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Toll routes are intended to relieve traffic congestion, but they do so at a cost, which revenues are intended to offset.
The Triangle Expressway, which opened between Apex and Durham eight years ago, has been exceeding projected revenues while operating under its annual cost projections.
But a Carolina Public Press investigation has found that the cost and revenue pictures for the state’s two newest toll routes in the Charlotte area, the Monroe Expressway and the Interstate 77 Express Lanes, are much less clear.
The Monroe route has not met its initial projections, while the I-77 lanes opened too recently for numbers to be available. Changes to the I-77 pricing structure were also instituted just this month.
Triangle Expressway in the money
The Triangle Expressway is more popular than officials anticipated a decade ago when it was developed. The N.C. Department of Transportation is also operating it at a much greater-than-anticipated profit.
For the fiscal year ending in mid-2019, the Triangle Expressway earned $52.6 million — $12.9 million more than was projected a decade ago.
Those revenues covered more than double the state budget’s allowance of $20.2 million in annual costs. But the Triangle Expressway also stayed under those cost projections by about $120,000.
Usage of the route also continues to grow. Transactions on the Triangle Expressway — each time a driver uses the toll road — increased by 8.7% over the previous year, according to the most recent DOT annual report.
Driving the full length of the Triangle Expressway, from southern Wake County to the Durham-Chapel Hill area, will cost a driver $3.37.
NCDOT’s message to investors a year ago said the Triangle Expressway’s strong performance has allowed the agency to refinance its debt three times for a total savings of more than $100 million over the life of the project.
“These savings could help reduce the state’s contributions for Complete 540, give the North Carolina Turnpike Authority Board toll rate flexibility in the future, or pay off project debt more quickly,” the fiscal year 2018 annual report said.
Complete 540 references the goal of completing the route of Interstate 540, an outer beltway that currently only partially encircles Raleigh. This would be accomplished by extending the Triangle Expressway northeastward from its current Apex terminus to Knightdale.
Bond rating companies Moody’s and Standard & Poor’s have rated the debt from the Triangle Expressway project as among the lowest-risk investments, which means the state can borrow money at a lower interest rate.
Monroe Expressway good on costs, not toll revenues
More drivers than expected are taking the Monroe Expressway, a bypass connecting the western Union County bypass with Charlotte-area Mecklenburg County. Even so, revenues so far are lower than expected.
The state thought it would earn $7.5 million from the expressway but fell short by about $1 million, even with heavier-than-expected usage.
According to DOT’s annual report, that shortfall can be partly blamed on the delay caused by the system’s bill-by-mail cycle.
Drivers who do not use NC Quick Pass can expect to receive a bill in the mail about 30 days after they drive the toll road.
Fortunately, the cost of operating the Monroe Express for the fiscal year was much lower than anticipated at $2.8 million — about $1.8 million less than DOT projected.
DOT forecast 14.3 million transactions for fiscal year 2019 on the Monroe Expressway. Driver demand on the new route exceeded that expectation, with nearly 15.5 million trips on the expressway during that time.
Drivers pay flat tolls on the four-lane Monroe Expressway, unlike the variable rate now in place on nearby I-77. The 18-mile toll road shaves 20 minutes off a driver’s commute, according to NCDOT.
This spring, six months after it opened, NCDOT said more than 129,000 drivers had used the expressway on its heaviest traffic day.
A full-length trip on the Monroe Expressway costs a driver $2.54 with the NC Quick Pass.
‘Back office’ system costs up
For both Triangle Expressway and Monroe Expressway, DOT said its operating expenses related to its payment system had increased over the prior year.
This was largely due to a contract extension with the company that operates what NCDOT calls the “back office system,” which processes tolling transactions, including from NC Quick Pass customers.
NCDOT awarded the back office system contract to TransCore in 2018.
Despite the TransCore contract, both the Monroe and Triangle expressways are operated and maintained by NCDOT, unlike toll lanes on I-77 which fall under a different contractual structure.
I-77 Express Lanes a newcomer
The annual report does not include cost and revenue reports for I-77’s toll lanes, which began opening earlier this year. The final section opened in November.
Earlier this month, North Carolina became one of several states that charges drivers escalating tolls as traffic becomes thickest.
Until December, drivers in the few areas where toll roads exist had only been charged flat rates to drive nearly 19 miles on the Triangle Expressway or to traverse the 14-mile Monroe Expressway.
Enter variable rate tolling, also called congestion pricing or dynamic pricing, which debuted in North Carolina on the I-77 Express Lanes earlier this month.
Drivers along the same 26-mile stretch of I-77 in northern Mecklenburg and southern Iredell counties can still choose to drive for free in general purpose lanes.
Starting Dec. 1, drivers in the I-77 Express Lanes started paying more as traffic demand increased and speeds slowed.
Toll rates can change every five minutes depending on traffic conditions, from as little as 35 cents during low traffic for each section driven to a high of $2.35 per segment during rush hour.
The goal is to keep traffic flowing at a minimum of 48 mph, according to I-77 Mobility Partners, the limited liability company that was contracted to oversee development and construction of the route and now handles maintenance and operation of the tollway.
I-77 Mobility Partners had levied flat tolls to drivers before Dec. 1. The rate did vary with time of day but did not fluctuate based on current highway conditions until now.
Carpoolers with three or more passengers can also drive in the express lanes for free, but only if they have an NC Quick Pass with High-Occupancy-Vehicle status toggled on.
Changing behavior with toll charges?
Economist Robert Krol told CPP that tolling part of a roadway based on congestion can change driver behavior.
“By varying the toll, higher during rush hours and having it be lower or zero in the middle of the night, it will even out the traffic flows,” said Krol, senior affiliated scholar at the Mercatus Center at George Mason University.
“You don’t need to get that many drivers off the highway to significantly increase speeds.”
A full-length trip on I-77 Express Lane’s main line during peak congestion will now cost a driver $9.40 one way, according to information from I-77 Mobility Partners.
That same trip during low-demand periods will cost a driver $2.45. Drivers who do not use an NC Quick Pass transponder will pay more.
Drivers who travel the same route without using the toll lane or decide a secondary road fits their needs sufficiently, will continue not being charged.
Private operation of I-77 lanes
The I-77 project was built with a mix of private money and NCDOT funds. The company’s 50-year contract obligates I-77 Mobility Partners, a subsidiary created by its parent company, Spain-based Cintra, to build and maintain all lanes of the highway.
Much of the project has been open for six months, with the most recent segment opening in November. Asked by CPP about what’s happened along the route, I-77 Mobility Partners spokeswoman Jean Leier pointed to released traffic counts through October.
“We will not be releasing any additional numbers until after the first full month that the entire roadway is opened,” she said.
From when it opened through last month, drivers in the pay lanes have taken more than 2.7 million trips in more than 515,000 different vehicles, according to I-77 Mobility Partners.
As CPP recently reported, NCDOT doesn’t measure traffic on that stretch of toll roads, leaving it up to I-77 Mobility Partners. The statistics that NCDOT does have for daily traffic on the entire highway along that stretch is more than a year old and dates to before the toll roads were operational.
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