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A Public Utilities Commission of Ohio administrative law judge ruled SOBE Thermal Energy Systems LLC cannot cut off steam heat to two downtown Youngstown buildings despite their failure to pay major rate hikes approved by the commission.
Jacky Werman St. John, a PUCO administrative law judge, ruled in favor of West 34 Investors LLC, the owner of Wick Tower, and Erie Terminal Place LLC, which owns Erie Terminal Place. Dominic Marchionda operates the two companies and has disputed the accuracy of rate increases imposed on his buildings.
Werman St. John ruled SOBE "may not disconnect the utility service of complainant during the pendency of the complaint due to nonpayment of the amount disputed related to the emergency rates approved by the commission."
Gregg Rossi, attorney for both companies, filed formal complaints and motions to intervene Oct. 13 with Werman St. John ruling Thursday in favor of the two companies.
The PUCO on June 24 granted significant emergency rate increases for SOBE's then 23 customers, which make up a majority of downtown Youngstown. The rates took effect June 30.
For 13 of the SOBE's 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 pay 163% more during those six months with two paying 85% more. The six others will pay increases between 123% and 159%.
Marchionda said bills for his two buildings were considerably more than 92%, and added Erie has an accurate meter to show how little steam heat it is actually using.
Erie Terminal on Aug. 26 paid $8 - what it was billed monthly for August, September and October 2025 - for its invoice while SOBE states it owes $25,734.97 for two months, according to an Oct. 2 court report by SOBE.
Rossi wrote Erie Terminal was assessed a $5,500 monthly charge for equipment that was never completed and didn't use any steam heat between June and September.
SOBE records show Wick owes $10,752.72.
In Rossi's requests to the PUCO, he asked the commission to require SOBE to provide documentation to prove its calculations regarding the rate hikes were correct, which the two buildings dispute.
In her rulings, Werman St. John wrote: "Nothing in this entry excuses complainant from making monthly payments in the amount that it made prior to the emergency rates going into effect. In other words, all amounts not directly related to the disputed emergency rate order must be paid. The commission maintains the authority to subsequently order additional relief, as permitted by law."
In Rossi's PUCO filings, he wrote the two buildings have "paid, tendered or stand ready, willing and able to pay all properly calculated and undisputed charges attributable to the subject account during the pendency of these hearings."
The rate increases were designed to keep SOBE operating, but that hasn't occurred with a number of customers not paying it.
SOBE recently disconnected service to two of its customers over nonpayment.
SOBE shut off steam heat service to 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.
The two buildings were disconnected because of failure to pay their bills, which were more than 91 days delinquent as of an Oct. 2 court report filed by receiver John C. Collins and haven't been paid since.
FNB owes $37,360.25 to SOBE with $26,900.25 of it more than 91 days delinquent, according to an Oct. 2 court report. The same report states 22 Market Street owes $85,551.93 to SOBE with $71,450 of it more than 91 days delinquent.
SOBE also sent shut-off notices to Wick and Erie.
But SOBE receiver John C. Collins and Michael Moran, his court-appointed lawyer, recently said the utility company was hesitant to disconnect the two buildings because they each have residential tenants. Both buildings have 40 housing units.
Collins said last week: "For us, it's a big difference. With residential, if at all possible, we want to settle the delinquent accounts."
SOBE will be out of money by late December or early January unless a government bailout saves it from defaulting on even more payments than at present, Collins said.
SOBE came to a settlement in July with Enbridge Gas Co. for past due bills. The amount was negotiated down from $2,226,662.62 to $724,324.42 with the agreement calling for SOBE to pay $40,240.25 a month, starting in August, for 18 months as well as regular gas bills.
But SOBE doesn't have the money to pay Enbridge and is already two months late with the payment plan, Moran said.
Also, SOBE returned two rented boilers in late July-early August and kept an 800-horsepower boiler, the largest at its Youngstown location, which reduced that monthly cost from $58,000 to $28,400.
SOBE has less than $120,000 left from a $750,000 payment given to it by Enbridge as part of the gas company's $1 million settlement with the PUCO over the Realty Tower explosion investigation. SOBE uses that money to lease the boilers.
A second 800-horsepower boiler is on order, but it hasn't arrived from Power Mechanical Inc., the Newport News, Virginia, company that leases the boilers.
That second boiler will double the rental cost for SOBE to $56,800.
SOBE was put into court-ordered receivership Sept. 26, 2025, after the PUCO determined the utility company could no longer provide services to its customers.
A rented 800-horsepower boiler was repossessed Sept. 30, 2025, from SOBE because the company defaulted on paying for the equipment that provided heat to its 23 downtown customers. That resulted in SOBE abandoning the city with Reg Martin appointed receiver at the request of the PUCO.
But with SOBE customers complaining about service failing a number of times during January and February, the PUCO had Martin removed as receiver with Collins replacing him Feb. 17.