YOUNGSTOWN, Ohio – The SOBE Thermal Energy receiver doesn’t object to the owners of two downtown buildings intervening in the Public Utilities Commission of Ohio’s case against the utility.
But his attorney said in a Tuesday filing in the Mahoning County Common Pleas Court case that the court can’t grant the relief those owners seek.
Last week, West 34 Investors LLC and Erie Terminal Place LLC, owners of the Wick Tower and Erie Terminal, respectively, filed a motion asking to intervene in the case regarding receivership matters that “directly affect continued steam service, customer payments, disposition or abandonment of system assets, use of operating revenues and other relief” within the court’s receivership jurisdiction. Both buildings are customers of the SOBE-operated district steam system.
The attorney for the owners of those buildings wrote in his motion that since the receivership began, those buildings “have experienced or faced service outages, inadequate steam, metering disputes, material rate or payment effects and business interruptions.”
Earlier this month, Erie Terminal received a disconnection notice for nonpayment of services.
The attorney for John C. Collins, the receiver, said in a response to the two entities’ motion to intervene that the relief requested is unclear.
“The proposed interveners’ motion suggests that this court has jurisdiction over the customer payments, disposition or abandonment of system assets and continued steam service,” it reads. “These matters are exclusively preserved for the Public Utilities Commission of Ohio to determine.”
SOBE is a public utility, it adds.
It says that under Ohio law, a heating or cooling company, when engaged in the business of supplying water, steam or air through pipes or tubing to Ohio customers for heating or cooling purposes is a public utility.
The PUCO established an emergency rate increase that was to take effect immediately to “preserve the financial stability of” SOBE, the filing reads.
“The rates that existing customers were to be charged was established by this new tariff,” it says. “Both Erie Terminal Place LLC and West 34 Investors LLC were notified of the rate change as were the other customers of this public utility. In fact, despite owing $25,734.97 for the steam portion of its obligation, Erie Terminal sent a payment of $8.”
The increases raised consumers’ bills by 36% or more for cooling service and by 85% or more for heating service. SOBE serves 23 buildings in downtown Youngstown, including City Hall and the city police station. Last April, the city was added as an intervening defendant in the common pleas court case.
The reply from the receiver’s attorney this week says that in multiple contacts with Collins, Erie Terminal and West 34 Investors LLC had been advised of the appropriate procedure for addressing a payment dispute or a dispute regarding service. “Instead, they have not filed anything with the PUCO and filed this motion seeking relief of some nature for this court.”
The rate established by the emergency tariff was the amount determined to be necessary “for the survival of the entire system which services 23 separate buildings. Nonpayment by two of the major obligors for services affects all customers of the system,” it says.
The two entities also imply the common pleas court would have jurisdiction to determine whether the system would be abandoned, the response says. Abandonment must occur after application to the PUCO and a hearing before it. “In such hearing, notice would be given and the commission consider whether such request is reasonable given the welfare of the public and the cost of operating the facility,” the response reads.
Presumably, neither of the entities that own the two buildings want the system to be abandoned, it continues.
“However, their continued failure to pay the rate established for the services provided to them frustrates the efforts to continue operations of the steam system,” the response says. “The receivership is left with the impression that these two proposed interveners wish to have services continued to be provided to them but not pay the amounts necessary for such operations to continue, causing the result that they purport to oppose to be required.”