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PUCO grants significant rate increase for SOBE customers

The cost for steam heat for most of downtown Youngstown will greatly increase — 93% for a majority of them almost right away and then by 162% more by November — with the Public Utilities Commission of Ohio’s approval of an emergency rate hike for SOBE Thermal Energy Systems LLC’s customers.

The PUCO board voted 3-0 Wednesday in favor of the rate increase, recommended by its staff.

Voting in favor of the increase were John D. Williams, Daniel R. Conway and Lawrence K. Friedeman without any comment. Chairwoman Jenifer French and Dennis P. Deters were absent from Wednesday’s meeting.

The initial June 15 recommendation by Christopher Healey, PUCO’s Rate and Analysis Department’s chief of accounting and finances, on behalf the agency’s staff, recommended most SOBE customers pay a 145% increase from their current rates from November to April, when steam heat is primarily used, and 75% during the rest of the year.

But after Michael J. Moran, the court-appointed attorney for SOBE receiver John C. Collins, included additional expenses in a June 18 filing with the PUCO, Healey recommended in a Monday filing to request the PUCO approve a rate increase of 162% for 14 of SOBE’s 23 customers between November and April, and 93% for the other six months for 13 of the utility company’s customers.

The emergency increases are needed to help SOBE, which provides steam heat to a majority of downtown Youngstown buildings, from going out of business in a few months, according to Collins, Moran and the PUCO staff.

The additional requested rate increase includes $55,570.31 owed to SOBE’s previous receiver and legal counsel that was supposed to be paid by June 14. That amount will be paid by SOBE customers over a six-month period if the PUCO grants the request.

The other expenses include a $2,221 monthly increase in water and sewer bills, a $4,752 monthly increase for SOBE staff payroll and benefits, and a $228 monthly increase in Ohio Bureau of Workers’ Compensation premiums, according to Healey’s report.

Healey wrote: “Staff recommends approval of emergency rates as set forth in the staff report and as modified in this response to the receiver’s comments. The net result of staff’s recommended changes is that the operational charge revenue requirement is $113,149.”

That monthly calculation was $96,686 in Healey’s June 15 recommendation.

Of SOBE’s 23 customers, 14 would see a 162% increase for steam heat usage between November and April under the PUCO staff recommendation. One would experience a 163% increase with two paying 85%. The six others would pay between 123% and 159%.

Before the adjustment, 14 would have paid a 145% increase, one would have paid 146% with two paying 73% more. The others would have paid between 108% and 137% more during that time.

The PUCO staff report shows one customer would see its current monthly rate from November to April go from $15,066 to $39,460. Another would go from $11,500 a month to $25,596.

Between May and October, listed as the non-heating season, rates for 13 of SOBE’s 23 customers would increase by 93% with two at 92%, one at 91% and two at 36% under the PUCO staff recommendation. The five other customers would pay between 64% and 86% if the PUCO approves the increase.

Before the revision, the rate increase was proposed at 75% for 14 SOBE customers, 76% for one and 24% for two. The rest were to see increases of 49% to 74% prior to the adjustment.

Healey’s report blacks out the specific names of the customers next to the proposed rate increases, what they currently pay and what they would pay if the PUCO approves the emergency hikes.

Among SOBE’s largest customers are Youngstown city hall and police building; Wick Tower; Erie Terminal Place; the Ohio One Building; FNB Youngstown LLC, which is developing Metropolitan Tower; and 22 Market Street Ohio LLC, which is developing the former Mahoning National Bank Building.

Starting at $3.85/week.

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