Projects funded during Round 1 of the Volkswagen Settlement in South Carolina are being implemented and some projects have been completed.
The Volkswagen Environmental Mitigation Trust Funds (often referred to as the VW Settlement Funds) resulted from a September 2015 investigation conducted by West Virginia University that revealed Volkswagen officials installed "defeat devices" intended to cheat diesel emissions tests, resulting in emissions of nitrogen oxides (NOx) emissions above compliance levels. As a part of settlements with the US Environmental Protection Agency (EPA) and the California Air Resources Board, Volkswagen is required to mitigate excess emissions through an Environmental Mitigation Trust totaling approximately $3 billion.
In 2016 Governor Henry McMaster designated the South Carolina Department of Insurance (SCDOI) as the lead agency to administer these funds for South Carolina. In that role, SCDOI issued a Request for Applications (Round 1) in March of 2019. This round of funding sought to award up to $10 million of the $34 million in VW Settlement Funds allocated to South Carolina (SC/VW Funds).
Round 1 of SC/VW Funds was limited to the replacement of Class 4-8 school, shuttle, and transit buses. The Request for Applications noted that priority may be given to funding replacement buses that are fueled by sources other than diesel.
On July 30, 2019, Governor Henry McMaster was joined by SC Superintendent of Education Molly Spearman and SCDOI Director Ray Farmer to announce recipients of funding from Round 1. After careful review, the SCDOI awarded approximately $9.3 million of SC/VW Funds to three of the eight applicants.
SC Department of Education
The SC Department of Education received approximately $7.8 million of the SC/VW Funds to replace 78 diesel school buses with new Thomas Built propane school buses. Buses and propane fueling infrastructure were delivered and installed at Horry County Schools (20), Richland District 2 (18), Beaufort County Schools (18), and Lexington District 1 (22). The 78-model year 1988 school buses being replaced had in excess of 240,000 miles, reaching as high as 650,000 miles. In addition to having older engines that were dirtier, these buses were outside of their useful life. They were replaced with model year 2020 propane autogas buses, resulting in cleaner transportation. The NOx emissions from the model year 1988 buses are certified at 10.7 versus 0.16 for the new propane school buses, as rated by current engine model standards.
Additional benefits include less noise pollution and operational savings due to less expensive fuel costs and maintenance for propane as compared to diesel. There is also a slight reduction in the maintenance costs for propane buses as compared to diesel buses. Finally, the 78 new school buses have safety features such as safer passenger seating, safer driver-restraint systems, improved driver ergonomics and visibility, anti-lock brakes, self-adjusting air brakes, electronic stability control, air-ride suspension, LED lighting, additional stop arm, 360-degree exterior camera system, and air conditioning.
Update: These 78 propane school buses have been delivered and are operational, with old diesel buses being scrapped. Many of these new propane school buses were critical to help deliver WiFi and meals to students during the COVID-10 pandemic.
Berkeley-Charleston-Dorchester Council of Governments
Berkeley-Charleston-Dorchester Council of Governments received approximately $1.4 million of the SC/VW Funds to replace three model year 1996 diesel transit buses, which all have at or near one million miles, with Proterra all-electric transit buses. Funding was also used to purchase the infrastructure necessary to charge the transit buses. In addition to the SC/VW Funds, approximately $576,000 was provided through a Charleston County sales tax to cover the annual lease expenditure for the electric battery used in each bus.
These buses will be part of Charleston’s public bus system seven days per week, 365 days per year, serving Route 10 on Rivers Avenue (US 78) in the greater Charleston area. This is Charleston Area Regional Transit Authority’s most active route, serving 25 percent of its riders with a little more than 1 million riders per year, and operates along the region's first proposed bus rapid transit corridor.
Seventy percent of the route's riders depend on public transit as their primary means of transportation. This route services the Charleston peninsula, Trident Health Systems, the Medical University of South Carolina, Boeing (through connection), and the airport (through connection), among others. Further, this route serves several areas designated by the US Census as Opportunity Zones (i.e., low-income areas that have historically experienced the negative health effects of emissions from industrial, roadway, and rail projects).
The new electric transit buses will help to reduce congestion and emissions in one of the most quickly growing areas of the state. Additional benefits include better fuel economy, (the average fuel economy of the buses being replaced is less than 5 mpg) lower maintenance, and fuel costs. Proterra has estimated a savings of $448,000 over a 12-year lifetime for an all-electric bus compared to a traditional diesel bus.
Update: These new all-electric transit buses have been ordered, with a scheduled delivery in August 2020. The buses should begin operation in September 2020, with old diesel transit buses to be scrapped by December 2020.
City of Anderson
The City of Anderson received approximately $73,500 of the SC/VW Funds to replace a model year 2006 diesel bus with nearly 400,000 miles, with a model year 2020 ElDorado National Axess compressed natural gas (CNG) bus. The City of Anderson provided approximately $417,000 through a federal grant to complete the project.
This bus will operate in the highest density areas of the City of Anderson. The transit bus will be in service Monday through Friday with an estimated average annual mileage in excess of 50,000 miles. The City has already realized maintenance cost savings from the two existing CNG buses in its fleet. The City also reports additional cost savings realized through minimal repair costs and preventive maintenance and training programs.
Update: This CNG transit bus has been ordered, with a scheduled delivery date of September 2020. Buses are scheduled to begin operation in November 2020, with the old diesel transit bus to be scrapped before November 2020.
SCDOI has calculated significant emission reductions over the lifetime of the each of the Round 1 funded projects. These reductions were calculated utilizing a publicly available tool developed by the US Department of Energy’s Argonne National Laboratory: the Heavy-Duty Vehicle Emissions Calculator (HDVEC). Based on calculations using the HDVEC, the 82 new buses will eliminate 64,102 lbs of NOx, 1,389 lbs of particulate matter, and 2,678 short tons of greenhouse gases.
As petroleum fuels combust, their chemical structures change, and by-products are created. Pollutants such as NOx are a by-product of combustion. When these gases react with the atmosphere, they create ozone. This colorless gas can increase the frequency of asthma attacks, cause shortness of breath, aggravate lung diseases, and cause permanent damage to lungs through long-term exposure. Elevated ozone levels are linked to increases in hospitalizations, emergency room visits, and premature death.
An extensive body of scientific evidence shows that long- and short-term exposures to fine particle pollution, also known as fine particulate matter (PM2.5), can cause premature death and harmful effects on the cardiovascular system, including increased hospital admissions and emergency department visits for heart attacks and strokes.
Future Funding Rounds
With approximately $24 million remaining to spend before 2027, future rounds of funding are anticipated. Although there has not been any information released on these future rounds, eligible mitigation actions include replacing or re-powering diesel engines in various vehicle or equipment categories. In addition, beneficiaries may utilize up to 15 percent of their total allocation on light duty zero-emission vehicle supply equipment located in a public place, workplace, or multi-unit dwelling. Projects eligible under the Diesel Emission Reduction Act program are also eligible for funding.
South Carolina is committed to an implementation process that is open and transparent.
Accordingly, all applications for funding will be made publicly available on SCDOI’s Volkswagen Settlement website at: www.vwsettlement.sc.gov.