On behalf of the Virginia Department of Transportation (VDOT), I am sending you information on the proposed E-ZPass monthly fee so you have the facts and can share them with your constituents should they contact you about this issue.

Virginia’s E-ZPass program will double over the next several years as new toll roads open.  As a result, the number of transponders will grow significantly (about half of a million) thereby increasing the cost to administer the E-ZPass program.  We are looking for ways to minimize the cost of running the program and fairly distribute the cost to the users.  Accordingly, VDOT is proposing a monthly fee of about $1 per transponder to pay for rising operational costs.  All revenues from the fee would pay for the expanded program.

VDOT manages the administration and customer service of E-ZPass in Virginia. This includes buying the transponders, processing electronic toll transactions and managing accounts. The E-ZPass transponder is like a credit card used to pay tolls.  Using the E-ZPass transponder makes paying tolls convenient and avoids waits at the toll plaza.  The long term benefits of charging a monthly transponder fee as opposed to assessing a fee on each individual electronic toll transaction will reduce the operational cost and minimize future toll rate increases.  

Customer Impacts and Benefits

•         Ongoing convenience - Customers would continue to enjoy convenient, nonstop travel, and online management tools. The new fee would cover the costs to administer the E-ZPass program and make it sustainable and self-supporting over the long term.

•         No transponder deposit - Eliminating the deposit allows VDOT to return nearly $7 million to its customers.  The current $25 deposit would no longer be required.  Users who have previously paid the deposit would have it converted to prepaid tolls on their accounts or refunded if accounts are closed and their transponder is returned.

•         Fair distribution of costs – The frequency of use and type of transponder could influence cost.

1.    Frequent vs. infrequent users - The current practice of providing transponders with no minimal requirement for use increases the number of transponders issued and the cost of administering the program.  Therefore, toll rates paid by users must absorb the transponder cost.  Assessing a monthly fee for each transponder distributes cost fairly to frequent and infrequent users of transponders.

2.    Standard vs. Flex Transponder - As the tolling program evolves there will be standard transponders and Flex transponders.  Flex transponders have a switch allowing HOV 3 qualifying carpoolers to ride in the 495 Express Lanes toll free and can be switched to recognize a paid user of the Express lanes.  The Flex transponder costs more to purchase and administer.  Assessing a monthly transponder fee associates the cost with those who receive the benefits.

•          Minimizes future toll increases – Going to a monthly transponder fee streamlines the process and reduces the related cost of assessing a fee to each electronic toll transaction.  The volume of transactions could double from its existing level of approximately 150 million transactions a year.  The toll facilities would pass this additional cost to the users.

•         Enhanced customer service – Retail sites (such as grocery stores) will become available to acquire transponders.  In addition to the walk in customer service locations in Herndon, Chesterfield and Gloucester Point, you can manage your account through the E-ZPass web page at www.ezpassva.com.  On this site you will have access to information explaining the 495 express lanes and other toll facilities that will be coming on line in the near future.

•         Reduce inactive accounts – Charging by transaction does not provide an incentive for customers  who no longer need E-ZPass to close their accounts and return unneeded transponders to VDOT.  If these transponders are returned,  the department can recycle them, saving the cost of purchasing new transponders.  This would reduce waste and costs for VDOT and result in a more efficient program.

•         Just in time fees  - VDOT would ensure that the transponder fee is generating just enough revenue to maintain and operate the program without generating excess revenues above expenses.

•         Operations in other states  - Two-thirds of the E-ZPass agencies charge some sort of fee to the account holders.

VDOT accepted public comments from mid-April through June 12 on the proposed monthly fee.  Comments were collected online and by mail.  VDOT is reviewing the comments. 

Online Resources:

E-ZPass Proposed Monthly Fee Release

http://www.virginiadot.org/newsroom/statewide/2012/vdot_accepts_public_comments58116.asp

E-ZPass Proposed Monthly Fee Web Page

http://www.virginiadot.org/newsroom/e-zpass_info.asp

E-ZPass Proposed Monthly Fee FAQ’s

http://www.virginiadot.org/VDOT/Newsroom/asset_upload_file896_57491.pdf

Thank you for your interest and I will keep you informed of the latest developments.

Sincerely,

Greg Whirley,

VDOT Commissioner