Impact fee money dips, but still benefiting region

June 16, 2016

Suppression of natural gas prices and a decline in Marcellus Shale drilling led to a commensurate drop in impact fee revenue distributed to Pennsylvania counties and municipalities. But the payments are still having a significant effect in Washington and Greene counties.

Pennsylvania’s Public Utility Commission posted 2015 figures on its website Wednesday, showing revenue fell to $188 million statewide, the lowest annual total since the fee was enacted in 2012 under Act 13. The $36 million dropoff – 16 percent – from 2014 was the second consecutive annual decline.

The impact fee, which is paid by drillers, is intended to help municipalities most impacted by natural gas drilling in the state’s Marcellus Shale fairway.

The allocation for Washington County is about $800,000 lower than it was in 2014, but for the second year in a row, it is the top recipient among the state’s 67 counties. The county will receive a $5.688,943.

That isn’t the only local body to top an impact fee list. Morris Township, in Greene County, will get the largest allocation of all municipalities in the state – $847,828.Greene, in fact, has four of Pennsylvania’s top seven municipal recipients. The townships of Cumberland ($711,975), Center ($677,343) and Morgan ($635,460) rank fourth, fifth and seventh respectively.

The money is divided among the counties and the municipalities in them based on a formula that includes the amount of drilling activity.

PUC spokesman Nils Hagen-Frederiksen said checks will be mailed “in the very near future,” probably before July 1.

Amwell will receive the largest outlay among Washington County communities – $633,828. Township Supervisor Wayne Montgomery considers the annual allocation “a godsend.”

“We’ve been able to do things at the park, on roads, with fire departments, stuff like that,” he said. “If we didn’t have the money, we wouldn’t be able to do all of this.”

Chartiers Township is the runner-up among Washington County municipalities with $503,086. Rounding out the top five are the townships of Hopewell ($491,663), Cross Creek ($473,079) and Morris ($418,427).

Washington County municipalities will get about $10.2 million in impact revenue, which, combined with the $5.7 million county outlay, means about $15.9 million in impact fees is headed here.

Greene County will receive $3,910,337 in fees, its municipalities about $6.6 million for a total of about $10.5 million. Franklin and Washington townships tied for fifth-highest disbursements in Greene at $518,200.

Overall, the PUC will distribute $187,711,700 in impact fees this year. It has collected and allocated more than $1 billion in five years.

Range Resources, according to the PUC, was the top producer for 2015 payments with $23,902,800. EQT was second ($16.4 million) and Chesapeake Appalachia a close third ($16.3 million).

Washington County was listed as having the most unconventional shale wells (1,327), followed by Susquehanna (1,239), Bradford (1,213) and Greene (985).

Despite the dip in distributions, impact fees continue to be roundly celebrated throughout much of Pennsylvania. Larry Maggi, chairman of the Washington County commissioners, is an advocate.

He said Thursday morning he didn’t know much about this year’s outlays, other than “Amwell got one of the biggest slices of the pie.” But he said bridges have been a major beneficiary across the county.

“We’ve done bridges the last couple of years, bridges that have been in really bad shape,” Maggi said. “Some had been closed for years, and we didn’t have to wait for (the state Department of Transportation,) didn’t have to wait for when money was available.”

David Spigelmyer likewise touted the fee setup. He is president of the Marcellus Shale Coalition, an industry trade group representing drillers and their supply chain partners.

“What we continue to hear from local leaders is that Pennsylvania’s unique tax on natural gas ... is an essential revenue source that’s helping to improve communities and the environment throughout the commonwealth,” he said in a prepared statement.

“These critical revenues are sent directly to local governments, which allows those closest to the development to invest in infrastructure improvements and community programs. It cannot be lost on anyone that Pennsylvania’s model is working as designed and these positive community and environment benefits are absolutely jeopardized by proposals for even higher energy taxes.”

Staff writer Barbara Miller contributed to this report.

Rick Shrum joined the Observer-Reporter as a reporter in 2012, after serving as a section editor, sports reporter and copy editor at the Pittsburgh Post-Gazette. Rick has won seven individual writing awards, including two Golden Quills.

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