Volkswagen Diesel Settlement Grants

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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 has developed a Beneficiary Mitigation Plan as required by the Trust Agreement through public input. The Plan 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) will be released for the upgrade/replacement of eligible school buses, each allowing for the disbursement of up to $1.7 million. Applications for school bus upgrade/replacement are being accepted now through June 14, 2019. The second solicitation will be released in fall 2019. As described in Table 2 of the Plan, school bus projects will be 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

School Bus Replacement Application Material

Important Dates

Date Time Deliverable
April 2, 2019 1:30-3:00 pm Webinar explaining application process and EPA Diesel Emission Calculator tool.
April 11, 2019 1:30-3:00 pm Webinar explaining application process and EPA Diesel Emission Calculator tool.
May 30, 2019 5:00 pm All questions must be submitted
June 6, 2019 5:00 pm Q&A will be posted on Authority's website
June 14, 2019 5:00 pm Applications must be submitted or post marked


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 school bus upgrade/replacement are being accepted now through June 14, 2019. Up to $700,000 will be made available for the upgrade/replacement of eligible public transit buses. Alaska will require 80% matching funds from applicants for the upgrade/replacement of eligible public transit buses because there are federal funds available to the state and urbanized areas for the replacement of public transportation and fixed-route buses via both state formula allocation and competitively. VW Trust funds may be used as mandatory cost-share for these federal funds. As described in Table 2 of the Plan, public transit bus projects will be evaluated based on:

  • Cost effectiveness ($/lifetime short ton NOx reduction)
  • Relative on-road NOx emission of project location
  • Relative air quality of project location
  • Relative exposure levels to at-risk communities
  • Voluntary matching funds

Public Transit Bus Replacement Application Material

  • Request for Applications – Public Transit Bus Upgrade/Replacement
  • Public Transit Bus Application Form - (PDF), (Excel)
  • EPA Diesel Emissions Quantifier
  • AEA will offer two Webinars to assist with the application process and explain the EPA Diesel Emissions Quantifier tool. To register for one of the webinars please follow the links below:
  • May 2, 2019 (Tuesday) from 1:30 to 3:00 AK Time
  • May 16, 2019 (Thursday) from 1:30 to 3:00pm AK Time – Register here
  • Bus Replacement Reference Maps and GIS Data (See tab)

Important Dates

Date Time Deliverable
May 2, 2019 1:30-3:00 pm Webinar explaining application process and EPA Diesel Emission Calculator tool.
May 16, 2019 1:30-3:00 pm Webinar explaining application process and EPA Diesel Emission Calculator tool. Register here
May 30, 2019 5:00 pm All questions must be submitted
June 6, 2019 5:00 pm Q&A will be posted on Authority's website
June 14, 2019 5:00 pm Applications must be submitted or post marked


Commercial Marine Vessel Upgrade (EMA 4; EMA 10)

Ferries or tugs equipped with unregulated, Tier 1, or Tier 2 marine engines may be repowered under EMA 4. These tugs and ferries may be repowered with any new Tier 3 or Tier 4 diesel or alternate fueled engine, or with all-electric engines. In addition, under the DERA Option (EMA 10), commercial marine vessels with pre-Tier 3 engines operated at least 1,000 hours per year are eligible for upgrade.

Alaska intends to allocate 10% of the VW State Trust to upgrade eligible marine vessels, require mandatory matching funds, and cap the funds at $200,000 per project.

Up to $800,000 will be made available for the upgrade/replacement of eligible marine engines through an RFA issued in fall 2019. Projects will require mandatory matching funds and be capped at $200,000 per project. These projects will be evaluated based on:

  • Cost effectiveness ($/lifetime short ton NOx reduction)
  • Alaska residency or Alaska-based business
  • Voluntary matching funds
  • Applicant experience with managing grants


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 Q1 2019 as follows:

  • Railbelt and Copper Valley Region (79% statewide population) - $950,000
  • Southeast Region (10% statewide population) – $125,000
  • Other areas of the state combined (11% statewide population) - $135,000

The funds will be made available to each of the areas as early as spring 2019. The Railbelt/Copper Valley and Southeast regions will each be required to develop a regional comprehensive plan that includes 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 and level 3 charging stations, rationale for site selections, prioritization of site installation, and schedule. Within each region funds will be prioritized based on the population of the area served, traffic volumes/commuting corridors, average miles of road traveled, and the amount of anticipated NOx reduction. Plans will need to demonstrate how the EV stations are sited in the most cost-effective manner and will need to include agreements with the entities who will own and maintain each site (e.g., local utility or government). All installations will be required to have interoperability.

For areas outside of these two regions, an RFA will be solicited and projects will be evaluated following the same criteria for prioritizing charging sites described above.



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 2019.



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) has announced a nationally competitive grant program with $85,000,000 in total funding for Fiscal Year 2019. 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). Eligible applicants include state and local governmental authorities and federally-recognized Tribes. Applications must be submitted by 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.

Commercial Fishing Loan Fund - Engine Fuel Efficiency Upgrade

The Division of Economic Development offers loans for the upgrade of commercial fishing vessel engines to improve the fuel efficiency of the propulsion engine or generator engine replacement on an existing vessel.

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.