HERS-ST Highway Economic Requirements System - State Version: User's Guide
Chapter 3 Understanding HERS-ST Analysis
This chapter addresses the types of HERS-ST analysis and discusses the capability to override improvements selected by HERS-ST.
HERS-ST offers four primary types of analysis:
- Select for implementation, all improvements with minimum benefit-to-cost ratios exceeding a specified threshold
- Maximize benefits as constrained by available funds
- Maximize return on investment as constrained by performance
- Identify and correct all deficiencies
These analysis types differ in how HERS-ST selects the improvements to implement. Following is an overview of each analysis type.
The minimum BCR analysis works on the premise of implementing all improvements with BCRs greater than a defined threshold value. When you select minimum BCR analysis, you must specify the minimum acceptable BCR for any implemented improvement. The minimum BCR analysis addresses the following questions:
- What improvements exceed a specified minimum BCR?
- What level of investment would meet this BCR threshold?
- What will be the condition and performance of the highway system after investing at this level?
With the minimum BCR set to 1.0, HERS-ST will implement all cost-beneficial improvements. In doing so, it defines the upper limit of highway investment and maximum improvement in conditions and performance that could be economically justified. The FHWA calls this approach the Maximum Economic Investment scenario, which is used to help estimate the Cost to Improve Highways investment scenario in the Conditions and Performance (C&P) Report.
A minimum BCR analysis can also be used to define the cost of implementing the most economically attractive set of improvements that would meet a particular benchmark or goal, by iteratively changing the BCR threshold until the target is reached. For example, FHWA uses this approach to define the Cost to Maintain Highways scenario in the C&P Report, adjusting the BCR threshold until average highway user costs at the end of the 20-year analysis period match those in the base year.
The constraint-by-funds analysis functions on the premise of maximizing the net present value of the benefits of improvements subject to specified constraints on funds available during each funding period. The constraint-by-funds analysis addresses the following questions:
- How many improvements can be implemented at the specified level?
- What level of system condition and performance can be obtained when the improvements are implemented?
During each funding period, the model identifies potential improvements, and ranks them by BCR. After examining all sections, the model selects the most economically attractive improvements in order until the available funds are expended, or no economically justifiable candidate improvements remain.
When you select this type of analysis, you must specify the funding level the model may allocate for improvements. You can specify funds by functional class, or combinations of functional classes, for the first four funding periods. After that, HERS-ST uses the values from the fourth funding period as the default values for subsequent funding periods.
HERS-ST will likely be unable to meet the exact funding constraint levels that you set. As HERS-ST implements successive improvements and the available funding is exhausted, the model may reach the point where it has some funds available, but not enough to implement the next improvement fully. When this occurs, the model will do one of two things, depending on the user-defined setting. By default, HERS-ST will implement all improvements up to, but not exceeding, the specified funding level. The remaining, unused portion of the funds will be carried forward to the future funding period. As an option, the user can set HERS-ST to borrow money from the future funding period to fund the cost of the next improvement in the current funding period, thus exceeding the funding constraint originally specified.
Conversely, if a funding constraint is set too loosely, then HERS-ST may not find enough projects meeting the specified minimum BCR threshold (or even enough deficient segments warranting consideration for improvement). In this case, the model may severely underspend relative to the specified funding levels.
The constraint-by-performance analysis functions on the premise of maximizing the return on investments necessary to achieve specified goals for the performance of the highway system at the end of each funding period. The constraint-by-performance analysis addresses the following questions:
- How many improvements are implemented to achieve a specified level of performance?
- What is the total cost of implementing these improvements?
The model identifies potential improvements and ranks them by BCR. After examining all sections, the model selects the most economically attractive improvements in order until reaching the performance goal or determining that no economically justifiable candidate improvements remain. The improvement should also meet the minimum BCR threshold specified by the user.
When you select a constraint-by-performance analysis, you must specify the level at which you want the highway to perform. You can specify performance goals by functional class, or combinations of functional classes, for the first four funding periods specified for the analysis. After that, HERS-ST uses the values from the fourth funding period as the default values for subsequent funding periods. The goals may be specified in cost per vehicle mile (e.g., vehicle operating cost, highway maintenance cost, injury cost), number of safety incidents (crashes, injuries, and fatalities), or maintenance costs per mile. You can weight goal components relative to each other and by functional class.
There is a special form of the performance-constrained analysis in which the initial level of system performance is the performance goal. The premise of this analysis is to maintain the current conditions of the highway network.
The full engineering needs analysis answers the following questions:
- How much will it cost to correct all highway deficiencies for each funding period?
- What will the system condition and performance be?
Although this analysis includes calculation of a BCR for each improvement, it effectively disregards the BCR when selecting improvements for implementation, essentially ignoring the HERS-ST economic analysis capabilities. This analysis focuses on improving all sections on which HERS-ST identifies a deficiency and implements the most aggressive improvement to correct deficiencies. The standards for improvement are user-specified engineering criteria rather than economic analysis. This type of analysis may provide a useful benchmark, but is not the type of analysis that produces an economically feasible scenario.
Normally, HERS-ST performs its own evaluations of the estimated costs and benefits of all potential pavement, widening, and alignment improvements and determines which improvements best meet the criteria provided by you. Information about the state of the highway system in the base year and forecast traffic volumes for some specified future year is provided in the HPMS sample section data file.
Chapter 6 describes how you can specify the improvements to be implemented, their initial costs and their effect on capacity.
Each run of HERS-ST analyzes the specified set of highway sections over an overall analysis period consisting of one or more funding periods (FPs), beginning in the base year specified. You specify the length of each FP and the number of FPs. In each FP, HERS-ST applies user-specified criteria to identify and select pavement, widening, and alignment improvements for the highway sections it is analyzing.
By including State Improvement data in your Workset, you have the ability to override the decisions HERS-ST makes regarding the selection of improvements, the initial cost of these improvements, and their effects on capacity. In particular, for any section, you can specify:
- That a particular type of improvement is to be made in a particular FP
- The initial cost of such an improvement
- Its effect on capacity
- That improvements are to be made only in specified FPs
This override feature makes it possible for you to specify improvements not selected by HERS-ST. Override improvements can be either HERS-type improvements (pavement, widening, or alignment improvements) or other types of projects (such as intersection modification or grade separation). Please refer to Table 6-3 for the format of the State Improvements data.
In the case of non-HERS-ST-type improvements, you must specify both the initial cost of the project and its effect on capacity. For HERS-type improvements, you can choose to provide cost and/or capacity specifications or allow HERS-ST to estimate these quantities.
This override feature allows you to, for example, incorporate information you have about the feasibility of particular improvements selected by HERS-ST or knowledge of unusual costs (e.g., for replacing bridges) that would be incurred in implementing these projects. This also makes it possible to require that several related improvements (such as widening a given highway) be scheduled for the same FP or in consecutive FPs. HERS-ST analyzes isolated, individual sections, and is currently not capable of recognizing the relationship between such improvements.
Intermediate Year data can be used to provide HERS-ST with more information about future traffic volumes than can be communicated in a conventional record of highway sample data. With this data you can specify:
- Traffic volume forecasts for two future years; an intermediate year and a final year.
- Forecasts of significant changes in traffic volume that are expected to occur in an intermediate year as a result of changes in the highway network.
Chapter 6 describes how you can specify intermediate year data for the HERS-ST analysis.
The Intermediate Year data is most useful when HERS-ST is used in conjunction with a Travel Demand Model (TDM). Please refer to Table 6-5 for the format of the Intermediate Year data. For example, assume that, for a set of highway sections, a TDM has been used to generate two sets of traffic forecasts for 2015 and two sets for 2025:
- Traffic volumes in 2015 assuming no significant changes in the highway network, and volumes following the assumed opening of a major new road in that year.
- Traffic volumes in 2025 that would exist in the absence of the new road, and volumes that would exist in the presence of the new road.
HERS-ST can analyze the two alternatives, the Build scenario and the No Build scenario, using the forecast models.