Nevada to get $22 million from Volkswagen settlement


During 2014, an associate professor at West Virginia University and his team of researchers discovered through testing that Volkswagen had embedded “defeat device” codes within the software of its diesel-powered TDI model vehicles, to hide emission violations of excessive nitrogen oxide while at the same time advertising that the TDI catalytic converters minimized NOx emissions.

That sparked the beginning of “Dieselgate.” The fallout from the scandal resulted in an international public reaction that included a multibillion-dollar lawsuit from the U.S. Federal Trade Commission against the Volkswagen Group, the largest civil suit for a false-advertising violation in FTC history. In addition, the U.S. Environmental Protection Agency and the U.S. Department of Justice also initiated a separate lawsuit regarding intentional violation of the U.S. Clean Air Act.

On Oct. 25, U.S. District Judge Charles Breyer in San Francisco approved the settlement terms that would affect all 50 states where Volkswagen and Audi diesel vehicles were sold.

Nevada has been apportioned $22 million from the $4.7 billion trust fund that has been split by the EPA into two programs: a NOx emissions reduction program that has been allocated $2.7 billion and a zero-emission vehicle infrastructure program that has been allocated $2 billion.

Siguard “Sig” Jaunarajs, a supervisor from the Bureau of Air Quality Planning under the Nevada Division of Environmental Protection, recently addressed a meeting of the Southern Nevada Fleet Association, to talk with fleet managers about upcoming state policy issues resulting from the settlement.

During the 2017 state legislative session that will begin February, Gov. Brian Sandoval will appoint a special committee to select public and private projects that comply with the goals of the Volkswagen mitigation trust fund. The committee will stage open hearings to define and evaluate project proposals that meet funding objectives during that time.

Jaunarajs outlined an example of a NOx emissions reduction project that could be proposed from the public and private sectors, based on the existing Nevada State Clean Diesel Program.

In populated areas, older diesel fleet vehicles could be retrofitted or replaced statewide with newer and more efficient diesel engines that meet current EPA standards, to better comply with the existing federal Diesel Emissions Reduction Act.

Larger diesel vehicles like school buses, public transit buses, garbage trucks, street sweepers and private fleet delivery trucks would be good initial candidates for this kind of statewide project.

To move forward to disburse the $4.7 billion trust fund to affected states, the newly elected Trump Administration will need to appoint an official trustee to manage it. Responsibilities of the new administrator will be to make sure the money is apportioned fairly to all affected states and to oversee that funding goals are achieved through effective implementation of localized programs at each state level.

The scandal centered on the “defeat device” software instructions that calibrated the 2.0-liter engines to minimize NOx emissions during stationary smog testing trials for U.S. Department of Motor Vehicles certification, but then reverted to an excessive air/fuel-burning mixture that increased vehicle performance when customer cars were being driven on U.S. roads.

That emissions adjustment also exceeded Clean Air Act standards governed by the U.S. Environmental Protection Agency for NOx, under real world driving conditions.

Volkswagen and Audi franchise dealerships unknowingly sold and leased more than 500,000 diesel vehicles into the U.S. market with the onboard “defeat device” software installed from 2009-15. Affected models included TDI versions of the VW Jetta, Passat, Golf and Beetle, as well as the Audi A3.

Local Nevada Volkswagen and Audi dealerships were caught in the middle of the crisis.

“Losing the ability to sell what was about 25 percent of our previous business was unfortunate,” said Doug Fleming, general manager for Findlay Volkswagen and Findlay North Volkswagen dealerships in Las Vegas, “though the majority of our guests have just transitioned to gasoline and still love the product and brand.”

“We haven’t had a lot of consumer disappointment at our level because guests know that the dealerships and the factory are separate entities,” Fleming said. “In addition, the majority of guests have been ecstatic with the resolution. VW has been excellent with communication on how to handle the process. It has been slow and difficult having to go through court approval every step of the way.”

Volkswagen Group customers who were affected by the scandal can now receive cash compensation as part of a buyback and lease termination program totaling $10 billion or can have their existing vehicles recalled and modified to comply with U.S. Environmental Protection Agency standards.

Buyback payments to customers with older TDI vehicles from 2009-2015 may significantly exceed their resale value, as listed in the Kelley Blue Book of comparative model prices.

The deadline for Volkswagen and Audi TDI owners to apply for compensation through the Volkswagen website is Sept. 1, 2018: www.vwcourtsettlement.com.

For more information about the Volkswagen Group diesel settlement with the U.S. FTC, visit www.ftc.gov/enforcement/cases-proceedings/refunds/volkswagen-settlement.

The automotive manufacturer has made a commitment to increase production of electric-powered vehicles to replace diesel-powered platforms. The company announced a goal to build and sell 1 million electric-powered vehicles through 30 of its product lines by 2025, and will begin manufacturing plug-in electric vehicles within the U.S. during 2020.

For more information about the Nevada State Clean Diesel Program, that provides grant funding opportunities for diesel emissions reduction projects, visit the website of the Nevada Division of Environmental Protection and its Bureau of Air Quality Planning that administers the Mobile, Smoke and Area Sources branch at ndep.nv.gov/baqp/msa.html.

To qualify for state funding from the zero-emission vehicle infrastructure portion of the EPA settlement, the remaining $2 billion in the Volkswagen trust fund, the Nevada Governor’s Office of Energy has been promoting expansion of its existing Nevada Electric Highway project, to provide DC Fast Charge infrastructure for plug-in electric cars along rural interstate highways that pass through state transportation corridors between California, Oregon, Idaho, Utah and Arizona.

More information about the Nevada Electric Highway project can be found at http://energy.nv.gov.