Dispute between city, utility heats up
YOUNGSTOWN — Youngstown Mayor Jamael Tito Brown is demanding Reg Martin, the court-appointed receiver for SOBE Thermal Energy Systems LLC, provide consistent utility services to its customers, including three city buildings, or legal action will be taken.
In a Friday letter to Martin, Brown wrote: “I am writing to express our serious concerns about the continued lack of reliable service to customers served by SOBE Thermal. Earlier today, we learned that city hall was receiving zero pressure from the heating system during peak demand and have heard from multiple businesses and property owners who have dealt with the same continued interruptions and inadequate heating service. This is not only creating economic hardship from operational disruptions, but growing uncertainty about SOBE’s ability to fulfill its services as it is legally obligated.”
Brown threatened legal action as well as putting the city’s monthly utility fees in escrow “until we are confident adequate services will be provided continuously.”
Martin told The Vindicator on Friday that numerous city officials, including those in the law department, have his cellphone number, and no one reached out to him with any concerns.
The new mobile boiler that went online Oct. 9 had a broken part early Friday and a replacement was immediately found and should be installed today, Martin said. The issue was unforeseen, Martin said, and was addressed right away.
Martin also said he needs a permit to dig up a pipe to make other repairs and hasn’t heard from city officials.
“I need cooperation from the city,” he said. “I’m at the point where I don’t care what you say.”
SOBE’s 28 customers, which make up most of downtown Youngstown, were without heating, cooling and hot water between Sept. 30 and Oct. 9 though Martin said it only affected three buildings. A previous rental steam plant was repossessed Sept. 30 and it took until Oct. 9 for a new one to start operating.
Martin, who was appointed SOBE receiver Sept. 26 at the request of the Public Utilities Commission of Ohio, said he talks two to three times a day with PUCO officials and has received little cooperation from the city.
“We understand how important this is to the city,” he said. “I have a fiduciary duty to everyone of the system’s customers. If four or five customers leave the system, there may be no way to keep the system operating.”
Martin scheduled a public meeting for 11 a.m. Wednesday at the Central YMCA’s Manchester Room, 17 Champion St., to discuss his ongoing efforts to fix SOBE, which was on the brink of collapse when he took over.
In a Thursday letter to SOBE customers, Martin wrote the purpose of the meeting is “to explain this situation in further detail, advise of our plans for the future and answer any questions.”
He added: “We strongly recommend your attendance and that of any other business that would give consideration to being served going forward by a reliable steam heat system on a competitive pricing schedule.”
In his Friday letter to Martin, Brown wrote he wants to know what steps have been and will be taken “to provide necessary and adequate service,” answer why customers were “not given timely notice of outages” and plans “are in place to ensure SOBE Thermal has sufficient redundancy capacity to maintain necessary services,” as well as a long-term commitment to downtown service.
This is the second time the city threatened legal action against Martin. It did so on Oct. 2, when SOBE wasn’t providing utility services.
Also Friday, state Rep. Lauren McNally, D-Youngstown, sent a letter to the PUCO stating she was “angry and deeply frustrated by what is happening in our downtown right now. The collapse of SOBE Thermal LLC and the ensuing chaos are unacceptable, and I demand answers as to how this happened under the state’s nose. We need decisive action now.”
McNally’s letter points out failings of SOBE going back nearly five years that were “warning signs” that the company was going to fail. That includes an annual report, in April 2024, by SOBE showing it had a loss of more than $500,000 in 2023 and subsequent legal issues that put the company out of business.
With SOBE in imminent danger of not being able to provide utility services because its rented mobile steam plant was to be repossessed, the PUCO intervened with Judge Anthony Donofrio of Mahoning County Common Pleas Court agreeing Sept. 26 to appoint Martin as receiver of the failing company.
SOBE provided utility services to its 28 downtown customers through a rented mobile steam plant from Wabash Power Equipment Co. of Wheeling, Illinois. Wabash repossessed the 800-horsepower boiler Sept. 30 after winning federal and Mahoning court orders that SOBE owed $383,214 in back payments.
Martin, the PUCO and the city of Youngstown — one of SOBE’s main customers — searched for a replacement for the Wabash boiler.
The first option was to ask Youngstown State University to use its boiler system through an old piping system. But that effort failed Oct. 1 because leaks were found in the system, which hadn’t been used in more than nine years.
A 650-horsepower boiler rented from Power Mechanical Inc. of Newport News, Virginia, for $19,750 a month was shipped Oct. 4 to Youngstown and arrived the next day, with assembly beginning then.
The boiler didn’t start operating until Oct. 9 because of various issues.
That same boiler had problems early Friday that resulted in it not working until a replacement part can be installed.
Martin said one of his top priorities is to get a backup system for the new rented boiler system so if it goes down again, there won’t be an issue.