Communities that are accustomed to receiving big checks from Marcellus Shale wells through the state’s natural gas impact fee will receive less this year because of lower gas prices and fewer wells being drilled, the state said.
Municipalities typically use the money for road repairs and maintenance, emergency services and big-ticket purchases.
For Sewickley Township, the $92,966 it received from last year’s production is about $65,000 less than what it will receive from production in 2022. The money is typically used to repair roads and buy anti-skid compounds and salt for winter maintenance, said Supervisor Chairman Mark Petros.
“Every little bit helps. It helps the taxpayers,” Petros said.
The Pennsylvania Public Utilities Commission announced this week that it has collected $179.6 million in Act 13 gas well impact fees levied on production in 2023, about $100 million less than it received in 2022. Since the state implemented the fee on producers of unconventional wells (wells drilled into the Marcellus Shale formation), the commission said it has distributed more than $2.7 billion since 2012.
The decline in revenue collected from impact fees is due to natural gas prices falling from $664 per million Btu in 2022 to $274 in 2023. Just 423 new wells were drilled in the state last year. Impact fees are also based on the number of wells drilled and the age of the wells.
All counties receive a percentage of the revenue from the gas impact fee, but counties and municipalities where drilling occurs receive more revenue to compensate for wear and tear on roads and infrastructure used by trucks involved in drilling operations.
According to the Marcellus Shale Coalition, a Pittsburgh-area industry group, lower natural gas prices from production could save Pennsylvanians more than $1.8 billion in energy costs in 2023 compared to 2022. The shale coalition said the lower electricity rates are directly related to increased use of natural gas for electricity generation.
Hempfield Mayor Aaron Sicco said the town plans to use the $161,961 it will receive for emergency services, repairs and equipment for the fire department.
Sicco said the town used funds from its 2022 budget – about $61,000 more than it will receive in 2023 – on exhaust fans and a fire engine at the North Hempfield Fire Station.
Hempfield expected its gas well impact fees to go down after discussions with state regulators. As a result, Sicco said Hempfield is planning to make “significantly less” this year than last.
Washington Township, which will receive $170,071, will put the money into its capital improvement fund for road repairs, said township Supervisor Joseph Olszewski.
Delhi Township Taken One big strike and One $123,3900 Decreased in the allocation, Sharp drop To $179,370.
The town is using the funds to purchase equipment and repair roads, Superintendent Don Kepple said.
“It helped,” Kepple said.
The county will receive about $1.1 million in this year’s distribution, about $72,000 less than last year.
County Commissioner Shawn Kertesz said the majority of the funding — about $800,000 — will be used to support the county’s Department of Public Safety’s 911 operations, including communications towers and other facilities.
Checks to counties and municipalities are expected to be mailed in mid-July, according to the PUC.
Joe Napsha is a Triblive reporter covering the Irwin, North Huntingdon and Norwin school districts. He also writes about business issues. He grew up on Neville Island and has worked for Triblive since the early 1980s. He can be reached at jnapsha@triblive.com.
