On March 7, the PA Supreme Court issued an order turning down the request of the PA Independent Oil and Gas Association to reconsider its December 28 decision in favor of the Public Utility Commission in a case involving the definition of a stripper well for the purposes of paying the Act 13 unconventional well impact fee.
At stake in this case was about $22.3 million in Act 13 fee revenue, or about 10 percent of the revenue collected by the PUC.
The Court, however, granted the reconsideration motion of the drilling company involved-- Snyder Brothers, Inc.-- and remanded that portion of the case to Commonwealth Court to reconsider the constitutionality of mandatory interest and penalties on those who do not pay Act 13 fees.
Under Act 13, so-called stripper wells were provided an exemption from the impact fee. Snyder Brothers, Inc. said a number of their wells were stripper wells and not subject to the fee. The PA Supreme Court’s decision in December said otherwise.
The dispute was over whether an impact fee would be assessed whenever a vertical well’s production exceeds an average of 90,000 cubic feet of natural gas per day for even one month of the year, or whether the well must exceed this production threshold in every month of the year for the fee to be imposed, as the Snyder Brothers contend.
The PUC consistently held that a well is not a stripper well and is subject to the impact fee if it exceeds the minimum production levels in one calendar month in a year, but Commonwealth Court held otherwise saying wells had to pay the impact fee only if a well exceeds the minimum production levels in every month in a year.
The PA Supreme Court agreed with the PUC’s interpretation.
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