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The Office of the Ohio Consumers' Counsel has requested the Public Utilities Commission of Ohio revisit its decision to impose huge emergency rate hikes on SOBE Thermal Energy Systems LLC's downtown Youngstown customers.
The OCC filed a motion, on behalf of SOBE's residential customers, for the PUCO to rehear its June 24 decision in which it granted an emergency rate increase for all 23 of the troubled utility company's customers with most paying a 93% increase, effective June 30, and an additional 162% increase for most from November to April.
SOBE provides steam heat to 23 buildings, which make up most of downtown Youngstown, and includes residents in Wick Tower and Erie Terminal Place.
John Finnigan, an OCC attorney, wrote if the request is denied, "residential utility consumers affected by the finding and order will lose the ability to present arguments that could mitigate the impact of SOBE's emergency rate hike. This is wrong and patently unfair to consumers."
Finnigan added: "The PUCO decided this case on a fast track, with no procedural schedule and no evidentiary hearing," and the OCC wants to "intervene in this case to give a voice to the residential consumers adversely affected by the PUCO's finding and order."
The statewide legal representative for Ohio's residential consumers in matters related to utilities, the OCC request was filed late Friday.
The OCC had filed a July 16 motion to intervene in the matter.
Also, the city of Youngstown on Friday filed a motion to intervene as well as one for a rehearing on the PUCO's decision.
The requests will be considered by the commission or by a PUCO administrative judge.
The city and the OCC wrote they are concerned that the emergency rates were decided too quickly without the PUCO giving adequate evidence for approving the hikes as well as questioning the evidence and transparency of the decision.
In granting SOBE's rate increase, the PUCO concluded "this emergency relief is not an attempt to circumvent or substitute permanent rate relief." The PUCO will also get monthly reports on SOBE.
Without the significant rate increases, SOBE would be out of money by September or October, said John C. Collins, its receiver since Feb. 17.
The additional funding will keep SOBE afloat, but Collins said after the PUCO granted the rate hike, "It is not a permanent solution. We've got to find a different way to build a boiler house and get the infrastructure to where this is a viable ongoing business to provide steam services to our customers."
It would cost about $13 million to build back SOBE's plant, Collins said.
To replace SOBE's underground distribution pipes would cost about $17 million, but Collins said he, the PUCO and others don't believe "that is necessary."
SOBE's plant was gutted in 2022 when David Ferro, the company's CEO, razed the boiler house and sold the three boilers for scrap. Ferro then had the company lease a boiler, but stopped paying the monthly rental fee with it possessed on Sept. 30. He abandoned the Youngstown plant with a judge appointing Reg Martin on Sept. 26 as SOBE receiver. Collins replaced Martin, who faced criticism and scrutiny from SOBE customers, as receiver on the recommendation of the PUCO.
Ferro wanted the Youngstown facility to use pyrolysis, which converts rubber chips into synthetic gas. That received significant pushback from residents and three one-year moratoriums by Youngstown City Council on the use of the process in the city. The Ohio Environmental Protection Agency issued a permit on Feb. 14, 2024, for SOBE to move ahead with its plans.
For 13 of the SOBE's 23 customers, the emergency rate increase, effective June 30, is 93% with two at 92%, one at 91% and two at 36%. The five other customers will pay between 64% and 80% more.
That is for the nonheating 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%.
SOBE's customers are looking for ways to get off the system saying they are unable to afford the large emergency rate increases.
Some SOBE customers attended a July 21 meeting with the state treasurer's office along with the 7 17 Credit Union and Brewer-Garrett Co. for a preliminary discussion to use the treasurer's Buckeye Business Advantage linked deposit program. The credit union would loan the money needed to Brewer-Garrett for five years at ideally no interest. Some SOBE customers could also choose to work directly with 7 17 through this program.
If the plan is implemented, those going with Brewer-Garrett would have the company install heating systems in the buildings on the SOBE system with the cost paid over a period of 20 years through an additional heating rate or a separate service fee to pay the cost of new systems for each customer.
Some of the money paid to Brewer-Garrett would go into escrow to come up with a long-term strategy for heat downtown.
After those 20 years -- or earlier if a building decides to pay it off sooner -- Brewer-Garrett would sell the individual heating systems at an amortized rate to customers.
Nothing is close to being finalized as the discussion occurred only a few days ago.
The city in June agreed to pay up to $130,000 to a law firm for a study that will offer long-term solutions for SOBE. The study is supposed to take three to four months.