Pennsylvania suspended a Texas energy company’s license to operate two Somerset County gas wells because it has failed to pay almost $95,000 in impact fees and related costs for 2014, 2015 and 2016.
The state Department of Environmental Protection on Wednesday ordered Xtreme Energy Co. of Victoria to cease operations immediately on its two wells — Hillegas and Menhorn — located south of Somerset in Brothers Valley Township. The suspension will remain in effect until the impact fees and penalties are paid, the state said.
This is the first time the department ordered a gas well owner to cease operations over not paying the impact fees, said Lauren Fraley, a spokeswoman for the DEP in Pittsburgh. The state distributed almost $252 million in impact fees in 2018, according to the Pennsylvania Public Utility Commission, which collects the fees.
The impact fees, distributed to state, local and county governments, are determined on a multi-year fee schedule based on the average price of natural gas, according to state Act 13 which authorized the fees.
“They (municipalities) rely on those fees,” Fraley said.
The PUC recommended to DEP on Sept. 10 that it withdraw Xtreme Energy’s permit to operate those two wells. The PUC’s enforcement and investigation bureau had investigated the matter, dating back to April 2017.
Xtreme Energy had agreed in a May 2019 settlement with the PUC to pay $94,684 by July 17. Xtreme did not pay the fees nor did it appeal a June 17 order requiring the payment, the PUC said.
Mike Hahn of Xtreme Energy, who offered rebuttal testimony in defense of Xtreme Energy’s failure to pay the impact fees, could not be reached for comment on Wednesday.
Xtreme Energy contended in 2017 it was not obligated to pay the fees before 2016, due to a change in ownership, and that the fee should not be applied to one well in the initial complaint. The PUC countered in 2018 by claiming Xtreme Energy owed $161,000, when interest and penalties were computed.
A supervisor for Brothers Valley Township could not be reached for comment Wednesday.