Judge selects veteran businessman to operate downtown utility company


By Kalea Hall

khall@vindy.com

YOUNGSTOWN

A company has been appointed to take over Youngstown Thermal, a downtown utility company in financial woe.

Next, customers will learn about surcharges aimed at keeping the energy company powered.

Judge R. Scott Krichbaum of Mahoning County Common Pleas Court on Tuesday appointed Reg Martin, owner of Columbus-based Martin Management Services, the receiver.

The court-appointed receiver is authorized to take possession of, manage, operate, protect and have complete control of all Youngstown’s Thermal’s operations, according to the judge’s entry.

Martin, who told The Vindicator he’s been in business doing receiverships and solvency for more than 20 years, said he’s never done a receivership of a utility company.

“It’s still a company that operates like any other company,” Martin said.

Martin said he hadn’t had a chance to see the judge’s order or read into Youngstown Thermal’s financial struggles.

The Public Utilities Commission of Ohio had the Ohio Attorney General’s office ask the court to seek a receiver for the company because of a potential energy crisis in downtown if Youngstown Thermal’s financial problems weren’t addressed.

In June, the PUCO staff reported, “Youngstown Thermal is unable to pay utility suppliers, debt service and employee payroll when those expenses are due.”

The last time PUCO had to have the court appoint a receiver for a utility was in 1987.

“The PUCO is pleased the court appointed a receiver for Youngstown Thermal,” said Matthew Schilling, PUCO spokesman, in a statement. “Receivership is an important step [toward] a long-term solution for the utility, as well as ensuring continued service to Youngstown Thermal’s customers.”

PUCO commissioners will meet today to review its staff’s recommendations on surcharges for Youngstown Thermal customers. The surcharges are to cover the cost of payroll expenses.

Carl Avers, Youngstown Thermal chief executive officer, alerted the PUCO of his company’s financial woes. Youngstown Thermal, a steam utility that provides heating and cooling services to about 40 downtown customers, has recently been unable to meet its payroll expenses and utility costs.

A major reason for the company’s financial straits is four customers not paying bills totaling $1.1 million, Avers said. Also affecting the company was the loss of Youngstown State University as its largest customer.

Avers wants the receiver to help him get the customers to pay their bills. Once they do, he says the company “will be in good shape.”

“It gets us on a path toward a solution,” Avers said. “This is a public utility, and a public utility will not fail. It is serving the public interest. The receiver and I will work toward a common goal. That is to sustain the business.”

The city of Youngstown is on the utility’s heating system and is one of the customers that apparently owes Youngstown Thermal money.

In a March report sent to the city and obtained by The Vindicator, Youngstown Thermal explains that a broken meter – owned by the company – has led to four-plus years of underbilling. Youngstown Thermal says the city owes $141,570 in unpaid steam service to City Hall.

Meanwhile, Youngstown Thermal owes the city for its water usage.

Youngstown Mayor John A. McNally was happy to hear the court appointed a receiver for Youngstown Thermal.

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