A natural gas well in Susquehanna County.
Lindsay Lazarski / WHYY
A natural gas well in Susquehanna County.
Lindsay Lazarski / WHYY
Natural gas companies must pay millions of dollars in outstanding impact fees to the state, following a recent Pennsylvania Supreme Court ruling.
Pennsylvania’s impact fees are collected annually from natural gas drillers — but certain low-producing wells, known as stripper wells, are exempt. In the first year of the life of a well, the impact fees can range from about $40,000 to $60,000, depending on the price of gas. Most of the money goes back to communities where drilling is occurring.
State law defines a stripper well as one that is “incapable of producing more than 90,000 cubic feet of gas per day during any calendar month.”
But there was disagreement on how to define that threshold. Drillers, including gas producer Snyder Brothers Inc. and the Pennsylvania Independent Oil and Gas Association, a trade group, had argued for a more expansive interpretation. But the Supreme Court disagreed, ruling late last month for a narrower definition favored by the Public Utility Commission — meaning more wells must pay the fees.
The PUC now says it’s generating invoices for 17 companies with outstanding balances and expects the payments will amount to millions of dollars.
“We estimate that the recent PA Supreme Court decision will involve hundreds of wells with outstanding Impact Fees totaling millions of dollars,” PUC spokesman Nils Hagen-Frederiksen said in an email. “At this time, we do not have a final total, but those figures will become clearer in the coming weeks.”
PIOGA general counsel Kevin Moody said they will be asking the court to reconsider.
“The PUC’s legal position the Court adopted was not the PUC’s position when it issued its four impact fee implementation orders and its impact fee [notice of proposed rulemaking],” Moody said in an email.
StateImpact Pennsylvania is a collaboration among WITF, WHYY, and the Allegheny Front. Reporters Reid Frazier, Rachel McDevitt and Susan Phillips cover the commonwealth’s energy economy. Read their reports on this site, and hear them on public radio stations across Pennsylvania.
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StateImpact Pennsylvania is a collaboration among WITF, WHYY, and the Allegheny Front. Reporters Reid Frazier, Rachel McDevitt and Susan Phillips cover the commonwealth’s energy economy. Read their reports on this site, and hear them on public radio stations across Pennsylvania.
Climate Solutions, a collaboration of news organizations, educational institutions and a theater company, uses engagement, education and storytelling to help central Pennsylvanians toward climate change literacy, resilience and adaptation. Our work will amplify how people are finding solutions to the challenges presented by a warming world.