Thursday, June 15, 2017

PUC Distributes $173 Million In Act 13 Drilling Impact Fees, Down $14.5M, More Reductions Ahead

The Public Utility Commission Thursday posted detailed information about this year’s distribution of Impact Fees on natural gas producers, totaling $173,258,900, on the PUC’s interactive Act 13 website.
This year’s distribution is approximately $14.5 million lower than last year, and down 27 percent from the highest amount collected in 203 of $225.7 million.
The changes this year are driven by a continued reduction in the price of natural gas – which again resulted in a $5,000 per well reduction in the fee paid this year – along with the increasing age of many wells, which also reduces the per-well fee.
The Act 13 fee program has also been hit with an adverse Commonwealth Court decision in March which would reduce Act 13 fee revenue another $16 million per year.  The PUC appealed the ruling in April and Rep. Pam Snyder (D-Fayette) introduced House Bill 1283 to fix the program legislatively, if needed.
The decline this year has also resulted in funding changes for many individual municipalities, as detailed on the PUC’s Act 13 website.
Over the past six years, the PUC has collected and distributed more than $1.2 billion in Impact Fees to communities across Pennsylvania.
Range Resources, EQT Production Company, Chesapeake Energy, SWN Production Company, Cabot Oil & Gas, Repsol Oil & Gas and Seneca pay the most in fees, in that order.
County and municipal governments directly affected by drilling will receive a total of $93,128,340 for the 2016 disbursement year.  Washington, Susquehanna, Bradford, Green, Lycoming, Tioga and Butler counties receive the most funding, in that order.
Additionally, $62,085,600 will be placed into the Marcellus Legacy Fund, which provides financial support for environmental, highway, water and sewer projects, rehabilitation of greenways and other projects throughout the state.
Also, $18 million will be distributed to state agencies specified by the Act.
The PUC has forwarded the information for payment and expects checks to be distributed in early July.
Extensive details regarding the Impact Fee distribution are available online, including specifics on funds collected and distributed for each year since 2011.
Visitors can search and download statistics such as distributions to individual municipalities or counties; allocation and usage of those funds, based on reports submitted by various municipalities; eligible wells per county/municipality; and payments by producers.
The PUC’s is responsible for implementing the imposition, collection and distribution of an unconventional gas well fee (also called a drilling impact fee) was established by the Unconventional Gas Well Impact Fee Act, signed into law as Act 13 of 2012.
For more information, visit the PUC’s Act 13 website.
(Chart: Act 13 drilling fee revenue by year.)

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