Pa. PUC Begins Enforcement of Portions of Act 13

[Note: This article was first posted here, in The Shale Play Today: August 2012.]

Despite the Commonwealth Court’s recent decision striking down Act 13’s limits on municipalities enacting zoning ordinances more restrictive than the state’s uniform requirements, the Pennsylvania Public Utility Commission (“PUC”) has begun enforcement of Act 13’s impact fee provisions. Specifically, the PUC has started to review some municipalities’ ordinances that seek to regulate drilling activity.

The results of the PUC’s reviews could prevent some municipalities from receiving their share of the new drilling impact fee this fall if PUC officials determine the municipal ordinances are out of compliance with Pennsylvania law. The provisions of Act 13 that were upheld give the PUC broad powers to enforce Act 13’s requirements. If a local ordinance is found to conflict with state law, municipalities would be ineligible for fee revenues until the ordinance is amended or the decision is reversed by the Pennsylvania Supreme Court. As such, the PUC is now attempting to distinguish which municipalities’ ordinances fall under the zoning section that was struck down, which might be inappropriate under the upheld provisions of Act 13, and which are in compliance. Complicating this process is whether the Pennsylvania Supreme Court will hear the appeal of the Commonwealth Court’s ruling on an expedited basis, as it is expected that the Supreme Court will take the appeal.

Lastly, the PUC has received several requests for advisory opinions from municipalities throughout Pennsylvania as to the scope and limits of the PUC’s power under Act 13. The PUC has not yet responded to any of the requests for advisory opinions nor are the advisory opinions binding on the municipalities. Thus, despite, the Commonwealth Court’s ruling, the PUC is moving full speed ahead with exercising its new authority under Act 13. This is evidenced by the recent report that the townships of South Fayette and Robinson, located in the southwest corner of Allegheny County, upon the written request of leaseholders, are having their drilling ordinances reviewed by the PUC. The PUC gives municipalities 20 days to file a response. The PUC then has 120 days to issue a ruling. The township’s impact fee revenues could be withheld until the PUC’s review is completed or the ordinance is revised.

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Posted by Kevin M. Eddy. Mr. Eddy is an associate with Spilman Thomas & Battle, PLLC. His primary area of practice is litigation, with an emphasis on the transportation, construction, and oil and gas industries.

Kevin M. Eddy