The Highway Economic Requirements System (HERS) has been used by the Federal Highway Administration's (FHWA's) Office of Legislation and Strategic Planning for much of the past decade to develop future National-level highway investment level, to either improve the Nation's highway system or maintain user cost levels on the system. HERS provides cost estimates for achieving economically optimal program structures. HERS can also predict system condition and user cost levels resulting from a given level of investment. These estimates provide benchmarks from which Congress considers the highway budget.
The HERS model uses incremental benefit cost analysis to optimize highway investment. Within the HERS process, travel forecasts for each highway facility included in the Highway Performance Monitoring System (HPMS) sample database are used to predict future pavement and capacity deficiencies. HERS addresses these deficiencies by selecting a set of alternative improvements to satisfy analyst-specified performance objectives. Each potential improvement is subjected to a rigorous benefit-cost analysis that considers travel time, safety, and vehicle operating and emissions costs; the most economically attractive improvement for each facility is tentatively selected. When funding is not available to achieve "optimal" spending levels, HERS prioritizes economically worthwhile potential improvement options according to relative merit (that is, benefit-to-cost ratios) and selects the "best" set of projects for system-wide implementation. When funding is available, HERS will recommend all projects having benefits in excess of costs. Given funding constraints or users-specified performance objective, HERS minimizes the expenditure of public funds while simultaneously maximizing highway user benefits.
The HERS concept may be usefully applied by State transportation agencies in program development, "needs" analysis, and/or establishing performance objectives. In addition, the approach may be valuable in assisting State DOTs as they comply with Governmental Accounting Standards Board's (GASB's) Statement 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments.
FHWA is applying an incremental approach to advancing a state version of HERS (HERS-ST). The first step, initiated in 1999, was establishment of the HERS-ST Pilot Program. The Pilot Program was designed to obtain information from state officials as to whether HERS-ST would be a positive addition to their cache of analytical tools. Officials from 17 self-selected states were introduced to the HERS-ST software, asked to evaluate it in the context of their requirements, and report back to FHWA as to it appropriateness for State use. The majority of pilot states reported that the model would be of benefit.
The HERS-ST prototype resulted from a minimal expenditure of resources. Not surprisingly, the Pilot Program participants had significant recommendations regarding needed improvements. Currently underway is a project that represents a partial response to those recommendations, focusing primarily on user-friendliness, and scenario development and interpretation. The Office of Asset Management is undertaking this project in collaboration with FHWA's Office of Legislation and Strategic Planning.
The product of this project will be combined with a concurrent effort to make fully operational the standard HERS analysis features. The joint final product will constitute Version 1.0 of HERS-ST and will be made available nationwide. A national HERS conference is anticipated where (1) the HERS-ST model will be distributed, with training, and (2) input will be solicited from state officials to inform FHWA's future HERS-ST activities, as well as the Office of Asset Management's overall research agenda with respect to EEA tools. Demand for the HERS-ST model will be continuously assessed and future revisions will be considered accordingly.