Maryland is eliminating the $7.50 fee imposed on all new customers of the state’s E-ZPass program, a strategic move to boost electronic toll payments as the state explores a cashless system for its eight toll facilities.

The decision, announced by Gov. Larry Hogan (R) during a Wednesday news conference at the foot of the Chesapeake Bay Bridge, also comes at a critical time in his reelection bid and builds on one of his first orders of business as governor three years ago when he lowered tolls across the state, marking the first time in 50 years that tolls were rolled back.

“We now offer E-ZPass transponders 100 percent free of charge. No upfront cost. No monthly cost. No cost at all. And lower tolls for using it,” Hogan said Wednesday, speaking at the toll plaza.

The elimination of the transponder sign-up fee will result in savings of $46 million for Marylanders, he said, including $6 million in transponder fees and $40 million in toll discounts available to E-ZPass users.

Customers using E-ZPass Maryland save 25 percent or more on the state’s tolls. At the Bay Bridge, for example, the toll is $2.50 for an E-ZPass customer and $4 for someone paying with cash.

For some drivers and their advocates, the E-ZPass no-fee option is welcome news. They say the change will encourage more drivers to get a transponder and eliminate a barrier for those unable to pay the fee. As more people use E-ZPass, the state also hopes to reduce the number of fines many toll users face when they bypass “all electronic” toll lanes without a transponder.

John Townsend, a spokesman for AAA Mid-Atlantic, said drivers in the Washington region often opt to purchase an E-ZPass transponder in Northern Virginia to avoid paying the $7.50 Maryland transponder fee. More than a dozen states are part of the E-ZPass network, including Virginia, Delaware, North Carolina, Pennsylvania, New Jersey and New York.

“It makes Maryland more competitive with bordering states of Virginia and Delaware, where motorists do not have to pay a monthly or annual fee for using the E-ZPass systems that belong to those states,” Townsend said.

The Maryland Transportation Authority is pushing the use of E-ZPass as it pursues a transition to an all-electronic system that could begin as early as summer 2019. In recent months the state has increased its marketing of the E-ZPass, which if used correctly, can save drivers the cost of penalties and move them through toll lanes more quickly. More than 1 million people have an E-ZPass in the state and nearly 79 percent of the toll transactions are made with an E-ZPass transponder, officials said.

Hogan said the transportation authority will replace nearly 400,000 old transponders at no cost to customers. Anyone who bought a transponder in 2018 will be issued a credit of $7.50 as long as the account is registered and in good standing, he said.

“It’s never been a better time to become an E-ZPass Maryland customer,” MDTA Executive Director Kevin C. Reigrut said. “Current cash and video tolling customers can now get a free transponder and save time and money with the substantial discount that E-ZPass Maryland offers.”

Hogan, who campaigned on improving roads, is viewed as strong on transportation. Political observers and even some Democratic leaders have said that whoever wins the democratic primary next month will have a tough time using transportation as an issue against Hogan, who has advanced two critical transportation priorities: the 16-mile light-rail Purple Line between Montgomery and Prince George’s counties and a deal to secure permanent dedicated funding for the Metro system.