Resident challenges: PUC to review some local Marcellus drilling laws

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Officials in Robinson, Washington County, have filed a formal, strongly worded response to the state Public Utility Commission, as the agency begins reviews of several local shale gas ordinances.

In recent weeks, four of the five local municipalities engaged in a lawsuit against the PUC and other state agencies challenging Act 13 -- the state's sweeping new law governing Marcellus Shale operations and fees -- have been under fire by local residents for their drilling ordinances.

The Post-Gazette obtained documents showing that each of those residents who challenged their local ordinances also holds a lease with prominent local drilling company Range Resources.

Though the Commonwealth Court this summer declared the zoning provisions in Act 13 to be unconstitutional -- the state Supreme Court is set to hear an appeal of that case Oct. 17 -- the PUC believes it still has jurisdiction to review local ordinances for compliance with other areas of the law, such as environmental issues, setbacks and boundaries, according to department spokeswoman Jennifer Kocher.

"Our responsibility went beyond that one section," she said. "The Commonwealth Court ruling was very specific and we have an obligation to continue with the implementation of the remainder of the law."

Those provisions were not struck down by Commonwealth Court, though the municipalities that challenged the law, including Peters, Cecil, Mt. Pleasant, and Robinson in Washington County and South Fayette in Allegheny County, along with an environmental group and several individuals, appealed that decision.

Local officials say it's no coincidence their municipalities are the ones being targeted by residents with leases. Each municipality except Peters has been challenged by a local resident.

According to Act 13, both residents and operators can ask the PUC to review a local ordinance for compliance, though neither Range nor any other local operator has challenged local rules yet.

Range spokesman Matt Pitzarella said he has no knowledge of Range assisting any of the local residents with their requests, though he said it's not surprising that each of the residents has a lease with his company because it does so much business in the region.

Before now, the PUC declined to review local ordinances for Act 13 compliance, citing the ongoing court battle, but the department reversed itself last month.

In a July 2 letter to William Sray -- the leaseholder who challenged the South Fayette ordinance -- PUC Secretary Rosemary Chiavetta declined his June 21 request for a review, saying that "due to the uncertainty surrounding the pending litigation, the Commission is not processing requests for review ... at this time."

Mr. Sray renewed his request Aug. 9, and Ms. Chiavetta issued a statement Aug. 22 saying the department would begin undertaking reviews limited to those parts of the law which have been left standing by Commonwealth Court.

Ms. Kocher said the PUC is "letting the court case play out in court," but in the meantime it will review ordinances as requested and make a decision over their compliance within 120 days, as required by the Act.

In his Aug. 23 letter to the PUC requesting a review of the Robinson ordinance, resident and leaseholder Rodger Kendall said he believes the ordinance "has prevented the development of oil and gas from taking place," and requests the agency withhold any impact fees until the township amends its ordinance.

According to Act 13, municipalities that don't bring their ordinances in line with the law could be stripped of impact fee funds and find themselves on the hook for legal fees incurred by residents.

Local officials believe the reviews that have been requested amount to little more than revenge.

"I think it's an effort to get retribution for us asserting our legal rights," said South Fayette Commissioner Deron Gabriel, about the ordinance challenged by Mr. Sray.

In the response he crafted as solicitor for Robinson, lawyer John Smith agreed.

"This punitive action of the PUC evidences malicious intent and is indicative of professional persecution," wrote Mr. Smith, who said the PUC has a conflict of interest due to ongoing litigation with the municipalities.

"These communities have borne the brunt of Marcellus Shale exploration and production operations and have close to 150 Marcellus wells operating within their borders, numerous compressor stations, frac ponds and miles of high-pressure pipeline."

Mr. Smith said the PUC has "taken an aggressive stance," and aligned itself with the oil and gas industry. He also represents Cecil and plans to file a similar response on that municipality's behalf after its drilling ordinance was challenged by resident and leaseholder Alan Rank.

Though the lawsuit group has hundreds of municipalities statewide supporting the challenge, both through legal briefs filed on their behalf and statements of support, the PUC so far hasn't received backing from "a single" municipality in the state, Mr. Gabriel said.

Mr. Smith said he feels the PUC has jumped the gun, reviewing ordinances even while the state Supreme Court is considering whether the state has the legal authority to usurp local zoning laws and whether the PUC is the right forum to determine which ordinances are worthy.

"We're in a lawsuit with the PUC over whether they should even be ruling on them," Mr. Smith said. "They should just wait."

Mr. Smith believes that as an arm of the executive branch, the PUC doesn't have the right to adjudicate or interpret ordinances -- only the judicial branch does.

The PUC decision to undertake reviews at this time could prove to be a moot point depending on how the Supreme Court rules, creating a nuisance and legal expenses for towns already feeling the biggest impact from drilling, Mr. Smith said.

"We believe our case is sound," he said. "We think the Commonwealth Court got it right."

Mr. Smith also disputes the challengers, saying that the law allows property owners who have been "aggrieved or affected in some way" to challenge the local ordinances. In these cases, he said, none of the property owners has been affected because no drilling permits involving their properties have been sought or granted.

"Not one of the plaintiffs has tried to enforce their [shale] ordinance," he said.

In the case of Mr. Rank's complaint in Cecil, Mr. Smith said local drilling companies were responsible for suggesting some of the language that Mr. Rank objects to in the ordinance, especially involving environmental standards.

The legal challenges in South Fayette and elsewhere are draining resources and have become a nuisance, Mr. Gabriel and Mr. Smith said.

"Why are we spending all this money on a process that hasn't been decided on?" Mr. Smith said.

"I think it puts us in a position where we constantly have to assert our legal rights and we shouldn't have to," Mr. Gabriel said. "We're really protecting the health, safety and welfare of our residents, and millions of dollars in home values. If we don't do anything, the cost would be much greater to the township."

marcellusshale - neigh_west - neigh_south - neigh_washington

Janice Crompton: jcrompton@post-gazette.com or 412-851-1867.


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