Sacramento tries to fend off L.A. in race for $44 million from VW to boost electric cars

By Dale Kasler and Anita Chabria

dkasler@sacbee.com

March 30, 2017 04:00 AM

A California Air Resources Board technician tests diesel emissions of a 2013 Volkswagen Passat at CARB’s lab in El Monte in 2015. Air board staffers were pivotal in uncovering a massive diesel pollution scandal. As part of its court-approved settlement, Volkswagen is designating a “Green City” to promote nonpolluting electric cars, and has tentatively chosen Sacramento. David McNew New York Times file
A California Air Resources Board technician tests diesel emissions of a 2013 Volkswagen Passat at CARB’s lab in El Monte in 2015. Air board staffers were pivotal in uncovering a massive diesel pollution scandal. As part of its court-approved settlement, Volkswagen is designating a “Green City” to promote nonpolluting electric cars, and has tentatively chosen Sacramento. David McNew New York Times file

The money is practically within Sacramento’s grasp – a $44 million jackpot, funded by Volkswagen to help make amends for an air-pollution scandal, to promote the use of electric cars within the city.

California’s other polluted communities aren’t just letting Sacramento walk away with the cash, however. Los Angeles is pushing to be designated as Volkswagen’s first California “Green City” instead, while representatives of the San Joaquin Valley say their region needs the money more than Sacramento.

Under the Green City program, Volkswagen will spend $44 million over the next 2  1/2 years on charging stations and publicity. It will also deploy a fleet of electric vehicles to deliver goods, provide ride-sharing services and serve as rolling ambassadors for nonpolluting cars. The Green City plan is part of a statewide $800 million campaign that Volkswagen will roll out over the next decade to raise public awareness about zero-emission vehicles, or ZEVs.

Volkswagen has tentatively anointed Sacramento as its first of two green cities. But it hasn’t spelled out why Sacramento was chosen, and the selection is far from a done deal. Volkswagen hasn’t made a final decision, nor has the California Air Resources Board. The board has to sign off on the Green City project and other aspects of the ZEV program, and it doesn’t expect to make a decision for another month or so.

In the meantime, the race is on. At an air board hearing last Friday on the Volkswagen plan, board members got an earful from Los Angeles public officials and community leaders about why their city should win the Green City designation. Their argument was based in part on size and visibility: Los Angeles’ high profile would create the perfect platform for drawing attention to electric cars.

“You have a real opportunity to showcase what a zero-emissions future could look like,” said Richard Teebay, a transportation specialist for the county of Los Angeles, in remarks to the board.

On this day, at least, L.A. had home court advantage. The hearing was held in Riverside, an hour east of Los Angeles, and a slew of officials showed up to extoll their city’s qualifications for the Volkswagen bonanza. Board chairwoman Mary Nichols, a Los Angeles resident, gently but pointedly asked Volkswagen’s representative about the show of support.

“What would you say to my friends and neighbors … who would like to be designated by you as a Green City?” Nichols asked Brendan Jones, chief operating officer of Volkswagen’s newly minted Electrify America subsidiary.

Jones replied: “We’re not going to be able to please everybody,” but added that he’s willing to discuss the program with Los Angeles officials.

Sacramento isn’t rolling over on this. Larry Greene of the Sacramento Metropolitan Air Quality Management District spoke at the hearing, as did Assistant City Manager John Dangberg. Phil Serna, an air board member and Sacramento County supervisor, endorsed Volkswagen’s tentative selection of Sacramento and said the region’s commitment to clean-energy initiatives would give the ZEV program a strong likelihood of success.

Exactly why Volkswagen has tentatively chosen Sacramento as its first Green City is unclear. The automaker has only spelled out its basic selection criteria, including a “sizable market” of at least 400,000 people, the potential to spread ZEV usage to lower-income neighborhoods and the ability “to influence broader awareness” of ZEVs in California and the nation.

In its proposal to Volkswagen, the city outlined plans for using electric cars to shuttle residents of low-income neighborhoods to light-rail and bus stations, transport high school students to jobs, and ferry homeless Sacramentans to shelters.

“We are the perfect city to get the designation,” said Sacramento Mayor Darrell Steinberg in an interview Wednesday. He said he’s confident the city will be chosen by Volkswagen, but he’s well aware there’s competition.

“Of course I understand politics and the way these things can work, but we are taking nothing for granted,” Steinberg said. “We are making our interest … very clear, and we are not shy.”

The Volkswagen program will go well beyond the Green City designation. Under its court-approved settlement, the carmaker will spend a total of $800 million building charging stations around the state and using other means to promote ZEV’s in California over the next ten years. It will even name a second Green City a few years from now.

But the scramble for the first Green City crown – Sacramento was one of 14 cities that submitted proposals to Volkswagen last fall – is just one of the controversies surrounding the Volkswagen ZEV program.

At the air board hearing, as well as a state Senate committee hearing last week, Volkswagen’s critics said the carmaker’s plan would favor wealthy cities and do little to spread electric cars in poorer communities. Although the program is supposed to be “brand neutral,” these critics also said Volkswagen could create a stranglehold on the market by blanketing the state with charging stations in strategic locations, which could force others in the industry to the side of the road.

“The criminal wrongdoer should not be permitted to profit from its wrongdoing,” former Michigan Gov. Jennifer Granholm told the Senate panel. Granholm now teaches law and public policy at UC Berkeley.

Volkswagen officials have said they won’t ignore poor communities. They also said they will be sure to spread their charging stations far and wide to avoid duplicating existing facilities. Jones told the air board that company officials “continue to refine the plan.” A spokeswoman said Volkswagen wouldn’t comment further on the plan.

The automaker has pleaded guilty to criminal charges after it admitted planting “defeat device” software in its diesel vehicles to cheat on emissions tests. It agreed to spend more than $14 billion buying back or fixing cars as well as paying civil penalties. The penalties include an agreement to fund a $2 billion program to promote ZEVs across the country, including $800 million in California. A disproportionate number of Volkswagen diesels were sold in California, and it was the air board’s engineers who were instrumental in uncovering the scheme.

California seized on the Volkswagen scandal as a way to boost electric-car ownership in the state. Officials want to have more than 1 million ZEVs on the road by 2025, nearly quadrupling the current number. ZEVs and plug-in hybrid cars account for about 3 percent of California’s new car sales.

While state officials are eager to promote electric vehicles, they’re wary of micromanaging the Volkswagen program. Signaling that the air board is likely to defer to Volkswagen’s judgment, Nichols said, “I don’t know that we are the experts on how best to invest ZEV money.”

Others, though, have been more than happy to give the air board suggestions.

At last week’s hearing, representatives from the San Joaquin Valley clamored for more attention from Volkswagen, noting that under terms of the court agreement the carmaker is supposed to spend about one-third of the ZEV money in “disadvantaged communities.”

“I personally love the city of Sacramento – it’s wonderful – but we all know that is not where the need is,” said Genevieve Gale of the Central Valley Air Quality Coalition in Fresno.

Some board members with Southern California sympathies picked up on the theme of righting a wrong.

“The VW diesel cars contributed a lot to the NOx problem we suffer in the south coast,” said board member Judy Mitchell, who represents the South Coast Air Quality Management District. NOx, or nitrogen oxide, is a key ingredient in the formation of smog.

“Some of the funds that you have in this pot should go to mitigate this damage,” Mitchell added.

Dale Kasler: 916-321-1066, @dakasler