Thursday, June 28, 2018

IFO Projects Increase In Drilling Impact Fee Revenue In 2018 Under Current Conditions

The Independent Fiscal Office Thursday reported revenue from the Act 13 drilling impact fee could increase another $14.5 million to $224 million in 2018, if natural gas prices and the number of wells remain about the same.
That would put revenues just over the record of $223.5 million set in 2013.  Fee revenue this year was $209.5 million.
However, if natural gas prices drop, fee revenue could go down by $30.4 million.
What neither estimate accounts for is an adverse decision from the PA Supreme Court which allows well operators to avoid paying the fee if they take wells out of service or reduce production for one month a year so a gas well can be classified as a stripper well.
The Public Utility Commission appealed an adverse decision on the issue by Commonwealth Court to the PA Supreme Court in April 2017.  No decision has yet been issued.
In 2017, the PUC estimated impact fee revenue would have been reduced by $16 million.
Legislation has also been introduced-- House Bill 1283 (Snyder-D-Fayette)-- to clarify this issue in law, but no action has been taken.
Click Here for a copy of the IFO impact fee report.

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