Development Of The Conceptual Model For A Least Cost Transportation Planning Process

Phase I Report - February 1994

Dick Nelson

Don Shakow

The Institute for Transportation and the Environment

Least cost planning: A comprehensive, technically consistent planning method that provides an economic framework to assess the cost-effectivness of all transportation modes and management strategies, while taking into account all societal costs.


This report presents the results of the first phase of a two-part least cost planning transportation study. The study was undertaken in response to a request by Washington State Department of Transportation Secretary Sid Morrison to suggest how least cost planning concepts might be applied to the work of the Central Puget Sound Regional Transit Authority (RTA).

The first phase has produced the conceptual design and logic for a computer model that incorporates the principles of least cost planning and an extensive list of transportation options for the region. The second phase will allow the model to be calibrated and applied to alternative transportation portfolios.

Least cost planning, which has been successfully used in electrical power planning in the Pacific Northwest, is a tool that can be employed to help solve the difficult and complex transportation problems facing the central Puget Sound region. Least cost planning aims to develop transportation plans that are socially optimal. It achieves this objective by searching every feasible alternative, those that limit demand as well as those that increase capacity. Current planning practices, by contrast, search within a narrow range of possibilities and achieve results that are not truly optimal.

The Congestion Problem

Although the transportation problem is multifacted, the single most important transportation issue in the mind of the public is traffic congestion. This region has experienced increasing congestion on its major highways as the number of drivers, vehicles, and trips taken has grown much faster than population and highway capacity. Regional travel models predict that congestion will grow considerably in the next 20-30 years, with an approximate doubling in the number of daily hours and highway miles of stop and go traffic.

Congestion creates costs -- personal costs for drivers in the form of lost time and stress, and economic costs for businesses that depend on the timely arrival of goods and services. These costs must be weighed against the costs of solutions for congestion.

The Regional Transit System Plan: Public Perceptions Versus Realities

The Puget Sound region faces a double-edged transportation dilemma. First the proposal for a new high capacity transit system linking major population centers will have very little effect on traffic congestion. That proposal, the Regional Transit System Plan, which has been several years in the making, is now before the Regional Transit Authority (RTA) for implementation, modification, or replacement. The second element of the dilemma is that the public, which strongly favors a new regional transit system, believes that the System plan will solve congestion.

But growing traffic delay on major roadways will be left virtually unchanged over the next 30 years by a $9-13 billion investment in rapid rail and expanded bus service. Even the two key public policies that have been adopted to support improved mobility, the Commute Trip Reduction law and the regional land use plan, Vision 2020, will have no more than a marginal impact in reducing the growth of vehicle travel. Yet, no formal mechanism is being applied currently to compare the significant costs of the Plan to its estimated benefits that appear to be quite modest.

A Composite Supply and Demand-Side Solution

The hypothesis used in this study is that a solution to congestion, to the extent it can be found, will be a composite created from a broad array of candidate supply and demand-side measures that are targeted at specific end-use markets. The solution will be built incrementally from measures taken in each transportation mode, including non-motorized, transit and ridesharing. It will involve changes in land use plans and rules. And it will involve strategies and policies that drive price of driving closer to its true cost.

Once the complexity of the problem is recognized, the challenge becomes one of designing an analtyical tool that can sort through a large number of options and select a set of measures that form an integrated transportation package. This package must be able to gain the public's support, both in terms of cost and the intervention it may require in the transportation marketplace.

The New Federal Transit Planning Rules

A new planning tool is not only wise, it is also the best way to comply with federal laws and regulations. New transportation planning rules, recently adopted to implement the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), appear to anticipate such a solution. These rules require a comprehensive study of alternative modes and strategies before federal funding for major transit improvements can be applied for. The RTA, together with the Puget Sound Regional Council, other transit systems, and federal highway and transit agencies are to jointly undertake the new study. They must provide a reasonable opportunity for public involvement.

The federal regulations require both direct and indirect costs to be addressed in the study. The regulations also require the options to be compared as to their cost-effectiveness. However, they do not define cost-effectiveness nor do they describe the process by which it is to be determined. These crucial steps are delegated to the agencies cited, with the assistance of the public.

A least cost planning model can be the process by which this region carries out the economic analysis for transit investments mandated by the new federal rules. More generally, it can be applied to other regional transportation investments such as the Transportation Improvement Program, and to state investments such as the Multimodal Trasnportation Plan. It is also the tool that will allow us to find solutions to difficult fiscal realities.

The Least Cost Model

The model being developed in this study, and summarized in this report, replaces the approaches to transportation planning, including demand-driven supply planning and indicative planning. It differs from these methodologies by searching among a "universe" of options in order to determine the combination that minimizes net social cost.

The model is being designed to the following specifications:

- The primary consumer utility that the transportation system is designed to satisfy is access, rather than mobility. The model, therefore, highlights those end-uses that can be met without requiring actual trips.

- Transportation modes to be considered by the model would include single occupancy 4-wheeled motorized vehicles, transit (including rapid, commuter, and light rail as well as bus), shared ride modes, taxis, and non-motorized and 2-wheeled motorized vehicles.

- Demand is aggregated by end-use categories (work, shop, social-recreational, etc.).

- Elderly, school, and disabled populations are analyzed separately.

- Commercial demands and modes (e.g. heavy trucks) are accounted for.

- A search is conducted over a large number (~200) options, including build, transportation system management and transportation demand management options.

- The feedback of options on trips, modal choice, and peak travel are accounted for.

- The social benefits -- including employment benefits -- of options are estimated.

- Options are "stacked" in (declining) order of their marginal net social benefit.

- The least cost solution involves the execution of options until the access requirements of the population are met.

Comparison with Other Transportation Models

Planning agencies currently employ highly elaborate and sophisticated econometric models to forecast transportation needs. This least cost planning model, by contrast, deliberately avoids complexity and attempts to condense the detail associated with the intricate pattern of trip production, attraction, and distribution. The focus throughout is to develop a timely process that will identify the combination of transportation options yielding the greatest regional benefits.

Conclusions -- How We Will Benefit from a Least Cost Planning Effort

A concerted effort over the next several months will improve the least cost model to the point that it can be calibrated and applied to alternative regional transportation portfolios. These portfolios would, for example, describe significant transportation alternatives now under consideration in the region including a rapid rail system as specified in the Regional Transit System plan, a "no-build" scenario that relies primarily on transportation system management and transportation demand management measures, and a scenario that requires greatly increased construction and implementation of pedestrian-friendly and bicycle-friendly measures, etc.

The conceptual framework presented here offers a new perspective on the relative costs and benefits of transportation decisions. Much data appears available to enable the implementation on computer. Accordingly, we are optimistic that, in the course of the next phase of this project, we will be able to make this model operational.

Table of Contents

Executive Summary --- 5

Acknowledgements --- 8

Introduction --- 9


1. Understanding our Regional Transportation Problem ---12

2. The New Federal Transit Planning Requirements --- 29

3. Alternative Approaches to Transportation Planning --- 32

4.. Least Cost Planning: Lessons from Energy Planning in the Northwest --- 38

5. Least Cost Planning in Transportation: The State of the Art --- 43

6. Full Cost Accounting Methodology --- 49

7. Overview of the Regional Transit System Plan from a Least Cost Perspective --- 53

8. Analytic Modeling, Transportation Modeling, and the Least Cost Planning Model --- 57

9. The Framework for an Alternative Regional Least Cost/Full Cost Planning Model --- 59

10. Running the Model: Least Cost Portfolios --- 68

11. Conclusions, Recommendations, and Requests --- 71

References --- 72

Appendix A: List of Options --- 74

Appendix B: Schematic Description of Model Code --- 79

Bound, complete print copies of the following two reports are available from: Integrated Transportation Research, 122 NW 50th Street, Seattle, WA 98107-3419 (Phone or Fax 206-781-0915). Cost: $10 each, postage and handling included.

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Last modified: May 3, 1996