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The Public Utilities Commission of Ohio will consider Wednesday a joint request from the city of Youngstown and the Office of the Ohio Consumers' Counsel to require an expiration date for significant emergency rate increases for downtown steam heat customers.
If an end date isn't set, the two entities asked the PUCO to require SOBE Thermal Energy Systems LLC, the troubled steam heat utility company for most of downtown, to file an application for new permanent rate increases.
Also, the two entities urged the PUCO to require language that the emergency increases are subject to refunds.
A consideration for a rehearing on those requests is in front of the PUCO at its Wednesday meeting.
In the Sept. 14 joint filing, the city and the OCC did not object to the major rate increases granted June 24 by the commission and instead made the other requests of the PUCO. The increases took effect June 30.
For 13 of SOBE's then 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 customers. One will be charged 163% more during those six months with two billed 85% more. The six others will be charged increases between 123% and 159%.
SOBE disconnected two customers - 22 Market Street Ohio LLC, which is developing the former Mahoning National Bank building, and FNB Youngstown LLC, which owns the First National Bank Building, also known as Central Tower - earlier this month when they failed to pay their bills for more than 91 days.
SOBE sent disconnection notices to two other downtown buildings. PUCO Administrative Law Judge Jacky Werman St. John ruled Oct. 15 that SOBE couldn't terminate service to the two buildings "during the pendency of the complaint due to nonpayment of the amount disputed related to the emergency rates approved by the commission."
The buildings are Wick Tower, owned by West 34 Investors LLC, and Erie Terminal Place, owned by Erie Terminal Place LLC. Dominic Marchionda operates the two companies and has disputed the accuracy of rate increases imposed on his buildings. Both buildings have 40 residential units.
Michael Moran, SOBE's attorney, filed responses Thursday asking for the dismissal of the Oct. 13 formal complaints and motions to intervene by the two companies.
Also Thursday, Moran wrote in motions to modify the orders that West 34 paid $10,752.72 and Erie Terminal paid $12,000 in money owed a couple of weeks ago. As of Oct. 15, West 34 still owed $31,382.21 to SOBE while Erie Terminal owed $56,655.64, according to a tentative agreement attached to the filings.
Those payments were part of a tentative agreement between SOBE and the two buildings that occurred when the companies filed with the PUCO and before Werman St. John's ruling.
The Thursday motions to modify the judge's order by Moran read that the owners of the buildings "agreed to make monthly payments in an amount down and monthly installment payments in the amounts stated in the agreement" and SOBE agreed "to refrain from disconnection of any service during the pendency of the proceeding, provided the installment payments were made as agreed."
Gregg Rossi, attorney for both companies, said: "I am filing a response that any tentative agreement which was unexecuted and never submitted to PUCO as a stipulation and never approved by PUCO is unenforceable."
Marchionda said Thursday: "We'll wait to see what the judge decides. I'll pay what I'm supposed to pay."
CITY/OCC FILING
Instead of objecting to the emergency rate increases, the city and the OCC wrote in a Sept. 14 joint filing: "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."
In the city's July 24 motion to appeal, Law Director Adam Buente raised other arguments including the PUCO didn't make sufficient findings to justify the rate increase and the city questioned the PUCO's authority to replace existing contractual rates.
But Buente subsequently said the city chose to focus the filing on the OCC's original objections as they "presented the city with the best possible chance of meaningful success at this particular administrative level."
The OCC is the statewide legal representative for Ohio's residential consumers in matters related to utilities and has argued several cases in front of the PUCO.
An attorney for the PUCO staff argued in a Sept. 21 response that the request for an emergency end date and the inclusion of language that the increases are "subject to refund" aren't valid.
The requests should be rejected by the PUCO "because they are outside the scope of the commission's rehearing entry," wrote Julian Johnson, an Ohio assistant attorney general with the public utilities section that represents PUCO staff.
The end date and refund language requests, Johnson wrote in his response "do not relate to the rate design or the revenue requirement. Instead, they relate to a future base rate case and refunds for emergency ratepayers. Since these issues are outside the scope of the commission's rehearing, the commission should decline to consider these issues."
Johnson wrote: "Even if the commission considers the consumer parties' arguments, the commission should reject these arguments on the merits. (State law) does not require the commission to set an end date for the emergency rate increase or set a deadline for SOBE to file a base rate case. The commission has continuing jurisdiction over this matter and can order SOBE to file a base rate case when appropriate based on monthly financial updates SOBE is required to provide to staff."
Johnson added: "For similar reasons, the commission should not modify the order to provide that the emergency rates may be subject to refund. The commission has not required emergency rates to be subject to refund in analogous cases."
Because of SOBE's significant financial problems, it will be out of money by December or early January unless the state and/or federal government intervenes, according to John C. Collins, its receiver since Feb. 17.