PUC Releases 2016 Impact Fees

The Pennsylvania Public Utility Commission (PUC) collected impact fees from the natural gas industry totaling $173,258,900 for 2016.
PUC Releases 2016 Impact Fees - News


Source: PUC

In Pennsylvania, more than $1.2 billion in Impact Fees have been collected and distributed to communities across Pennsylvania since enacted in 2012. The 2016 amount is about $14.5 million lower than 2015 due to a continued reduction in the price of natural gas (which resulted in a $5,000 per well reduction in the fee paid this year) and increasing age of many wells, which also reduces the per-well fee. This decline has resulted in funding changes for many individual municipalities.

County and municipal governments directly affected by drilling will receive a total of $93.128 million for the 2016 disbursement year. Additionally, $62.086 million 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. Checks are to be distributed in early July.

The PUC website highlights the top disbursement breakdowns across the state

Top counties receiving impact fees for 2016 and by well count:

CountyImpact FeesWells
Washington$5.381 million1452 wells
Susquehanna$4.863 million1304 wells
Bradford$4.319 million1210 wells
Greene$3.794 million1084 wells
Lycoming$3.179 million875 wells
Tioga$2.427 million883 wells
Butler$1.672 million482 wells

Top municipalities receiving impact fees for 2016 and by well count:

Municipality, CountyImpact FeesWells
Cummings, Lycoming$922 thousand248 wells
Morris, Greene$775 thousand171 wells
Auburn, Susquehanna$771 thousand131 wells
Center, Greene$731 thousand191 wells
Cogan House, Lycoming$687 thousand179 wells
New Milford, Susquehanna$673 thousand157 wells
Cumberland, Greene$647 thousand72 wells

Top producer payments for 2016:

CompanyImpact Fee
Range Resources Appalachia LLC$22.762 million
EQT Production Co$18.268 million
Chesapeake Appalachia LLC$14.015 million
SWN Production Company LLC$12.790 million
Cabot Oil & Gas Corp$12.552 million
Repsol OIl & Gas USA, LLC$ 9.535 million
Seneca Resources Corp$ 9.470 million

In 2015, the counties used the fees for the following services:

Impact Fee UseAmount
Capital Reserve Fund$17.434 million
Emergency Preparedness/Public Safety$5.415 million
Public Infrastructure Construction$3.641 million
Judicial Services$2.487 million
Social Services$2.268 million
Information Technology$1.355 million
Environmental Programs$0.996 million
Storm water/Sewer Systems$0.834 million
Tax Reductions$0.261 million
Career & Technical Centers$0.153 million
Planning Initiatives$0.004 million

In 2015, municipalities reported using fees for the following services:

Impact Fee UseAmount
Public Infrastructure Construction$27.606 million
Capital Reserve Fund$17.885 million
Emergency Preparedness Fund$6.830 million
Amount Not Reported$3.190 million
Storm Water/Sewer Systems$1.791 million
Environmental Programs$1.277 million
Tax Reductions$0.849 million
Planning Initiatives$0.516 million
Information Technology$0.228 million
Water Preservation & Reclamation$0.125 million
Judicial Services0.039 million
Social Services$0.037 million
Housing$0.011 million
Career & Technical Centers$0.005 million

The PUC reported 8,035 horizontal wells and 86 vertical wells were eligible for the 2016 impact fees. There were 648 horizontal and 674 vertical wells deemed ineligible, and 110 horizontal and 49 vertical wells has a disputed status.

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. Information can be found on PUC's website.