Ohio agency sounds off on SOBE

Consumers’ Counsel worries over loss of heat to downtown residents

YOUNGSTOWN -- With disconnection notices sent to two downtown residential buildings, the Office of the Ohio Consumers' Counsel is "very concerned about Youngstown residents who could lose heat and hot water because their building owner has not paid bills for steam service."

Among the four buildings that recently received disconnection notices from SOBE Thermal Energy Systems LLC for failure to pay their bills in at least the last 60 days were Wick Tower and Erie Terminal Place.

They each have 40 residential units in addition to commercial space.

The other two are the former Mahoning National Bank and the First National Bank building, also known as Central Tower. The owners of those two buildings are planning residential housing as part of major renovation projects there.

The disconnection notices state service may be disconnected as soon as today. The steam heat to the four buildings won't be cut off today, but the disconnections would likely occur the week of Oct. 5, unless payments are made, Michael Moran, attorney for SOBE receiverJohn C. Collins, told The Vindicator on Tuesday.

The four properties haven't paid their SOBE bills, which included a major rate increase that took effect June 30, in the past 60 days, with some being longer than that, Collins and Moran said.

Maureen Willis, OCC's director, said: "Residents who receive steam service through their buildings generally have no control over whether the building owner pays SOBE. Yet tenants and their families could suffer the consequences if service is disconnected."

Willis said the OCC urges affected tenants to contact their landlord or property manager immediately "and demand to know what steps are being taken to keep the heat and hot water on. The building owner should take immediate steps to address the SOBE utility bills and any disputes over the amounts owed so that residents are not put at risk of losing essential service."

The OCC is the statewide legal representative for Ohio's residential consumers in matters related to utilities.

For 13 of the SOBE's 23 customers, the emergency rate increase for the nonheating season between May and October was 93% with two at 92%, one at 91% and two at 36%. The five other customers are paying between 64% and 80% more.

Between November and April, the rate will increase by an additional 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%.

Dominic Marchionda, whose companies own Wick and Erie, said Tuesday he is willing to pay the increases, but his buildings were billed for much more than 93%.

Marchionda said Erie Terminal was paying about $750 to $800 a month before the emergency rate increase, and is now being charged nearly $13,000 a month - and it's during a time when that building isn't using any steam heat.

SOBE records show Erie Terminal owes $25,735.18 for the past two months -- $12,826.69 for its most recent bill and $12,908.49 for the previous bill.

Marchionda said he wants an explanation and is "not trying to be unreasonable."

Gregg Rossi, attorney for Wick and Erie, filed a motion in Mahoning County Common Pleas Court to intervene in a case involving SOBE's receivership limited to "matters that directly affect continued steam service, customer payments, disposition or abandonment of system assets, use of operating revenue and other relief within this court's receivership jurisdiction."

Rossi said Marchionda wants to know what Collins is doing, have the opportunity to be heard and perhaps take injunctive relief if necessary.

Willis said: "Residential customers should not be used as leverage in a billing dispute between SOBE and their landlord. The immediate priority should be keeping the heat and hot water on while the parties work to resolve their differences."

Willis added: "There may be legitimate disputes over SOBE's new rates and the amounts building owners have been billed. But those disputes should be resolved legally without putting innocent tenants in the middle. Nonpayment of PUCO-approved tariff rates is not the answer."

SOBE records show for the past 60 days, Wick owes $10,752.72, 22 Market owes $12,360.75 and FNB owes $7,947.86.

Of SOBE's 23 customers, which make up a majority of downtown, only 10 are current with their payments. Of the remaining 13, Collins said four or five are still paying the old rate before the emergency increases. That includes the city of Youngstown for city hall and the police station.

The OCC and Youngstown had asked the Public Utilities Commission of Ohio for an end date for the major emergency rate hikes approved June 24 by the commission for SOBE and the inclusion of language that the increases are "subject to refund."

An Ohio assistant attorney general representing the PUCO's staff argued in a Monday response that the requests aren't valid "because they are outside the scope of the commission's rehearing entry."

A ruling wasn't issued as of Thursday.