Youngstown Thermal receiver provides update on business
By Kalea Hall
Youngstown Thermal’s receiver, Reg Martin, is “very pleased” with the current state of the energy utility company.
“We are making progress,” Martin said. “We have potential buyers who are looking at the company.”
Martin, who owns Columbus-based Martin Management Services, was appointed by Judge R. Scott Krichbaum of Mahoning County Common Pleas Court in early August to take possession of, manage, operate, protect and have complete control of Youngstown Thermal’s operations.
Youngstown Thermal is a district heating and cooling system that provides services to more than 40 customers in downtown Youngstown.
The Public Utilities Commission of Ohio was informed in June by the chief executive officer of Youngstown Thermal, Carl Avers, the company was in a financial struggle that could have caused an energy crisis in downtown.
Avers no longer has operating authority of Youngstown Thermal, Martin said.
The PUCO had the Ohio Attorney General’s office ask the court to seek a receiver for the utility company. The last time a court had to appoint a receiver for a utility company was in April 1987 for the Rutland Fuel Co. of Rutland.
Martin has been in business doing receiverships and solvency for more than 20 years.
Since Martin took over Youngstown Thermal, he said progress has been made with the utility’s operating efficiencies, and there have also been cost-reduction measures made.
Martin hopes to get new customers on the system, so that Youngstown Thermal can return to profitability. He has regular communication with potential buyers of Youngstown Thermal.
Customers have been reassured the service will be uninterrupted and will “absolutely continue going forward.”
“The customers do not have to be [concerned] with ongoing service at this time and into the future,” Martin said.
Youngstown Thermal’s financial struggle began with the loss of Youngstown State University as a main customer and reportedly continued when four major customers stopped paying their bills, resulting in a loss of more than $1 million collectively.
One of those customers is the city of Youngstown, which receives heating services from the utility company. Youngstown Thermal said a broken meter led to four-plus years of underbilling that totals $141,570. The city disputes that figure.
Home Savings Bank, which uses Youngstown Thermal’s heating and cooling services at its corporate headquarters at 275 W. Federal St. downtown, is another customer with purported underbilling from a defective meter. The bank disputed the underbilling in a motion filed in August.
“There’s a process that must be followed and we have to validate those charges before we request money,” Martin said. “There’s always two sides to every story and we are working to get these amicably resolved.”
Martin is also working on alternatives to shorten the time period of surcharge rates or to minimize the dollars required entering winter. The surcharge rates were imposed by the PUCO to keep Youngstown Thermal’s utility and payroll costs covered.
The rates vary by customer. The PUCO staff recommended the 45 unnamed customers be charged a minimum of $100 each. After that charge, the staff allocated remaining payroll and health care expenses based on peak demand. The PUCO staff calculated each customer’s percentage contribution to the peak demand month for 2016, then each customer’s contribution was applied to the monthly payroll and health care costs to determine a monthly surcharge.
In coming weeks, Martin plans to form a community advisory board to receive input, hear customer concerns and to keep the board informed of Youngstown Thermal’s progress.