The Public Utility Commission published notice in the January 30 PA Bulletin of the Act 13 drilling impact fees to be applied to unconventional shale gas wells existing during calendar year 2020.  As a result, there will be an estimated loss of about $56 million in revenue to a record low of $145 million. Read more here.

Since 2018, revenue from the Act 13 drilling impact fee has dropped by $106.981 million -- by over 42.4 percent

The basic fee per well will drop by approximately $5,200 from $45,700 in 2019 to $40,500 in 2020 for first year wells.  The fee is dropping because of a formula in law that calculates the fee based in part on the average price of natural gas.

In calculating the fee for calendar year 2019, the PUC used an average price of $2.628 and for 2020 the average price was $2.077.

As a result of this shortfall, communities and state agencies that normally fund projects from the Act 13 fee revenue will take a significant hit.

Earlier in January, the Independent Fiscal Office estimated these reductions would amount to--

-- Counties, Municipalities & Housing: from $109.180 million to $75.872 million - $33.3 million

-- Marcellus Legacy Fund: from $72.787 million to $50.581 million-- $22.2 million

Funding for county conservation districts and state agencies will remain the same.

For information on past distributions of Act 13 drilling impact fee revenue, visit the PUC’s Act 13 Impact Fee webpage.

NewsClips:

Laura Legere: Pain Of Natural Gas Price Drop Spreads To Communities,  PA Agencies As Act 13 Drilling Fee Revenue Falls By $56 Million

Rachel McDevitt: Act 13 Drilling Impact Fees Expected To Drop By More Than $50 Million To Low Natural Gas Prices

Related Article:

-- IFO: Act 13 Drilling Impact Fee 2020 Revenue To Drop By Over 55.5 Million; Dropped By Over 42% In Just 2 Years

[Posted: January 29, 2021]

2/1/2021