State seeks input on plan for $8.1M in VW settlement funds

  • In this Jan. 24, 2017, photo, Volkswagen vehicles are stored at the vacant Silverdome in Pontiac, Mich. The Volkswagen TDIs are in the center of the emissions scandal forcing Volkswagen to buy back those vehicles affected. The Alaska Energy Authority is seeking ideas for how to spend $8.1 million the state received as its share of Volkswagen's $2.9 billion settlement with the EPA. (Photo/Carlos Osorio/AP)

The Alaska Energy Authority is asking for ideas about how to spend $8.1 million the state received as part of the 2016 legal settlement stemming from Volkswagen’s use of emissions “defeat devices” in many of its late model diesel cars.

The $8.1 million is Alaska’s share of nearly $2.9 billion the German vehicle manufacturer was required to put into trusts to fund mitigation of nitrogen oxides, or NOx, emissions from diesel engines of all sorts nationwide.

Nearly $54.5 million was allocated to a trust for federally recognized Tribes nationwide and the rest was allocated to states based on the number of vehicles sold in each state that were equipped with the emissions control defeaters between 2009-2016.

In Alaska there were 1,450 such vehicles, which emitted about 10.5 tons of NOx, according to AEA Environmental Manager Betsy McGregor. Nationwide, almost 600,000 vehicles and their owners were affected.

VW was also required to spend roughly $10 billion to buy back the vehicles with the devices that purposefully gave readings indicating the cars and SUVs were emitting lower amounts of NOx than was actually the case when tested for emissions outputs.

“The vehicles were more (fuel) efficient and more powerful but they released thousands of tons of NOx beyond EPA standards,” McGregor said during a June 4 public meeting in Anchorage.

AEA also held meetings in Fairbanks and Juneau to inform the public about its plans and solicit feedback.

High concentrations of nitrogen oxides can aggravate respiratory ailments, such as asthma and long-term exposure can lead to the development of respiratory diseases and increase one’s susceptibility to respiratory infections. The particulate emissions can also contribute to the formation of acid rain.

The car company was further required to invest $1.2 billion over 10 years to support increased use of zero emissions vehicles in the U.S.

Specifically, AEA is asking for feedback on the Proposed Draft Beneficiary Mitigation Plan the agency put together since January — its early ideas on how to spend the money.

The agency is trying to use the limited money in the most cost-effective manner, McGregor said, and wants the public’s help in doing so.

Currently, the mitigation plan calls for 58 percent of the $8.1 million to be allocated over up to 10 years through competitive grants open to any applicants. That $4.7 million is open to anyone wishing to replace or repower generally pre-2009 model diesel freight trucks, buses, ferries, tugboats or other equipment and vehicles with cleaner burning engines.

McGregor emphasized that grant applications must meet a litany of specific criteria to be eligible for the trust funds largely because they are available as a result of a court settlement.

Another 12 percent, or $1 million would be available for government-sponsored projects to repower or replace older diesel vehicles or equipment.

The final 30 percent of the $8.1 million would be split evenly between federal Diesel Emissions Reduction Act projects, which are primarily diesel powerhouse replacements in rural Alaska, according to McGregor, and projects to add electric vehicle infrastructure in the state.

McGregor said AEA officials want the electric vehicle funds to go to coordinated efforts that would help strategically place charging stations along the road system, for instance.

“We don’t want a shotgun approach. We want them to be strategically located,” she added.

In some cases applications could be given preference depending on the air quality and amount of NOx historically released in a given area.

The formal public comment period on the mitigation plan runs from May 1 to July 1 and McGregor said AEA hopes to issue requests for applications in late summer or early fall.

“We expect to be funding projects by the end of the year,” she said.

The proposed draft plan and additional information is available on AEA’s website,


Elwood Brehmer can be reached at [email protected].

06/06/2018 - 10:22am