North Carolina is getting $92 million in free money; the line to get a piece of it is long

Ninety-two million dollars sounds like an enormous amount of money, but it will only begin to wean the state’s major diesel users from that polluting fuel. And disbursing those funds to worthy applicants — cities, counties, school districts, ferries, trains, airports, private construction companies and others — could become entangled in bureaucracy.

That $92 million is the state’s portion of the EPA’s Volkswagen Settlement Trust Fund  — $2.7 billion to be apportioned to states and Indian tribes to invest in technology that will reduce nitrogen oxide emissions, also known as NOx, from diesel fuel. The EPA divvied up the settlement amounts among states based on their number of registered diesel Volkswagen models.

“There are greater needs than the funds will pay for,” Mike Abraczinskas, director of the state’s Division of Air Quality, told lawmakers on the Joint Energy Policy Commission earlier this month. In prioritizing the projects, he said, DAQ has to evaluate cost effectiveness, the potential gains in air quality and environmental justice issues within disproportionately impacted communities.

Diesel engines — trucks, school buses, trains and ships — are primary emitters of NOx. The pollutant contributes to the formation of acid rain, smog and ozone depletion. It can harm human health, particularly the respiratory system, and can react with other chemicals to create toxic byproducts.

The money could then be allocated to projects that address those emission sources. For example, funding electric-car charging stations could boost that technology; cities and towns could use the money to install pollution controls on their garbage trucks and school buses, or to buy electric/ hybrid buses. Construction companies, airports, ferries and trains could all use the funds to wean their equipment off diesel.

The fund is part of the EPA’s $14.7 billion in civil and criminal penalties levied against Volkswagen for violations of the Clean Air Act. The auto company had cheated on federal emissions tests by programming the diesel vehicles’ onboard computers to show lower NOx than during real-world driving. On the road, these vehicles actually produced 40 times more NOx than during the testing. More than 580,000 VW vehicles with 2-liter and 3-liter engines in model years 2009-2016 had been tampered with in the U.S., plus some Audis and Porsches. Eleven million vehicles were affected worldwide.

The first hurdle to obtaining the funds has been cleared. Gov. Roy Cooper recently named the NC Department of Environmental Quality’s air division as the state’s beneficiary; that designation makes the state eligible to receive its portion of the settlement. DEQ now plans to issue a Request for Information; that gives interested parties an opportunity to essentially pitch their ideas for funding. That information will be part of the state’s draft mitigation plan to the EPA and the federal settlement trustee, based in Delaware.

Up to 15 percent of the allocation –$13.8 million —  can be spent to administer the program. Abraczinkas told lawmakers that DAQ could do that work for less money, “so we can do more good for the projects.”

However, the process is not as simple as, for example, stroking a check to the North Carolina Railroad Company, a private entity that would also be eligible for the funds. Legally the appropriation must pass through the legislature. “I’m questioning the state’s ability to spend they money without an appropriation from the General Assembly,” said Rep. Dean Arp, a Union County Republican.”Or would the state treasurer be writing the checks?”

The proposed projects must be open to public comment, according to EPA rules. and must be posted by the federal trustee online.

Next, the independent trustee, based in Delaware, must approve the Division of Air Quality as the state’s beneficiary. The deadline is February 2018.  The state then has until October 2027 to fund and implement all of the projects.