Pennsylvania’s Gas Impact Fee Distribution Rose by $100 Million in 2021

The Pennsylvania Public Utility Commission on June 17 published complete details of their $234 million impact fees spendings in 2021 on natural gas producers. Till date, the commission has distributed $2.2 billion impact fees to Pennsylvania communities including this year’s distribution.

The impact fee, also known as unconventional gas well fee, is paid by all producers with spud wells in the Commonwealth as mandated in the law Act 13 passed in 2012. The commission is responsible for the collection and distribution of the fee for the purpose of covering the statewide impacts of drilling.

The $234 million amount has been divided among different domains as follows:

• $123 million will be given to county and municipal governments which were directly impacted by drilling activities.
• $86 million will be provided for building highway, water, sewer and environmental projects throughout the state via Marcellus Legacy Fund
• $25 million will be distributed among the agencies as per Act 13 specifications.

The commission has directed the Department of Treasury to distribute the payments by early July 2022.

Approximately 85 percent increase in gas price as compared to last year allowed the commission to improve its impact fees distribution that is $100 million higher as compared to last year. The average natural gas price in 2020 was $2.08 per MMBTU which rose to $3.84 per MMBTU in 2021.  Moreover, 518 new wells were also drilled during the year 2021.

Pennsylvania Public Utility Commission is the sole entity responsible for the fair execution of collection and distribution of impact fees. All relevant information regarding the impact fees disbursement since 2011 can be accessed online on Pennsylvania Utility Commission Act 13 website. The details include all statistics of distribution to individual municipalities and counties along with wells eligibility criteria for each county and payments by each producer.