehicle priority at 50 signalized 

intersections and two uniquely branded BRT 

stations. As the managed lane network expands, 

FDOT hopes to allocate a portion of the revenues to 

subsidize transit service to support the BRT system.

The I-95 project involved two FDOT districts, the 

Florida Turnpike Authority, two counties, and two 

metropolitan planning organizations (MPO). There 

was no formal “agreement” between FDOT and the 

Turnpike Authority, but staff was given specific 

authority during project planning, construction and 

operation. The project team also gained cooperation 

with the various transit agencies agreeing to help 

with transferring passengers and setting up rules 

regarding fares.

Ongoing Work

FDOT is moving ahead with an express toll lanes 

network in South Florida. Since the opening of the 

I-95 project, FDOT has completed efforts to add 

three reversible express toll lanes on I-595 in Ft. 

Lauderdale, and work is under way on extending 

the I-95 managed lanes north to Ft. Lauderdale. 

Other ongoing work includes adding priced 

managed lanes in the median of I-75 and on the 

north-south portion of the Palmetto Expressway in 

Miami. The Florida Turnpike is also adding 

managed “premium toll” lanes to the southern 

portion of its Homestead Extension in South MiamiDade and to the Veterans Expressway in the Tampa 

Bay Region. These would be the first managed 

lanes on a toll road in the United States. 

FDOT’s vision is to deploy express toll lanes and 

networks throughout the State. Work is underway 

in Jacksonville (I-295), Orlando (I-4 Ultimate 

Project), and the Tampa Bay region (I-4, I-75, and 

I-275). The FHWA VPPP also funded a Bus Toll 

Lanes Proof-of-Concept study in the TampaHillsborough County region. The bus toll lane 

concept envisions premium transit service operating 

on newly built priced-managed lanes that would 

function as the “fixed guideway” component of a 

BRT network. The bus toll lane is not a HOT lane 

in that in would not give toll discounts based on 

vehicle type or occupancy. The bus toll lane 

concept could be considered a second or third 

generation priced managed facility if it moves ahead 

to implementation. 

Initial Design • Concurrent flow HOV lanes on I-95. Peak period operation only. 

First Generation Pricing 

Project

• Went directly into a second-generation project by converting an HOV lane 

to HOT, combined with a lane addition and expanded buffer. 

Second Generation Pricing 

Project

• Extended HOT express lanes on I-95 using some new construction and 

added supporting facilities such as park-and-ride lots.

Next Steps • Complete I-95 Express Lanes and other regional express toll lane projects. 

Continue to work on express toll lane system. Pursue bus toll lanes.

Table 4. Evolution of the Southeast Florida Managed Lanes.

Websites

95 Express Managed Toll Lanes In Miami Dade & Broward Counties: http://www.95express.com/

South Florida Express Lanes Network: http://www.95express.com/pages/related-info/south-florida-express-lanesnetwork

HOT = high-occupancy toll, HOV = high-occupancy vehicle
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 13

Figure 3. Map. The Current and Planned Express Toll Lane Network in the Greater Miami Area. 

(Source: Florida Department of Transportation) March 12, 2014
14 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Technology

• Anticipated transit technical challenges related to passenger transfers and fare integration.

• Accounted for time to develop dynamic tolling software.

• Used existing SunPass transponder technology and back-office operations. 

Institutional

• Defined a strong project vision. 

• Determined organizational structure from the onset, with clear lines of responsibility among the various 

agencies. 

• Developed a concept of operations early and refined as project was implemented.

• Coordinated with authorizing agencies in the initial stages. 

• Appointed a strong project manager, who delegated responsibility to team members. 

Planning/Policy

• Planned for future phases of project.

• Established a comprehensive schedule. 

• Included design/operations professionals in planning process. 

• Planned additional resources for project opening.

• Planned for the future network integration.

Design

• Obtained additional lane on I-95 through lane and shoulder narrowing.

• Provided additional buffer width by using pylons.

• Developed adopted standard for express toll lane signing.

• Designed toll gantries for potential future roadway expansion.

Operations 

• Enforcement was difficult during HOV operations but simplified during the HOV-to-HOT conversion 

project with widened buffers and limited access points, along with the carpool registration requirement.

• All users must have SunPass transponder.

Financial

• Each entity that implements portions of the express toll lanes network will use financing methods 

authorized by its governing legislation.

• Public-private partnership delivery will be considered based on State law.

Communications

• Kept public officials informed of project changes. 

• Coordinated communications among the project partners.

• Developed a distinct “flying e” logo and name: “Southeast Florida Express Lanes Network.” 

Table 5. Southeast Florida Challenges and Opportunities.

HOT = high-occupancy toll, HOV = high-occupancy vehicle
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 15

NORTHERN VIRGINIA

Northern Virginia was one of the first regions to 

implement high-occupancy vehicle (HOV) lanes, 

which eventually developed into a system of HOV 

lanes on I-395, I-66, and I-95. A missing piece to 

the HOV system was the Capitol Beltway (I-495), 

which provides a cross-county connection between 

the radial freeways. In response, the Virginia 

Department of Transportation (VDOT) initiated a 

large planning process along I-495 focused on 

adding HOV lanes. During the Environmental 

Impact Study (EIS), an opportunity was created 

through a private sector proposal (see text box) that 

changed the focus of the managed lanes project. 

VDOT signed a contract with the concessionaire in 

December 2007, and construction began on the 495 

Express Lanes, rebranded as the E-ZPass Express 

Lanes. Opened in 2012, the 14-mile priced 

managed lanes segment of I-495 extended from the 

Springfield Interchange to a point north of the 

Dulles Toll Road. The design added two express 

toll lanes in each direction, replaced more than 50 

overpasses and bridges, reconstructed ten 

interchanges, and added direct HOV/highoccupancy toll (HOT) connections to the I-95/I-395 

HOV lanes. The HOT lanes allow HOV 3+ and 

transit vehicles to travel free, while dynamic tolls 

are used to manage the other traffic. 

The public-private project created several 

institutional challenges for VDOT. While the State 

already had public-private partnership authority 

with the Public-Private Transportation Act (PTA) of 

1995, the Legislature was reluctant to relinquish 

control over the public-private partnership projects. 

Also, since the HOT lane proposal from the private 

sector was unsolicited, there initially was no project 

champion from a public agency or the political 

sectors. The State appointed an independent review 

panel, which ended up voting in favor of the private 

consortium proposal. Once the design with HOV/

HOT lanes and transit provisions was clarified, the 

Virginia Secretary of Transportation supported the 

project. VDOT also created the Office of 

Transportation Public Private Partnerships (OTP3), 

renamed the Virginia P3 Office, or VAP3, effective 

in 2014. Both the public and private sector partners 

were integrated into a team to deliver the project 

successfully. 

Injecting Private-Sector Initiatives to Create a Priced Managed Roadway 

In Northern Virginia, a complex planning process was already underway for the Capital Beltway (I-495) 

expansion when the unsolicited high-occupancy toll (HOT) lane proposal arrived from the concessionaire. At 

that time, the I-495 alternatives being considered would result in substantial right-of-way acquisitions and high 

capital cost. The concessionaire proposal promised a smaller project footprint with a much lower price tag. It 

also brought high-occupancy vehicle (HOV)/HOT lanes and transit benefits into the corridor. After substantial 

review, this design concept was added as a new alternative and the Environmental Impact Statement (EIS) 

process was restarted and completed. Having the EIS process already underway streamlined the approvals and 

was seen as a positive factor by the private applicant, the Fluor Corporation/Transurban team. 

Highlights

• One of first regions to have HOV lanes, 

including systems that have been operational for 

over 40 years.

• Unsolicited private proposal to build dual 

express toll lanes in median of I-495. 

• Successful implementation led to new Public 

Private express toll lane project on I-95/I-395.

• Public private partnership required extensive 

reorganization and leadership within VDOT.
16 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

While the 495 Express Lanes were being implemented, the topic of converting other high-occupancy 

vehicle (HOV) lanes was explored. This led to the creation of the I-95 Express Lanes project, which is a 

separate public-private partnership. The project proposed to construct and operate HOT lanes along a 

29-mile portion of the existing, reversible, HOV-3 facility on I-95 and I-395. A third reversible lane was 

also added from the Prince William Parkway to the project’s northern terminus between Duke Street and 

Edsall Road. To the north of this point, the reversible facility will continue to operate as an HOV 3+ 

facility. New HOV ramps were constructed, park-and-ride lots were expanded and funds were used to 

make other local transit improvements. 

VDOT is currently studying the possibility of implementing HOT lanes along I-66 outside the Beltway for 

a distance of about 25 miles, to US 15 in the Haymarket area. The State is looking for approval in 2015 

with an opening possibly by 2021. In addition, VDOT is studying I-66 inside the Beltway for conversion 

during peak periods only from HOV to HOT as a VDOT owned and operated managed lane facility.

The Federal Highway Administration Role 

Value Pricing Pilot Program (VPPP) awarded funds to the Virginia Department of Transportation to study 

high-occupancy toll (HOT) lanes in 2003. However, the funds were redirected to evaluate HOT lanes in 

the Hampton Roads area. In 2011 VPPP awarded the state funds to examine the public acceptability of 

pricing in the Washington, DC, region (project conducted by the Metropolitan Washington Council of 

Governments (MWCOG) Transportation Planning Board).

Initial Design • HOV lanes on I-95, I-395, and I-66. Combination of concurrent flow 

and reversible HOV lanes.

First Generation Pricing Project • None. 

Second Generation Pricing Project • Construction of I-495 Express Lanes with two added HOT lanes in 

each direction on the Capitol Beltway.

• I-95/395 Express Lanes, which is a combination of an HOV to HOT 

conversion and lane additions.

Next Steps • Exploring the possibility of creating HOT lanes on I-66 outside of the 

Beltway for 25 miles. 

• Studying conversion of HOV to HOT lanes during peak periods on 

I-66 inside the Beltway.

Table 6. Evolution of Northern Virginia Managed Lanes.

Websites

Virginia Megaprojects – I-495 HOT Lanes: http://www.vamegaprojects.com/about-megaprojects/i495-hot-lanes/

I-495/I-95 Express Lanes: https://www.expresslanes.com/

HOT = high-occupancy toll, HOV = high-occupancy vehicle
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 17

Figure 4. Map. The Northern Virginia Managed Lanes Facilities. 

(Source: Virginia Department of Transportation)
18 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Technology

• Needed new switchable transponders called E-ZPass Flex to support the Express Lanes. Allows users to 

declare as an HOV 3+ on the I-495 and I-95 Express Lanes. New back-office operations were created by 

Transurban. 

Institutional

• Extensive reorganization needed within VDOT to implement the public-private partnership project on 

I-495. This organization is now working well and facilitated the I-95 Express Lanes project. 

• Concerns by Arlington County and the City of Alexandria resulted in changes in the final design of the I-95 

Express lanes project. 

Planning/Policy

• Ongoing planning for the I-495 improvements was interrupted by the unsolicited HOT lane proposal. A 

new alternative was added to the environmental impact review process. 

• Expanding network creates challenges for toll policy and public information.

Design

• Reconstruction of I-495 required new overpasses and interchanges along with supporting infrastructure. 

The result was a state-of-the-practice express lane design. 

Operations 

• VDOT needed to revise the E-ZPass operations to allow self-declaration of HOV status. Enforcement 

areas were designated on I-495. 

• Similar operations are present on I-95/I-395, although tolled (non-HOV eligible) vehicles must exit the 

lanes at the Alexandria city boundary, where the facility reverts to an HOV lane.

Financial

• Public-private partnership proposal provided needed funding to implement the projects along with State 

and Federal funding.

Communications

• Extensive public outreach for the 495 Express Lanes gained support after previous planning efforts could 

not reach a consensus on a viable project.

• Existing HOVs using I-95/I-395 must obtain an E-ZPass flex and switch it into HOV mode to receive a 

free trip. This is a change from several decades of ongoing HOV operations in the corridor. 

Table 7. Northern Virginia Challenges and Opportunities.

Photo source: Virginia.gov

HOT = high-occupancy toll, HOV = high-occupancy vehicle, VDOT = Virginia Department of Transportation

Figure 5. Photo. Construction of the I-495 Express Lanes in Northern Virginia.
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 19

PUGET SOUND, WASHINGTON

The Puget Sound region in Washington State has 

had one of the Nation’s largest regional highoccupancy vehicle (HOV) systems for many years. 

It features 235 miles of managed facilities. 

The Washington State Department of 

Transportation (WSDOT) first considered a priced 

managed roadway system in 2006 when the 

Washington State Legislature asked WSDOT to 

conduct a study on the feasibility of adding up to 

two express toll lanes to I-405 that would connect 

with existing high-occupancy toll (HOT) lanes on 

SR 167. This would form a seamless 50-mile 

Eastside Corridor.5

 The first phase is scheduled to 

open in late 2015. It will include a dual express toll 

lane system from downtown Bellevue to Bothell/

Woodinville, and an existing carpool lane from SR 

522 to I-5 will be converted to a single express toll 

lane. The remaining sections south of Bellevue 

will be added as funding becomes available to 

increase capacity along I-405. 

The other major priced managed roadway currently 

under construction is the SR 520 Bridge 

5 Priced managed lanes on I-405 were initially considered in 2002 as 

part of a programmatic Environmental Impact Study for the I-405 

Master Plan. This concept was further studied and then supported 

with state legislation. Priced managed lanes were successfully tested 

along SR 167, helping to build support for the I-405 express lanes 

project.

Replacement Project. This project is being partially 

funded with toll revenues generated by the SR 520 

full-facility pricing project, which was funded as 

part of FHWA’s Urban Partnership Agreement 

(UPA) grant program. The SR 520 full-facility 

pricing project charges variable tolls on all lanes of 

the existing floating bridge across Lake Washington. 

This project is unique because it initiated pricing on 

an existing bridge. The project was designed to 

manage demand and generate revenue to help fund 

the new bridge prior to completion of the 

replacement bridge, which is under construction. 

An underlying objective of the managed lane 

program is to ensure ongoing reliability for transit, 

which relies strongly on the regional managed lane 

network to maintain efficient transit operations. 

Pricing provides WSDOT with another demand 

management tool to enable reliable speeds to be 

achieved on the managed lanes throughout the day. 

Building a network of priced managed lanes creates 

design and operational challenges. Since most of the 

actions include converting and expanding the existing 

HOV lane system, the design needs to integrate those 

features without needing to totally rebuild the 

freeway infrastructure. For example, there are 

several HOV direct-access ramps along I-405 that are 

being retrofitted to better accommodate added toll 

traffic while maintaining reliable access for HOVs 

and transit. There are also different HOV eligibility 

rules that may be in place for each corridor. These 

will need to be reconciled as part of the concept of 

operations and public outreach process. 

A key feature of the Puget Sound program is continuous interagency planning and collaboration. For 

example, the SR 520 Bridge tolling project has been 

a joint effort between WSDOT, King County Metro 

(transit service provider), and the Puget Sound 

Regional Council (PSRC). These agencies collaborated on the Urban Partnership proposal and have 

remained active partners during implementation of 

the pricing project. WSDOT is the overall lead for 

the project, requiring coordination between 

Highlights

• Initial HOV to HOT conversion has evolved 

into a dual express toll lane system and full 

road-way tolling.

• The regional managed lane system plan is 

tied to the 2040 vision for managed roadways.

• Managed lanes also function as key transit 

corridors.

• Developing the initial portion of the network 

required extensive coordination within 

WSDOT and among 20 agencies. 

• The regional partners needed to deal with 

different operating rules on each facility.
20 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

A Vision for Regional Pricing

The Puget Sound Regional Council (PSRC) Vision 2040 

plan (adopted in 2010) envisions priced freeways 

throughout the region. The intent is to manage and 

finance the highway network as a system of fully tolled 

facilities. The creation of priced managed lanes using the 

high-occupancy vehicle (HOV) lane system as a backbone 

is the first step towards future fully priced roadways.

Wahington State Department of Transportation’s 

(WSDOT) Toll Division, the Northwest Region, and the 

SR 520 mega-project office,6 which is constructing the 

new 520 floating bridge. Local agencies on both ends of 

the bridge are also actively engaged. 

A strong public process has helped to build support for 

roadway pricing. A tolling implementation committee 

was established in 2010 to gauge and build public support 

and to provide guidance to the legislature. WSDOT also 

identified pricing champions in both the public and private 

sectors. The Secretaries of the WSDOT, past and present, 

have been stalwart supporters of the implementation of 

pricing to achieve the many PSRC regional policy goals. 

The following projects fit within those policy goals: the 

SR 520 Bridge (i.e., a fully tolled facility), priced managed 

lanes on SR 167, and forthcoming express toll lanes on 

I-405. Also important is the leadership provided by 

major businesses such as Boeing and Microsoft, whose 

employees commute along these roadways. The private 

sector leadership has helped bolster legislative support to 

continue the pricing program.

6 The mega-project office reports directly to WSDOT headquarters in 

Olympia, WA.

Figure 6. Map. Existing and Proposed Priced Managed 

Lanes for SR 167 and I-405 in the Puget Sound Region. 

(Source: Washington State Department of Transportation)

The Federal Highway Administration Role 

The State’s early Value Pricing Pilot Program (VPPP) 

awards were focused on non-toll strategies (parking cash 

out and GPS-based pricing). In 2003, the State received 

funds to study high-occupancy toll (HOT) lanes on SR 

167. The project was implemented in 2008. 

Subsequently, VPPP funded projects to evaluate the 

express toll lanes concept were undertaken in 2009 and 

they are currently piloting continuous access on SR 167. 

Full facility pricing began on the existing SR 520 bridge 

in December 2011. The facility is tolled by time of day, 

and toll revenue generated will be used to pay for part of 

the construction costs of the new floating bridge.
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 21

Initial Design • HOV lanes on 235 miles of regional freeways. Combination of concurrent 

flow and reversible HOV lanes. 

First Generation Pricing 

Project

• Converted single-lane SR 167 HOV lanes to HOT lanes. 

Second Generation Pricing 

Project

• Added variable tolls on SR 520, which includes an existing bridge crossing 

Lake Washington. A new bridge is under construction. 

• Creating dual express toll lanes on I-405, eventually tying to the existing 

SR 167 HOT lanes.

Next Steps • Complete I-405 Express Toll Lanes and SR 520 bridge replacement. 

Continue to work on priced managed lane system and regional priced 

freeway vision. 

Table 8. Evolution of Puget Sound Managed Lanes.

Websites

WSDOT – I-405 Express Toll Lanes: http://www.wsdot.wa.gov/Tolling/405/

WSDOT – High-occupancy Vehicle (HOV) Lanes: http://www.wsdot.wa.gov/HOV/

Photo source: WSDOT

HOT = high-occupancy toll, HOV = high-occupancy vehicle

Figure 7. Photo. Existing SR 520 Bridge in Washington Prior to Replacement.
22 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Technology

• Needed to update Good-to-Go transponders and back-office operations to accommodate addition of SR 167 

and SR 520 pricing projects. Toll system was originally developed for the Tacoma Narrows bridge project.

• Switchable transponders allowed self-declaration of HOV status on SR 167.

• The upcoming I-405 express lanes require WSDOT to change to a declarable transponder in order to allow 

HOV 3+ to travel free during peak periods and HOV 2+ to travel free during off-peak periods.

Institutional

• Extensive coordination was needed within WSDOT among the Toll Division, Northwest Region, and 

Headquarters Offices.

• More than 20 agencies were involved in Eastside Corridor Express Toll Lanes. WSDOT created an 

executive committee to coordinate State, regional, and local interests.

• The state Transportation Commission sets the toll rates with input from WSDOT and other stakeholders. 

Planning/Policy

• While there may be differing eligibility rules on each facility, WSDOT is striving to the extent possible to 

provide consistent messaging for the customer. 

• WSDOT conducted regional tolling studies with the goal of eventually implementing pricing on all 

freeways consistent with the regional transportation plan.

• I-405 master plan was modified to accommodate the dual-lane express system.

Design

• SR 167 was a pilot HOV-to-HOT conversion with limited access points. It subsequently became a 

permanent facility, but the design was converted to allow continuous HOV/HOT access.

• Freeway-to-freeway HOV/HOT connection is a high priority linking SR 167 and I-405 to provide seamless 

transition within Eastside corridor. 

• Creating express toll lanes on I-405 requires some changes in express lane buffers and direct HOV access 

ramps, which were not designed to accommodate non-HOV traffic. 

Operations

• Enforcement was straight-forward during first generation SR 167 HOV-to-HOT conversion project. 

Connection to I-405 may create modified HOV eligibility rules and self-declaration process.

• SR 520 Bridge charges all vehicles, with the exception of transit and vanpools that are exempted[1] if 

registered and have a Good to Go! Pass. 

• The SR 520 corridor includes Active Transportation Demand Management. 

Financial

• Revenues collected on I-405 will be dependent on HOV eligibility rules.

• WSDOT needing to collaborate with Sound Transit and FTA on funding responsibilities and performance 

requirements for existing direct access ramps along I-405, which were partially funded for HOV and transit 

access only.

Communications

• The public has been supportive of HOV lane system; extensive public outreach is being conducted to gain 

support for the Eastside Corridor tolling project.

• Implementing SR 167 HOT lanes as a “pilot project” helped to gain public support as it has become more 

successful.

• There is a continuing need to educate the public on the function of pricing on SR 520 as a tool for both 

traffic management as well as funding. The success of the UPA project funded by USDOT helped to 

reinforce that message. 

Table 9. Puget Sound Challenges and Opportunities.

FTA = Federal Transit Administration

HOT = high-occupancy toll

HOV = high-occupancy vehicle

UPA = Urban Partnership Agreement

USDOT = United States Department of Transportation

WSDOT = Washington State Department of Transportation
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 23

MINNEAPOLIS/ST. PAUL, MINNESOTA

The greater Minneapolis-St. Paul region has 

implemented two managed lane projects on I-394 

and I-35W. Both of these facilities started as highoccupancy vehicle (HOV) lanes and were 

subsequently converted to high-occupancy toll 

(HOT) lanes under the MnPASS program. The 

HOT lanes allow HOV 2+ and transit to travel free, 

while single-occupancy vehicles (SOV) can buy into 

the lanes using dynamic pricing. 

The MnPASS project objectives, first applied to 

I-394, were as follows:

• Improve efficiency by increasing the personand vehicle-carrying capabilities of existing 

HOV lanes.

• Maintain free-flow speeds for transit and carpools.

• Implement electronic toll collection for dynamic

pricing and electronic enforcement.

The I-394 conversion resulted when the facility’s 

under utilized HOV lane came under increased 

political and public scrutiny. The new MnPASS 

managed lanes were opened along the 11-mile 

corridor in 2005 and featured dynamic pricing. 

These were the first HOT lanes to use doublestriped lines rather than physical barriers. 

The I-35W MnPASS lanes, supported under the 

Urban Partnership Agreement (UPA) program, were 

opened in 2009 and included 8 miles of an HOV to 

HOT conversion project, plus a 3 mile priced 

dynamic shoulder lane. The dynamic shoulder 

lane is used as a priced managed lane during peak 

periods, and then returned to a shoulder during 

off-peak periods. The priced dynamic shoulder 

lanes were an outgrowth of the region’s system of 

bus-only shoulders and were considered a better 

way of utilizing existing infrastructure as an 

interim solution. 

Both the I-394 and I-35W MnPASS lanes could be 

considered first generation priced facilities in that 

they converted existing HOV lanes into HOT lanes, 

and in the case of I-35W, converted an existing 

shoulder into a peak period HOT lane. The move 

into second generation priced facilities will occur in 

2015, when MnPASS will add new lanes to a 4-mile 

section of I-35E, north of St. Paul. 

In 2016, the Minnesota Department of 

Transportation (MnDOT) plans to extend the I-35E 

MnPASS lanes further north through a combination 

of lane additions and an innovative approach 

through the I-35E/I-694 commons area. Because 

there was no need to add lanes through this recently 

reconstructed commons area, MnDOT decided to 

convert the inside southbound general purpose lane 

to a HOT lane during the morning peak period. In 

the northbound direction through the commons, 

there will be no HOT lane designation. This 

approach will be evaluated for a 1-2 year period, and 

modifications could be made depending on the 

evaluation results. 

MnDOT and the Metropolitan Council (the region’s 

metropolitan planning organization (MPO) have a 

vision for a MnPASS system throughout the Twin 

Cities area. There are plans to extend the MnPASS 

lanes on I-35W south of Minneapolis, add MnPASS 

lanes on I-35W north of Minneapolis, and add 

MnPASS lanes on I-94 between Minneapolis and 

St. Paul. MnDOT is also evaluating and developing 

several other corridors for MnPASS lanes should 

additional funding become available. 

Highlights

• The initial conversion from HOV to HOT 

lanes on one project led to acceptance of 

pricing in other corridors.

• The region instituted the innovative use 

shoulders for bus travel.

• The new corridor managed lane includes an 

HOV conversion and sections of new lanes.

• Implementation of a vision for a regional 

HOT network is underway.
24 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Initial Design • HOV lanes operated on I-394 and I-35W. 

First Generation Pricing 

Project

• Converted HOV lanes to HOT lanes.

• Added priced dynamic shoulder to I-35W. 

Second Generation Pricing 

Project

• Expanding HOT lane system by adding lanes to I-35E. 

• Exploring conversion of existing general purpose lane capacity.

Next Steps • Planning and developing future priced managed lanes on several corridors. 

Table 10. Evolution of Minneapolis Managed Lanes.

The Federal Highway Administration Role 

The first pricing funds were awarded in 1999 to conduct a regional study and public outreach. The 

Minnesota Department of Transportation (MnDOT) was awarded Value Pricing Pilot Program 

(VPPP) funds the next 6 years to study both toll- and non-toll-pricing applications. 

In 2007, MnDOT obtained UPA funding to test several innovations to managed lanes along I-35W. 

In 2012, MnDOT received a VPPP grant to conduct a pre-implementation study of highoccupancy toll (HOT) lane options on I-35E.

Websites

Regional Transportation Management Center (RTMC) – Reports – MnDOT: http://www.dot.state.mn.us/rtmc/

reports.html

Photo source: FHWA

HOT = high-occupancy toll, HOV = high-occupancy vehicle

Figure 8. Photo. I-35W MnPass Express Lanes in Minnesota.
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 25

Technology

• Used intelligent lane control signs over each lane to enable tolling on the shoulder during peak periods and 

to control variable speeds on all lanes. Currently installing advanced transponder enforcement technology 

and fully digital pricing signs.

Institutional

• Built political constituency in first MnPASS projects and looking for opportunities to expand HOT lane 

acceptance throughout the region.

• MnDOT is the region’s sole toll agency and has a close working relationship with the region’s MPO. 

Planning/Policy

• Two separate HOT lane system planning efforts led to the adoption of a HOT lane system vision in the 

MnDOT and MPO long range transportation plans.

• In-depth HOT lane planning and development are underway on several corridors.

• The primary policy goals are to maximize the movement of people through corridors during congested 

periods, increase transit use and carpooling, and provide commuters with a reliable and sustainable 

congestion-free option.

• MnDOT is currently considering interoperability policies. 

Design

• MnDOT used design exceptions as needed to fit lanes within I-394 and I-35W. For I-35W, these variations 

were made easier due to the project being a UPA grant project and being on tight deadlines.

• The priced dynamic shoulder design on I-35W was facilitated by a successful history with shoulder bus 

lanes. 

Operations 

• Each corridor has some operational variations (e.g., reversible dual lane segment on I-394, priced dynamic 

shoulder lane segment on I-35W, and gap in the HOT lane on northbound I-35E), but most operational 

features are the same as or very similar to each other among the corridors (e.g., common signing, 

occupancy and pricing rules).

• The managed lanes are primarily a single-lane system.

• Managed lanes operate only during weekday peak periods. 

Financial

• Objective of MnPASS is to manage congestion, not to maximize revenue.

• MnDOT & transit agency negotiated revenue splits.

• I-35W was almost entirely funded by the Federal UPA program, which was key in facilitating public and 

political acceptance. 

• A portion of the I-35E corridor is being delivered using design-build.

• Utilizing high return-on-investment strategies is critical (e.g. implementing within existing infrastructure 

and right-of-way footprint; coordinating with bridge and pavement preservation work; including transit 

advantage improvements like Park & Ride lots).

• Funding for HOT lane system expansion is a challenge when virtually all of MnDOT’s revenue is going to 

preserve existing infrastructure. 

Communications

• Familiarity with existing MnPASS projects helped to facilitate understanding of I-35E project. Generally 

with each corridor there is a different set of users with different expectations. 

• Extensive public outreach and surveys conducted to determine the most acceptable mix of strategies to 

extend I-35E to the north. 

• Emphasizing expansion of transit benefits and travel choices is important. 

• Focusing on customer value is key. 

Table 11. Minneapolis Challenges and Opportunities.

HOT = high-occupancy toll 

HOV = high-occupancy vehicle 

MnDOT = Minnesota Department of Transportation

MPO = metropolitan planning organization

UPA = urban partnership agreement
26 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Figure 9. Map. The Existing and Future Managed Lanes in the Minneapolis/St. Paul Region. 

(Source: Minnesota Department of Transportation)
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 27

HOUSTON, TEXAS

Houston’s experience with managed lanes started in 

the late 1970’s with the North Transitway (I-45) 

contraflow lanes. Subsequently, transitways (i.e. 

reversible managed high-occupancy vehicle (HOV) 

lanes) were developed along I-45 North (North), 

I-45 South (Gulf), I-10 (Katy), US 59 South 

(Southwest), US 59 North (Eastex) and US 290 

(Northwest). 

The transitways were primarily one-lane, reversible, 

barrier-separated facilities located in the median of a 

freeway. Houston Metropolitan Transit Authority of 

Harris County (Metro) and Texas Department of 

Transportation (TxDOT) jointly funded these 

projects under various agreements, which also 

involved Federal funding (Federal Highway 

Administration (FHWA) and Federal Transit 

Administration (FTA) for the Gulf, North, Eastex, 

Southwest and Northwest corridors. 

As this radial network of transitways was completed 

in the late 1990’s, usage grew and several of the 

managed lanes started to have capacity problems 

due to high HOV usage. The region was also facing 

severe congestion on most of the general purpose 

lanes, leading to plans for freeway reconstruction 

and expansion on some corridors. The decisions 

that came next led to the development of secondgeneration managed lanes that also brought in 

pricing characteristics. The Katy Freeway (I-10) 

serves as a good illustration of this evolution. The 

Katy HOV lane opened in 1984, and vehicle 

eligibility for the HOV lane gradually decreased 

from only transit and vanpools to all vehicles with 

two or more occupants. Growing travel demand led 

to overcrowding and slower speeds on the HOV lane 

during peak periods. In response, the Katy HOV 

lane was restricted to HOV 3+ during the peak 

hours, leading to “empty lane” syndrome. 

In January 1998, the QuickRide pricing program 

began. The primary goal of this program was to 

increase the person throughput on the Katy HOV 

lane and in the Katy freeway corridor. The plan 

added pricing to allow HOV 2 users to “buy into” 

the HOV lane during the morning and evening peak 

periods—hence the name QuickRide. A postimplementation study that evaluated the QuickRide 

program found that demand for paid HOV-2 was 

relatively low and did not lead to significantly better 

freeway operations. During this time, TxDOT 

conducted an evaluation process to assess the 

current condition and future needs of the Katy 

Freeway corridor including the general-purpose 

lanes, the HOV lane, and local access roads. The 

study recommended a full reconstruction of the 

Katy Freeway. Due to the need for substantial 

capacity above what could be environmentally 

approved, two lanes in each direction were reserved 

as special use lanes. 

The Harris County Toll Road Authority (HCTRA) 

made a proposal to finance the construction of the 

four special-use lanes in the median of the Katy 

Freeway between I-610 and SH 6 with the 

stipulation that the agency could operate them as a 

priced managed lane facility. The proposal by 

HCTRA to build, operate, and maintain the 

managed lane portion of the highway allowed the 

construction of the facility to be completed sooner. 

In turn, this action allowed TxDOT to prioritize 

funding for other managed lane corridors in the 

region.

Highlights

• Katy Freeway represents full evolution from 

reversible HOV lane, to HOT conversion, to 

dual express toll lanes within rebuilt freeway.

• Strong partnership among State and regional 

agencies for planning, implementation and 

operation.

• Partnership and strong leaders contributed to 

effective public communication.
28 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

The Federal Highway Administration Role

Houston’s first congestion pricing project was 

awarded under the Congestion Pricing Pilot 

Program in the late 1990s. Between 2002 and 2005, 

the Value Pricing Pilot Program (VPPP) funded 

pricing feasibility studies in Austin, Dallas, Houston 

and San Antonio to evaluate the feasibility of 

dynamic pricing. 

The Dallas-Fort Worth area performed one of the first 

evaluations of pricing from a regional perspective. 

The Katy managed lanes helped to test the design for 

multilane treatments that have since been 

implemented on corridors in Texas and elsewhere. 

While Harris County Toll Road Authority (HCTRA) 

would operate the managed lanes, the generalpurpose lanes remained under the jurisdiction of 

Texas Department of Transportation (TxDOT). 

A later pact with Metro was made in a tri-party 

agreement to allow transit vehicles to use the 

managed lanes for free as an effort to improve 

mobility on the corridor. This innovative delivery 

process provides a model for funding, operating, 

and maintaining the managed lanes. The tri-party 

agreement between TxDOT, HCTRA, and Federal 

Highway Administration (FHWA) was also 

innovative because it included components not 

commonly involved in the delivery of major 

transportation investments: These include (1) 

having a shared operating agreement, (2) financing 

the construction of managed lanes on an Interstate 

Highway through a county-based toll operator, and 

(3) using open road electronic tolling.

The Katy Freeway Managed Lanes on I-10, also 

referred to as the Katy Tollway, became fully 

operational in 2009. Two managed lanes operate 

(HOV 2+ discount) in each direction in the median 

of the facility, bounded by at least four generalpurpose lanes in each direction and three or more 

frontage road lanes. The managed lanes terminate 

at the west end into a concurrent-flow HOV lane. 

It was the first newly constructed managed lane 

project in Texas that included variably priced 

operations. The priced managed lanes occupy four 

lanes within the center of the freeway and contain 

channelized slip ramps with the general purpose 

lanes as well as flyover ramps with transit facilities 

and local streets. In 2014 HCTRA formally 

announced that they were no longer going to 

co-sponsor managed lane operations on the Katy 

Freeway Managed Lanes nor be a sponsor to the 

new US 290 Managed Lanes. TxDOT will likely 

take over sponsorship of these projects in 2015. 

Snapshot of other Houston Managed Lanes

NOTE: These are all considered first generation priced managed lanes.

Northwest Freeway (U.S. 290) QuickRide - Converted a reversible high-occupancy vehicle (HOV) lane to a 

high-occupancy toll (HOT) lane facility. The US 290 Northwest Freeway QuickRide conversion occurred in 2000 

and was replaced in 2012 with a more advanced, dynamically priced ETC operation that allowed single occupant 

vehicles to pay to use the facility. This project is now in the process being replaced by an expanded, multilane, 

second-generation facility. 

Gulf Freeway (I-45S) - Converted one reversible HOV lane to a HOT, HOV2+ free, time variable tolling (no 

tolling 7-8am / 4-6pm) lane with occupancy declared via declaration lanes at entrances.

North Freeway (I-45N) - Converted one reversible HOV lane to HOT (A1-33), HOV2+ free, time variable tolling 

lane with occupancy declared via declaration lanes at entrances.

Eastex Freeway (US-59N) - Converted one reversible HOV lane to HOT, HOV2+ / motorcycles ride free 

(5-11am / 2-8pm) lane.

Southwest Freeway (US-59S) - Converted one reversible HOV lane to HOT, time variable tolling, HOV2+ / motorcycles 

ride free (5-11am / 2-8pm) lane. Outer portion now transitions to one concurrent lane in each direction. 
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 29 10 10

Kirkwood

Wilcrest

Dairy Ashford

Gessner

N. Post Oak

8

290 610

Old Katy Rd.

Antoine

Bunker Hill

Silber

Chimney Rock

Northwest

Transit

Center

Tolling PlazaManaged LanesGeneral Purpose Lanes HOV Lanes

EntranceExit

Addicks

Park & Ride

Eldridge

Wirt

TEXAS

6

Welcome to the new and improved Katy Freeway. Combined with the recent freeway expansion, the new Katy Managed Lanes mean more options for everyone. These managed lanes include two lanes in each direction between State Highway 6 and Interstate Highway 610 West that replace the single, reversible HOV lane. 

The new lanes offer more reliable travel times for METRO buses and carpoolers, while making any unused lane capacity available to single drivers who pay a toll for the potential travel-time savings. As of April 18, 2009, Single Occupancy Vehicles (SOV) are allowed to use the lanes for a toll, which will be charged electronically via EZ TAG or TxTag. Rates are posted on message boards at all entrances. 

Katy Freeway Managed Lanes

Managed Lanes MaP

MANAGED LANES MAP

MANAGED 

LANES

KATY FREEWAY

DriviNG ProGrESSKatyManagedLanes.org Figure 10. Diagram.The Katy Freeway Managed Lane Facility in Houston.

(Source: Harris County Toll Road Authority
30 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Photo source: Houston Public Media.org

Figure 11. Photo. Gulf Freeway High-Occupancy Vehicle and High-Occupancy Toll Lanes at the 

Eastwood Transit Center in Texas.

Initial Design • Single reversible HOV lanes on four radial freeways. Expanded to a total of six 

radial freeways by 1990s. 

First Generation 

Pricing Project

• Converted reversible HOV lane to HOT. Katy Freeway charged HOV-2s during 

peak hours. Project was subsequently replaced by freeway reconstruction. 

Second Generation 

Pricing Project

• Katy Freeway reconstructed and opened in 2009 with dual express toll lanes in each 

direction.

Next Steps • Continue to work on priced managed lane system with Katy Freeway style 

reconstruction on US 290 corridor as funding permits. I-45N (North) is the only 

other corridor slated for some reconstruction, and HOT lane may retain same 

design. A new managed lane corridor is planned for the median of SH 288. 

Table 12. Evolution of Houston Managed Lanes.

HOT = high-occupancy toll, HOV = high-occupancy vehicle
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 31

Technology

• Included state-of-the-art tolling equipment as rebuild of Katy freeway.

• Used existing HCTRA back office operations, enforcement, and transponder technology.

Institutional

• Extensive coordination was needed between TxDOT, FHWA, and the Harris County Toll Road Authority. 

Later this group grew to include Metro to handle transit use of the managed lanes.

• The effort had strong project champions at technical, agency, and political levels.

• TxDOT has since needed to take over operations, as HCTRA has withdrawn from its role on the Katy and 

other regional priced managed lanes projects. 

Planning/Policy

• TxDOT determined that the original reversible lane HOT operation (originally intended only for a short 

term 5-8 year operational life) was unable to provide sufficient priority treatment for the long term, and a 

more robust strategy was needed.

Design

• Two managed lanes operate in each direction in the median of the facility, bound by four or more generalpurpose lanes and three or more frontage road lanes in each direction.

• The roadways feature generous lane, shoulder, and buffer widths.

• A wide inside shoulder at the tolling plazas gives enforcement vehicles a place to manually observe HOV 

occupancy compliance.

• The Addicks Park-and-Ride Lot and the Northwest Transit Center are located at opposite ends of the Katy 

Managed Lanes project and provide services for users seeking carpools and transit services.

Operations 

• Having no formal concept of operations did not affect efficiency of operations, but would have been 

helpful in early concept design and placement of tolling infrastructure. 

• Differing occupancy policies created challenges in developing a seamless priced managed lane network.

• Tolling operations are facilitated by long history of pricing in Texas.

Financial

• Clear funding roles were achieved among the entities.

• Funding was locally prioritized by agency partnering, thus accelerating the project schedule.

Communications

• TxDOT and other local agencies built on the many years of experience with the Katy HOV and HOT lanes 

to build support.

• Clear and coordinated messaging throughout project development and implementation contributed to the 

project’s success. 

Table 13. Houston Challenges and Opportunities.

HCTRA = Harris County Toll Road Authority 

HOT = high-occupancy toll

HOV = high-occupancy vehicle

TxDOT = Texas Department of Transportation
32 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

SAN DIEGO, CALIFORNIA

The I-15 Express Lanes facility in San Diego offers 

an example of a priced managed lane project that 

contains an integral transit component. The I-15 

facility, located northeast of downtown San Diego, 

started as a reversible, two-lane high-occupancy 

vehicle (HOV) facility that extended for 8 miles. 

Opened in 1988, the HOV lanes were underutilized 

for several years, with demand decreasing during 

the early 1990s. Also during this time, agencies 

sought to expand peak commuter transit service to 

the northeastern San Diego region. 

Using a Value Pricing Pilot Program (VPPP) grant 

from Federal Highway Administration (FHWA), 

San Diego converted the HOV lanes into a highoccupancy toll (HOT) facility. Renamed FasTrak, 

the I-15 HOT lanes’ purpose was to better utilize the 

HOV lanes and ensure fast, reliable transit service. 

The managed lane operation was simple in that 

there was only one entry and exit point. Revenues 

from the HOT lanes were allocated to new corridor 

transit service, providing an additional travel choice 

to commuters. 

The success of the HOT lane conversion led to a 

major freeway reconstruction/expansion effort in 

2012 between SR 163 and SR 78. This project 

added two HOT lanes in the existing section to 

create a bi-directional, four-lane facility and 

extended the project north by 12 miles, completing a 

20-mile barrier-separated HOT facility. The 

managed lanes have a movable barrier that can 

allow various combinations of operations for the 4 

combined HOT lanes and multiple access points to 

the general purpose highway lanes. In addition, 

direct access ramps, park-and-ride lots, and transit 

stations were added along the HOT lane section. 

The HOT lanes allow HOV 2+ and transit to travel 

free, while single-occupancy vehicles (SOV) can 

buy into the lanes using dynamic pricing. This 

operation allows demand to be fully managed 

throughout the HOT lane facility. 

The initial HOT Lane project included a new express 

bus service. Further expanded as part of the secondgeneration project, a 35-mile all-day bus rapid transit 

(BRT) line was implemented in 2014 connecting 

Escondido to downtown San Diego via the I-15 

Express Lanes (branded as “Rapid”). Five direct 

connector ramps allow BRT vehicles (and carpools/

vanpools/SOV toll users) access to off-line BRT 

stations and park-and-ride facilities. These connector 

ramps and stations are spaced roughly every 4 miles. 

I-15 FasTrak currently generates toll revenues of 

nearly $1 million per year for BRT service in the 

I-15 corridor. After covering operating expenses, 

the remaining revenues are earmarked to be spent 

on improving corridor transit service, an 

arrangement that helped to gain political and public 

acceptability of the project. 

Due to the success of the FasTrak project, the San 

Diego Association of Governments (SANDAG) is 

working to expand the express toll lane network to 

I-5, I-805, and SR 52. Each facility will have unique 

character and design features but will have common 

branding and basic operating rules. 

The Federal Highway Administration Role

The FasTrak project was originally funded under the 

Congestion Pricing Pilot Program (CPPP). Future 

aspects of the project (exploring variable and dynamic 

pricing and enforcement) were funded under the 

Value Pricing Pilot Program (VPPP). 

Highlights

• I-15 started as reversible HOV lanes, then 

became high-occupancy toll (HOT), and is 

now operated as a dynamically-priced 

by-the-mile system on a 20-mile, bidirectional managed lanes facility.

• Emphasis on new transit service and use of 

toll revenues to help support transit 

operations.

• Success leading to express toll lane network 

expansion to I-5, I-805, and SR 52.
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 33

Figure 12. Screenshot. The San Diego I-15 Corridor Express Lanes.

(Source: San Diego Association of Governments)
34 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Table 15. San Diego Challenges and Opportunities.

Technology

• The complexity of dynamic pricing increased with the HOT lane extension and the addition of more access 

points.

• SANDAG is investigating automated vehicle occupancy technology to identify and enforce a mix of users.

Institutional

• The project had strong political champions.

• The agencies involved needed to work out agreements to fund transit service from toll revenues. 

• SANDAG consolidated internal responsibilities to help facilitate implementation. 

Planning/Policy

• The project provided an opportunity to include new BRT transit service on corridor. 

• HOV 2+ vehicles were able to continue to travel for free on the corridor with multiple HOT lanes. 

Design

• Expansion required design integration of direct access ramps, transit stations, and park-and-ride facilities.

• The facility features more complex signing for access and changeable toll rates. 

Operations 

• Enforcement was simple during the first-generation phase due to single access points. Expanding the 

length and increasing access to the managed lanes creates additional enforcement needs. 

• Moveable barrier allows flexible management but must be adjusted regularly. 

Financial

• A major portion of revenues collected were earmarked to expanded transit service in corridor. 

Communications

• The public was supportive of extending HOT lanes and the supporting facilities and services.

• Expansion of transit service with toll revenues addressed many of the equity issues. 

BRT = bus rapid transit

HOT = high-occupancy toll

HOV = high-occupancy vehicle

SANDAG = San Diego Association of Governments

Initial Design • Reversible HOV lanes with single entry/exit point (8 miles). 

First Generation 

Pricing Project

• Converted HOV lanes to HOT lanes. Added peak express transit.

Second Generation 

Pricing Project

• Expanded HOT lane system to four lanes and extended to 20 miles. The system 

contains multiple access points and supporting facilities and services. All-day 

BRT service was also implemented.

Next Steps • Plans exist to expand FasTrak on the I-5, I-805, and SR-52 corridors. 

Table 14. Evolution of I-15 Managed Lanes.

Websites

SANDAG, I-15 Express Lanes: http://www.sandag.org/index.asp?projectid=34&fuseaction=projects.detail.

HOT = high-occupancy toll, HOV = high-occupancy vehicle
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 35 Photo source: UTSandiego.com

Figure 13. Photo. I-15 Express Lanes in California.

CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 37

Summary

Priced managed lanes have evolved over the past 20 years. As these facilities transform from simple 

high-occupancy vehicle (HOV) to high-occupancy toll (HOT) lane conversions into major road expansions 

or regional networks, the planning, design, and implementation challenges are magnified. The case studies 

presented in this primer provide lessons learned in making these transformations and perspectives on how 

regions that have some HOV/HOT lanes can move to the next level of HOT networks or express toll lanes.

Each project and region is unique, but there are some cross-cutting lessons learned that should benefit 

future applications of second-generation priced managed lanes: 

Technology

• Most second-generation projects are not constrained by technology, which is rapidly advancing. 

• Second generation priced roadway projects are coinciding with advancements in vehicle detection and

ability to employ dynamic pricing options.

• There is a need to provide transponders (with switchable features as appropriate) that can be flexibly used 

across a region.

Institutional

• Identify project champions to build a political constituency in the initial priced lane projects.

• Look for opportunities to expand those coalitions into other corridors or a regional network.

• Develop an organizational structure to oversee implementation and coordination among agencies.

Planning and Policy

• Develop regional transportation plans that include roadway pricing to help ease the implementation of

priced facilities. 

• Realize that a network of priced managed facilities will be phased over time. Plan each project for its

unique features, but keep the broader vision in perspective. 

• Consider network-scale decisions related to legal, financial and regulatory issues, so that the issues are not 

repeated for each project.

• Decide up-front who plans, designs and operates the facilities.
38 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Design

• Provide a consistent design within and among corridors. The public needs to understand design 

treatments such as lane access and separation to safely navigate a network of priced facilities. 

• Make sure there are well-designed connections between priced facilities.

• Use Intelligent Transportation Systems to manage traffic flow effectively and to provide consistent 

messaging to users. 

Operations

• Develop a clear policy for priced lane user eligibility and toll rates. If part of a priced lane network is an

HOV to HOT conversion, then the agency may need to continue eligibility for HOVs at free or reduced 

rates. This may complicate regional tolling policies for other corridors that have new express toll lane 

capacity added. 

• Create a consistent process for motorists to declare their status within the lane. Reduce the need for

switchable transponders to comply with different rules across corridors.

• Define standard operating procedures for the organization(s) responsible for running the facilities. 

Operating procedures are needed both between and within organizations. Procedures should become 

more regionalized as a network is deployed over several years.

• Coordinate back-office operations and traffic management centers.

Financial

• Expanding roadways or developing priced managed lane networks is more expensive and complex than

HOV to HOT conversion projects. 

• Agencies should be clear from the beginning about how and to whom revenues will be allocated.

• Multiple-lane priced roadways offer greater revenue potential and funding flexibility. 

• New financial mechanisms may be appropriate, including public/private partnerships.

Communications

• Start early in the planning process to educate the public regarding the costs and benefits of the project(s). 

• Clearly define the communication roles of each partner agency.

• Communicate how the toll rates work and any changes by time of day and corridor. 

• Develop and apply a consistent branding that will be recognized and understood throughout a region.
CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 39

The authors would like to thank the following individuals for their contributions to this primer. As CoChairs of the Transportation Research Board Congestion Pricing Committee, David Ungemah and Lee 

Munnich provided background information. Chuck Fuhs, Chair of the Transportation Research Board 

Managed Lanes Committee, and Katherine Turnbull of Texas A & M Transportation Institute contributed 

to the Houston, Texas case study. Susan Shaw of the Virginia Department of Transportation contributed to 

the Northern Virginia case study. David Schumacher of the San Diego Association of Governments 

contributed to the San Diego, California case study. Robert Poole and Chris Swensen contributed to the 

Southeast Florida case study. Patty Rubstello of the Washington State Department of Transportation 

contributed to the Puget Sound, Washington case study. Ken Buckeye of the Minnesota Department of 

Transportation contributed to the Minneapolis-Saint Paul, Minnesota case study.

Acknowledgments

CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 41

1. Fuhs, Chuck and Hal Kassoff. (2007, July). Building Flexibility into Managed Lanes: the Next 

Generation, Parsons Brinckerhoff. TRB 2008 Annual Meeting. Washington, DC.

2. Swisher, Myron, et. al. (2003). “Life-Cycle Graphical Representation of Managed High-Occupancy 

Vehicle Lane Evolution.” Transportation Research Record 1856, Paper No. 03-4138. Washington, DC.

3. Ungemah, David. (2010, June). HOT Lanes 2.0- An Entrepreneurial Approach to Highway Capacity.

Parsons Brinckerhoff. Presentation Slides for 2010 National Road Pricing Conference in Houston, TX.

4. Perez, Benjamin G., et. al. (2012, October). Priced Managed Lanes Guide. FHWA-HOP-13-007. 

Parsons Brinckerhoff. Washington, DC.

5. Poole, Robert. (2013, April). “Managed Lanes and Networks,” subsection of Annual Privatization 

Report 2013: Surface Transportation. Reason Foundation. Los Angeles, CA. 

6. Florida Department of Transportation. (2014, May). Southeast Florida Express Lanes- Regional 

Concept for Transportation Operations. Miami, FL. 

7. Goodin, Ginger, et. al. (2013, September). Katy Freeway: An Evaluation of a Second-Generation 

Managed Lanes Project. FHWA/TX-13/0-6688-1. Texas A&M Transportation Institute. Austin, TX. 

8. Turnbull, Katherine F. (2003). Houston Managed Lanes Case Study: The Evaluation of the Houston 

HOV System. Federal Highway Administration. Washington, DC. 

9. Munnich, Lee W., et. al. (2006, March). I-394 MnPASS: A New Choice for Commuters, Hubert H. 

Humphrey Institute of Public Affairs. Minneapolis, MN.

10. Buckeye, Kenneth. (2010, November revised). Managed Lane Innovations: Minnesota Interstate 35W. 

Minnesota Department of Transportation. TRB 2011 Annual Meeting. Washington, DC. 

11. Buckeye, Kenneth, et.al. (2013, July). I-35W South MnPASS HOT Lanes. TRB 2013 Annual Meeting. 

Washington, DC. 

References

CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects | 43
44 | CONGESTION PRICING A Primer: Evolution of Second Generation Pricing Projects

Federal Highway Administration

U.S. Department of Transportation

Office of Operations

1200 New Jersey Avenue, SE

Washington, DC 20590

www.ops.fhwa.dot.gov

Toll-Free “Help Line” 866-367-7487

September 2015

FHWA-HOP-15-036