PUCO Orders Appointment of Receiver to Run Thermal
YOUNGSTOWN, Ohio – The Public Utilities Commission of Ohio has ordered the attorney general “to seek the appointment of a receiver and pursue any other appropriate civil remedy” to ensure adequate heating and cooling services for the “approximately 40 [downtown] customers” of Youngstown Thermal LLC and Youngstown Thermal Cooling LLC.
The order, issued Friday during a special meeting of the PUCO, affirmed the findings of the agency staff that Thermal “is in imminent danger of insolvency.” It cites the company’s “inability to timely pay utility suppliers, debt service, and employee payroll and the magnitude by which its outstanding debt serving requirements exceed currently projected revenue.”
Thermal’s CEO, Carl Avers, notified the PUCO June 14 in a letter that Thermal “is experiencing acute financial distress.” In response, the PUCU staff conducted a review of the company’s finances and issued its report June 29. As all this was unfolding, Avers announced June 26 that he plans to sell its assets to an entity interested in developing a “world-class energy system for Youngstown.”
The company’s troubles publicly surfaced in July 2015 after Thermal notified the PUCO that its largest customer, Youngstown State University, would be leaving the steam heating and cooling system and building its own power plant. YSU represented 60% of the company’s revenues. Concurrently, Avers was embroiled in a two-year, contentious personal bankruptcy liquidation in which he listed $59.7 million worth of liabilities and just $5,100 in assets.
In October 2015, Avers reported his downtown steam plant had been selected as a test site in a $75 million Department of Defense project. That project was later cancelled.
As of June 15, the PUCO staff said Thermal owed more than $200,000 to natural gas, electric and water service suppliers, and had been sued by one of them, EDF Energy Services LLC.
In addition, the staff found that Thermal owed more than $7 million on a term loan secured in 2011 for $5 million. And the staff determined “Youngstown Thermal’s financial woes are compounded by its poor record-keeping [such as] worrisome accounting discrepancies and misaligned data.
In its order that a receiver be appointed, the PUCO noted it would “facilitate the collection of accounts receivable, the creation of accurate accounting records and the establishment of new rates for service, all of which are necessary for the continuation of utility service to Youngstown Thermal’s customers.”
Nov. 8, 2016: Youngstown Thermal Makes Its Case to City Council
Oct. 2, 2015: Youngstown Thermal Named Test Site for $75M Project
July 31, 2015: Avers Responds to Stories about Youngstown Thermal
July 28, 2015: $5M Price Tag for Thermal’s Turnaround Plan
July 25, 2015: Thermal Losing 60% of Revenue; CEO in Bankruptcy
Copyright 2018 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
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