Gas impact fees generate $146M for Pennsylvania counties, municipalities

Jun. 15—Lower natural gas prices and other factors mean some Pennsylvania counties and municipalities are in line for their smallest gas impact fee disbursements in the decade since the program began, the state Public Utility Commission said Monday.

In all, the state and its county and municipal governments will share in almost $146.3 million in 2020 impact fees, the PUC announced.

As it typically does, Susquehanna County will receive the most among Northeast Pennsylvania counties — slightly more than $4 million — which also ranks it second in the state behind Washington County in southwest Pennsylvania.

The money comes from a fee, authorized by Act 13 of 2012, collected by the PUC from gas producers. It has generated more than $2 billion since then.

This year's overall distribution is about $54 million lower than in 2019, which the PUC attributed primarily to lower natural gas prices, along with the fewest number of new wells since the passage of Act 13.

The biggest share of the 2020 impact fees, $71.5 million, will go to county and municipal governments directly affected by drilling, based in part on the number of wells they have.

Another $51 million will be transferred to the Marcellus Legacy Fund, which provides support for environmental, highway, water and sewer, greenway rehabilitation and other projects in all 67 counties. The final piece, amounting to $23.7 million, will be distributed to state agencies.

In Northeast Pennsylvania, only Susquehanna and Wyoming counties host wells subject to the fee.

In addition to the $4 million Susquehanna County will receive, three of its townships are due municipal disbursements that rank among the top seven in the state: Auburn Twp., $660,581; New Milford Twp., $646,461, and Springville Twp., $511,142.

Wyoming County's 2020 share will be $822,431, down from more than $1 million last year, according to the PUC.

Richard Wilbur, who heads the Wyoming County Board of Commissioners, said the county has always treated the disbursement as "extra money" to fund necessary projects outside its regular budget.

For example, it used about $800,000 over two years to do GIS mapping for its 911 system — a "huge project that never would have happened if not for Act 13 money," he said.

At the same time, it has set aside some of the money to help build up a $1.7 million fund balance, which he anticipates the commissioners will add to this year, as a hedge against the possible loss of Act 13 funds down the road.

"We all agree we need to be as frugal as we can and spend for the things that we need to spend for and try to save where we can for the future," Wilbur said.

Disbursements for other area counties include: Lackawanna, $122,855; Luzerne, $185,985; Monroe, $99,767; Pike, $32,700, and Wayne, $30,094.

Natural gas prices declined last year as a result of reduced demand due to a mild winter and the impacts of the COVID-19 pandemic, the American Petroleum Institute Pennsylvania said, citing the state's Independent Fiscal Office. Nationwide, natural gas consumption dropped 2% in 2020, the first decline since 2009.

"Like many industries, the energy sector was not immune to the economic impacts of the pandemic," API PA Executive Director Stephanie Catarino Wissman said in a statement.

Despite those difficult market conditions, Wissman said the state's abundant supply of natural gas presents an opportunity to continue using the impact fees for infrastructure and environmental programs throughout the commonwealth.

"Combining the billions in impact tax revenue with the billions in other business taxes and investments made by the industry, natural gas development is providing tremendous benefits to communities across the state, even in areas without drilling activity, and boosting our economy," she said.

David Callahan, president of the Marcellus Shale Coalition, said while the industry was impacted by economic effects of the pandemic, responsible natural gas development continues to be beneficial to Pennsylvania communities and families.

The PUC announcement "should serve as yet another a reminder to policymakers that the natural gas industry's role in creating broad-based economic, environmental and national security benefits is essential and that our current tax framework is the right choice for the commonwealth," Callahan said.

Contact the writer: dsingleton@timesshamrock.com, 570-348-9132