Natural-gas firms have paid nearly $200 million under Act 13

Posted: September 12, 2012

Natural-gas companies have paid nearly $200 million to Pennsylvania's Public Utility Commission to meet the requirements of the impact fee imposed by Act 13.

The PUC released the numbers Monday, 10 days after the deadline for companies to send checks.

When the legislation was being debated, lawmakers came up with an initial estimate of $180 million in revenue. The current tally, however, shows $205.9 million owed and $197.6 million paid.

Some companies are disputing the amount they owe; others have not responded to letters and reminders from the commission, PUC spokeswoman Jennifer Kocher said.

The Marcellus Shale Coalition, an industry group, termed the amount "staggering by any measure."

"At a time when budget shortfalls are stretching state and local governments to their limits, responsible American natural-gas production is helping to support tens of thousands of good jobs and providing enormous, much-needed revenues for critical services," said Kathryn Klaber, coalition president.

Nevertheless, she said, the amount "serves as a stark reminder that we must ensure that we have commonsense policies in place, especially local zoning uniformity, at the center of Act 13, which encourage economic growth, job creation, and additional revenue."

George Jugovic Jr., president and CEO of the environmental group Citizens for Pennsylvania's Future, said the roughly $200 million "doesn't look like that much" if all of the potential impacts of gas drilling are taken into account.

Considering an estimated $3 million to $8 million per mile to build a two-lane rural road, he said, the amount "doesn't seem to be such a large pot from which to draw money to compensate for impacts of the industry."

"Of course, that assumes that the real intent of the fee was to address many of the impacts, and I don't think that was the real intent," Jugovic said. "The end game was a political compromise."

Statewide, 4,034 horizontal wells and 419 vertical wells fell under the Act 13 provisions, signed into law Feb. 14.

The fee is based on the number of wells drilled, the types of wells, and how much they produced. The PUC will distribute the money to counties and municipalities, with additional money going for statewide projects.

The PUC did not release a tally of how much each county will get. But Doug McLinko, chairman of the Bradford County commissioners, said he expected about $12 million for local coffers.

Of that, McLinko said, the county likely will get about $8 million, amounting to 14 percent of its annual $57 million budget. The commissioners expect to use it to pay off the county's debt and reduce property taxes by perhaps 6 percent per taxpayer.

Any funds left will help create jobs "to someday cut more taxes," he said, adding that natural gas has been "a boon to the county."

Bradford is the most-drilled county in the state, McLinko said, with 962 wells - basically every well drilled since 2008 - subject to Act 13 provisions. That amounts to nearly one well per square mile.

Companies paying the largest sums to the PUC are: Chesapeake Appalachia, $30,840,000; Talisman Energy USA Inc., $26,440,000; and Range Resources Appalachia L.L.C., $23,670,000.

Among the companies that have not responded is Carrizo (Marcellus) L.L.C., which the PUC lists as owing $3,050,000.

Contact Sandy Bauers at 215-854-5147,, or follow on Twitter @sbauers.

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