Jun 21, 2024 By Mike Jones 4 min read

The amount of Act 13 impact fee money being disbursed to counties and municipalities across Pennsylvania plummeted to its lowest levels since the pandemic as natural gas prices dropped significantly over the past year.

The state Public Utility Commission announced Tuesday that it will allocate $179 million from fees levied on producing natural gas wells for jurisdictions where they’re located, which is down nearly $100 million compared to last year’s allotment.

This year’s disbursement is the lowest since 2020, when $146 million was sent out after production was hampered by the pandemic. However, impact fee revenue had steadily climbed afterwards and hit $278 million in total disbursements last year.

Despite the downturn, Washington County once again led the state in the amount of impact fee money and will receive $5.499 million this year, although that is barely half of the more than $9 million from last year.

Washington County Commission Chairman Nick Sherman said the impact fee disbursements are a double-edged sword because while low natural gas prices are a benefit for consumers, they also are a hit to the county coffers.

“Joe Citizen is very happy about low gas prices,” Sherman said. “When I’m heating my home, I reap those benefits, but when we rely on the proceeds from gas prices, Washington County takes a hit.”

Sherman said natural gas prices fell sharply over the past year, meaning fewer wells are being drilled as producers wait for prices to increase.

“That’s unfortunately the nature of the beast we’re dealing with. This is 100% driven by (natural) gas prices. When gas prices are low, we get less money. It’s that simple,” Sherman said.

The drop also hit Greene County, which will get $3.866 million this year after receiving $6.487 million last year. The drop also affected municipalities, which typically use the money for road projects or to help fund local police departments.

Center Township in Greene County will receive the second most allocation of any municipality in the state with $847,637, with Amwell Township in Washington County fifth with $692,358, followed by Franklin Township in Greene with $672,943, which was the seventh largest allocation of any municipality.

That figure is down quite a bit for Center Township, which received $1.381 million last year. Township Supervisor Harry Gillispie said while the small allocation is significant, township officials expected it due to falling natural gas prices and were able to prepare for the decrease in this year’s budget.

“It is what it is,” Gillispie said. “We expected it to drop. We’ll just continue to use the money the way we’ve been using it for roads, bridges and public safety.”

He said the impact fee money goes into a separate account so the township is not reliant on it with the volatile nature of the industry. The windfall for Center Township in recent years has allowed officials to improve road surfaces, which in turn leads to less maintenance and saves the municipality money in the long run, according to Gillispie.

“It doesn’t hurt,” Gillispie said of the decreased allocation this year. “Would we like to have more? Sure. Who wouldn’t? But it won’t really impact us financially.”

It may have a bigger impact on Fayette County, which saw its allocation nearly cut in half. The county will receive $687,753 this year compared to $1.172 million last year.

Fayette County Commission Dave Lohr noted that the impact fee money is used to fund the county’s 911 operations, so less revenue means fewer additional public safety projects will get funded this year.

“It’s definitely always a concern,” Lohr said. “We’ve designated that money for our 911 system and things of that nature. That ($687,753 allocation this year) is the right amount we need all the time for 911. Dropping as far as it does, it does take other projects out of the mix because we need to keep that 911 system strong. So we do pay attention to that.”

2023 Act 13 Impact Fee Disbursements

Statewide – $179 million

Washington – $5.499 million

Greene – $3.866 million

Fayette – $687,753