April 29, 2013
Indiana drivers who use E-ZPass transponders to pay tolls electronically on the Illinois Tollway might soon be charged an extra fee to balance out what Illinois officials see as a long-unresolved fairness issue.
Since 2010, Illinois Tollway I-Pass customers have paid a 3-cent transaction fee, on top of the normal tolls, every time they pay a toll on the Chicago Skyway or the Indiana Toll Road.
But E-ZPass customers pay no transaction fees on tolls along the Illinois Tollway.
Both the skyway and the Indiana Toll Road are operated by the same private contractor that uses the E-ZPass toll-collection system. The transaction fee covers customer service costs related to tolling operations, officials said.
The extra pennies paid by I-Pass subscribers on the skyway and toll road add up, totaling about $750,000 a year, Illinois Tollway officials said.
The disparity in fee policies may finally change, tollway officials said. The situation points up a contentious issue involving the reciprocal use of the two toll-collection systems across state borders.
In addition, the 3-cent transaction fee that I-Pass customers pay on the skyway and Indiana Toll Road comes atop the 87 percent hike in tolls imposed last year on the Illinois Tollway system to help pay for a $12.1 billion construction project.
The tollway is evaluating its transaction-fee policy "to ensure fairness to all of our customers," said Wendy Abrams, a spokeswoman for the Illinois State Toll Highway Authority.
The issue will be brought before the tollway board's Customer Service Committee in May to determine the legal avenues for potentially passing on a transaction fee to E-ZPass customers from only one state — Indiana — and how the fee would be implemented, Abrams said.
E-ZPass is the electronic toll-payment system used by Indiana and about two dozen toll agencies in the U.S. It is accepted along with I-Pass on the Indiana Toll Road and the Chicago Skyway. Indiana joined the E-ZPass consortium in connection with discontinuing its own toll-collection system, called i-Zoom, in 2012.
Yet I-Pass is the predominant transponder used on the Indiana Toll Road and the skyway, tollway officials said. In 2012, I-Pass was used in 59 percent of all electronic transactions on the Indiana Toll Road and the skyway, tollway officials said.
Some 204,793 I-Pass transponders have been distributed to Indiana residents, according to the tollway. The tollway system currently has 4.6 million active transponders, officials said. Total customer service costs are about $2.2 million annually, the officials said.
"Illinois, in effect, provides a large portion of the customer service costs" for the private company that operates the skyway and the Indiana Toll Road, Abrams said.
The extra 3 cents that I-Pass customers pay on the two toll roads account for why drivers who scan their monthly I-Pass statements online may have noticed what appear to be odd charges, like $4.03 instead of $4 for driving on the skyway, and 53 cents instead of a 50-cent toll at various locations on the Indiana Toll Road.
The transaction fees are collected "to help offset certain costs associated with interoperability of the E-ZPass network," according to the Indiana Toll Road Concession Company, which is the private company that under long-term lease agreements operates the Indiana Toll Road for the state of Indiana and the skyway for the city of Chicago.
The company initiated the 3-cent charge to cover the transaction fee the Illinois Tollway imposes for the costs of providing the company with services related to transponders, customer account maintenance and the customer call center, tollway officials said.
"Most toll agencies around the nation, including the Illinois Tollway, absorb these customer service costs and factor them into the tolls they charge," Abrams said.
She said the Indiana Toll Road Concession Company "could decide to pay these customer service expenses as a cost of doing business and simply take less profit. However, they have chosen instead to pass these costs on to their customers."
A spokeswoman for the Indiana Toll Road Concession Company said it's not as simple as absorbing the costs.
"While other toll roads may be able to adjust their tolls, the rates on the skyway and the Indiana Toll Road are restricted by the contracts," said the company's spokeswoman, who asked not to be identified by name. The I-Pass/E-ZPass transaction fees were "an unforeseen cost that were not factored into the leasing of the roads," she said.
She pointed out that the full amount of the 3-cent transaction fee charged to I-Pass customers on the skyway and the Indiana Toll Road is remitted to the Illinois Tollway.
But Abrams said the Illinois Tollway "eats part of the cost" of processing toll transactions on the two toll roads. Although revenues generated from the 3-cent transaction fees are about $750,000 per year, the actual cost to the Illinois Tollway to process the fees is about 6 cents per transaction, or $1.5 million annually, Abrams said.
Tollway officials expect processing expenses to become more efficient when the toll authority upgrades its electronic toll-collection system, with a goal to do so by 2015. Selection of a vendor is expected this year, officials said.
The new system will improve customer communications and provide enhanced functionality with the E-ZPass system, as well as lay the groundwork for future electronic tolling technologies, officials said.
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