What Happens Now That Pennsylvania Legislators Have Passed An Impact Fee

February 8, 2012 | 3:58 PM

By Scott Detrow

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Pennsylvania’s House has passed a Mar­cel­lus Shale impact fee on a 101–90 vote.

Now that the leg­is­la­tion is on its way to Gov­er­nor Corbett’s desk, what hap­pens next? Here are some key mile­stones to look for.

Once Cor­bett signs the bill into law, coun­ties host­ing nat­ural gas wells will have 60 days to pass an ordi­nance autho­riz­ing an impact fee within their bor­ders. If a county’s com­mis­sion­ers don’t want a levy, they sim­ply won’t hold a vote on the matter.

After the ini­tial 60-day win­dow ends, munic­i­pal­i­ties will have a chance to over­ride any county com­mis­sion­ers who opt out of the impact fee.  If a town­ship or bor­ough wants a fee, it will need to pass a res­o­lu­tion read­ing, “The (insert name) in the county of (insert name) hereby resolves to have the county impose an uncon­ven­tional gas well fee on each uncon­ven­tional gas well spud in the county.” If more than half of a county’s munic­i­pal­i­ties do this within 60 days, the county’s fee will be enacted. The fee will also go into effect if coun­ties rep­re­sent­ing more than 50 per­cent of the county’s total pop­u­la­tion pass the resolution.

Sep­tem­ber 1, 2012: The due date for retroac­tive 2011 fees. Sen­ate Repub­li­can lead­ers esti­mate the fee will gen­er­ate around $180 mil­lion, if every drilling county opts into the levy.

Jan­u­ary 1, 2013: The bill requires nat­ural gas drillers to post the chem­i­cals they use dur­ing hydraulic frac­tur­ing on FracFocus.org. (This is some­thing Mar­cel­lus Shale Coali­tion mem­bers have already begun doing on a vol­un­tary basis.) Next Jan­u­ary, the Depart­ment of Envi­ron­men­tal Pro­tec­tion will eval­u­ate the web site, and deter­mine whether it’s pro­vid­ing enough well-by-well chem­i­cal infor­ma­tion. If not, DEP may begin host­ing the data on its web­site. (The impact fee marks a major improve­ment in Pennsylvania’s frack­ing dis­clo­sure reg­u­la­tions. Until now, com­pa­nies have been required to report chem­i­cals to the state, but the infor­ma­tion has remained private.)

Jan­u­ary 31, 2013: The Pub­lic Util­ity Com­mis­sion will set 2012 fee rates. Per-well fees are based on a slid­ing scale. The PUC will set a rate based on two fac­tors: changes in the Con­sumer Price Index, and 2012 nat­ural gas rates.  Nat­ural gas prices fluc­tu­ate on a daily basis, so the com­mis­sion will arrive at the rate by tak­ing the New York Mer­can­tile Exchange’s nat­ural gas price from the last day of every month, and aver­ag­ing the 12 totals out.

April 1, 2013: 2012 fees are due. Leg­isla­tive lead­ers esti­mate the sec­ond fee pay­ment will gen­er­ate about $211 million.