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Pennsylvania Impact Fee Payments Mostly Unchanged in 2014

The Pennsylvania Public Utility Commission plans to distribute $123.3 million to county and municipal governments by July 1 as part of the $223.5 million it collected in impact fees last year, it said Wednesday.

State agencies would receive $18 million, while the Marcellus Legacy Fund, established to finance environmental, highway, water and sewer rehabilitation projects, would receive $82.2 million. The top producing counties and leading producer payments changed little from 2013's distributions.

Washington, Bradford and Susquehanna counties are each set to receive the most. Washington County in the southwest part of the state, where 1,176 wells reported impact fee payments, is due $6.5 million, while Bradford and Susquehanna counties in the northeast are due a little more than $6 million each.

Producers are required to submit annual impact fee payments to the PUC by April 1. Each producer self-reports financial liability, making it difficult to assess any increase or decrease in annual collections. In 2013, the state collected $225.7 million from 6,277 eligible horizontal wells (see Shale Daily, June 3).

Last year, producers reported 7,175 eligible wells. Range Resources Corp. again paid the most in impact fees, $28 million, to the state. Chesapeake Energy Corp. paid about $23 million, and EQT Corp. paid $17.4 million, rounding out the top three producer payments.

Cumberland Township in southwest Pennsylvania’s Greene County is scheduled to receive the most of any municipality at slightly more than $918,000. In 2013, both municipalities and counties used most of their distributions to pay for public safety services, with the rest going to infrastructure upgrades, local tax reductions and environmental programs, among other things.

The impact fee is charged for all unconventional wells in the state during their first 15 years in operation, regardless of how much they produce. It is calculated with a multi-year schedule that is based on the average annual price of natural gas. Since the fee was passed into law in 2012, the state has collected nearly $856 million (see Shale Daily, April 4, 2014; Feb. 15, 2012).

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