Municipalities have started spending some of the proceeds from the state's impact fee on natural gas drillers.
Enacted for the first time last year _ at a rate of $50,000 for each horizontal well drilled before 2012 and $10,000 for each vertical well into an unconventional formation (such as Marcellus and Utica) _ the impact fee generated more than $204 million statewide.
According to the revenue distribution formula included in the law authorizing the fee, the state took $23 million off the top for distribution to county conservation districts, the state Fish and Boat Commission, the Public Utilities Commission (charged with administering the law), the state Department of Environmental Protection (which enforces the act), PennDOT, the state Emergency Management Agency, the office of the state Fire Commissioner and the Marcellus Legacy Fund/Natural Gas Energy Development Program.
Of the nearly $181 million remaining, 40 percent (or about $73 million) went to the Marcellus Legacy Fund, which will be used for environmental projects, bridge improvement, water and sewage projects, recreation and refining or processing facilities and hazardous site cleanup.
The remaining 60 percent, or nearly $109 million, went to local governments for the wells within their borders, with 36 percent going to counties with producing wells to remediate the impact of the Marcellus shale industry and 37 percent going to the municipalities hosting the wells.
Of the final 27 percent, the host municipalities and others close to the well got half, and the other half went to all county municipalities, based on their population and miles of roads.
The communities may use the funds in 13 spending categories and must report how they spent it to the Public Utilities Commission and also post the information on their websites.
The categories of permitted spending include road/bridge/infrastructure; water/stormwater and sewer systems; environmental programs; preservation and reclamation of waters and water supplies; tax reductions, including homestead exclusions; safe and affordable housing; records management, geographic information systems and information technology; delivery of social services; judicial services; deposit into reserve fund for future use in one of the spending categories; career and technical centers for training workers for the oil and gas industry; and local or regional planning initiatives.
In Venango County, which had one Marcellus well in Oakland Township subject to the impact fee, the reported spending ranges from $31.25 for Polk Borough to $9,360.63 for Oakland Township.
Of the 22 municipalities, including the county, which have reported their spending to the PUC, seven _ including Allegheny, Canal, Mineral and Victory townships and Cooperstown, Polk, and Rouseville boroughs _ received less than $100. Ten received amounts between $100 and $500 _ including Cherrytree, Cornplanter, Frenchcreek, Irwin, Jackson, Pinegrove, Plum, President, Richland and Sandycreek townships.
At more than $9,000, Oakland Township topped the list followed by the county ($8,825.60), Oilcreek Township ($1,025.72), Cranberry Township ($834.44) and Sugarcreek Borough ($640.27).
The total spending for the 22 municipalities combined in $14,243.08.
Fifteen of the municipalities (68 percent) opted to spend the money on roads, bridges and infrastructure (for a total of $4,558.65), while four decided to place the money in reserve accounts for future spending ($9,560.46 combined).
Rouseville Borough opted to use its $59.89 in the water, sewer and stormwater category, and Frenchcreek Township used its $113 in the social services category (for the Franklin Library).
The form filed by Allegheny Township with the PUC did not indicate how the township plans to spend its $59.12.
The county also received $46,648.46 from the Marcellus Legacy Fund.
The amounts received from the impact fee for Venango County municipalities can be expected to increase for the coming year as three additional horizontal wells _ one Halcon well in Frenchcreek Township and two Chevron Appalachia wells in Richland Township _ are included in the state Department of Environmental Protection's most recent spud report. The wells are not subject to the impact fee until they are drilled (or "spud'').
The 2013 impact fees are to be distributed July 1. The PUC has not yet released the distribution amounts.
The impact fee is a 15-year annual fee on each unconventional well. The fee is established on a sliding scale, with the largest amount paid in the well's first year and stepping down thereafter. The amount of the fee is based on the average price of natural gas for the prior year.
In Clarion County, where 11 unconventional gas wells were subject to the fee, the reported spending ranges from $200 for Richland Township to $157,484.36 for the county, with all but five of the 24 municipalities reporting spending of more than $1,000 and six topping $10,000.
The county tops the list, followed by Porter Township ($50,798.13), Toby Township ($40,541.34), Elk Township ($21,716.26), Limestone Township ($15,503.82) and Redbank Township ($13,245.01).
Like Venango, the majority of those reporting opted to spend the money on roads, bridges and infrastructure (42 percent for total spending of $86,946) or place it in reserve (31 percent for total spending of $212,317.59).
While it devoted $1,629.32 to roads, bridges and infrastructure, New Bethlehem opted to use $5.28 for water, stormwater and sewer systems.
Richland Township spent $200 on emergency preparedness and Toby Township spent about half of what it received from the impact fee ($20,244.26) in that category.
Two municipalities used the funds for environmental programs _ Sligo Borough ($1,213.28) and East Brady Township ($771.17).
According to the DEP's most recent spud report, four additional unconventional wells were drilled in Clarion County in 2012 and will be subject to the fee. The new wells put the county's total number of unconventional wells at 29, according to the spud report.
In Forest County, where three unconventional wells were subject to the fee, nine municipalities (including the county) reported a total of $71,801 in spending.
Three of the municipalities (33 percent) placed the funds (totaling $30,646 combined) in reserve.
Two of the municipalities (22 percent) opted to use the funds for roads, bridges and infrastructure, resulting in $17,028 for those uses.
No use was specified for three of the municipalities that received more than $23,000 combined.
Tionesta Borough spent its $900 on emergency preparedness.
The impact fee money for Forest County will be on the rise, however, as the DEPs spud report shows 12 unconventional wells were drilled in the county in 2012 and another was added in April.
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