Author: Published: May 24, 2019 Utility Dive

Dive Brief:

  • Many states are squandering funds from the Volkswagen emissions settlement by not sufficiently focusing on electrifying transportation, according to a new report from U.S. Public Interest Research Group (PIRG) and Environment America Research & Policy Center.
  • States received almost $3 billion as a result of a federal settlement regarding emissions testing cheat devices placed in Volkswagen vehicles. However, the report points out that more than a dozen states have either no plan, or limited plans, to prioritize electric vehicles (EV) and infrastructure.
  • The report highlights four states for committing s​ubstantial amounts to accelerate electrification, including mass transit systems. In particular, Washington and Hawaii maxed out spending on electrification, and received top marks in the study.

Dive Insight:

The federal VW settlement does not preclude states from spending the money on traditional technologies, but clean energy advocates say it would be a wasted opportunity if the funds were not spent on emissions-free resources.

“Volkswagen breached customers’ trust and put all of our health at risk,” Sam Landenwitsch, senior vice president for The Public Interest Network, said in a statement. However, the settlement “provides states with the perfect opportunity to kick-start the transition to a cleaner and healthier electric transportation system. A lot of good is coming out of how states are spending this money — but many states are not going nearly far enough.”

Washington and Hawaii earned A+ scores for maxing out electrification spending. Rhode Island and Vermont also each earned an A in the study, for committing “substantial amounts to accelerate electrification, including electrifying their mass transit systems.”

New Hampshire last year decided to use use $4.6 million, or about 15% of its share of the Volkswagen emissions settlement, to develop charging stations around the state. The PIRG scorecard gave New Hampshire a D rating, concluding it was not making electrification a priority and had not made diesel vehicles ineligible for funding.

Massachusetts has prioritized spending settlement funds on electrification, and received a B rating, along with California and New York.

The report gave failing grades to 14 states and Puerto Rico, including Florida, Pennsylvania and West Virginia. These states “have limited or no plans to prioritize electric vehicles and infrastructure,” the groups said.

For example, Wisconsin, which also received a failing grade, allocated $42 million, or more than 60% of its settlement funds, for two programs to replace retiring state vehicles. While both programs aim to lower the number of aging diesel vehicles, neither prioritizes electric vehicles, “which means that a bulk of the award could end up going towards diesel vehicle projects,” the report said.

However, a theme in the report and in comments from stakeholders, is that it is not too late for states to improve.

States that prioritized funding for EVs, electric buses and charging infrastructure “are the smart ones,” Plug in America Executive Director Joel Levin told Utility Dive.

“We encourage those states that didn’t score high — the ones who did not prioritize funding for electric transportation projects — to rethink their plans and prioritize projects that advance EVs,” Levin said in an emailed statement.

For states that still have funding, “it’s not too late to direct it toward projects that center on electric mass transit and infrastructure,” PIRG said.

Electric vehicles remain a small fraction of vehicles in the United States, but their adoption is expected to grow quickly. Bloomberg New Energy Finance predicts EVs will represent 28% of global light-duty vehicle sales sometime shortly after 2025. And the Edison Electric Institute, which represents U.S. investor-owned utilities, projects 7 million zero-emission vehicles on U.S. roads by 2025.