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Pennsylvania PUC Unveils Recipients of Oil/NatGas Impact Fee Revenue

The Pennsylvania Public Utility Commission (PUC) has made public the county and municipal recipients of impact fee revenue collected last year from unconventional oil and gas companies, including the amount disbursed to each entity.

The 44-page list is available on the (PUC) website. The more than $224 million that was collected last year came from 6,489 unconventional wells that were under development.

"These dollars are helping local communities all across Pennsylvania meet their critical obligations to their constituents without the need to raise local taxes," said Pennsylvania Gov. Tom Corbett. "With this new revenue, we are making significant investments in conservation and environmental protection projects throughout the commonwealth, including the first infusion of new money into the Growing Greener program since 2002."

Approximately $123 million of 2013 revenue will be distributed to county and municipal governments in over 40 counties that host shale gas activity. Another $82 million will be distributed through the Marcellus Shale Legacy Fund to counties for parks, recreation, greenway trail and bridge improvements, as well as competitive grants awarded to local governments and non-profit organizations for environmental improvement projects.

Another $17 million of 2013 impact fee revenue will go to state and county agencies with responsibility and oversight of natural gas development, including the Department of Environmental Protection, Pennsylvania Emergency Management Agency, the PUC, the Office of the State Fire Commissioner, and the Pennsylvania Fish and Boat Commission.

In early April the PUC said oil and gas companies in the state paid $224.5 million in impact fees last year, representing the most collected since the fee was imposed in 2012 (see Shale Daily,April 4). Including the latest figures, the impact fee, which charges a flat rate for all the wells drilled in the state no matter how much gas is produced, has collected more than $630 million in revenue since its inception (see Shale DailyJune 14, 2013Sept. 12, 2012). The money does not go into the state treasury, but is distributed as described to local governments and state agencies.

The impact fee is included in Act 13 -- the state's omnibus oil and gas legislation -- signed into law by Corbett in 2012 (see Shale DailyFeb. 15, 2012). It is not a production tax, but it effectively collects 2% of the value of all gas sold in the state.

The abundance of low-cost natural gas pouring out of the Marcellus and Utica shales has driven electric and natural gas prices down nearly 40% since 2008, saving the average Pennsylvanian nearly $1,200 annually in lower energy costs, Corbett said. After importing 75% of its natural gas just five years ago, Pennsylvania has become a net exporter of gas for the first time in more than a century.

"Pennsylvania is leading the way toward energy security and independence, while creating new jobs for our citizens and setting the stage for a manufacturing renaissance," Corbett said.

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