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Steptoe & Johnson PLLC: Pennsylvania PUC Issues Order for Unconventional Well Impact Fees

By Russell L. Schetroma and Nathaniel I. Holland 

On May 10, 2012, the Pennsylvania Public Utility Commission ("PUC") issued its final implementation order for Chapter 23 of the Unconventional Gas Well Impact Fee Act (Act 13). The PUC has regulatory authority under Chapters 23 and 33 of Act 13; however the ongoing litigation in the Commonwealth Court over Chapter 33 (providing for restrictions on municipal zoning of oil and gas operations) has caused the PUC to delay the implementation of Chapter 33.

Chapter 23 defines the unconventional gas well fee and the PUC's responsibilities for collection, administration, and distribution of the fees.

The final implementation order covers the following issues (including submitted comments from parties on the prior tentative implementation order dated March 15, 2012):

  • The implementation of fee ordinances by the counties (noting that all counties with unconventional wells had met the deadline)
  • The future implementation of ordinances in counties with no current unconventional wells
  • The calculation of the impact fee
  • Annual adjustments of the fees based on the Consumer Price Index
  • Fee collection timing and procedures
  • Reporting and recordkeeping requirements for producers
  • Payment enforcement mechanisms
  • Fee distribution to counties and local municipalities (60%), and the "Marcellus Legacy Fund" (40%)
  • Local municipality reporting requirements

The full text of the final implementation order and its accompanying attachments (including producer reporting forms and instructions) are available here at the PUC website under "Secretarial Letters and Orders." 

Russell L. Schetroma focuses his practice in the areas of energy and oil and gas law. Nathaniel I. Holland focuses his practice in the areas of oil and gas law, including business transactions and litigation.

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