Volkswagen Diesel Settlement Grants

Alaska is a beneficiary of $8.125 million from the federal Volkswagen Settlement for Volkswagen's installation of illegal software in diesel vehicles designed to cheat emission tests. AEA developed a Beneficiary Mitigation Plan (Plan) through a public process that describes how the state proposes to distribute the funds amongst the eligible mitigation actions defined in the settlement. All Requests for Applications (RFAs) will be publicly noticed on this website. If you are interested in receiving email notifications please join the VW listserve.

 

Beneficiary Mitigation Plan

On January 29, 2018, Alaska became a beneficiary of the Volkswagen Settlement Environmental Mitigation Trust. AEA developed a Beneficiary Mitigation Plan as required by the Trust Agreement through public input. After consideration of the public support for school buse replacement, AEA amended the Plan, eliminating the allocation of commercial marine vessel upgrades to allow for additional school bus replacement. The Plan, as ammended,  summarizes how the State proposes to allocate the mitigation funds among the various Eligible Mitigation Actions to reduce NOx emissions. Alaska will disburse the $8.125 million fund as follows:

 

School Bus Replacement (EMA 2)

Eligible Mitigation Action 2 includes the repower or replacement of Types A-D school buses. Vehicles eligible for scrappage and repower or replacement include those with engine model years of 2009 or older. The engines/buses may be replaced with new cleaner diesel engines/vehicles, alternative fueled engines/vehicles (e.g., CNG, propane, electric hybrid), or all-electric engines/vehicles.

Two requests for applications (RFA) were released in 2019 for the upgrade/replacement of eligible school buses.  As described in Table 2 of the Plan, school bus projects were evaluated based on:

  • Cost effectiveness ($/lifetime short ton NOx reduction)
  • Location in a NOx emission priority area
  • Location in an air quality priority area
  • Location within at-risk communities
  • Voluntary matching fund

Given the public support for school bus replacement and the amount of applications received, AEA reallocated 10% of the Trust funds to replace the buses proposed in the oversubscribed applications. A total of 33 school buses will be replaced in 8 school didtricts as follows:

  • Alaska Gateway School District - 1
  • Anchorage School District - 13
  • Juneau School District - 1
  • Kake City School District  - 2
  • Kenai Peninsula School District  - 7
  • Kodiak Island School District - 1
  • Matanuska-Susitna Borough School District - 4
  • Southeast Island School District - 4

The new buses will result in a reduction of 24.6 short tons of nitrogen oxides (NOx) and 1.8 short tons of fine particulate matter over the lifetime of the replaced school buses.
 

Public Transit Bus Replacement (EMA 2)

Eligible Mitigation Action 2 includes the repower or replacement of Classes 4-8 shuttle or transit buses. Vehicles eligible for scrappage and repower or replacement include those with engine model years of 2009 or older. The engines/buses may be replaced with new cleaner diesel engines/vehicles, alternative fueled engines/vehicles (e.g., CNG, propane, electric hybrid), or all-electric engines/vehicles.

Applications for public transit bus upgrade/replacement were accepted April through June 14, 2019. Up to $700,000 was made available for the upgrade/replacement of eligible public transit buses, with a requirement of 80% matching funds from applicants. AEA received one application from the City and Borough of Juneau, Capital Transit. Capital Transit will be awarded $233,960 towards the purchase of an all-electric transit bus and associated charging infrastructure.
 

Installation of Electric Vehicle Charging Stations (EMA 9)

Alaska intends to allocate 15% of the EMT funds to electric vehicle charging infrastructure regionally based on populations within the connected road systems beginning in  2020 as follows:

  • Contiguous Statewide Road System Region - $950,000
  • Other areas of the state combined - $250,000

The funds will be made available to each of the areas as early as spring 2020. The Contiguous Statewide Road System will have two components; one along the highway system connecting communities and another within communities. Communities along the Contiguous Statewide Road System and other isolated communities throughout the state will each be required to develop a community-wide comprehensive plan that includes input from stakeholders such as AEA, DEC, utilities, statewide and local transportation planners, local government, fleet owners, electric vehicle owners, and car dealerships. The plans will include locations of existing infrastructure and proposed locations for new level 2 charging stations; rationale, criteria, and process for site selections; prioritization of site installation; schedule; and responsible entity for plan implementation. Following plan approval, selected sites will need to include agreements with the entities who will own and maintain each site (e.g., local utility or government) for a period of five years. All installations will be required to have interoperability.

 

Replacement of Diesel Engines used for Prime Power (EMA 10 DERA)

To fully leverage federal funds for projects in rural Alaska, Alaska intends to set aside approximately $250,000 of the EMT annually for the state’s voluntary match under the State DERA program for five years. VW State Trust funds will be made available for these projects winter 2018/2019, spring 2019, spring 2020 and spring 2021. The Alaska Energy Authority will determine which projects receive VW Trust funding based on the same criteria used to prioritize state Rural System Power Upgrade (RPSU) projects.

For the first round of funding, eligible diesel engines will be replaced in the powerhouses located in Circle, Takotna, Tuluksak and Chignik Lake. The projects are funded by the EPA through the state DERA program ($746,174), the Denali Commission ($53,234), State of Alaska capital funds ($276,643), and the VW State Trust ($497,449), for a total cost of approximately $1,573,500. These projects will be completed in 2020. AEA has also committed $315,508 of VW State Trust funds as voluntary match to EPA FY19 DERA funds..

 

Other Funding Opportunities

The following grant funding opportunities and loans are available that may be used as match for projects that are eligible for Volkswagen Trust funding.

Low or No Emission (Low-No) Program FTA-2019-001-TPM-LOWNO

The FTA (Federal Transit Administration) announces its nationally competitive grant program annually. The main purpose of the Low-No Program is to support the transition of the nation’s transit fleet to the lowest polluting and most energy efficient transit vehicles. The maximum federal share is 85% of net project costs for projects that involve leasing or acquiring transit buses (including clean fuel or alternative fuel vehicles) and 90% of the net project cost for acquiring, installing, or constructing vehicle-related equipment or facilities (including clean fuel or alternative fuel vehicle-related equipment or facilities). The Fiscal Year 2019 program closed May 14, 2019.

Power Project Loan Fund

AEA provides loans to local utilities, local governments or independent power producers for the development or upgrade of power facilities. These loans may be used as mandatory cost-share for DERA projects to repower or replace diesel engines or gensets in diesel powerhouses. The loan term is related to the life of the project. Interest rates are between tax-exempt rates at the high end and zero on the low end.

National Zero-Emission Vehicle (ZEV) Investment Plan

Volkswagen is required to invest $2 billion ($800 million within California and $1.2 billion outside of California) in four 30-month investment cycles over 10 years in ZEV infrastructure, access, and awareness initiatives. For each investment cycle, project proposals are submitted to Electrify America, which develops an investment plan to be reviewed and approved by the EPA. The second of round of project proposals closed March 2018. Proposals for the third round are currently being accepted. Additional information is available at www.electrifyamerica.com.