A Pennsylvania judge ruled that the state Public Utility Commission (PUC) had no authority to review local drilling ordinances for compliance with Act 13, a decision that could force the agency to release nearly $1 million in impact fee revenue withheld for noncompliance.

Commonwealth Court Senior Judge Keith Quigley issued a cease and desist order against the PUC from acting upon requests pursuant to Section 3305 of the state's Oil and Gas Act. That provision empowers the PUC to issue advisory opinions on whether local ordinances comply with Act 13 and the Pennsylvania Municipalities Planning Code (MPC), a statute from 1968.

Quigley said the court's ruling on July 26, which found portions of Act 13 unconstitutional (see Shale Daily, July 27), had permanently enjoined the state from enforcing Section 3304 of the Oil and Gas Act, which addresses the uniformity of local ordinances.

"Section 3305 is a provision enforcing Section 3304 as it grants the PUC authority to review proposed local ordinances at the request of municipalities and to issue orders after review of local ordinances at the request of the aggrieved parties," Quigley said in a two-page opinion issued Friday. "The language of the court's July 26 order does not distinguish between the basis for the PUC's review...Section 3305 is a vehicle by which Section 3304 is enforced."

Rep. Jesse White (D-Cecil), an opponent of Act 13 who also blasted the PUC for withholding impact fee revenue from four townships challenging the law (see Shale Daily, Oct. 17), praised Quigley's ruling.

"This is another win in what's becoming a long string of victories for the side of local communities as related to Act 13," White said. "Instead of fighting and attacking local governments at every turn, supposed industry leaders like Range Resources and the Corbett administration should attempt to work with us. Or, at the very least, they should realize that our local towns won't back down and won't tolerate the intimidation designed to divide and conquer our communities."

White's district includes Cecil, Mount Pleasant and Robinson townships in Washington County, and part of South Fayette Township in Allegheny County. All are plaintiffs in the legal challenge to Act 13, Pennsylvania's new omnibus Marcellus Shale law. The case is now before the state Supreme Court (see Shale Daily, Oct. 18; July 27; April 2).

"The PUC's move was nothing more than a nod to Gov. Corbett and the gas industry's attempt to divide and conquer," White said. "Fortunately, and thanks to the rule of law, it didn't work. If the gas industry really wants to work together and formulate a reasonable way to develop Marcellus Shale, the people driving the policy and public relations need to realize that their default solution of attacking anyone who doesn't agree with them is failing miserably.

"We're tired of the games, the tactics, the double-talk, the lies and the attacks. It has to end if we want this industry to succeed long term in Pennsylvania."

The PUC's headquarters in Harrisburg were closed Tuesday as a result of Hurricane Sandy, but spokeswoman Jennifer Kocher told NGI's Shale Daily that "the order, its implications and any further PUC action or appeal are under review at this time."

Last week the PUC removed a list from its website detailing how $108.7 million in impact fee revenue would be distributed (see Shale Daily, Oct. 29). The agency had announced Oct. 15 that counties with producing unconventional wells would receive $38.2 million, municipalities with producing unconventional wells would receive $39.3 million and municipalities that are contiguous or within five linear miles of municipalities with producing wells would receive $28.7 million (see Shale Daily, Oct. 16).

Since the PUC's announcement on Oct. 15, officials in Lycoming County and the City of Williamsport have been trying to determine how the city was shorted more than a quarter million dollars in impact fee revenue. Meanwhile, Washington County's Mount Pleasant Township, another locality that sued the state over Act 13, signaled that it was willing to change its local drilling ordinance so it can collect more than a half million in impact fee revenue (see Shale Daily, Oct. 24).