Steptoe & Johnson PLLC: Pa. PUC Decides Local Ordinance Violates Act 13

Steptoe & Johnson PLLC: Pa. PUC Decides Local Ordinance Violates Act 13

[Recently], the Pennsylvania Public Utility Commission (PUC) ruled that the South Fayette Township's ordinance governing oil and gas well development and processing violates provisions of Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes (Act 13), Pennsylvania's primary law regulating oil and gas operations.

The PUC found that South Fayette's Ordinance violates the Act's provisions on preemption of local regulation under Sections 3302 and 3303. As a result, the Township will forfeit their ability to receive funds collected from impact fees until the Ordinance is amended or repealed. The Township has until November 28 to comply - days before the December 1 deadline for impact fee funds. It stands to lose nearly $3,000 if no action is taken or the order is affirmed on appeal.

The PUC's decision comes months after a Township resident and gas lessor filed multiple complaints with the PUC purporting that he was adversely affected by the Township's Ordinance. He claimed that the Ordinance established standards for water withdrawal, environmental impact analysis, and waste disposal, among others, that conflict with regulations already set forth by the Pennsylvania Department of Environmental Protection. The PUC sided with the resident,ruling that the provisions violate the Act 13 preemption of local regulation.

The Commonwealth Court's recent decision in Robinson Twp. v. Com., No. 284 M.D. 2012, __ A.3d ___ (Pa. Commw. Ct. July 26, 2012) [enhanced version available to subscribers], which is on appeal to the Pennsylvania Supreme Court, invalidated Act 13's uniformity requirements for local ordinances under Section 3304 of Act, but expressly left Sections 3302 and 3303 intact.

[The Oct. 18] decision marks the first time that the PUC has held that a local ordinance violated Act 13. Any municipality or individual property owner may petition the PUC to review the legality of a local drilling ordinance. The decision must be made no more than 120 days after submission and can be appealed to the Pennsylvania Commonwealth Court.  

Russell L. Schetroma focuses his practice in the areas of energy and oil and gas law. Nathaniel I. Holland focuses his practice in the area of energy transactional law.

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