Steptoe & Johnson PLLC: Pa. PUC Releases Shale Impact Fee Data

By Russell L. Schetroma and Adam Curtis  

The Pennsylvania Public Utility Commission (PUC) released its first report on Monday on the impact fees resulting from the state's new Marcellus shale law, dubbed Act 13. The PUC is the agency in charge of collecting and disseminating the fees. According to the PUC, producers have paid a total of $197 million in fees for spud wells retroactive to December 2011-a better than expected outcome. The agency released its totals one week after the September 3 fee payment due date.

The PUC figures include payments by 58 companies on 419 vertical wells and 4,034 horizontal wells. Other companies delayed their payments due to a dispute over fee assessments with the PUC which would have added an additional $2 million to the total according to an agency spokesman. Per Act 13, only companies that produce a minimum 90,000 cf. of gas per day must pay the fee and smaller companies contend their production does not meet that threshold. The amount of fees collected is expected to fluctuate as the fee is based on the price of natural gas.

The PUC is expected to disseminate the fees to agencies in 37 Pennsylvania counties by early December 2012.

In a statement, Marcellus Shale Coalition President Kathryn Klaber said, "At a time when budget shortfalls are stretching state and local governments to their limits, responsible American natural gas production is helping to support tens of thousands of good jobs and providing enormous, much-needed revenues for critical services."

According to the PUC, a July decision by the Pennsylvania Commonwealth Court striking down portions of Act 13 will not affect the collection of impact fees. The court nullified the sections of the law restricting local zoning, but left the rest of the law intact. An appeal was filed with the Pennsylvania Supreme Court by Governor Tom Corbett's administration almost immediately after the lower court's decision. An argument before the Supreme Court is scheduled for October 17.

Russell L. Schetroma focuses his practice in the areas of energy and oil and gas law. Adam Curtis is a paralegal who focuses his work on State and Local Government Issues, Governmental Affairs and Litigation.

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