Minnesota expected to get $47 million from Volkswagen settlement

Minnesota is in line to get a $47 million pot of money to fight pollution, and businesses that sell a wide range of environmentally friendly products are positioning themselves to get a share of it.

As part of the nearly $15 billion settlement in the Volkswagen diesel emissions cheating scandal, states receive a combined $2.7 billion to support projects that reduce pollution. The settlement details specific projects the money can be spent on, such as replacing old school buses, garbage trucks, delivery trucks and even snowplows with cleaner engines.

"We're getting calls from Canada and all over the U.S. from consulting firms, legal firms and manufacturing firms that build buses, saying, spend Minnesota's money on this," said Rocky Sisk, the leader for the Volkswagen mitigation project at the Minnesota Pollution Control Agency (MPCA), the agency in charge of deciding how Minnesota will spend the money.

The amount of money each state receives is determined by the number of recalled Volkswagen cars registered there. Minnesota had more than 9,000 recalled Volkswagens, which ranks 21st among states.

Possible uses of the funds include developing cleaner shipping ports, construction equipment, electric vehicle charging station infrastructure or expanding other emissions-reducing programs. States can spend a maximum of only 15 percent of their settlement money on electric car charging station infrastructure.

States have to make tough decisions on how they want to split the money.

If the state chooses to spend a portion of the money on new transit bus engines, for example, officials would have to decide if they would replace engines with cleaner diesel ones or propane, natural gas or electric engines.

"A bunch of groups are trying to explain to us why their particular company or venue is the most important way to spend these funds," Sisk said.

The Minnesota pollution agency can't make any final decisions on how to split the money just yet. States are still waiting for the official green light from the federal trustee distributing the Volkswagen settlement. Once the trustee gives the go-ahead, MPCA will submit a plan on how Minnesota will use the money.

Drive Electric Minnesota is one of several advocacy groups petitioning MPCA to spend the money on electric vehicles. It wrote a letter saying they would like the maximum 15 percent, about $7 million, to be spent on building out the state's electric car recharging station infrastructure.

"With just this funding alone, you could have a fast charger every 50 miles in every major traffic corridor in Minnesota," said Brendan Jordan with the nonprofit Great Plains Institute, which oversees a project called Drive Electric Minnesota. "That's one decision the state could make that could solve that problem in one fell swoop."

Great River Energy, the Maple Grove-based energy company, wants money to fund a pilot program with electric school buses. The first in what it hopes is a fleet will take students to school in Lakeville in the fall. The pilot program has a $1.2 million budget, and the company is hoping the state will pay half of it from the fund.

"This funding is essential for us to continue the pilot and document regional economics in the state of Minnesota," said David Ranallo, marketing manager at Great River Energy. "We also think it is important to deploy electric school bus technology outside metro areas where a majority of students ride a bus for longer distances each school day."

Xcel Energy, Minnesota's largest electric and natural gas company, would like funds to explore electric or natural gas options with Metro Transit buses.

A letter signed by 35 state representatives and senators urged the MPCA to ensure the money goes into urban areas that might have populations more exposed to air pollution, communities by highways or low-income areas in more densely populated areas. The legislators also would like to see 15 percent at the most spent on electric car infrastructure.

"This could impact groups where air quality is really poor. Those buses run all day long," said Matt Privratsky, government affairs specialist at Fresh Energy, an advocacy group for clean energy.

The MPCA's Sisk said he anticipates the money to be distributed to a variety of different areas. While he didn't rule out any specific category, he said Minnesota would be less likely to spend its settlement money on shipping ports.

For now, MPCA is still gathering proposals from groups across the state. Once a green light is given, the state must apply for both the money and then submit a plan on how it will be spent.

Volkswagen reached the $14.7 billion settlement after admitting that it installed software to fool emissions testing equipment and give its cars passing grades, even as vehicles produced nitrous-oxide emissions up to 40 times higher than the federal limit.

"Volkswagen dumped 600 tons of pollution in the state and now they are giving us money to clean it up," Sisk said. "I think over the course of 10 years, there's a lot of pollution that's not going to be released in Minnesota. If we do this right, we will be able to benefit all the people in this state and that's a pretty good thing to do."

Patrick Thomas • 612-673-7740