Youngstown Thermal customers to face surcharge due to company’s flagging finances
By Sarah Lehr
Youngstown Thermal customers will face surcharges due to the company’s flagging finances.
The Public Utilities Commission of Ohio voted during a special meeting Friday evening to establish the emergency surcharge on rates.
The amount of the surcharge is not yet determined, but an order issued Friday states it must bring in sufficient revenue to allow the company to compensate its skilled workers. Youngstown Thermal recently has had problems making payroll on time.
“Youngstown Thermal is in imminent danger of insolvency and an emergency surcharge is necessary to maintain heating and cooling service to downtown Youngstown,” the order states.
PUCO’s staff will file a recommendation within seven days regarding the surcharge amount. The commission will then vote on the issue.
Friday’s order also directs Youngstown Thermal to establish a segregated escrow account for depositing future customer payments. The order states the account is necessary because of the company’s “poor record-keeping” in the past.
Youngstown Thermal is a utilities company that uses steam for heating and cooling. Carl Avers, chief executive officer of Youngstown Thermal, contacted PUCO, a state regulator, in June about a potential “energy crisis” in downtown Youngstown due to the company’s inability to meet expenses in a timely manner.
PUCO has since asked the Ohio Attorney General’s Office to step in and appoint a receiver to right Youngstown Thermal’s finances. That matter is ongoing in the Mahoning County Court of Common Pleas.
PUCO has not taken that type of legal action with a utilities company since 1987.
“It is rare,” said PUCO spokesman Matt Schilling,
Youngstown Thermal has about 40 Youngstown customers, including The Vindicator, the city of Youngstown and the Youngstown Business Incubator.
Barb Ewing, chief executive officer of the Youngstown Business Incubator, said the company anticipated surcharges due to Youngstown Thermal’s financial problems.
She said there is “no chance” the YBI will seek another heating and cooling provider.
“It is simply too expensive for us to retrofit the building for a new system,” Ewing said.
Avers said he is not concerned customers will leave Youngstown Thermal due to the surcharges. Avers said customers will see lower prices in the future because of new fuel sources and technology.
Avers added that Youngstown Thermal is working with PUCO to “solve the short-term and long-term situation” and emphasized that services will not be interrupted. He also termed record-keeping issues as “minor.”
The company has attributed its financial problems, in part, to the loss of its largest customer, Youngstown State University. The company also has pointed to the failure of several customers to pay their bills.
Youngstown Thermal contends the city of Youngstown owes $141,570 due to years of underbilling, stemming from a broken meter. The city disputes that figure.
Friday’s order states PUCO’s staff will review disputed bills and make recommendations for each situation. If a customer does not agree with a recommendation, the customer will have the opportunity for a hearing before the commission.
Youngstown Thermal put its assets up for sale in June.