State officials fought toll lane operators over the I-95 aux lane ‘compensation event’

WOODBRIDGE — Before the Interstate 95 Express Lanes could be expanded to Fredericksburg, there was this little thing known affectionately as a “compensation event.”

That’s the term coined by state officials and Transurban, operators of the E-ZPass Express Lanes on I-95, 395, and 495, when they signed an agreement to build and maintain the lanes under former Virginia Gov. Bob McDonnell.

Under the terms of the contract, if the state made any improvements to the general purpose lanes (non-tolled lanes) alongside any portion of Transurban’s toll facilities, state taxpayers would be on the hook to pay Transurban for potential lost toll revenue.

We reported on the issue back in 2017 when the effort to open a fourth, auxiliary lane on I-95 south from Route 123 to Prince William Parkway was just gaining momentum.

On Tuesday, Gov. Ralph Northam, flanked by legislators from Prince William and Fairfax counties, announced that lane would be built. To boot, there will be no “compensation event.”

“What we’ve agreed to, essentially, is a cease-fire,” said Senator Jeremy McPike (D-29, Prince William County).

State officials and Transurban on Tuesday announced, along with a total of $1 billion in new transportation infrastructure to include the I-95 auxiliary lane, that the firm would not claim a compensation event only for the auxiliary lane project.

A spokeswoman from Transurban didn’t want to talk to us specifically about the company’s decision to waive the compensation event clause. In a prepared statement from the governor’s office on Tuesday, Transurban President Jennifer Aument was quoted, “Transurban has a long history of working with the Commonwealth to collaboratively solve major transportation challenges.”

The I-495 Express Lanes opened in 2012, and the toll lanes on I-95 opened two years later. McPike was elected in 2015, and he says he’s been working on addressing the compensation event issue since his first day in office.

An employee of the Alexandria government, McPike, too, is a commuter. He’s never been a big fan of the original deal Transurban struck with the state.

“This was the biggest land giveaway in Virginia history,” said McPike.

While the toll lanes on I-495 were constructed by Transurban, along with 14 new bridges and overpasses that added overall capacity to the Capital Beltway, then the majority of the lanes on I-95 and 395 — from Dumfries to the Pentagon — were built with funds from state taxpayers 40 years ago. Under a deal with the state in 2012, Transurban took over the lanes with a charge to manage them for 75 years.

“That [Transubran] would have some sort of right to gain money over lost toll revenue, therefore, anybody who drives the general purpose lanes would have to suffer is ridiculous,” McPike continued.

The announcement about the expansion of the auxiliary lane came as part of a larger $1 billion package of new transportation investments in Northern Virginia. While state taxpayers will fund the $30 million auxiliary lanes, Transurban will foot the bill for others improvements:

• $400 million extension of I-95 E-Z Pass Express Lanes to Fredericksburg (the FredEx project)
• $550 million extension of I-495 -E-ZPass Express Lanes from Dulles Toll Road to the American Legion Bridge at the Maryland State Line.
• $50 million addition of a new reversible ramp from the I-95 E-ZPass Express Lanes to Opitz Boulevard in Woodbridge

That Opitz ramp project will not only improve access to the Potomac Mills mall area, it will also improve access to the E-ZPass lanes for fire and rescue crews, said McPike. He is a volunteer firefighter for the Dale City Volunteer Fire Department.

Last week, the state released preliminary information about which Smart Scale projects would receive transportation dollars for work on projects beginning in 2024. None of the nine projects submitted by Prince William County — to include the I-95 auxiliary lane — made the cut. Projects aimed at relieving congestion in Northern Virginia failed to impress state funders who opted for projects that, instead, got people out of cars and onto public transit.

At the time the Smart Scale project list came out, McPike said he knew the auxiliary lane would be funded under the deal struck by the state and Transurban. Now that the deal is done, the project will get underway this year instead of having to wait even longer — perhaps into the late 2020s for funding, he adds.

This new agreement won’t mark the end of talks about compensation events between the state and Transurban.

“Anywhere that we want to expand the general purpose lanes alongside the Express Lanes, we’re going to have this issue. We have contracts in place, and we’re stuck dealing with this,” said McPike.

This new agreement won’t mark the end of talks about compensation events between the state and Transurban.

“Anywhere that we want to expand the general purpose lanes alongside the Express Lanes, we’re going to have this issue. We have contracts in place, and we’re stuck dealing with this,” said McPike.