Missouri’s Volkswagen Trust Program FundsFY 2019 ReviewFY 2020 Plans

May 30, 2019

Volkswagen (VW) Trust

Presentation Overview

• Background • Missouri’s Beneficiary Mitigation Plan• Review FY 2019• Tentative Plans for FY 2020• Implementation Guidelines

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Background

BackgroundIn 2015, VW admitted using software that caused diesel vehicles to perform differently during emissions tests so they would pass.

• American consumers bought 590,000 affected VW and Audi vehicles- Missourians bought 7,500 affected vehicles

• During normal operation, these vehicles emitted nitrogen oxides (NOx) at levels higher than EPA standards

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Affected Volkswagen Vehicles

Source: 2014 Department of Revenue Vehicle Registration Data

Other34%

Kansas City13%

Springfield4%

Columbia4%

St. Louis45%

Environmental Mitigation Trust

• Volkswagen to pay $2.9 billion to an environmental mitigation trust fund

• Missouri’s share of trust: $41 million• State to use funds to counteract excess NOx

emissions from faulty VW vehicles

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Eligible Mitigation Actions

1. Large trucks (class 8)2. School, shuttle and

transit buses3. Locomotives4. Ferries/tugboats5. Marine shorepower

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6. Medium trucks (class 4-7)7. Aircraft service equipment8. Forklifts and cargo-handling

equipment9. Charging stations for electric

vehicles10. Diesel Emission Reduction

Act (DERA) option

Missouri’s Beneficiary Mitigation Plan

Missouri’s Beneficiary Mitigation Plan

• Submitted August 6, 2018• Provides Missouri’s vision and goals for the VW Trust

• Overall goal for using funds• Percentage of funds for each project category in plan• Consideration of air quality benefits in areas with

disproportionate air pollution burdens• Estimation of emission benefits for project category in plan

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Estimated Emission Reductions

10

0

500

1,000

1,500

2,000

2,500

Excess Emissions Caused byAffected VW Vehicles in Missouri

Expected Emission Reductions fromVW Trust in Missouri

1,200 min

Life

time

NO

xEm

issi

ons

(tons

)

750

2,000 max

Beneficiary Mitigation Plan Overall Goals• Reduce NOx emissions from mobile sources

• Additional goals:- Replace aging school bus fleets- Reduce diesel and gasoline fuel consumption - Upgrade government and private fleets - Target areas that currently or historically have not met

air quality goals- Target areas with affected Volkswagen vehicles- Promote electric vehicles

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Award Category Projects Funding Level

1 School Buses $12 million

2 Government Trucks $6 million

3 Transit and Shuttle Buses $4 million

4 Nongovernment Trucks $6 million

5 Locomotive and Marine $2 million

6 Airport and Cargo Equipment $2 million

7 DERA Option $3 million

8 Electric Vehicle Charging Stations $6 million

Award Categories and Funding Levels

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Review FY 2019

(July 1, 2018 – June 30, 2019)

FY 2019 Review

• School Buses

• Government Trucks

• Transit and Shuttle Buses

• Electric Vehicle Infrastructure

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Fiscal Year 2019 Funding Awarded• School Buses (~$4.7 million)

~$2.7 million for financially disadvantaged schools~$2.0 million for cost share school bus replacements

• VW DERA Option (~$276,000) • Federal DERA funds (~$414,000)• Government Trucks (~$600,000) • Transit and Shuttle Buses (~$400,000) • Department of Corrections (~$1 million)• FY19 Appropriations Authority $7.25 million

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Review FY 2019

School Bus Replacement

FY 2019 School Buses – Cost Share

• Application period: Aug. 7, 2018 to Sept. 14, 2018

• Award: 25 percent of the new bus cost up to $22,000

• Received applications from 67 entities for the replacement of 137 eligible buses

- 64 public schools (130 buses)- 3 privately-owned school bus contractors (7 buses)- Includes 29 replacements under DERA - 16 buses withdrawn for various reasons

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School Buses – Financially Disadvantaged Districts (FDDs)

• The Department used data from the Department of Elementary and Secondary Education (DESE) and Missouri State Highway Patrol (MSHP) to determine the schools most in need of a new, fully funded school bus

• 28 FDDs are receiving up to $100,000 to replace an old, eligible bus

• VW Trust funding approximately $2.7 million

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School Buses FY2019 Results:

• 152 school bus replacement projects

• 63 tons of NOxemissions reduction

School Buses

Funding Category

TotalEmissions Reduction:

VW Category 1: 40.87 tons

VW Category 1 FDD: 10.18 tons

VW Category 7: 2.94 tons

State Clean Diesel: 8.03 tons

All School Bus Categories: 63.67 tons

School Buses – Approximate Funding to Date

Remaining funds$7.3 Million

FY 2019$4.7 Million

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Review FY 2019

Government Truck

Government Trucks - Set aside funds by AreaFuture applicants will utilize the remaining “set aside” funds for this category

• St. Louis: ~$800K• KC: ~$600K• Rest: none

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St. Louis$1.5M

Kansas City

$600K

Rest of State

$900K

Total Set Aside Funds

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Government TrucksFY2019 Results:• Application period opened

November 20, 2018 through January 11, 2019

• Received 56 applications • 162 applied-for projects in

Round 1a, with 33 revisions in Round 1b

• 35 awarded projects totaling over $1,600,000 and over 48 tons of NOx

Round 1a: Government TrucksTotal Funding

Awarded $579,242

Projects Awarded 10

Total NOxReduction (tons) 18.88

Round 1b: Government TrucksTotal Funding

Awarded $1,034,630

Projects Awarded 25

Total NOxReduction (tons) 29.34

Review FY 2019

Transit/Shuttle Bus Replacement

Transit/Shuttle Buses - Set aside funds by Area

Future applicants will utilize the remaining “set aside” funds for this category

• St. Louis: ~$900K• KC: ~$400K• Rest: ~$200K

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St. Louis$1M

Kansas City

$400K

Rest of State

$600K

Total Set Aside Funds

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Transit and Shuttle BusesFY2019 Results:

• Application period opened November 20, 2018 through January 11, 2019

• Received 4 applications • 12 applied-for projects in Round

1a with 2 revisions for Round 1b• 5 projects awarded totaling over

$460,000 and over 16 tons of NOx

Round 1a: Transit and ShuttleTotal Funding

Awarded $392,000

Projects Awarded 4

Total NOxReduction (tons) 15.04

Round 1b: Transit and ShuttleTotal Funding

Awarded $75,000

Projects Awarded 1

Total NOxReduction (tons) 1.66

Review FY 2019

Department of Corrections

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Department of CorrectionsFY2019 Results:

• 9 projects submitted to the air program

• Over 26 tons of NOx emissions reduction through the replacement of:– 4 Medium Trucks (GVWR<33,000 lbs)– 4 Large Trucks (GVWR>33,000 lbs)– 1 Transport Bus

Department of Corrections

Total Funding Awarded

Up to $1,000,000

Projects Submitted 9

Total NOxReduction

(tons)26.31

Review FY 2019

Electric Vehicle Infrastructure Workgroup

Electric Vehicle Infrastructure Workgroup

• Kickoff meeting November 29, 2018– Three subgroups formed:

• Goals, Roadmap and Milestones• Barriers and Development• Strategies for Implementation and Deployment

– Each subgroup led by a stakeholder• Second meeting March 22, 2019

– Report on complete work

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Electric Vehicle Infrastructure Workgroup

Recall:• Beneficiary Mitigation Plan allocates maximum

15% (about $6 mil) allowed to light-duty zero emission vehicle infrastructure projects

• Stakeholders supported:• Electric vehicle infrastructure (not hydrogen) • Focus on highway corridors first

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Presenter

Presentation Notes

This is the proposed highway charging map, also called the “minimum practical highway charge network”. These will be DC Fast Charge stations with potential Level 2 chargers as well to cover the majority of vehicle types with the fastest recharge they can accept. Dots are targeted sites that meet goals of distance, travelled routes, and have priorities and tentative electric supplier marked (investor-owned utility, cooperative, or municipal utility). Yellow dots on I-70 and I-44 are sites already identified and/or operated by Electrify America, the independent arm of Volkswagen that was formed and funded through a different portion of the larger VW settlement. Between the six yellow Electrify America sites and remaining ~35 sites that the electric vehicle infrastructure workgroup hopes to fund, long distance highway travel should be supported within the next 8 years in Missouri.

Electric Vehicle Infrastructure Workgroup

• Next steps:– Continue subgroup work

– Draft request for proposals

– Create timeline now that appropriations complete for FY20

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Tentative FY 2020 Plans

(July 1, 2019 – June 30, 2020)

Tentative Plans for FY2020

• Meet reporting obligations on funds spent in accordance with the trust agreement

• Gather stakeholder input on implementation guidelines for remaining categories

• Open application period for remaining categories in the coming months

• Participate in EPA DERA grant program

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Wilmington Trust Requirements

• Semi-annual reports are due July 30 and January 30

• Award details are posted on our VW Trust website by category

• Information includes:– NOx reductions– Funding amounts– Who is receiving the funds

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FY2020 Appropriations

• Current Budget includes:– $13.5 million for distribution under Missouri’s

Beneficiary Mitigation Plan – $1 million for replacement of Department of

Corrections’ fleet• Funding amounts for each award category

will be based on applications received and amounts allocated in MO’s BMP

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Tentative Application Schedule

• July/August – Final call for applications in target areas for: – Government Trucks– Transit/Shuttle Buses

• September/October – Open application period for:– Non-government Trucks (target areas)– Locomotive and Marine– Airport and Cargo Equipment– DERA

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FY19 DERA – Program Year 2020• Missouri will participate in EPA FY19 DERA grant program• Eligible diesel vehicles, engines and equipment may include

school buses, Class 5 – Class 8 heavy-duty highway vehicles, marine engines, locomotives and nonroad engines, equipment or vehicles used in construction, handling of cargo (including at a port or airport), agriculture, mining or energy production (including stationary generators and pumps)

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Est. Base Est. MatchingFunding Amount $323,511 $161,756Total Funding $485,267

Input on Implementation Guidelines

• Post guidelines for public comment • Finalize based on stakeholder input • Upcoming guidelines:

– Marine and locomotive – Airport and cargo equipment– Nongovernment diesel trucks– Electric vehicle infrastructure– DERA

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Implementation Guidelines

Implementation Guidelines

• Draft guidelines posted for public comment• Revisions to the previous draft guidelines based

on experience with FY19 application periods– Improve readability– Clarify program requirements

• Future revisions planned for:– Government Trucks– Transit/Shuttle Buses– School Buses

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Category 4: Nongovernment Truck

• Open to privately-owned Class 4-8 diesel trucks with engines from 1992-2009

• Projects must meet a minimum $20 per pound of lifetime NOx emissions reduction to be considered

• Projects ranked by price per pound emissions reduction, with the lowest price per pound projects receiving awards

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Category 4: Nongovernment Truck (cont.)

• Projects will compete in three funding pools:1. St. Louis Area Funding Pool: ~$1.5 Million available2. Kansas City Area Funding Pool: ~$600,000 available3. Outside of St. Louis and Kansas City Area Funding Pool:

~$900,000 available

• Targeting Areas: The price per pound for a project will be modified based on area of operation in the state– Projects operating in Jackson, St. Charles, Jefferson,

Franklin, Boone, Greene, and St. Louis counties as well as the City of St. Louis will receive preferential treatment

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Category 5: Locomotive and Marine

• Open to government- and privately-owned switch locomotives, tugboats, and ferries

• Applicants may also use funds to install shore power systems to reduce emissions associated with idling marine vessels at dock

• Projects will be ranked by their price per pound of NOx emissions reduction, with the lowest price per pound projects receiving awards

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Category 5: Locomotive and Marine (cont.)

• Projects in this category will compete statewide for $2 million per BMP

• Targeting Areas: The price per pound for a project will be modified based on area of operation in the state

–Projects operating in Jackson, St. Charles, Jefferson, Franklin, Boone, Greene, and St. Louis counties as well as the City of St. Louis will receive preferential treatment

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Category 6: Airport and Cargo Equipment• Open to forklifts, gantry cranes, and other equipment

used at airports and other transportation hubs to service airplanes and move cargo

• All projects in this category must be repowered with an electric engine or replaced with an equivalent electric piece of equipment

• Projects will be ranked by price per pound of NOxemissions reduction, with the lowest price per pound projects receiving awards

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Category 6: Airport and Cargo Equipment (cont.)

• Projects in this category will compete statewide for $2 million per BMP

• Targeting Areas: The price per pound for a project will be modified based on area of operation in the state

–Projects operating in Jackson, St. Charles, Jefferson, Franklin, Boone, Greene, and St. Louis counties as well as the City of St. Louis will receive preferential treatment

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Comments on the Guidelines are due: June 28, 2019

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Questions?

Contact Information:Missouri Department of Natural ResourcesAir Pollution Control ProgramVolkswagen TeamPhone: 573-751-4817MOVWTeam@dnr.mo.gov

dnr.mo.gov/env/apcp/vw53