Rush for E-ZPass drives Md. to put more money into contract

There’s been an unexpected rush for E-ZPasses in Maryland as the state moves to eliminate toll booths, replace old transponders and change the cost structure for accounts. And with that surge in demand, the state is set to direct $30 million more in toll revenue toward the E-ZPass contract.

The Maryland Board of Public Works is due to vote Wednesday to add the $30 million to the current 10-year E-ZPass contract with Kapsch Traffic Com USA. That will more than double the original contract amount of $19.5 million approved in 2012.

Part of the $30 million includes $3.06 million that the state wrongly spent without permission since March 15.

The E-ZPass transponders and associated tolling system components have already been accepted, so a vote of the board consisting of Gov. Larry Hogan, Comptroller Peter Franchot and Treasurer Nancy Kopp is required to retroactively sign off on the spending.

Demand for E-ZPass transponders has surged more than the Maryland Transportation Authority expected over the last few years as changes were put in place to eliminate the fee for a basic E-ZPass (but not an E-ZPass Flex), replace older EZ-Pass transponders that did not always work, and drivers became more aware of Maryland’s plans to do away with regular toll plazas in coming years.

“These initiatives led to a 10% increase in MDTA E-ZPass account activity. Not only did these initiatives result in increasing new accounts, the initiatives also increased the number of accounts with multiple vehicles and added transponders requests,” board documents said.

Drivers who frequently use Maryland toll roads have also chosen to get Maryland E-ZPass accounts even if they live out of state, since Maryland only offers E-ZPass discounts to Maryland account holders.

In addition to the additional $30 million for the final three years of the contract, the board is also due to set the cost of a three-year option available to the state starting in 2022 at an additional $30 million.

About the wrongly spent money, board documents said, “Due to human error and staff changes involved in managing MDTA’s inventory and financial systems, MDTA only recently became aware that it overspent the contract amount for 3½ months this year.”

The contract is paid for through toll revenue from across Maryland’s toll roads and bridges.

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