PUC Distributes Over $200 Million In Act 13 Drilling Impact Fees; A Sharp Drop Of $51.5 Million From Last Year

On June 17, the Public Utility Commission posted detailed information about the distribution of CY 2019 Act 13 drilling impact fees on natural gas producers – totaling $200,364,500 – on the PUC’s Act 13 website.

The $200.3 million in revenue is a sharp drop from CY 2018 revenue which totaled $251.8 million. The Independent Fiscal Office issued an estimate of CY 2019 revenues in January that was spot-on.  Read more here.

With this year’s distribution, the PUC over the past nine years, has collected and distributed over $1.9 billion to communities across Pennsylvania.

County and municipal governments directly affected by drilling will receive a total of $109,180,326 for the 2019 reporting year. 

In addition, $72,186,900 will be transferred to 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, $18,397,250 will be distributed to state agencies, as specified by Act 13.

The PUC has forwarded the information to the Department of Treasury for payment and expects checks to be distributed in early July.

One of the reasons this year’s distribution is lower than last year is due to the average price of natural gas in 2019 ($2.63 per MMBtu) versus the average price in 2018 ($3.09 per MMBtu) which caused a lower impact fee payment for each well in 2019.

The number of new wells drilled has also been dropping further reducing revenues.

As required by the fee formula in Act 13, the PUC reduced the drilling impact fee by $5,000 per horizontal unconventional well for the CY 2019 fees.  Read more here.

The distributions for individual municipalities are detailed on the PUC’s Act 13 website.

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 is responsible for implementing the collection and distribution of an unconventional gas well fee (also called an Impact Fee), established by the Unconventional Gas Well Impact Fee Act and signed into law as Act 13 of 2012.

Visit the PUC’s Act 13 website to learn more.

[Posted: June 17, 2020]  PA Environment Digest