IFO Report on Impact Fee Revenues and Outlook for Next Year 

While the 2022 impact fee revenues are the highest ever due to high natural gas prices and the number of new wells, a report from the Independent Fiscal Office explains the reasons for the higher rates and what that means for future years. Under Act 13 of 2012, wells pay fees on a declining schedule for 15 years. This means that many of the wells drilled in the earliest years of the current boom are nearing the end of their useful life and will soon no longer pay fees Unless they are re-fracked.   The IFO notes that natural gas prices are expected to average only about $2.85 through the end of the year, significantly below 2022’s $6.64. If the average price is below $2.99, this means that much lower fees will be levied, with the newest wells paying 25% to 36% below the levy for 2022 and older wells paying up to 50% less. As the new wells with higher production capability are being drilled at a slower rate than 2022, total impact fee revenues for 2023 are estimated to decrease. Click here to learn more.