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PA Energy Development Authority to Accept Applications for Project Funding

During the PA Energy Development Authority’s (PEDA) April board meeting, the entity discussed opening a grant application period, possibly starting this June. That would mark the first time PEDA has accepted applications for project funding since 2010, with the last award being made in 2011.

An estimated $12.5 million remains in the fund, pulling from the Energy Development Fund and Growing Greener funds earmarked for energy projects that would result in watershed benefits.

Historically, PEDA funds are available to a variety of private businesses, as well as municipalities, schools or universities, and non-profit corporations that have planned alternative energy projects which deploy: solar, wind, low-impact hydropower, geothermal, biologically derived methane gas including landfill gas, biomass, fuel cells, coal-mine methane, waste coal, integrated gasification combined cycle, demand management measures including recycled energy, energy recovery, combined heat and power, energy efficiency, and load management/building controls.

Eligible project types typically include manufacturing of alternative energy or energy efficiency equipment or materials, the development of new energy and energy efficiency technologies, generation and use of alternative energy for the production of alternative fuels, and the implementation of energy efficiency or demand side projects.

The funding timeline and parameters have not yet been announced, PEDA generally has a 60-day window for application submissions. ERG will keep you updated as more information becomes available.

Natural Gas Industry Concerned about Efforts to Increase Taxes, Overhaul Regulations
Representatives of the oil and gas industry held a press conference in Harrisburg this week to discuss bipartisan discussions in the General Assembly to enact a severance tax on natural gas production in an effort to plug leaks it the state budget. Beyond select legislators, all four Democratic candidates for Governor are also suggesting a severance tax to help fund schools and other state necessities, with State Treasurer McCord doubling down proposing a 10% tax.

The industry said it feels it is paying its fair share and the additional taxes or fees would have a severe impact. The Associated Petroleum Industries of PA said that natural gas drilling and production companies have already paid $2.1 billion in state and local taxes since 2007 and another $630 million in Act 13 drilling impact fees since 2013.

There is a question of how much longer and at what rate drilling will continue in Pennsylvania. Louis D. D’Amico, President & Executive Director of the PA Independent Oil and Gas Association, said that the number of drilling rigs now in Pennsylvania has been reduced significantly, from 111 in 2011 to just 56. Gas companies are moving rigs west to Ohio where there is a better tax structure and the potential to produce oil and other valuable liquids, he said.

The Supreme Court’s ruling on Act 13 of 2012 leaves many holes to be filled, and one of many pieces of legislation introduced to date is Senate Bill 1359, sponsored by Sen. Jim Ferlo (D-Allegheny). Ferlo’s bill would overhaul key requirements of the statute which regulates oil and gas drilling under Act 13. The proposal would include imposing a Marcellus Shale severance tax, strengthening environmental and health protections, protecting the restoration of local zoning powers, and a two year moratorium on additional leasing of state forests for drilling.

“Act 13 of 2012 has numerous shortcomings, some of which have recently been successfully challenged in court, and my bill hopes to right some of these wrongs,” Ferlo said. “The current law fails to protect public health and safety, falls short on covering the actual costs of drilling, and undervalues the natural gas the Commonwealth can produce; all issues that my bill addresses.”

Ferlo went on to explain that his legislation would “bring in $775 million in badly needed revenue, estimated based on the Commonwealth’s natural gas production numbers from last year.”