Guidebook for Intercity Passenger Rail Service and Development (2016)

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21 This chapter covers the elements of planning for intercity passenger rail service after estab- lishment of an intercity passenger rail program and after identification of funding sources and authority to undertake a project has been completed. This chapter includes sections on identifi- cation of initial projects, network design and route selection considerations, and coordination of planning with host railroads and state/federal agencies. The chapter ends with sections on service development plans and how to support a service feasibility study. Project Identification and Initiation This section describes the typical process carried out by a state DOT or other implementing public-sector agency tasked with initiating an intercity passenger rail program and identifying the initial project or projects that should be undertaken by the agency. Typically, states beginning an intercity passenger rail program are not starting without an identified need for additional inter- city passenger travel capacity between the major urban centers. In many cases, freight rail cor- ridors (either operating or abandoned) connect these urban centers, and these corridors are seen as a way to provide alternative transportation in the form of intercity passenger rail service. Some states may have traditional intercity passenger rail routes that may no longer be in operation or operated by Amtrak daily (or even 2 or 3 times weekly), which the implementing agency would like to see increased so as to enhance desirability and thereby improve ridership numbers and shift highway traffic from congested roadways. Specific corridor feasibility studies to identify such opportunities often precede the creation of a state rail program or have taken place as part of the SRP process described earlier. This section describes four aspects of this phase: • Integration of state intercity passenger rail corridor planning with states’ long-range trans- portation plans • Importance of documenting desired projects in the SRP • Identification of specific state funding sources • Coordination with regional plans Integration of Intercity Rail Planning with State Long-Range Transportation Plans SRPs are required by FRA to show how intercity passenger rail and other rail projects are integrated with long-range transportation planning for the other transportation modes. Rail planning for passengers could address general intercity passenger demand identified in statewide planning studies and might even be included in alternative analysis for specific highway projects previously conducted by the state. C h a p t e r 3 Planning: Project Feasibility/ Service Development

22 Guidebook for Intercity passenger rail Service and Development Once an SRP is completed, the results should be incorporated to appear along with other modal plans in the comprehensive state long-range transportation plan. Prioritization and implementa- tion of intercity passenger rail options will vary from state to state, depending on several factors. Many states do not have significant funds available for rail projects, and their state transportation funding authority may be limited to highway-only expenditures. In other cases, the attractive 80-20 or 90-10 federal-state matching fund rates afforded to many federal highway funding programs do not readily match up with federal rail programs, which have been proposed, in some cases, at a less attractive 50-50 funding rate. Such restrictions often mean that it is financially unattractive for states to invest in rail projects compared with highways or other modes with higher matching rates—even if the state has complete flexibility in modal funding. As future funding programs emerge at the state and federal level, if rail and other alternative modes are given equity in terms of flexibility and matching rates, perhaps rail projects, including intercity passenger rail projects, will better compete for transportation funding. Planners at state DOTs and other implementing agencies responsible for rail planning must work with leaders and planners within their agency or at associated state agencies to ensure that intercity passenger rail development and planning are considered along with highways and airport funding for intercity travel needs. Project Documentation in SRPs As outlined in FRA’s State Rail Plan Guidance (2013), a project must be documented as part of a state’s SRP in order to receive federal funding. This requirement is similar to the long-time requirement for highways to be listed and prioritized in a state’s transportation improvement program to be eligible to receive federal highway funds. Descriptions of the proposed project and its prioritization, along with other similar projects, are aspects that should be covered. Because this is a relatively new requirement, some states whose rail plans were completed before the 2013 FRA guidance have received funding without complying with this requirement. New projects are expected to be mandated to comply with this provision of the guidance. Identification of Specific Funding Sources In the FRA guidance, another new requirement for future projects is that they have an identified source of funding for future operations and ongoing, long-term capital replacement needs to ensure long-term maintenance, SOGR, and upgrades. Without these sources of funding specifically identified, state-supported intercity passenger rail services will have difficulty in succeeding and thriving; however, even in states with a long history of state-funded corridors, intercity passenger rail funding is often appropriated on an annual, biennial, or other state funding cycle with no long-term legislative commitment to a specific funding level. This leaves state DOTs in a dif- ficult position of promoting intercity rail service development when funding is mercurial and inconsistent, subject to political changes and infighting, and often lower than is needed to ensure long-term service provision and SOGR. States without such commitments to long-term funding in support of intercity passenger rail will likely receive less federal funding in the future as this requirement is implemented. Coordination with Regional Plans One of the first activities that an agency developing plans for intercity passenger rail should undertake is the study of regional transportation plans in the urban areas that will be connected by the proposed/potential service. Often, urban planning documents or regional highway plans do not include great detail on the intercity transportation needs that will be addressed by intercity

planning: project Feasibility/Service Development 23 rail; however, regional transit plans and especially urban rail transit system layouts are useful in initial planning for intercity service. By understanding where transit hubs, both rail and bus, are located in relation to the existing highway, railway, and airport connections, an implement- ing agency can make better decisions on proposed frequency, desired operating performance (i.e., conventional or HSR), desired station locations (where needed stations do not exist), and related factors. Local land use patterns and proximity to social traffic generators such as sports stadiums and medical facilities can also be important drivers in attracting ridership and are described in such studies. State DOTs should work with regional transit agencies and MPOs to coordinate planning within urban areas to ensure that intercity and local/regional transit options work together to the benefit of both. Network Design/Route Selection Few elements of a new rail service are more important than the selection of a route to efficiently serve key markets while maintaining service velocity that will attract intercity passengers from competing modes. FRA insists that service proponents assess the merits of multiple historic service routes between a given pair of cities, even when the immediate prospects for initiating service appear to favor a given alignment. This is understandable on at least one level—current or recent Amtrak service may use a certain route for reasons unrelated to the route’s long-term suitability for high-quality, frequent passenger operations. Long-term service goals may, in fact, conflict with use of a route that is considered as the best maintained today if the current high level of maintenance is the product of robust and growing rail freight traffic that may lead to future rail line congestion and decreases in passenger rail performance. Another consideration is the need to balance the interests of communities along a given potential route. A line connecting two major cities will often generate most of its traffic from the endpoint stations even while traversing intermediate communities. Therefore, project sponsors must balance the need for broad political support with the need to keep overall transit times com- petitive. Adding to these difficulties is that there is a service penalty along a corridor whenever intermediated communities must be served. The service penalty associated with an intermediate stop is higher for diesel-powered service (the norm for North America) than for trains using electric traction due to far slower acceleration back to top operating speeds. Defining and Optimizing a Project Route In addition to regional and local community input, several quantitative factors should be considered to help rank alternatives and contribute to the selection of the best route. Major cost-related factors often include capital cost, operations and maintenance (O&M) cost, forecast ridership and revenue, resultant subsidy requirement, and broad evaluation of funding sources to cover ongoing net costs. Typical route alternative studies will include estimation of the following key capital cost categories: • Track and related ROW infrastructure upgrade requirements • Additional sidings or double/multiple track to ensure sufficient capacity for existing/future freight and the proposed passenger service • Acquisition of any land not already owned for corridor infrastructure improvements • Improvements to or introduction of advanced automated signaling, including PTC requirements • Electrification (e.g., power supply, overhead catenary systems, and substations) if the proposed service is to be electric powered • New stations or upgrades/expansion of existing stations as appropriate

24 Guidebook for Intercity passenger rail Service and Development • Acquisition of appropriate rolling stock (e.g., locomotives and cars) unless planning to lease equipment, if available, from existing Amtrak or other operator equipment pools • Other major capital cost items as appropriate Typical major components of ongoing O&M costs to be studied include the following: • Direct train and engine (T&E) labor cost, including spare staff and related costs • Fuel and energy costs, including delivery and administration • Station operating costs (e.g., maintenance, utilities, and potential staffing) • Onboard service (OBS) labor cost and supplies, including administrative and commissary support • Ongoing ROW maintenance cost, possibly shared with a host railroad if operated in conjunction with freight • Administrative and overhead operating costs • Marketing, sales, revenue management, and related operating costs Ridership/revenue modeling is discussed in greater detail in a subsequent section, but the critical quantitative measures for use in the subsidy requirement comparison of alternative routes are as follows: • Forecast passenger ticket revenues • Additional projected revenues from food and beverage or premium services • Other transportation-related revenue • Total operating revenue equaling the sum of the above • Projected ridership related to the estimated revenue In most cases, a route design consultant, working with the state sponsor, will develop a matrix of quantitative measures comparing several viable route alternatives to help rank and prioritize route selection on an objective, quantitative basis. Equally important, however, will be the feed- back from all potential stakeholders (e.g., planning agencies, municipal governments, and public hearing input), which may outweigh the purely quantitative comparison in the matrix. Various ranking methods exist that can be used to color code (e.g., red-yellow-green) the non-quantifiable views of stakeholders on specific qualitative factors so as to be able to include these in matrix form. Regardless, the ultimate selection and route recommendation need to represent a fair balance of stakeholder qualitative preferences and quantifiable economic facts. Select Best Practice Examples in Restoring Service to Historic Passenger Rail Corridors In addition to outright new greenfield ROWs, which are rare as a primary corridor for new, conventional, or higher speed (i.e., HrSR) state-sponsored service, most typical corridors studied and selected for implementation are on existing shared freight lines. These corridors can range in physical condition and level of use from minimal service and low (pre-upgrade) track condition (e.g., FRA Track Class I) up to high-quality, high-density Class I mainline infrastructure, typically already at FRA Track Class IV. There are pros and cons in each of these situations. If a new service is operating for low-density freight rail traffic, although it will require at least minimal introductory track and infrastructure upgrades and likely introduction of a new automated signaling system, it will usually not create serious conflicting capacity problems for its—typically—shortline or regional host railroad. On a highly maintained, high-density Class I freight railroad line, although the infrastructure and signaling might be able to safely accom- modate passenger rail service without major upgrades, there is likely a serious threat to freight capacity and fluidity. This may lead to the host railroad’s requirement to build substantial addi- tional capacity (e.g., a second or third main track) or to a request for building a parallel, mostly

planning: project Feasibility/Service Development 25 separate, dedicated passenger line in the adjacent ROW, if space and budgets permit. Recent requirements to upgrade or add a PTC system will need to be considered with the provision of passenger service. Four broad categories of freight lines can be defined in regard to their history of past passenger service over the same line. This categorization is based on their history of passenger service since the formation of Amtrak in 1971. The categories are as follows: • Category 0. Freight routes that had discontinued their passenger service prior to the mass discontinuances on April 30, 1971, in conjunction with the creation of Amtrak. • Category 1. Freight routes that had some remaining passenger services until the mass dis- continuance of privately operated passenger trains on April 30, 1971, but no passenger service since the introduction of Amtrak. • Category 2. Freight routes that became part of the initial Amtrak Basic Network system on May 1, 1971, but were subsequently discontinued due to budget-related cost-cutting actions. • Category 3. Freight routes that, either since Amtrak inception or through subsequent intercity route additions/modifications, host passenger operations with Amtrak. Each category has its own challenges and opportunities and, to some degree, has good examples of current state-sponsored service application as described below. Category 0—Service Discontinued Prior to Amtrak Inception There are several examples of good state-sponsored services on routes where passenger service had been discontinued prior to the April 30, 1971, Amtrak inception-related abandonments. The NCDOT-sponsored Charlotte–Raleigh Piedmont service operates two local intrastate trains as well as the Charlotte–Raleigh portion of the Charlotte–Raleigh–Washington, DC–New York Penn Station Carolinian through route. Similarly, the frequent service and rapidly growing Northern New England Passenger Rail Authority (NNEPRA)-sponsored Brunswick–Portland– Boston Downeaster Service was introduced on a freight-only line whose last passenger services had been discontinued several years before Amtrak’s inception. Category 1—No Passenger Service Since Amtrak Inception There are also several good examples of state-sponsored, short-distance services that use portions of former passenger routes that were discontinued by private operators on April 30, 1971, and not continued by the initial Amtrak network. All three of Amtrak’s current successful international services to Canada were re-added to the system after varying lengths of hiatus. New York’s Montreal–Albany–New York Penn Station Adirondack and Toronto–Buffalo–Albany–New York Penn Station Maple Leaf services—as well as Oregon and Washington’s Vancouver–Seattle– Portland (Oregon) Cascades service—fall into this category. California’s Sacramento–Oakland– San Francisco–Bakersfield San Joaquin service is another example of a major, multi-frequency corridor on which there was no passenger service since the May 1, 1971, introduction of Amtrak but where service levels have since grown. Starting with an early, single daily state-sponsored round trip, this corridor has grown to a high-volume operation consisting of six daily round trips. Category 2—Service Discontinued after Amtrak Inception and Restored by State Action Several successful and long-running state-sponsored services began in the late 1970s/early 1980s as part of a legislative incentive for states to assume responsibility for service restoration over por- tions of routes that had been discontinued after inception of the Amtrak national system. Examples of state DOT-sponsored services that began with this program include Missouri’s Kansas City– Saint Louis Missouri River Runner and Pennsylvania’s Pittsburgh–Harrisburg–Philadelphia–New

26 Guidebook for Intercity passenger rail Service and Development York Penn Station Pennsylvanian. Both of these operate on portions of the discontinued National Limited route. Another example is Oklahoma-Texas’ Oklahoma City–Fort Worth Heartland Flyer along a portion of the discontinued Lone Star route. Over the years, several states have also explored (but not implemented) restoring service over segments of other major discontinued historic, long-distance routes. These include the North Coast Hiawatha, Floridian, Desert Wind, and Pioneer routes. Category 3—Freight Routes Where Intercity Passenger Service Has Been Added Post-Amtrak Inception There have been several successful short-distance service introductions (as well as other routes considered but not implemented) on short point-to-point corridors overlapping portions of existing long-distance Amtrak routes. Among the most visible and successful is the California Capitol Corridor Joint Powers Authority (CCJPA)-sponsored San Jose–Oakland–Sacramento high-frequency Capitol Corridor, overlapping the legacy Amtrak Coast Starlight route that provided one round trip per day in the basic system. At least minimal service remained (two to three daily round trips)—even in the original Amtrak network—on what is now the highly successful, frequent San Diego–Los Angeles (currently 12 daily round trips) California’s Pacific Surfliner service corridor. In addition to sponsoring multiple additional frequencies between the original terminal cities, the state added a successful, multiple-frequency extension between Los Angeles and Santa Barbara with one daily round trip all the way to San Luis Obispo, using the access rights principle of overlapping an existing intercity Amtrak route, in this case the Amtrak Coast Starlight. Coordination with Railroads and Other State/Federal Agencies Coordination with host railroad companies should occur as part of any project planned on, adjacent to, or interacting with a freight railroad and as necessary to avoid having railroad executives and others learning of proposals regarding potential shared use of their ROWs from the media or other outside sources. Public agencies are free to study or propose services as they wish, but it is recommended that any study be preceded by an initial contact with the relevant corridor owner(s) as early as possible in any study process in order to begin establishing trust among potential partners and to coordinate messaging regarding the study process and outcomes to the public and the outside world. In discussing coordination with railroad companies, it is important to be aware of the distinction between STB classifications based on rail company revenues. Class I railroads are large, multistate systems; Class II railroads are regional railroads; and Class III are local/terminal railroads. (These classifications should not be confused with FRA track classifications. For example, FRA Track Class I classification signifies very poor condition or excepted track that may only be operated below 10 mph.) Establish Discussions with Host Railroads Regarding Shared-Use Corridor Issues NCHRP Report 657: Guidebook for Implementing Passenger Rail Service on Shared Passenger and Freight Corridors includes a thorough description of the process and challenges associated with developing passenger rail operations on previously freight-dedicated rail alignments. Freight rail corridor owners have little natural incentive to collaborate with sponsors of passenger rail proposals and may present the following objections: • Service speeds (operational speeds) for passenger trains exceed, often by a wide margin, those of typical mainline freight operations. The practical effect of this differential is that

planning: project Feasibility/Service Development 27 the capacity consumption of a given passenger train far exceeds that of a typical freight train operating in the same alignment. • The scale of liability issues for passenger service is greater than for most freight operations. • Precisely scheduled passenger services impose a level of discipline on discrete sections of the large-scale freight handling that host carriers may view as incompatible with the large proportion of on-demand freight trains they operate. NCHRP Report 657 describes mitigation approaches to each of these challenges. State DOT or other public agency sponsors may encounter reluctance by freight rail service providers to engage in new proposals for shared use of existing freight rail infrastructure or even the same ROW corridor. The first point of contact in the host carrier world, for a state agency, is often the freight rail carrier’s government affairs representative for the region in question. Depending on circum- stance, the specific project discussion may then be turned over to local rail operating authorities or to the passenger rail specialists within the company who address passenger rail proposals from a corporate perspective. Most freight carriers prefer to be engaged early in the planning process. Other factors to keep in mind at this stage of project development regarding host rail carriers include • The work of public planning officials and consultants is, by definition, open to public scrutiny and covered extensively in the media. Freight rail carriers would rather be involved early to help guide potential choices rather than do damage control with the media after the fact. • Local planning agencies seldom have the large-scale network perspective of rail operations that guide Class I freight railroad carrier strategies. The host carrier can provide early guidance on the most and least feasible corridor alternatives for a new passenger rail service. • Service and capacity analysis associated with the introduction of passenger service is costly and time consuming and draws on resources often in short supply across the industry. Early engagement improves the opportunity for solid analysis to be completed in a timely manner and before public expectations have been set for a new operation. Once host carriers are engaged, understanding the roles and communication processes that will underlie the new partnership between rail service planning agencies and the host railroad should occur as quickly as possible. All parties should acknowledge and respect the different per- spectives and incentives at play in the public-sector and private-carrier worlds; those differences will not disappear but can be managed if recognized up front. This may often be done through adoption of a simple written memorandum of understanding or memorandum of agreement rather than a more formal or legal process at this early stage of development. Two other recent reports may prove useful to those considering a shared-use service scenario consideration for the first time: • NCFRP Report 27: Web-Based Screening Tool for Shared-Use Rail Corridors details a web-based analysis framework that can serve as a first-cut/triage support instrument for identifying rail corridors that may be worthy of progressing to more detailed and costly evaluation for potential shared-use freight and passenger rail service and for ruling out those corridors where freight rail traffic levels or physical infrastructure limitations may constrain use for passenger rail. • NCHRP Report 773: Capacity Modeling Guidebook for Shared-Use Passenger and Freight Rail Operations provides information on the fundamental principles and drivers of rail capacity and the various tools available to support progression to more formal capacity analysis. Coordination with Other State Agencies (e.g., Land Planning) DOT and other agency planning officials more effectively position future passenger rail service for a given state or combination of states through engagement and coordination with other

28 Guidebook for Intercity passenger rail Service and Development public agencies. Those agencies planning service in a corridor that crosses state lines face special challenges and opportunities in managing the political process and in coordinating required state and local funding matches that are part of any federally supported corridor development programs. NCRRP Report 5: Developing Multi-State Institutions to Implement Intercity Passenger Rail Programs identifies best practices in coordinating projects across state lines. Other types of public agency engagements that should be considered include the following: • Economic development agencies may have or can develop complementary strategies to focus new development or population concentration to station nodes that could reduce overall reliance on personal auto use. Similarly, county- and MPO-based economic development offices should be engaged in early consideration of new transportation choices. • Seeking buy-in from individual state (or multiple states) and local land use planning officials can prove critical as a specific passenger rail project takes shape. Not everyone enjoys the prospect of seeing increased train traffic move through their communities, particularly if the town in question is too small to warrant a station stop on its own. Planning officials should discourage develop- ment on rail-adjacent land parcels that is incompatible with more frequent or HrSR operations. • Host freight carriers may be concerned that the transformation of an alignment to include passenger operations will lead to higher density residential development and changes to zoning of parcels adjoining the tracks currently available for rail freight service. To address this concern, public agency economic development and land use planning protocols should acknowledge the need to protect the ability of rail freight carriers to play their role without residential or other incompatible land uses associated with passenger rail development inadvertently limiting future freight rail expansion and shifting of even more freight to the highway mode. Coordination with Federal Agencies Although many intercity passenger rail projects result from studies or initiatives at the state, regional, or local levels, coordination with federal agencies, especially those involved with trans- portation, is vital throughout the intercity passenger rail development process. The three most important transportation agencies involved are FRA, FHWA, and STB. FRA Rail projects that include federal funding often must be coordinated through FRA for intercity rail and/or FTA for commuter rail. The distinctions between commuter and intercity rail may, at times, appear to be arbitrary and confusing. Typically, commuter rail initiatives rely on FTA appropriations and are sponsored by a transit agency or MPO. Intercity rail projects that use federal funds authorized through PRIIA must be led, according to statute, by the state DOT. Regardless of the funding source, safety approvals for conventional rail service always fall under the jurisdiction of FRA. FHWA FHWA plays a role with respect to highway-rail grade crossings and other highway-related issues associated in particular with new corridor construction. In exceptional cases, FHWA has been assigned overall project leadership for a rail improvement project given short-term resource con- straints within the federal DOT. FHWA may also be assigned the overall leadership role for a multi- modal corridor project that involves a combination of new highway and rail track construction. STB STB plays a high-level policy role in the rail mode. Even if located entirely within a state, STB is involved if the transportation or facilities employed are part of the interstate railroad network.

planning: project Feasibility/Service Development 29 STB also will become directly involved with a specific passenger rail project if there is a dispute about intercity access rights to a host carrier alignment or as a product of disputes with Amtrak and its obligations under PRIIA. Service Development Planning FRA-funded passenger rail projects (either totally new service or significant upgrade of existing service) require a supporting service development plan (SDP) that outlines the planning, imple- mentation, and eventual actual operational characteristics of the project. The July 1, 2010, Federal Register provides broad general guidance on the current FRA HSIPR Program (U.S. Federal Register 2010). Appendix 2 of that document provides additional information on stages of project develop- ment, including Appendix 2.1, covering a broad range of possible issues to be explored in service development program planning specific to HrSR and HSR. It begins with a definition of the SDP for an HSIPR service development program whose prime objectives are to • Demonstrate the purpose and need for new or improved HSIPR service • Analyze alternatives for the proposed new or improved HSIPR service and identify the alter- native that would best address the identified purpose and need • Demonstrate the operational and financial feasibility of the proposed alternative • Describe, as applicable, how the implementation of the HSIPR service development program may be divided into discrete phases Contents/Requirements of a Service Development Plan Current FRA HSIPR guidance lists 10 major topical areas that may be included in an SDP (it is not a requirement to include all topic areas listed for every potential or proposed service). These topic areas are as follows: 1. Purpose and Need 2. Rationale 3. Identification of Alternatives 4. Planning Methodology 5. Demand and Revenue Forecasts 6. Operations Modeling 7. Station and Access Analysis 8. Conceptual Engineering and Capital Programming 9. O&M Costs and Capital Replacement Forecast 10. Public Benefits Assessment More recently, as part of its FY14 Grant Application Solicitation guidelines, FRA issued a guidance document for use by states or other organizing entities on the broader service development planning process and specific timing and contents (level of detail) for a particular project’s SDP. This now includes the option that a “proposed intercity passenger rail Service Development Program may be divided into discrete phases” (FRA 2014). Further into the document, in Sec- tion 3, is a detailed outline for structuring an SDP along with a comprehensive list of elements that could be included in an optimal SDP. Ridership and Revenue Forecasting Given the rarity of intercity passenger rail startups over the past half century, little empirical data exists to support projections for ridership and revenue for service proposals in additional

30 Guidebook for Intercity passenger rail Service and Development locations. The state of the art for such modeling is less mature than that applied to urban transit and commuter rail proposals. Conventional rail service at typical North American train operation speeds is seldom faster than travel on the corollary interstate highways—provided the latter is in a free-flowing state. In some cases, rail service may succeed as a result of congestion or other operational challenges of the highway network. In other cases, passengers are attracted to rail due to the value of time available during the trip experience for productive activity (e.g., reading, working, or sleeping), which cannot typically be enjoyed (at least by the driver) in car-based travel. Finally, ridership and revenue modeling may be simpler for true HSR proposals where major competition primarily comes from commercial air travel. It is easier to project diversions from one commercial transport mode to another than to project abandonment of auto travel to train travel. Also, the market value of those trip diversions can rely on much more solid data, reflecting current travel fares. Ridership and Revenue Models Ridership and revenue models that are accurate and have an appropriate level of detail (also known as demand models) are critical to intercity passenger rail service planning, financial feasi- bility assessment, benefit assessment, and environmental analysis. Three different levels of detail are used in these types of models. These are as follows: • Screening-Level Demand Models. Appropriate for preliminary/screening environmental impact statement (EIS) analysis. • Corridor-Level Demand Models. Tier 2 (corridor-level [e.g., 20–30%] engineering/design EIS). • Investment-Level Demand Models. Detailed investment-worthy demand models that would be required as a precondition for public-private partnership (PPP) agreement where private investors assume revenue risk or for large, totally publicly funded projects. As a result, the term demand modeling can describe methods ranging from a relatively simple, generic broad screening evaluation to a corridor-specific model developed in great detail with all factors based on the route being examined. The three major levels of detail used in demand modeling are described in the following sections. Screening-Level Demand Models: What They Can and Cannot Do A screening-level demand model, such as FRA’s CONNECT model, is a sketch-level HSR planning tool designed for preliminary feasibility studies. It is best used to assess which cities to include in the network, how to configure the network, and which general levels of service are appropriate for each corridor. CONNECT forecasts sketch-level ridership, revenue, operating costs, capital costs, and other associated indicators. FRA’s CONNECT can produce estimated ridership results for specific years 2020, 2030, 2040, or 2050 based on the data and projected growth rates supplied to the model. By design, CONNECT is preset to produce a low, medium, and high estimate for all future-year outputs. This type of model is most often used to determine whether further analysis is warranted. In general, a screening-level model like FRA’s CONNECT is best used to compare alternatives and should not be relied on for absolute results with the precision required even for Tier 1 EIS studies and definitely not for actual investment decisions. Among the most specific limitations of such a screening-level model is the use of broad metropolitan statistical areas (MSAs) as the zones for trip production and attraction, rather than much narrower/smaller travel analysis zones (TAZs). Therefore, these models do not offer the resolution necessary to evaluate the rider- ship or cost implications that would result from more narrowly defined changes in alignment or the specific number of or location of a station or stations within an individual MSA.

planning: project Feasibility/Service Development 31 Corridor-Level Demand Models To provide more accurate and detailed ridership and revenue demand model results, it is often necessary to develop a corridor-specific model, some of whose essential elemental components include the following: • Detailed socioeconomic activity forecasts for MSAs and smaller intermediate communities along the corridor • Estimation of the total current/future travel demand, by specific origin-destination (O/D) pair, at a more detailed level than for screening-level models, along the corridor for all existing modes (auto, air, intercity bus [if relevant], intercity rail [if relevant]) • Analysis of known improvements planned for the existing modes, primarily auto and air • Development of a corridor-specific mode-choice split, based on assumed value-of-time utilities • Assessment of corridor-specific feeder/distribution systems (including existing and planned public transit, where applicable) for the larger stations along the corridor • Assumption (or estimation) of an induced travel factor representing net new additional trips that may be taken as a result of improved access (faster total trip times/lower total cost/greater available frequency), as has been observed in successful European and Asian HSR systems Investment-Level Demand Models When a proposed project is near the point of final funding assessment and actual construction commitment, a more refined and precise revenue/ridership forecast, in the form of an investment- level demand model, may be needed. Although more costly and time consuming to perform, this model will go into greater depth so as to narrow the range of uncertainty in forecast performance. The need for (minimum) revenue production attainment is critical in those PPP projects where the private investor agrees to assume at least a portion of the revenue (producing) risk. Among the likely key areas for additional depth or breadth of data to provide more accurate results are the following: • Use of a further disaggregated zone system (e.g., use of sub-TAZs) on the O/Ds (up to four times more zones) to make the resultant forecast much more accurate • Collection of more refined (larger data set) raw data to understand existing travel demand (primarily detailed auto O/Ds) • Disaggregation of existing travel O/D data to time-of-day specifics to provide more accurate total and time-of-day travel demand • Analysis of more detailed alternatives for access/egress analysis for all potential rail stations rather than just for major urban areas Ridership and Revenue Study Reviews In part because there can be so much variability in the range of (or ultimately demonstrated accuracy of) demand model results, it is frequent practice to have an independent panel of experts review all demand model forecasts. This process can be facilitated by the sponsoring agency (e.g., state DOT studying a new intercity corridor) or possibly by the study’s funding source agency, if different (e.g., FRA convening the independent review). One recent review was that performed on earlier demand model results for the California High-Speed Rail Authority as it transitioned to a substantially revised business plan. Among the critical issues raised in this review was the distinction between higher ridership achievable in a ridership-maximizing fare policy assumption versus the lower ridership (but higher revenue) that would be generated using a revenue-maximizing fare policy.

32 Guidebook for Intercity passenger rail Service and Development Supporting Feasibility Studies The choices of location, mode, and design of rail transportation initiatives have effects that extend well beyond the marginal changes in personal mobility. Projecting these broader changes and developing a coordinated, multidisciplinary approach to maximize benefits to a corridor or region can build political support for a project and may reveal value-capture opportunities that help address the financial hurdles facing major public infrastructure investments. Establishing project feasibility (and various conditions affecting that feasibility) through conduct of appro- priate studies is essential. Economic Analysis A list of key socioeconomic effects can be analyzed quantitatively so as to help justify investment in new intercity passenger rail systems. Although some significant benefits (e.g., time savings and mode diversion from auto to rail so as to reduce pollution and congestion) are more pronounced in higher or true high-speed service, such benefits can still be significant in a well-designed con- ventional speed system. Many of the current PRIIA Section 209 participating state sponsors of intercity passenger rail service have performed such economic analyses (either by their internal staffs or by employing consultants) to help justify new services or specific ARRA/HSIPR-funded capital improvement projects. Some generally agreed-on important areas for quantitative estimation follow. Included are some simple examples of model calculations (note: this list is not in order of importance or likely magnitude). • Potential Positive Local Economic Impacts. Economic impacts for key cities along the route, including detailed calculation of net job creation during planned construction and direct job creation after the start of revenue service. An example of a simple model for calculating con- struction period job creation would be a simple linear tool that uses estimated construction cost by corridor sub-segment, average labor percentage of (comparable) construction expenditures, and average construction wages to determine the annual direct employment generation, and then uses a regionally appropriate multiplier constant to calculate estimated secondary job creation during construction. • Potential Economic Improvement. General improvement in the overall economy and resultant potential local tax generation for key cities along the route, such as sales, property, and similar local taxes. • Potential Quantified User Benefits. For riders who divert from other modes, primarily from automobiles. These benefits may include but are not limited to quantified value of time, quantified accident reduction—fatality reduction and non-fatal accidents, and quantified consumer surplus). An example of a simple model for quantified accident reduction after revenue service would be a simple linear tool that starts with forecast ridership by city pair for diverted auto riders, derived calculated passenger-miles, auto VMT avoided (based on aver- age occupancy per car), and differential accident and fatality rates for automobiles vs. HSR (assuming almost no accidents for HSR), and then uses accepted average monetized value per type of accident incident avoided. • Non-user Quantified Collateral Benefits. Examples include time savings due to reduced congestion, accident reduction (fatal and serious injury), and further time saved through reduction at freight grade crossings resulting from project-created grade separations and closures. Strategic/Business Planning A wide range of economic and financial elements are necessary inputs to a strategic/business plan for a new intercity passenger rail service, whether the anticipated operation is conventional,

planning: project Feasibility/Service Development 33 higher speed, or true HSR. Several states/sponsoring agencies have suggested, and FRA appears in recent state rail planning guidance to be receptive to, a level of detail in a draft business plan that is proportional to the magnitude and ultimate cost of the proposed investment. FRA suggests that business plans in support of a full SDP prior to funding commitment and investment include some quantitative consideration of the following factors: • Total capital cost and proposed sourcing of funds • Estimated annual operating costs • Corridor-level demand forecast (ridership and revenue) • Resultant forecast operating profit/loss statement based on revenue and O&M cost • Financing plan if capital is not assumed to be grant funding • Public (socioeconomic) benefit assessment and benefit/cost analysis • Net present value assessment if assuming to use blended financing (e.g., PPP) Public Involvement During the Feasibility/Service Development Stage FRA prescribes a clear, ongoing public outreach protocol for any Tier 1 (service-level) or Tier 2 (project/corridor-level) EIS evaluating proposed new intercity passenger rail service. This includes but is not limited to wide circulation of background materials explaining options under possible consideration to the communities that the proposed passenger rail project would serve, or through which it would operate, and using electronic media, structured live public meetings, open-access virtual/Internet public meetings, write-back comment mechanisms, and so forth. Depending on the study size and length, there may be multiple sequences of such outreach meet- ings, starting with the early information-gathering stage, continuing through the screening and narrowing options phase, and ultimately covering the recommended option(s). Public outreach is typically accomplished as a collaboration of the sponsoring agency (e.g., state DOT) and its consultant(s). In most cases, FRA participates in the meetings; FRA always reviews all relevant presentation materials. Build Consensus/Public Support A strong regional consensus and broad public support are needed for every proposed intercity passenger rail service. In some cases, the likely project champion is the initial sponsoring agency (e.g., state DOT, MPO, or specially established multistate intercity rail compact). In other cases, the consensus builder may evolve and transition to be led by an individual city/metropolitan area or a grassroots-led citizen support group. The importance of developing the broadest possible support base becomes evident as project opposition begins its movement, opposing a particular project on fiscal, sensitive location, or supposed environmental harm arguments. Much potential opposition and spreading of misinformation can be avoided by the public agency keeping a cur- rent and ongoing flow of accurate information about the proposed project or study to the public.