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146 Evaluation and Performance Measurement of Congestion Pricing Projects
9. The Port Authority of New York and New Jersey
Congestion Pricing Program
The Port Authority of New York and New Jersey (Port Authority) was established in 1921 as the
first interstate agency created under Article I, Section 10, of the U.S. Constitution. The Port Author-
ity has the power to construct and operate seaports, airports, and interstate bridge and tunnel cross-
ings in a 1,500square-mile "Port District" in New York City and New Jersey. Together the Port
Authority's six toll crossings accommodated over 240 million vehicle trips in 2009, making it one
of the largest toll operators in the United States. Its toll facilities include the George Washington
Bridge, which is the most heavily traveled bridge crossing in the United States.
The Port Authority is a self-supporting agency with the power to levy tolls and fees associ-
ated with the use of the facilities it operates. It receives no tax revenues and has no taxing
powers of its own. The Port Authority relies on the revenues generated by the facilities and
services it operates to cover operational costs and to back the bonds it issues to finance cap-
ital projects. In 2008, toll revenue from these facilities generated $991 million out of the Port
Authority's net income of $3.5 billion. The agency's other revenue sources include rent, aviation
and port fees, and transit fares.
The process of adjusting toll rates requires political support and involves gaining approvals
from the Port Authority's Board; it is also subject to veto by the governors of New York and
New Jersey. When contemplating such a change, the Port Authority establishes an overall rev-
enue target it seeks to raise in order to meet the agency's operating and capital investment plans.
Agency staff has had the flexibility to assess alternative approaches to reach the revenue target,
while addressing other policy and mobility objectives. It is within these carefully scripted param-
eters that the Port Authority has been successful in implementing a toll structure with rates that
vary by time of day and method of payment.
9.1. Overview of the Port Authority's Congestion Pricing Program
The Port Authority introduced congestion pricing on the four bridges and two toll tunnels
connecting New Jersey with New York City in March of 2001. At that time, the Port Authority
had just announced a capital investment plan totaling more than $14 billion in capital projects
over the coming 10 years. The prime objective of the toll change was to raise the revenue required
to support the regional investment plan. However, by introducing discounts for traveling in off-
peak periods and for using electronic toll collection (ETC) payment rather than cash, the new
structure also provided an important opportunity to achieve additional traffic management and
congestion reduction objectives. These included
· Encouraging temporal shifts in crossing trips to less-congested off-peak travel periods
· Increasing the use of electronic toll collection
· Encouraging the use of mass transit and carpooling
· Creating incentives for commercial traffic to travel during the least congested overnight period
· Eliminating high-frequency commuter discounts
· Simplifying operations by making toll rates and policies easier to communicate and tolls them-
selves easier to collect
Prior to 2001, eastbound round-trip toll rates on all Port Authority crossings were $4.00 for
passenger vehicles, $4.00 per axle for trucks, and $3.00 for motorcycles and buses. (Port Author-
ity tolls are collected in a single direction at tolling points in the New York-bound direction at
all six crossings.) These rates were reduced by 10 percent for ETC users and additional discounts
were available to frequent travelers on any of the three bridges connecting Staten Island and
New Jersey.
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Congestion Pricing Case Studies 147
The new 2001 toll structure introduced the following changes:
1. It established a $6.00 toll rate for cash transactions at all times, while providing $1.00 dis-
counts to ETC users during peak periods and $2.00 discounts for ETC customers at all
other times. The peak toll rates were in effect from 6:00 to 9:00 A.M. and 4:00 to 7:00 P.M.
on weekdays, as well as on weekends from 12:00 noon until 8:00 P.M.
2. For trucks, it provided a $1.00 per axle discount during the midday and evening hours, as well
as a 42-percent reduction of $2.50 per axle during the weekday overnight period between
midnight and 6:00 A.M.
The Port Authority modified its toll regime again in March 2008, with the primary goal of rev-
enue generation to support capital improvements. The new toll schedule also strengthened the
agency's commitment to congestion pricing by removing the $1.00 peak-period discount for
ETC users and charging all automobiles an $8.00 toll during peak periods. Cash tolls remain
at $8.00 for passenger cars at all times of the day, while ETC users receive a $2.00 discount in
off-peak periods. Additional discount programs are also available for registered carpool and
low-emission vehicles using ETC. Truck toll rates continue to provide modest discounts during
midday and evening off-peak periods and deep reductions in overnight tolls. The elimination
of the peak-period discount for ETC customers established a policy of charging the highest toll
rates during the most congested travel periods, regardless of payment method. The change also
created a greater peak vs. off-peak price differential (i.e., $2.00) making the price signal for tem-
poral travel shifts more compelling.
9.2. What Is Monitored?
The full spectrum of the Port Authority's performance monitoring activities is provided in the
accompanying Facility Performance Monitoring Summary Matrix. The matrix is a comprehen-
sive record of all current, known metrics used to monitor performance on the Port Authority
crossings, organized by evaluation category. It also includes earlier FHWA-sponsored evalua-
tion work performed by a three-university team published in 2005 looking at the 20002004
period. Provided in the matrix for each metric used are frequency of collection, purpose, a sim-
ple indication of importance, and particular characterizations of the metric that relate back
to agency/facility goals or applications. An expanded version of the matrix providing sources
of information and other notes is included in the Final Report for NCHRP 08-75 which is
available on line. The matrix is intended to be a visual overview of the Port Authority's com-
plete monitoring effort, easily comparable to other fully variable-priced facilities with similar
matrix summaries. A more qualitative discussion of how these metrics are applied in practice
and which ones are the most significant is provided below. Not all metrics noted in the matrix
are discussed here.
Given the innovative nature of the new toll structure and the multiple goals behind it, the Port
Authority has implemented a comprehensive program to monitor its performance and under-
stand its effects on regional mobility patterns. As a mature toll operator, the Port Authority had
already developed standard metrics to monitor the performance of its toll facilities. These are
the basic pieces of information that any major toll operator needs to know in order to make
informed decisions about its ongoing operations. The most fundamental of these is revenue
generation, which is tracked closely and compared with the estimates generated by the agency's
sophisticated and well-calibrated traffic and revenue forecasting tools. Toll-revenue generation
is directly related to traffic activity levels. As part of its standard accounting and business proce-
dures, the Port Authority tracks the overall number of toll transactions for each of its crossings by
vehicle class, time of day, and payment method. This detailed and historical time series data has
enabled the Port Authority to study what effects the introduction of congestion pricing had on
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148 Evaluation and Performance Measurement of Congestion Pricing Projects
travel patterns for motorists using its crossings and heightened its focus on variations in the time
of day of travel by vehicle type and toll facility.
In addition to the transaction data generated by its ETC and manual toll collection systems,
the Port Authority conducts regular westbound counts of traffic at all its bridges and tunnels.
These counts include vehicle classifications by approach, origin-destination information based
on registration data and the general travelshed the crossing serves, and vehicle occupancy. The
introduction of congestion pricing has not changed the metrics included in the Port Authority's
manual traffic counts.
In addition to the revenue, transaction, and traffic volume measures described above, the Port
Authority also tracks queue lengths and wait times at each of its toll plazas three times per year.
This is accomplished using a combination of aerial photographs, travel time runs in test vehi-
cles, and information generated by the regional TRANSMIT (TRANSCOM's System for Man-
aging Incidents & Traffic), a system which uses ETC readers and E-ZPass transponders as
anonymous vehicle probes to provide link travel times and road speeds to roadway operators in
the New York-New Jersey region.
The Port Authority also tracks safety on its toll facilities and toll plazas. They look at cur-
rent and historical crash data and track the progress of operational and physical changes to
reduce crashes at the crossings and their approaches. The Port Authority also tracks the over-
all use of ETC versus cash tolls and the location of trucks and buses using the crossings. The
interplay of the placement of ETC and cash booths, the number of large vehicles traversing the
toll plazas, and the method of payment used by trucks and buses all have a bearing on safety
at the toll plazas.
The Port Authority also has a well-established ongoing program to monitor customer satis-
faction at its crossings. The agency employs a biennial customer satisfaction survey designed to
track multiple standard measures over time. While not targeted to toll policy per se, these sur-
veys do address bridge and tunnel operations, signing and communication, safety and security,
and overall facility appearance as critical measures that help evaluate the relationships between
capital and operating improvements and customer satisfaction and align future investments
with areas most important to customer satisfaction. In addition, the Port Authority conducts
focus groups and stated preference surveys from time to time, usually in association with spe-
cific projects or improvements. While the information gathered may not be specifically targeted
to congestion pricing, the results often help shape the policy and mobility agenda supported
through the toll pricing structure. While the Port Authority's outreach efforts have confirmed
that users support the use of varying toll pricing by time of day, motorists have reacted more
positively to messages of toll discounts rather than peak prices. One shortcoming of the Port
Authority's current toll system is there is no driver feedback from E-ZPass electronic toll cus-
tomers about the price paid at any point of time, limiting the ability to reinforce the price sig-
nals at the time of the transaction.
9.3. Other Essential Data Gathering Activities
In addition to these monitoring activities, the Port Authority conducted essential data gath-
ering activities prior to implementing its congestion pricing program, which greatly facilitated
the ability to advance the program. In the mid-1990s, the Port Authority conducted stated pref-
erence survey research to understand how motorist behavior would change as a result of time-
of-day pricing. The resulting price elasticities were then incorporated into traffic and revenue
forecasting tools that the Port Authority used to assess the possible implementation of conges-
tion pricing at the interstate crossings. This same research was also used to estimate ETC partic-
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Congestion Pricing Case Studies 149
ipation rates.6 The stated preference surveys cannot be classified as monitoring activities. How-
ever, they were essential to the Port Authority's ability to model the effects of congestion pricing
on toll revenues and traffic patterns. Absent this key capability, it would not have been possible
for the Port Authority to demonstrate the revenue implications of time-of-day tolling or con-
vince other transportation operators and stakeholders that traffic diversions would be manage-
able. These tools were essential in garnering the political and public support needed to gain the
approval of the Port Authority Board and the governors of two states to implement congestion
pricing on its toll crossings.
The Port Authority also launched an aggressive public outreach campaign prior to the initial
implementation of congestion pricing in 2001. Port Authority officials met with elected officials,
editorial boards, other toll agencies, departments of transportation, community groups, and
known opponents of congestion pricing to elicit their opinions on different aspects of the pro-
posed program. The outreach effort provided an opportunity to educate stakeholders on the
rationale for using congestion pricing, the anticipated results of doing so, and the mechanics of
how the system would operate. This survey work enabled the Port Authority to document public
perceptions on congestion pricing prior to its implementation on the New York-New Jersey cross-
ings. It also enabled the agency to develop a better understanding of the concerns of different
stakeholder groups and reflect those concerns in the different decisions that needed to be made
regarding how the new pricing system would function.
9.4. Why Performance Evaluation Takes Place and How Performance
Monitoring Data Is Used
The Port Authority has implemented a comprehensive effort to monitor the performance of
its toll facilities following the implementation of congestion pricing. The process serves various
important needs.
· Documenting Toll Revenues and Financial Objectives
Performance data allowed the agency to document revenue generation following the imple-
mentation of the new congestion pricing toll regimes in both 2001 and 2008. This information
was also essential for accounting and financial planning purposes and providing information
on the agency's financial performance to bondholders.
· Improving Traffic and Revenue Forecasting Capabilities
The performance monitoring data allows the Port Authority to identify variations in traffic
and toll revenue collections from its forecasts and then use that information to improve the
accuracy of its traffic and revenue forecasting tools.
· Improving Operational Performance
The performance monitoring data enables the Port Authority to assess the operational per-
formance and safety of its toll plazas and crossings and identify potential adjustments to
improve performance in these areas.
· Documenting Changes in Travel Behavior
The performance monitoring data documents changes in travel patterns and behavior by dif-
ferent user groups and allows stakeholders to understand the effects of time-of-day pricing
and other toll-related policies on regional traffic and congestion. This information has been
essential to informing ongoing decisions on toll and congestion management policies, includ-
ing the refinements to the Port Authority's congestion pricing program implemented in 2008.
6Mark Murriello and Danny Jiji, "The Value Pricing Toll Program at the Port Authority of New York & New Jersey: Rev-
enue for Transportation Investment and Incentives for Traffic Management," Transportation Research Board 2004 Annual
Proceedings.
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150 Evaluation and Performance Measurement of Congestion Pricing Projects Congestion Pricing Case Studies 151
Table 9-1. Port Authority of New York and New Jersey congestion pricing program summary matrix.
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152 Evaluation and Performance Measurement of Congestion Pricing Projects
· Validating the Case for Congestion Pricing
Lastly, the collective data derived from the performance monitoring program enables the Port
Authority to validate all aspects of the performance of the congestion pricing program--from
revenue generation to congestion management and safety--for the different decisionmakers,
communities, and stakeholders affected by it. Performance validation has been essential in
garnering support for the ongoing operation of congestion pricing on the Port Authority's toll
facilities.
9.5. What Additional Performance Metrics or Data Would Be Helpful
to Agencies Considering Congestion Pricing?
Port Authority staff believe that guidance on quantifying and measuring traffic and conges-
tion reduction benefits would be helpful, particularly for commercial traffic which represents a
key constituency group. Given that the vast majority of performance measurement efforts in the
United States have involved HOT lanes, which are generally not available for use by trucks and
most commercial vehicles, there is very little data available on the response of commercial traf-
fic to congestion pricing and effective metrics for measuring it. Guidance on the performance
measures for pricing would be useful in moving beyond the consideration of congestion pricing
on managed lanes to the use of congestion pricing on much more heavily traveled toll facilities
where truck volumes have a fundamental effect on overall congestion and system performance.
The Port Authority is also beginning to work on an approach to measure travel-time reliabil-
ity, focusing on the variability of travel times. Part of the challenge of measuring travel-time reli-
ability is that the amount of time motorists spend on Port Authority crossings represents only a
small portion of the overall length of the trips made. This is a common challenge for many agen-
cies operating priced facilities.
The Port Authority has also found that as a result of the combination of electronic toll col-
lection and variably priced tolls, motorists often are not aware of the exact price they pay to
make trips on the Port Authority's toll facilities. Toll levels are not communicated to ETC users
at the time the actual transaction is made. In addition, motorists' awareness of actual toll rates
is further blurred by the complex network of toll facilities in the greater New York-New Jersey
region and the many different discount programs available by the different toll agencies. This
dynamic presents a communication challenge and also has a direct effect on the results of con-
gestion pricing, given that the ability of motorists to modify decisions on their choice of route,
mode, and time of travel are based on their knowledge of tolls they pay and the cost implica-
tions of changing their travel behavior.
