For decades, the Utah Department of Transportation has relied on gas tax revenue to fund transit, road maintenance and transportation projects. But with more drivers switching to electric and hybrid vehicles every year and the purchasing power of the gas tax consistently decreasing, UDOT is exploring other ways to bring in money.
A program launched on the first day of the year aims to do just that. The Road Usage Charge program started by UDOT gives Utah drivers of alternative-fuel vehicles the option of paying by the number of miles driven instead of paying an annual fee. As of 2019, drivers of these vehicles pay a flat fee when they register their car.
Last year’s fees were $60 for electric vehicles, $26 for plug-in hybrids and $10 for gas hybrids according to UDOT. Those numbers will increase to $90, $39 and $15 respectively this year, and to $120, $52 and $20 in 2021.
Those who participate in the voluntary program will be charged 1.5 cents per mile driven, according to Tiffany Pocock, manager of the Road Usage Charge program. Opting in will mean they don’t have to pay the extra registration fee and won’t be charged any higher than what the fee would have been, regardless of the number of miles traveled.
Pocock said electric car users, who travel an average of 8,000 miles a year, are unlikely to see any savings this year through program participation. But when the registration fees increase in 2021, the voluntary program would save drivers money.
“You could, in theory, drive less, pay less at that point,” Pocock said.
In 2018, the Utah Legislature passed transportation governance amendments that, among other things, required UDOT to implement a road usage charge system for alternative-fuel vehicles by 2020.
UDOT fulfilled that requirement and, in doing so, became the second state in the country to have a fully-fledged pay-per-mile alternative-fuel vehicle program, Pocock said.
Around two-dozen states have adopted annual flat fees for alternative-fuel vehicles, but only Oregon and Utah give the option of paying by the mile.
The mileage tracking works by using an OBD2 device that plugs into a vehicles diagnostic port and captures sensor data, said Pocock. This data is sent to a third party that collects and reports the number of miles driven.
“And then you would just drive,” the program manager said.
Payments are made using a prepaid wallet that is set up once participants put a credit or debit card on file. Mileage fees are automatically deducted periodically, according to an information sheet about the program.
People concerned about privacy and how their data is used can opt for short-term data retention, the sheet said.
In 2019, the gas tax rate at the state level was 30 cents per gallon and 18.4 cents per gallon at the federal level, according to UDOT data. A conventional sedan that gets 25 miles to the gallon would pay, on average, $301 in total fuel taxes, with $187 of that going to the state. At the same time, electric vehicles paid zero in gas taxes.
Only 2% of vehicles in the state are electric, gas-hybrid or otherwise alternatively fueled, according to UDOT.
But these numbers are growing quickly. In 2018, the amount of alternative-fuel vehicles in Utah grew by more than 50%.
“The gas tax is doing what it needs to do here in the short term,” Pocock said. “But (with) the growth of electric vehicles we’re seeing … (they) will probably be what the majority of the cars are on the road here in the future.”
Nobody likes increased fees, said Pocock, but this program operates on a “pay for what you use” basis and, in a few years, will be necessary to adequately fund Utah’s roads and transportation infrastructure.
“We’re just trying to plan ahead and figure out what that funding structure and revenue needs to look like,” Pocock said.