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An attorney for the Public Utilities Commission of Ohio's staff argued that requests for an end date for the major emergency rate hikes approved by the commission for SOBE Thermal Energy Systems LLC and the inclusion of language that the increases are "subject to refund" aren't valid.
The two requests made by the city of Youngstown and the Office of the Ohio Consumers' Counsel in a Sept. 14 joint filing should be rejected by the PUCO "because they are outside the scope of the commission's rehearing entry," wrote Julian Johnson, an Ohio assistant attorney general with its public utilities section that represents PUCO staff.
The end date and refund language requests, Johnson wrote in his response "do not relate to the rate design or the revenue requirement. Instead, they relate to a future base rate case and refunds for emergency ratepayers. Since these issues are outside the scope of the commission's rehearing, the commission should decline to consider these issues."
Johnson wrote: "Even if the commission considers the consumer parties' arguments, the commission should reject these arguments on the merits. (State law) does not require the commission to set an end date for the emergency rate increase or set a deadline for SOBE to file a base rate case. The commission has continuing jurisdiction over this matter and can order SOBE to file a base rate case when appropriate based on monthly financial updates SOBE is required to provide to staff."
Johnson added: "For similar reasons, the commission should not modify the order to provide that the emergency rates may be subject to refund. The commission has not required emergency rates to be subject to refund in analogous cases. The calculation of refunds would also be impossible considering that SOBE is in the process of installing meters for its customers and customers are not currently being charged based on actual usage."
Johnson wrote the OCC and the city "have not presented any valid basis to modify the commission's order. The commission should affirm the order."
In its joint filing, the city and the OCC wrote: "Absent an ending date for the emergency rates or a requirement to file an application for new rates by some date certain, the emergency rates are not temporary. In effect, SOBE can keep the emergency rate increase in effect for as long as it likes. Allowing emergency rates to remain in effect indefinitely transforms a temporary measure into a de facto permanent rate increase, without the scrutiny and protection of the ordinary ratemaking process."
Jacky Werman St. John, the PUCO administrative judge on this case, will consider the arguments and draft an order to the PUCO as to whether to uphold, modify or reject the emergency rate increases. The PUCO on Aug. 19 agreed to the request by the OCC and the city to reconsider.
It is up to the PUCO to act on Werman St. John's recommendation.
In a June 24 decision, the PUCO board agreed to large emergency rate increases for SOBE's customers in an attempt to keep the utility in business.
For 13 of the SOBE's 23 customers, the emergency rate increase, which took effect June 30, is 93% with two at 92%, one at 91% and two at 36%. The five other customers are paying between 64% and 80% more.
That is for the non-heating season between May and October.
Between November and April, the rate will increase by another 162% for 14 of SOBE's 23 customers. One will pay 163% more during those six months with two paying 85% more. The six others will pay increases between 123% and 159%.
John C. Collins, SOBE's receiver since Feb. 17, said that despite getting approval from the PUCO for the significant rate increases to help its finances, a number of customers aren't paying it so there hasn't been more money coming into the company. Unless there's an infusion of money, the utility could be out of business by November, Collins said.