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By DAVID SKOLNICK
Staff writer
The Public Utilities Commission of Ohio will meet Wednesday to consider whether it will rehear its June 24 decision to approve significant emergency rate increases for SOBE Thermal Systems LLC, which impacted all of its downtown Youngstown customers.
The PUCO will consider requests for a rehearing from the city of Youngstown and the Office of the Ohio Consumers' Counsel regarding the rate increases for SOBE's customers. The PUCO approved steam heat rate increases for all SOBE customers with most of them paying 93% more, starting June 30, and an additional 162% increase for a majority from November to April.
SOBE has 23 buildings, which make up most of downtown, on its steam heat and hot water system.
The city and the OCC filed applications to the PUCO for rehearing on July 24, 30 days after the commission's decision to grant SOBE's emergency rate increase.
At Wednesday's meeting, the PUCO can accept or reject the appeals. It also has the option of waiting to make a decision up until 90 days after the July 24 appeals.
If the PUCO doesn't take action in that 90-day period, the initial order is affirmed under state law. But Matt Schilling, PUCO spokesman, said that it is rare for the PUCO not to act in those 90 days.
The PUCO could issue a written order in those remaining 90 days after July 24 or it could have another hearing with attorneys from the city, the PUCO and SOBE arguing the case.
In the July 24 motion to appeal, with a minor amendment made Monday, city Law Director Adam Buente argued the PUCO's order "is unreasonable and unlawful."
John Finnigan, an OCC attorney, wrote: "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 city and the OCC, the statewide legal representative for Ohio's residential consumers in matters related to utilities, 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 that "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 as receiver on the recommendation of the PUCO.
At Collins' request and with the PUCO staff's recommendation, the commission voted June 24 for the emergency rate increase for SOBE customers.
Without the emergency rate increase, SOBE would have been unable to make its payments by September or October, Collins said.
To cut costs, SOBE returned two of its three rented boilers two weeks ago until October. The return of the two boilers will reduce the company's monthly expense for the boilers from $58,200 to about $28,000.
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 are paying between 64% and 80% more.
That is for the non-heating 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%.
Some SOBE's customers are looking for ways to get off the system saying they are unable to afford the large emergency rate increases.
Meanwhile, Mayor Derrick McDowell is continuing discussions with Gov. Mike DeWine and his office on possible options to save the troubled company with state funding, but there's a long way to go in the process.
If the state provides funding, it may be for a smaller SOBE system that doesn't serve all of its current 23 customers,