Volkswagen Diesel Settlement Grants

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 (EMA 9)

Alaska allocated 15 percent of the Trust funds ($1.25 million) for EV fast-charging and Level 2 charging installations. AEA developed a phased approach to establish a statewide interconnected EV fast-charging network along the highways and ferry terminals, to be completed as funding allows. In 2021, AEA utilized about $875,000 of VW Trust funds and $90,000 of DOE State Energy Program funds, along with private matching funds from site hosts, to develop the first phase of the fast-charging network, connecting Seward and Homer north to Healy. Fifteen fast chargers and eight Level 2 chargers will be installed at nine selected sites located within 100 miles of adjacent sites. The first station was commissioned in Homer in September 2021; the remaining sites are anticipated to be completed by summer 2022. The remaining $375,000 Trust funds allocated for publically available EV chargers will be disbursed 2022-2023. Future solicitations will be posted here.


School Bus Replacement Program (EMA 2)

Eligible Mitigation Action 2 allowed for the replacement of Types A-D school buses with engine model years of 2009 or older with new similar cleaner diesel, alternative fueled (e.g., CNG, propane, electric hybrid), or all-electric vehicles.

Since 2019, AEA expended about $4.5 million on the purchase of 33 school buses in eight school districts: Alaska Gateway (1), Anchorage (13), Juneau (1), Kake City (2), Kenai Peninsula Borough (7), Kodiak Island (1), Matanuska-Susitna Borough (4), and Southeast Island (Prince of Wales Island) (4). The school bus in Tok is the first all-electric school bus in the State of Alaska and the third electric school bus manufacturer Thomas has ever made. It has been in operation at the Alaska Gateway School District in Tok since fall 2020. The new buses will result in a reduction of 24.6 tons of nitrogen oxides (NOx) and 1.8 tons of fine particulate matter over the lifetime of the replaced school buses. This program is now closed.



Public Transit Bus Replacement Program (EMA 2)

Eligible Mitigation Action 2 allowed for the replacement of Classes 4-8 shuttle or transit buses having engine model years of 2009 or older with new cleaner diesel, alternative fueled (e.g., CNG, propane, electric hybrid), or all-electric vehicles.

AEA opened a solicitation in spring 2019 and received one application from the City and Borough of Juneau, Capital Transit. Capital Transit was awarded $233,960 for the purchase of an all-electric transit bus and associated charging infrastructure. The bus became operational in spring 2021. It is the first all-electric public transit bus in the state. This project is anticipated to result in a lifetime reduction of 2.2 tons of NOx. This program is now closed.



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

Beginning with the federal fiscal year 2017, AEA has set aside Trust funds as voluntary matching funds for AEA’s Diesel Emission Reduction Act (DERA) program to fully leverage the federal funds allocated to the State by the EPA. By contributing to the voluntary match, the State receives 50 percent more EPA DERA funds to replace diesel engines or gensets in rural powerhouses. Replacement projects are selected by AEA staff based on need.

Thus far, AEA has expended or committed about $1.1 million towards the replacement of prime power diesel gensets in the communities of Circle (2), Takotna (2), Tuluksak (1), Chignik Lake (2), Arctic Village (3), Chenega Bay (2), Platinum (1), Grayling (1), and Ruby (2). These projects will result in a reduction of at least 14 tons of NOx per year. Additional Trust funds will be set aside as voluntary matching funds for the federal fiscal year 2021 DERA projects.



Other Funding Opportunities

The following grant funding opportunities and loans are available that may be used as a 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