Volkswagen Diesel Settlement Grants

Volkswagen Settlement

Alaska is a beneficiary of $8.125 million from the federal Volkswagen (VW) Settlement for VW's installation of illegal software in diesel vehicles designed to cheat emission tests. The Alaska Energy Authority (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 email list.

Beneficiary Mitigation Plan

On January 29, 2018, Alaska became a beneficiary of the VW 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 bus replacement, AEA amended the Plan, eliminating the allocation of commercial marine vessel upgrades to allow for additional school bus replacement. The Plan, as amended, summarizes how the State proposes to allocate the mitigation funds among the various Eligible Mitigation Actions to reduce NOx emissions. Alaska anticipates disbursing the $8.125 million fund as follows:



Installation of EV Charging Stations - DCFC Network Program (EMA 9) - $1,000,000

AEA will release a series of solicitations to disburse approximately $1 million to develop an EV fast charge corridor from Homer and Seward to Fairbanks. The series of solicitations are intended to 1) qualify electric vehicle supply equipment (EVSE) Suppliers; 2) identify potential Site Hosts; and 3) competitively select fast charging site projects.

The fast chargers will be located 50-100 miles apart and within 5 miles of the highway system. The funds will provide for the installation, hardware, software, network, and operations and maintenance services at 10-15 sites. The equipment is to be operated and maintained for a period of five years. Trust funds will pay for 80 percent of the project cost, not to exceed $100,000 per site; program participants will be required to fund the remaining 20 percent and any costs in excess of the $100,000 per site limit. As an additional incentive to promote the program, AEA will award up to $10,000 for each of the first ten sites selected during the first open solicitation period that begin site development prior to June 30, 2021.

A Request for Qualifications (RFQ) was issued February 22, 2021 to develop a list of qualified suppliers of EVSE Packages that meet AEA’s requirements for equipment, software and network services to operate and manage the EVSE. The list of qualified EVSE Suppliers will be made public March 10, 2021.

A Request for Information (RFI) questionnaire was issued February 24, 2021 to identify parties interested in hosting DCFC charging sites. Responses to the RFI will be provided to the list of qualified EVSE Suppliers so both parties can work together to determine site feasibility and develop project proposals including ownership model, fee structure, and cost estimates for the installation, equipment and services.

AEA anticipates releasing a Request for Applications (RFA) March 12, 2021 to competitively select fast charging site projects as part of the EV DCFC Network Program. It will be the responsibility of the qualified EVSE Suppliers to submit applications on behalf of the Site Host and site.

Solicitations can be found on AEA’s procurement site here.

Anticipated Schedule for DCFC Network Program Solicitations

Description Deadline Date
Release of RFQ to qualify EVSE Vendors February 22, 2021
Release RFI to identify potential site hosts February 24, 2021
RFQ Submission Deadline March 8, 2021
Notification of Approved EVSE Vendors March 10, 2021
Release of RFA for DCFC Sites March 12, 2021
RFA Round 1 Submission Deadline May 5, 2021
Round 1 Sites Selected May 12, 2021



Installation of EV Charging Stations - Community-based Level 2 Charging Program (EMA 9) - $250,000


School Bus Replacement (EMA 2)

Eligible Mitigation Action 2 includes the repower or replacement of Types A-D school buses 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 were replaced in eight school districts 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. Tok Transportation LLC purchased an all-electric school bus, the first in the State. It has been in operation at the Alaska Gateway School District since fall 2020.



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.



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. AEA will determine which projects receive VW Trust funding based on the same criteria used to prioritize state Rural System Power Upgrade (RPSU) projects.

Thus far, AEA has expended or committed $812,957 towards the replacement of prime power diesel gensets in the communities of Circle, Takotna, Tuluksak, Chignik Lake, Arctic Village, and Chenega Bay.



Other Funding Opportunities

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

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

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 — VW 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. Additional information is available at