Youngstown Thermal assets for sale
By Kalea Hall
Youngstown Thermal, a steam heat and cooling system provider to several downtown buildings, plans to sell its assets, its chief executive said Monday.
“It’s part of our initiative for a much larger community system,” Carl Avers said.
The assets of the company include the underground pipes and the plant at 205 North Ave. Avers didn’t disclose the assets’ value, but he said the replacement valuation for the Youngstown steam assets is $91 million.
“The new system will have a lower cost structure by using economy of scale, different fuels and technology,” Avers said.
Youngstown Thermal’s steam-utility service is a district energy network. At Youngstown Thermal, and other steam systems in the U.S., a fuel input of varying kinds is used for boiling water to create steam that travels through a pipeline to heat buildings. At Youngstown Thermal, 6 miles of underground pipe carry steam from the steam-plant production facility on North Avenue. Youngstown Thermal also offers district cooling through a central chiller system that sends chilled water to remove heat from the buildings on the energy system.
The company said that it supplies about 50 customers with heating and four with cooling.
But Youngstown Thermal has lost major clients in recent years, such as Youngstown State University. Last October, the city of Youngstown announced it, too, would drop Youngstown Thermal and replace it with another energy provider. The city indefinitely postponed that decision after a presentation by Avers.
In 1980, Avers and business partners purchased the Youngstown steam system for $800,000 from Ohio Edison. The company invested millions to modernize the system.
Avers said the assets of Youngstown Thermal have been on the market for about one year.
In a news release Monday, Avers listed two French companies that are “major suitors” for the Youngstown steam system assets: Engie and Veolia. The companies could not be reached to comment.
Engie is a “global energy player” involved in electricity, natural gas and energy services, according to its website. The company has operations in 70 countries. It has 250 district heating and cooling energy systems globally. Ohio State University trustees approved a $1 billion deal with Engie and Axium Infrastructure in April to privatize the university’s district heating and cooling system.
Veolia “designs and provides water, waste and energy management solutions that contribute to the sustainable development of communities and industries,” according to its website. The company owns several steam systems including Philadelphia’s.
“French companies now own most of those systems as the French energy companies see the value of this energy infrastructure,” Avers said.
Any change in ownership of Youngstown Thermal must be approved by the Public Utilities Commission of Ohio.
The commission on Monday said it is not supervising a sale transaction of Youngstown Thermal and there has not been an application filed with PUCO for the transfer of ownership of Youngstown Thermal.
Avers said there is no time line set on when a change of ownership will be filed with the commission.