SOBE receiver optimistic about potential federal help
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YOUNGSTOWN - Despite previous unsuccessful efforts to get government money, the receiver for the financially troubled downtown Youngstown steam heat utility said he is "optimistic" about help from the U.S. Department of Energy discussed by President Donald Trump.
John C. Collins, receiver for SOBE Thermal Energy Systems LLC, said Tuesday that he'd heard about the DOE assistance before Trump's announcement at a Monday rally at the Covelli Centre.
"The DOE is talking about potentially providing funding to either SOBE or another entity, but we don't know if that's for a permanent solution or for funding to have us operate over the winter and spring," Collins said. "We're heard nothing further."
U.S. Sen. Bernie Moreno, a Republican, announced June 30 that he had talked to DOE officials to provide federal loan guarantees to help SOBE customers buy their own boilers and get off the system. But that failed because the program requires at least $250 million be spent and the purchase of boilers for downtown SOBE customers would be considerably less than that.
Collins said Tuesday that he doesn't know the particulars of any DOE assistance, but it would not be that same loan guarantee.
Collins said: "We have no idea on the program or how they would get the money to whoever would handle the solution. We're optimistic something may come out of it. The system is in dire need of assistance and the customers need a solution. I'm optimistic about it based on what the president said last night and what we've heard in the last few weeks."
Collins declined to say if he's discussed this with anyone on the federal level.
Trump said at Monday's rally for U.S. Sen. Jon Husted and gubernatorial candidate Vivek Ramaswamy, both Republicans, that Husted and Moreno brought the SOBE issue to his attention that "major buildings in Youngstown (are) in danger of shutting down as we enter the cold season. So tonight I'm pleased to announce that I am directing the (DOE) to work with your senators to find a quick solution and make sure it doesn't shut down. It's going to stay open and you're going to stay nice and warm."
Reagan McCarthy, Moreno's spokeswoman, said: "Sen. Moreno is committed to finding a solution for his constituents in Youngstown. He will exhaust all possible options and won't rest until this issue is resolved."
Husted's office said the senator "and his team are seeking solutions to this situation and have been in touch with the Department of Energy about this matter to explore how they may be able to assist residents and businesses (in) downtown Youngstown."
There have been a number of efforts to get financial assistance for SOBE and/or its customers from the federal and state governments that have been unsuccessful to date.
Without a government bailout, SOBE has enough money to pay for boilers that provide steam heat until the end of December or early January, Collins said Tuesday.
A city of Youngstown spokesman referred comment about this issue to a Facebook post from Mayor Derrick McDowell.
In the post, McDowell called Trump's announcement "significant and it unlocks continued development of a strategic plan around what we have already been engaged in for the last 9 ½ months. This issue now sits with senators, the federal government, the state and our local elected officials, community partners and more to help secure reliable heating for our community."
McDowell wrote: "Our residents, downtown businesses, employees and public institutions deserve certainty. This is not about promises that leave their future in question. The stability of this utility is a matter of economic security, public welfare and the continued vitality of downtown Youngstown. We cannot afford to enter another heating season without a dependable, sustainable solution."
McDowell wrote that he welcomes Trump's commitment and "we will turn this announcement into a clear plan, defined responsibilities and a reliable outcome."
The Public Utilities Commission of Ohio on June 24 granted significant emergency rate increases for SOBE's 23 customers, which make up a majority of downtown Youngstown. The increases took effect June 30.
For 13 of the SOBE's 23 customers, the emergency rate increase for the non-heating season between May and October, was 93% with two at 92%, one at 91% and two at 36%. The five other customers are paying between 64% and 80% more.
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%.
The emergency rate increases were supposed to keep SOBE out of financial collapse, but that hasn't happened because of customers not paying the hikes.
SOBE recently disconnected two of its customers - 22 Market Street Ohio LLC, which is developing the former Mahoning National Bank building, and FNB Youngstown LLC, which owns the First National Bank Building, also known as Central Tower - for failing to pay their steam heat bills for more than 60 days.