Saturday, December 29, 2012

CAHSRA plans on spending $83.20 per ton of CO2 for "green power"

One of the many points upon which California High Speed Rail has tried to sell itself is in the fact that it will be a carbon free form of transportation, responsible for no CO2 emissions in its normal operations, unlike air and automobile travel, both of which are dependent upon greenhouse gas releasing fossil fuels. While California's electricity is significantly less polluting than the national average, it still isn't entirely free of pollutants, releasing 0.819 pounds of CO2 equivalent per kilowatt hour (2009, calculated from page 3; note that imported electricity is significantly dirtier than that produced in California itself and the amount of imports per year can cause significant changes in electrical CO2 emissions).

In order to get rid of this small amount of greenhouse gas generation, the Authority plans on spending a premium of 3.09 cents per kilowatt hour for "green power." This comes to a fairly staggering premium of $83.20 per metric ton of CO2. This premium is even higher if compared to simply buying domestically generated electricity which, at 0.661 pounds per kilowatt hour, comes out to $103.10 per metric ton of carbon dioxide. By the time that high speed trains actually begin running, the carbon intensity of California electricity will be even lower and the resulting premium for "green power" consequently higher.

Now, this may very well be a more accurate price for carbon than conventional estimates or California's cap and trade auction price of $10 per metric ton, but it seems quite odd to spend substantial sums of money simply for the sake of bragging rights. Indeed, even the Authority does not go so far in its benefits analysis, attributing a social cost of carbon that reaches only $48.71 (in 2011 dollars) by 2050 (page 21).

As far as paying this premium as an advertising strategy goes, this is a rather pricey means for dubious gains. Those who choose their method of travel at least partially based upon carbon emissions are not likely to be dissuaded from a trip because it contributes 19 pounds of CO2e and could, in any event, be easily induced to pay a token amount of money for a carbon offset. However, the appeal of high speed rail, for nearly all potential travelers, is going to be from other factors than the amount of carbon generated.

Now, is the total amount of money spent on this a terribly large sum? To a certain degree, yes. The Authority's medium scenario estimates are for 8.9 million, 16.3 million, and 21.1 million train-miles annually for the initial operating system, Bay to Basin, and Phase 1 Blended plans (page 12) as well as 59 kWh per train-mile (ibid, page 7). This translates to annual costs of $16.2 million, $29.7 million, and $38.5 million (2011$) in order to run the high speed rail system without carbon emissions. Looking at the year 2040 that the mileages are evidently for, the carbon free premium for the Phase 1 Blended represents just over 4% of total O&M costs. It's not too terribly large a portion of the total budget, but I find it a waste of taxpayer dollars to spend that much money on self-congratulatory "green power" instead of purchasing significantly cheaper offsets.

Wednesday, December 26, 2012

All Aboard Florida expects annual revenue of $145 million

Orlando Sentinel

If the All Aboard Florida train becomes a reality, the system linking Orlando International Airport with Miami would generate $145 million in fares annually by 2018, according to records filed by the company with the state.
With one-way tickets estimated in the $100 range, that would mean the Coral Gables-based company is expecting to carry nearly 1.5 million passengers between Central and South Florida within three years of its inaugural trip in 2015.
All Aboard Florida also is seeking a 99-year lease, presumably for free or a token payment, to lay down tracks along the south edge of the BeachLine Expressway, which runs from Interstate 4 south of downtown Orlando to Cocoa on the east coast.
Those details were revealed in an 81-page proposal All Aboard Florida sent the state Department of Transportation last month. The document was released to the public after the company was given the go-ahead by the state to open talks for securing the BeachLine property.

The ridership estimate down from an earlier statement of more than three million made earlier and my own estimates of about 1.8-3.2 million full fare passengers needed for break even operations. However, my own estimates involved a substantially lower fare and no food and beverage revenues. Of course, this ridership estimate may be an erroneous one made by the Orlando Sentinel from fare ranges and revenues and actual ridership higher. While station ridership projections indicate two million riders per year from three of four stations (excluding Orlando), this figure is for 2030 rather than 2018. Unfortunately, I haven't been able to find the documents in question.

I believe that the estimated ridership is actually above that 1.5 million figure, since it is assuming full fares for the full length of the route. Since there are intermediate stations, which will not have a hundred dollar fare, ridership should be rather higher, probably in the low two million range. Update: Another article reports an expectation of 3.29 million riders by 2018. 

Tuesday, December 25, 2012

Merry Christmas

The twenty-fifth day of December.
In the five thousand one hundred and ninety-ninth year of the creation of the world
from the time when God in the beginning created the heavens and the earth;
the two thousand nine hundred and fifty-seventh year after the flood;
the two thousand and fifteenth year from the birth of Abraham;
the one thousand five hundred and tenth year from Moses
and the going forth of the people of Israel from Egypt;
the one thousand and thirty-second year from David's being anointed king;
in the sixty-fifth week according to the prophecy of Daniel;
in the one hundred and ninety-fourth Olympiad;
the seven hundred and fifty-second year from the foundation of the city of Rome;
the forty second year of the reign of Octavian Augustus;
the whole world being at peace,
in the sixth age of the world,
Jesus Christ the eternal God and Son of the eternal Father,
desiring to sanctify the world by his most merciful coming,
being conceived by the Holy Spirit,
and nine months having passed since his conception,
was born in Bethlehem of Judea of the Virgin Mary,
being made flesh.
The Nativity of our Lord Jesus Christ according to the flesh.

Tuesday, December 18, 2012

Disappointing news from All Aboard Florida: Cost overruns and delays

Not even private passenger rail is immune as All Aboard Florida service is pushed back two years and $500 million more

Passenger rail line company All Aboard Florida got the go ahead Tuesday to begin negotiating a lease so it can build the northern portion of its $1.5 billion Miami to Orlando speed train.
The speed train could begin construction as early as next year. The proposal given to the agencies includes documents that indicate its completion is slated for the end of 2015, which means it wouldn't be up and running until the following year, at the earliest. Originally, All Aboard Florida officials had projected they would be done by the end of 2014.
The train would have stations in Miami, Fort Lauderdale and West Palm Beach and a station at Orlando airport.
The Fort Lauderdale and West Palm Beach stations would be completed by August 2015, while the Miami station, which is envisioned as being larger and could include commercial development, wouldn't be finished until December 2015.
All Aboard Florida is a newly launched subsidiary of parent company Florida East Coast Industries.
"This is a major step forward for the project," said Husein Cumber, Executive VP of Corporate Development for Florida East Coast Industries. "AAF will begin negotiations with FDOT to determine the lease terms that will allow our $1.5 billion private investment to move forward quickly so we can enhance Florida's transportation network and begin to create thousands of new jobs in our state.”

I'm not terribly surprised at the time delay; 2014 was always an extremely ambitious schedule and this delay lets them take more time with construction of the railcars as well. The increase in cost is disappointing, though well in keeping with American tendencies towards 50% overruns. My suspicion is that cities are asking for more grade separations, improvements, or other traffic improvements in connection with the stations than was initially budgeted for.

Thursday, December 6, 2012

Amtrak routes by 2012 cost recovery

With the release of the September 2012 Monthly Performance Report, we now have information on costs and revenues for Amtrak's routes throughout Fiscal Year 2012. With that information I've put together a spreadsheet of all of Amtrak's routes ranked according to their 2012 cost recovery level. In order to remove the affects of state support subsidies, I've considered only ticket revenue (found on Page A-3.5) against total expenses (page C-1) for the state supported routes. This has the side-effect of removing food and beverage revenues as well while keeping their costs and so state supported routes may actually be a few percentage points better for farebox recovery. The spreadsheet follows after the cut and is color coded for convenience in assessing between Northeast Corridor, state supported, and long distance trains.

Tuesday, December 4, 2012

Yes, the NEC makes a profit

Noel Braymer recently wrote an article for RailPAC in which he argued that far from being profitable, as the surpluses in train operations appears to show, the NEC is actually a net drain for Amtrak, citing $575 million in capital costs for the Northeast Corridor against $180 million in surpluses for the Northeast Corridor’s train operations (Acela and Regional). This leads to a suggestion that the NEC should be handed off to an independent third party owner who would charge sufficiently high fees (while also increasing traffic on the lines) to recover the full costs of the corridor. Unfortunately, this does not seem to be in accord with the facts insofar as I can find them.

Partially because I can’t seem to find a document that matches with his $575 million cost for the Northeast Corridor and partially because I like the breakdown better, I’ll be using the numbers for Fiscal Year 2012. Scrolling down to page A-4.6, we have a breakdown of all of Amtrak’s capital spending in the engineering and mechanical departments. At first glance, the engineering budget, which is the one we’re interested in for the Northeast Corridor, shows $518 million either spent or projected to be spent through the remainder of the fiscal year. However, not all of this properly belongs to the category of routine maintenance, which is the relevant criteria to judge the Northeast Corridor on.

Categorically, the entirety of electric traction, track, and communications should fall under this accounting, though this does include costs for Philadelphia-Harrisburg and potentially track owned in Michigan. I do not count the New Jersey HSR Improvements, Life Safety construction, or special projects as a routine cost of the Northeast Corridor and, in fact, these are often funded by other sources, such as Federal grants or by other agencies (such as the new Sunnyside Yard is by MTA). Nor do I count station spending as being properly assigned to the Northeast Corridor. $50 million, half of the total spending this year, is Federal grants for reconstruction in accordance with the Americans with Disabilities Act. The remainder is split between hundreds of Amtrak stations nationwide and would not transfer to a third party were the Northeast Corridor to be spun off.

This brings us to a total of cost for the Northeast Corridor of $310.4 million. Against this is a surplus of $300 million for the Acela and Northeast Regional through August; assuming costs in line with revenue for the remainder of the fiscal year, I estimate a total surplus of $319 million for the year. Update: The September 2012 report shows a total surplus of only $281.9 million for Northeast Corridor trains for the year; I do not know why why costs for September were $110.9 million against revenues of $91.4 million; about 50% higher than would have been expected for a simple 1/12th fraction. Presumably there are end of year costs counted only in September rather than spread throughout the year.

Rather than being a net drain on Amtrak, the Northeast Corridor pays for itself, even excluding track access fees (see above update). If we consider track fees, equally charged per train mile as a simple “fair share” model would suggest, the Northeast Corridor comes out even further ahead. With Amtrak only producing 51% of the train miles on the Northeast Corridor (Table 7, page 12), the maximum charge which ought to be levied is $158.3 million (according nicely with the $164 million said to be paid in fees by other NEC users), leaving a plentiful sum from the operations which is more than enough to pay for the mechanical costs of the trains as well; the more so when the train miles from long distance and state supported services are discounted.

If, of course, Amtrak is not reimbursed according to a fair share formula, that certainly has the potential to drag the potential profitability of the corridor down; but all that suggests is that all users must pay equitably for the corridor, not that the corridor should be spun off into the hands of a third party agency. At the same time, I am not suggesting that the Northeast Corridor is sufficiently profitable as to pay for necessary upgrades or even potentially all of the backlogged maintenance necessary to return to a state of good repair. While that may now be true, the profitability of the Northeast Corridor over and above infrastructure maintenance is a fairly recent phenomenon and not one I’d care to currently mortgage the corridor on without seeing the trend continue for a few more years.

Quite frankly, I don't see the proposal of an independently owned Northeast Corridor as being a good idea even in the abstract. There is a degree of compelling logic to spinning off the Northeast Corridor and Amtrak's Northeast Corridor operations as a complete entity; there is not for spinning off simply the infrastructure by its lonesome. If Amtrak pays its fair share, which would be the legal case in 2015 even if it isn't now, their costs would not change. If they pay only the incremental costs of running over the lines, to the great annoyance of all the commuter agencies then stuck with the remainder of the bill, you simply have a government agency being subsidized by other government agencies. Meanwhile, the suggestion that such an agency would increase revenues by increasing freight traffic along the line is a suggestion that is actively detrimental to good passenger rail, which must minimize the amount of freight traffic that it interacts with.