Tolls rise on I-77
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As drivers return, the private company that runs I-77’s toll lanes is collecting more money than projected
I-77 Mobility Partners, which runs the toll lanes on I-77 north of uptown, is on track to collect $45 million in tolls in 2022 — more than the pre-construction estimate of $35 million for this year.
by Steve Harrison, WFAE
After generating little revenue during the height of the pandemic, the privately managed Interstate 77 toll lanes are making enough money to meet or exceed revenue projections.
The toll lanes generated $2.16 million in the second quarter of 2020, according to the company that manages them. That was in April, May and June — a time when businesses were closed and many people were working from home.
In the fourth quarter of 2021, however, the toll lanes brought in $11.5 million. If that pace continues in 2022, the toll lanes would generate about $45 million this year — $10 million more than projected for 2022 before construction began.
The increase in revenue is not only due to more people using the lanes.
I-77 Mobility Partners, the private company that built and manages the lanes, is now making more money from each transaction, the result of setting higher rates than when the lanes first opened.
During the first part of the pandemic, the average toll transaction was 72 cents. At the end of 2021, that had increased to $1.34. (A toll transaction covers only part of the entire 26-mile project. If you drive from Charlotte to Mooresville, you will be charged several times, in separate transactions.)
I-77 Mobility Partners said in a statement that it’s “cautiously optimistic” about the increase in revenue.
MORE CARS, HIGHER TOLLS: Between the fourth quarter of 2020 and the fourth quarter of 2021, traffic on the I-77 toll lanes rose 65%, while the amount of revenue collected was up 140%, according to figures from I-77 Mobility Partners, which operates the toll lanes.
Controversial project
Toll lanes, or managed lanes, are designed to give motorists a reliable travel time — no matter how many people are on the highway. Companies that manage the lanes can adjust their prices depending on usage.
The goal is for vehicles to always be able to travel at least 45 mph in the toll lanes. If traffic in the toll lanes increases to a point at which traffic slows down, the tolls are increased. In theory, that pushes some drivers back into the general-purpose lanes.
There are similar toll lane projects with fluctuating prices throughout the country, in places like Washington D.C., Denver and Miami.
But the I-77 toll lane project was one of the most controversial transportation projects in North Carolina.
Some Lake Norman residents opposed having any toll lanes.
Others said they were OK with the concept of toll lanes, but they wanted the state to widen I-77 first — just as the DOT has done for other highways throughout the state. Much of I-77 through Cornelius, Davidson and Mooresville was only two lanes in each direction and had never been widened.
And others objected to the project being turned over to a private company. Spanish infrastructure company Ferrovial is the majority owner of the toll lane project.
The DOT said it didn’t have enough money to expand I-77 with free lanes. The state said a private company could borrow money easier and build the project faster.
High tolls, even with little traffic
As the toll lanes enter their third year of operation, it’s clear that I-77 Mobility Partners has set toll rates that are much higher than state-managed toll roads in North Carolina. Unlike the I-77 toll lanes, which have variable prices, the state toll roads have fixed prices.
For instance, it costs $2.72 to drive the full 20 miles of the Monroe Expressway in Union County, a publicly funded and publicly managed highway. Though the Monroe Expressway is not a managed toll lane project, it’s similar in that it parallels U.S. 74 and gives motorists a faster trip through Union County.
It costs $3.71 to drive the full 19 miles of the Triangle Expressway outside of Raleigh. That highway is also publicly financed and managed.
On a recent visit to the north Mecklenburg toll lanes, at about 11:30 a.m. Tuesday, there was no congestion on I-77 in the Lake Norman area. Traffic in the general-purpose lanes was moving at least 70 mph.
At that time, driving 26 miles from Charlotte to Mooresville on the toll lanes cost $8.40. I-77 Mobility Partners estimates the tolls for the same northbound trip at 5 p.m. would be $13.41.
“The strategy is to maximize revenue,” said Cornelius resident Kurt Naas, who was a leader in the opposition to the toll lanes. “If you have 10 cars willing to pay $9 and you have one car willing to pay $100, you kick out the other cars. It’s not about moving traffic or moving congestion.”
He added: “They are looking to find that maximum price elasticity and charge as high as you can without reducing demand.”
I-77 Mobility Partners wouldn’t agree to an interview about how it sets prices. The company said in a statement:
For those who do opt to utilize the express lanes, the cost has proven to be very reasonable. On average, our customers pay $15 a month — or a little more than the cost of a 44 cent stamp each day — to use the express lanes.
The company added:
The express lanes provide drivers a reliable travel option when they want it, and the majority of our customers do not drive the entire length of I-77 Express. The average trip is nine miles, and the average number of transactions is three. Drivers always have the choice to travel the entire length of the 26-mile corridor for free, unlike those on other traditional toll roads who must pay a toll to travel the corridor.
I-77 Mobility Partners publishes maximum and minimum toll rates that have been agreed to by the Turnpike Authority. They allow for a wide range of pricing. For people traveling northbound, the minimum toll for the entire segment is $2.70. The maximum toll is $70.45.
It added that since the lanes opened at the end of 2019, congestion on I-77 has decreased. (Congestion has decreased on most highways because of the pandemic.).
No subsidies requested
The state’s contract with I-77 Mobility Partners calls for the Turnpike Authority to give the company up to $75 million if it can’t meet its debt service payments. I-77 Mobility Partners has not asked for that money.
The project was also late to open. The DOT said it withheld $8.23 million from the company as penalties for being late.
Steve Harrison is a reporter with WFAE, Charlotte’s NPR news source. Reach him at sharrison@wfae.com.
In brief…
Drivers license settlement: More than 185,000 North Carolina drivers whose licenses were revoked for failing to pay fines could have their licenses reinstated, under a settlement announced this week. The settlement with social justice groups allows those drivers to have their licenses restored if they were unable to afford the fines. They have to seek permission from their sentencing court. (NCDOT)
Reliable car: There’s a 1992 Honda Accord EX wagon with 965,000 miles on it on display at McKenney-Salinas Honda in Gastonia. “This is like our little museum right here,” the dealership’s operations director said. “It’s a cool car!” It’s not for sale, but the Kelly Blue Book trade-in value is between $417 and $980. (Observer)
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The I-77 toll lanes are for the affluent at the expense of all the rest of us.