Ruling requires drillers to pay millions in outstanding impact fees
Pennsylvania蘑菇视频 Public Utility Commission is preparing invoices for 18 natural gas production companies to pay millions of dollars in impact fees they owe on low-producing wells from recent years.
The case applies to 483 wells in 23 counties, according to a list supplied Friday by the PUC. Nearly one-fourth of these wells are in Greene (61) and Washington (52). Five are in Westmoreland, four in Fayette and four in Allegheny.
This action was prompted by a state Supreme Court decision Dec. 28 on so-called 鈥渟tripper wells,鈥� which, according to state law, are 鈥渋ncapable of producing more than 90,000 cubic feet of gas per day during any calendar month.鈥� These wells are exempt from impact fees. But there was disagreement on what that term actually entails, and some drillers maintained that certain lower-producing sites qualified as stripper wells and did not pay impact fees on them.
The high court determined last week only wells that fall under 90,000 cf in every month of a year are stripper wells. That ended a legal debate in which the Pennsylvania Independent Oil and Gas Association, a trade group, and gas producer Snyder Brothers Inc. argued the exemption, as stated in the law, was more expansive.
Producers in Pennsylvania are assessed annual fees, with most of the money going to municipalities where drilling occurs. Some of those funds will be heading to towns in Washington and Greene counties. A list of specific municipalities affected, however, was not available Friday afternoon, according to PUC spokesman David Hixson.
The commission did list the 18 affected producers, which include Chesapeake Appalachia, EQT Production, Range Resources Appalachia and Rice Drilling B. The others: Alpha Shale Resources, ARD Operating, BLX Inc., Chief Oil & Gas, EOG Resources, MDS Energy Development, Pin Oak Energy Partners, RE Gas Development, Redmill Drilling, Snyder Brothers Inc., SWN Production Co., Vantage Energy Appalachia, XTO Energy Inc. and Xtreme Energy Co.
Although a large percentage of the disputed wells are or were in Greene and Washington counties, Armstrong County had the most of any county, 98. Butler (82) was second, followed by Greene, Bradford (59) and Washington.
PIOGA general counsel Kevin Moody said in a statement following the decision: 鈥淲e are extremely disappointed that the majority ignored the unrebutted evidence of the PUC蘑菇视频 consistent interpretation of the word 鈥榓ny鈥� to mean 鈥榦ne鈥� and instead agreed with the PUC that the meaning of the word in this context is ambiguous.鈥�
Moody said the group plans to ask the Supreme Court to reconsider.