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Beaver County Receives $495,000 in Natural Gas Impact Fees

Infrastructure projects in Beaver County funded by natural gas impact fees.

News Summary

Beaver County will receive over $495,000 in impact fees from the natural gas industry as part of a larger statewide fund exceeding $2.88 billion. This funding, announced by State Representative Roman Kozak, is aimed at supporting local infrastructure projects. Additionally, municipalities in the 14th Legislative District will benefit from an extra $366,000. Although the total impact fee revenue for 2024 will be $164.6 million, it’s a slight decline compared to previous years due to fewer new natural gas wells being drilled.

Pennsylvania – Beaver County will receive more than $495,000 in impact fees from the natural gas industry, according to an announcement from State Representative Roman Kozak. This funding is part of a larger distribution where statewide impact fees have exceeded $2.88 billion since the establishment of the fee system.

In addition to the funds allocated to Beaver County, municipalities in the 14th Legislative District will receive an additional $366,000. This financial support is intended to assist with various local projects including road and bridge repairs, housing initiatives, and other crucial infrastructure needs.

Impact fees are charges imposed on natural gas drilling operations as an additional cost, on top of standard business taxes paid by corporations in Pennsylvania. These fees were established in 2012 under Act 13, with the goal of ensuring that communities affected by drilling receive adequate funding for the challenges they face.

Stephen M. DeFrank, Chairman of the Pennsylvania Public Utility Commission (PUC), has pointed out that these impact fees provide vital and ongoing support for local communities impacted by natural gas development. The PUC announced that for 2024, a total of $164,592,500 in natural gas impact fees will be distributed across Pennsylvania, benefiting numerous counties, municipalities, and various state programs.

Despite the significant amount allocated for distribution in 2024, this figure represents a decrease of around $15 million compared to the previous year. The decline is attributed to fluctuations in the number of new natural gas wells being drilled. Last year, Pennsylvania reported a total impact fee revenue of $234 million, marking the second-highest amount generated since the fees were instituted.

Beaver County has experienced a record high in natural gas tax revenue, collecting $731,668 in 2021, which surpassed the previous high of $727,511 recorded in 2018. The implementation of Act 13’s impact fee on unconventional natural gas wells resulted in approximately $1.7 million raised for Beaver County and its 54 municipalities in 2021. New Sewickley Township emerged as the municipality receiving the most significant portion of this funding, totaling $245,401. During the same year, there were 140 eligible natural gas wells in Beaver County, an increase from prior years.

Statewide, counties and municipalities affected by gas drilling can expect to receive over $129 million from the overall distribution, while an additional $105 million will be allocated for various statewide projects. The trend of financial support through impact fees underscores the critical role natural gas production holds in Pennsylvania, which is now the second largest natural gas producer in the nation.

The natural gas industry contributes significantly to Pennsylvania’s economy, providing over 120,000 jobs and generating more than $41 billion in economic activity in 2022 alone. This economic boost has raised the state’s GDP by nearly $25 billion. Moreover, households that utilize natural gas have reported average annual savings ranging from $1,100 to $2,200, with prices having dropped by as much as 76% since 2008.

Beyond economic advantages, natural gas production in Pennsylvania has led to considerable environmental benefits, including a 44% reduction in greenhouse gas emissions from 2005 to 2020. Pennsylvania’s effective impact fee model serves as an alternative to a traditional severance tax and has successfully generated over $2.2 billion for a variety of projects over the past decade.