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June 25, 2019 1:30 PM, EDT

Oregon Gov. Kate Brown Expands Road-Usage Charge Program

Road-Usage Charge Program Interstate 5 in Oregon. (Oregon Department of Transportation)

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Oregon Gov. Kate Brown has signed legislation that will expand the state’s voluntary road usage charge program, known as OReGO.

OReGO assesses a per-mile charge to participating drivers, who plug a small cartridge or “dongle” into their vehicle’s data port to keep track of miles driven and fuel consumption. The current usage charge is 1.7 cents per mile. Under the legislation, signed June 20, the charge will keep pace with climbing fuel tax rates starting Jan. 1.

The legislation also allows an unlimited number of qualified vehicles to register for OReGO (the program previously was capped at 5,000 participants.) To qualify, vehicles must get 20 miles (or more) per gallon; this rate is the “break-even point” at which fuel tax payment equals the road charge. Drivers of vehicles that get fewer than 20 mpg will continue to pay taxes at the pump.

Brown

Brown

HB 2881 also directs the Oregon Department of Transportation to consult with vehicle dealers to encourage participation in OReGO at the vehicle’s point of sale.

“The historic implementation of OReGO, the nation’s first road-usage charge, provides a fair and sustainable path to transition from a per-gallon charge to a per-mile charge,” Brown said at the bill-signing ceremony. “The system is going to enable us to maintain and improve Oregon’s infrastructure in the face of growing fuel efficiencies.”

Under the legislation, OReGO participants who operate electric vehicles or those that get 40-plus mpg are exempt from mpg-based registration fee increases. The idea is that drivers with extremely fuel-efficient vehicles or those who do not drive many miles may save money.

The current annual registration fee is $56 for vehicles in Oregon. Starting in 2020, registration fees are expected to increase by various amounts, depending on the vehicle’s fuel-mileage rate. For example, vehicles with rates of 40-plus mpg will be charged $76 in 2020 and $78 in 2022. Electric vehicles will be charged $153 in 2020 and $158 in 2022.

Orego

“The best benefit may be for electric vehicle owners because their registration fees will increase the most. If they drive less than about 6,100 miles a year, they will likely save money by enrolling in OReGO and paying by the mile instead,” said Maureen Bock, OReGO program manager. “While we can’t yet support all vehicles, we are implementing new technologies that will allow more drivers and vehicles to participate.”

Oregon’s Road User Fee Task Force started conducting per-mile charging pilot programs in 2007. OReGO has enrolled more than 1,600 vehicles since its formal launch in 2015.

The revenue generated from Oregon’s fuel taxes and vehicle registration fees is directed to road and bridge projects. As vehicles become more fuel efficient, the stream of revenue from the fuel tax is thinning. OReGO is meant to ensure drivers pay for the miles of road that they use, rather than the gallons of fuel.

Oregon has been joined by several other states, including Utah and California, which have conducted pilot programs with such charge systems.

“States are panicking. The funding mechanisms are depleting, and that’s all because of fuel efficiency,” said Michelle Godfrey, a spokeswoman for the Oregon Department of Transportation. “In Oregon, we’re trying to pay more attention to all of the processes and things that we do that cause carbon emissions, [but] we also have to decouple our funding from the carbon-based system.”