Gas well fees making impact on Sewickley, South Huntingdon townships
Officials in Sewickley and South Huntingdon townships say they have not yet decided how they will spend, or if they will spend, the more than $215,000 in Marcellus shale gas well impact fees that each of those two municipalities will get from the state.
Among municipalities in the region, Sewickley and South Huntingdon – which had more natural gas wells than other communities – received the most money from the fees levied on natural gas producers under the Unconventional Gas Well Impact Fee Act.
Sewickley Township will receive $237,789 for 2012 for 32 wells that are eligible for the Marcellus shale gas well impact fee, while South Huntingdon will receive $218,321 for the 29 eligible wells, according to the Pennsylvania Public Utilities Commission, which collects and distributes the money. The PUC announced the distribution of the shale gas well impact fees earlier this month.
“We haven't even spent last year's” allocation of $141,256, said Sewickley Township Supervisor Wanda Layman.
Sewickley's allocation for 2012 represents about 15 percent of the township's $1.56 million budget for 2013. Sewickley's allocation for 2012 is up about 68 percent from the township's 2011 allocation. It's an unexpected windfall for Sewickley, which had conservatively projected in its 2013 budget that it would receive only $112,000.
South Huntingdon Supervisor Eddie Troup said no decision has been made on how to spend the $218,321, which is about 15 percent of the township's $1.45 million budget for this year. Supervisor Scott Painter suggested setting aside $50,000 for emergencies.
The township's allocation for 2012 fell by 19 percent from South Huntingdon's impact fee of $260,114.
The local governments can spend the shale gas well impact fees on various expenses related to natural gas development, according to the Pennsylvania PUC. Those expenses include road, bridge and other public infrastructure; stormwater and sewer line construction and repair; emergency response preparedness, training and equipment; preservation and reclamation of surface and subsurface water supplies; job training and projects which increase the availability of affordable housing to low-income residents.
The PUC anticipates mailing the checks to the municipalities this week.
The natural gas producers operating within the state pay the Marcellus shale impact fees, which is based on the number of the producer's natural gas wells with an output of more than 90,000 cubic feet per day. The fee per gas well is based on the average annual price of natural gas, as determined by the New York Mercantile Exchange's closing price on the last day of each month.
Under the formula, a municipality receives money for the number of wells drilled within its borders, the number of wells that are in an adjacent municipality or within a five mile radius, based on population and highway miles. The municipalities also receive an allocated amount based on the number of wells within their county.
Thus, West Newton, with no natural gas wells, is able to receive $6,429 in impact fees for 2012, down from $7,135 for 2011.
West Newton used its 2011 allocation for construction, maintenance and repair of roads and infrastructure, according to a report filed by the borough with the PUC.
Pam Humenik, borough secretary, said the council has not yet received the money and has not decided what it will do with it.
Madison Borough received the least amount among the area's municipalities, just $689 for 2012, which was less than the $765 for 2011.
Madison deposited its 'windfall' into the borough's general fund.
Westmoreland County will receive $1,577,394 in Marcellus shale impact fees for 2012, down from the $1,721,907 it received for 2011. It received the seventh highest total among counties in the state, as the number of eligible wells rose to 193, from 160 wells in 2011, the PUC said.
As for the state, it said it collected more than $202.4 million this year under the Unconventional Gas Well Impact Fee Act, thus raising the two-year total to $406 million, according to the Pennsylvania PUC. Statewide, the counties and municipalities affected by drilling received $102.7 million.
The state put $71.7 million into the Marcellus Legacy Fund, which was established to fund environmental, highway, water and sewer projects, rehabilitation of greenways and other projects throughout the state.
Joe Napsha is a staff writer for Trib Total Media. He can be reached at email@example.com or 724-836-5252.