YOUNGSTOWN — The Public Utilities Commission of Ohio does not oppose Youngstown’s motion to intervene in the court case involving SOBE Thermal Energy Systems LLC’s receivership, but wants a judge to reject the city’s cross-claim against the beleaguered utility company.

In a response to the city’s request to intervene, Julian P. Johnson, an Ohio Assistant Attorney General and PUCO’s legal counsel, wrote the state agency “acknowledges the city’s valid interests, which align with those of the PUCO. The PUCO appreciates the city’s strong leadership and consistent advocacy for SOBE’s customers and looks to continue to engage collaboratively with the city to achieve stability of the utility. Therefore, the PUCO does not object to the city’s participation in the proceeding.”

Johnson added that because “the interests of the city and the PUCO are so closely aligned, the city should be treated as an intervenor-plaintiff,” and the city’s request to pursue a breach of account claim with SOBE through this proceeding be rejected by Mahoning County Common Pleas Court Judge Anthony Donofrio “because the claim lacks a sufficient nexus with the subject of this action and because the claim was enjoined by the court’s Feb. 17 agreed entry. PUCO also asks that the court reject the city’s request for the escrow of the receiver’s fees. An escrow of fees is unnecessary and unduly burdensome to the incoming receiver.”

In a Feb. 9 court filing, the city asked not only to intervene, but to order Reg Martin, the SOBE receiver who was subsequently removed after the utility repeatedly failed, be required to “provide necessary and adequate service to customers as required by Ohio law, order the receiver to inform SOBE customers and counsel for the PUCO of any maintenance issue that could affect customers within eight hours of said issue, order the receiver to inform this court and the PUCO within 24 hours of any temporary outage of SOBE Thermal’s systems, direct the receiver to escrow funds payable to the receiver and the receiver’s counsel with the clerk of courts until SOBE has proven it is consistently operational, and any other relief this court deems just and equitable.”

Johnson wrote that “an order requiring the incoming receiver to escrow its fees and costs is unnecessary and a waste of resources for both” Collins and the clerk of courts.

He added: “If the city’s request is granted, it would cripple the new receiver in his duty to fix the issues that are preventing SOBE from operating successfully at optimal capacity without any further interruption in providing service to its downtown customers.”

The city also sought $11,213 from SOBE as a judgment on its account because of failures to provide steam heat to city hall.

The city’s motion states it should be allowed to intervene because SOBE, through Martin, was unable to provide steam service as ordered by the court; the city “has direct, substantial and legally protectable interests that directly related to the receivership, including the protection of public health within city limits;” and “disposition of this action without the city’s direct participation will impair the city’s ability to protect these interests.”

The motion was filed Feb. 2, but didn’t appear on the court docket until Feb. 9 because the county clerk of courts struggled to figure out how to include the city’s request.

MARTIN REMOVED

With repeated failures to provide steam heat under Martin’s leadership to SOBE’s 28 customers, which make up a majority of downtown Youngstown’s buildings, the PUCO filed a Feb. 11 motion to remove Martin as the utility’s receiver less than five months after his Sept. 26 appointment by Donofrio at the behest of the state agency.

Donofrio granted the request Feb. 17 and also removed attorney Kenneth R. Goldberg as the receiver’s legal counsel.

At the request of the PUCO, John C. Collins, an Akron attorney originally from Youngstown, replaced Martin as receiver and Michael J. Moran, a Cuyahoga Falls attorney, replaced Goldberg.

On Feb. 13, two days after the PUCO asked that Martin be removed, Goldberg filed an objection to the city’s request to intervene in the court case.

Martin was appointed Sept. 26 as SOBE receiver and Goldberg as his legal counsel by Donofrio at the PUCO’s request as the company was insolvent and unable to provide heat to its customers. A rented 800-horsepower boiler was removed Sept. 30 from SOBE because the company defaulted on paying for the equipment that provided heat and hot water to its customers. SOBE owed $383,214 in back payments to the steam plant’s owner, Wabash Power Equipment Co. of Wheeling, Illinois. The repossession would have made the company unable to provide utilities to its customers.

But the equipment rented by Martin proved to be unreliable.

SOBE’s boilers repeatedly failed to provide proper heat and hot water for its customers, forcing a number of them to shut down.

Several buildings were without heat for five days, starting Feb. 7, after the failure of two SOBE boilers, including an 800-horsepower one that arrived Feb. 1.

That came only days after SOBE couldn’t provide heat from Jan. 27 to Feb. 2, and Feb. 3 in some buildings, during days when the temperature was well below zero. Even after steam heat started flowing, some businesses couldn’t get it because of broken pipes.

Without the repossessed boiler, Martin was able to rent a 650-horsepower steam plant that was hooked up about 10 days after the other was taken away.

Because of $750,000 Martin received for SOBE from Enbridge Gas Ohio’s settlement of the 2024 Realty Tower gas explosion investigation by the PUCO, he rented a 200-horsepower boiler. But the two boilers couldn’t provide enough heat for customers starting Jan. 27 and lasting for a week.

Martin also used the Enbridge settlement money to rent an 800-horsepower boiler, which arrived Jan. 30. But that and the 650-horsepower boiler failed Feb. 7 with heat not restored to buildings until Feb. 12.

Donofrio previously approved paying $44,803.85 to Martin between Sept. 26 and Nov. 28 and $21,900 to Goldberg between Sept. 29 and Nov. 24.

In Donofrio’s Feb. 17 order removing the two, he gave Goldberg 30 days to submit a final motion for approval of fees and costs.