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In a filing with the Public Utilities Commission of Ohio, the city of Youngstown and the Office of the Ohio Consumers' Counsel did not object to the significant emergency rate increases for downtown steam heat customers, but want the hikes to have an expiration date.
If an end date isn't set, the two entities urged the PUCO to require SOBE Thermal Systems LLC, the troubled utility company for most of downtown, to file an application for new permanent rate increases.
In its joint filing, the city and the OCC wrote: "Absent an ending date for the emergency rates or a requirement to file an application for new rates by some date certain, the emergency rates are not temporary. In effect, SOBE can keep the emergency rate increase in effect for as long as it likes. Allowing emergency rates to remain in effect indefinitely transforms a temporary measure into a de facto permanent rate increase, without the scrutiny and protection of the ordinary ratemaking process."
It added: "Emergency rates should therefore include a firm expiration date and require affirmative justification before any extension. The PUCO should provide an ending date for the emergency rate increase or require SOBE to file an application for a permanent rate increase under (state law) by some date certain."
Jacky Werman St. John, the PUCO administrative judge on this case, will consider the arguments and draft an order to the PUCO as to whether to uphold, modify or reject the emergency rate increases. The PUCO on Aug. 19 agreed to the request by the OCC and the city to reconsider.
It is up to the PUCO to act on Werman St. John's recommendation.
In a June 24 decision, the PUCO board agreed to large emergency rate increases for SOBE's customers in an attempt to keep the utility in business.
For 13 of the SOBE's 23 customers, the emergency rate increase, which took effectJune 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%.
In the city's July 24 motion to appeal, Law Director Adam Buente raised six arguments: the PUCO didn't make sufficient findings to justify the emergency rates, the city questions the PUCO's authority to replace existing contractual rates, the proportional-share allocation methodology lacks evidentiary support because some customers don't have functioning meters, the commission failed to consider the impact of the emergency rates on governmental customers, the commission should require additional accountability regarding expenditures of emergency revenue and the city asked the PUCO to clarify that the emergency rates are temporary.
Only the city's latter argument asking the PUCO to clarify that the emergency rates are temporary was included in the Monday joint filing with the OCC.
The filing focused on the OCC's original objections.
Buente said Tuesday: "After significant consultation with OCC and outside counsel, we determined that the two issues presented in the joint brief presented the city with the best possible chance of meaningful success at this particular administrative level."
John Finnigan, an OCC attorney, wrote in a July 24 motion to appeal: "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 OCC, the statewide legal representative for Ohio's residential consumers in matters related to utilities, contends the PUCO erred by failing to require an application for permanent rates and for failing to set an end date for the emergency rates, and that the PUCO should have required language that the increases were subject to refund.
In its joint filing, the city and the OCC wrote: "The PUCO should require SOBE to include tariff language stating that any charges collected by the emergency rates shall be subject to refund if the amount exceeds the level of charges found to be just and reasonable in SOBE's next rate case."
In a Sept. 2 report with Mahoning County Common Pleas Court, John C. Collins, SOBE's receiver since Feb. 17, wrote that despite getting approval from the PUCO for the significant rate increases to help its finances, the hikes have "not made an appreciable difference in the income being generated by the company," and, unless there's an infusion of money, the utility will be out of money in November at the latest.
Of SOBE's 23 customers, seven didn't pay their July 31 invoice - the first bill with the new rates - and three made partial payments, including the city of Youngstown and the city school district, which only paid the old rates, according to Collins' report.
"Customers who have not been paying their invoices continue to significantly contribute to the financial problems of the company," Collins wrote.
The nonpayments that were up to 30 days late as of the court filing totaled $110,055.72, Collins wrote. Overall, customers owed $417,101.23 to SOBE in delinquent payments, according to Collins.
SOBE's monthly income between May 1 and Aug. 27 was $100,592 with regular monthly expenses of $80,000, Collins wrote.