YOUNGSTOWN, Ohio – A proposal from a party to either acquire or operate the assets of troubled SOBE Thermal Energy Systems LLC could come “within the next month,” according to a report filed by the utility’s court-appointed receiver.
John C. Collins, the receiver charged with managing the affairs of SOBE, said in his second receiver’s report with the Mahoning County Court of Common Pleas Sept. 2 that Detroit Thermal, a subsidiary of Cartier Energy, is the only company that has demonstrated “continuing interest” in coming to some arrangement with SOBE.
Collins said he was informed that Detroit Thermal is in discussions with all interested parties related to the SOBE matter. Although the company has not at this time submitted a written proposal regarding operating or acquiring SOBE, Detroit Thermal “may be submitting a proposal within the next month,” he said in his report.
Several companies have reached out to Collins over the last six months showing some interest in purchasing or operating SOBE, the report said. However, representatives from Detroit Thermal have expressed the deepest interest, and have visited Youngstown to inspect SOBE’s assets, met with customers and city officials, and also met with representatives of the Public Utilities Commission of Ohio, the report stated.
A purchase is among the long-term solutions for SOBE, which provides steam heat and chilled water services to 22 customers downtown. The district heating company was placed into receivership in late September 2025 after the PUCO determined that the company could no longer deliver mandated services to its customers.
Desperate for Funding
Still, any long-term resolution of SOBE’s problems would take some time, Collins said. Meanwhile, the utility needs to secure additional funding in order to stay in business through November, he warned.
“Unless the receiver receives interim funding to breach the gap between today and the implementation of a permanent solution, the company will be unable to pay its expenses,” the report said. SOBE intends to lease a second 800-horsepower boiler in September to serve customers during the winter months, which will further add to the strain on its finances.
Earlier this year, SOBE was awarded $750,000 in gift funds from Enbridge Gas. That money is earmarked for operational expenses such as paying its lease obligations on its boilers and to pay for the installation of new meters at customer locations.
As of now, the company generates an average monthly income of $100,592 per month, the report stated. Ordinary monthly expenses – excluding lease payments for boilers and gas provided by Enbridge – stand at $80,000 per month.
In order to reduce costs, two of SOBE’s boilers that were leased from Power Mechanical Equipment Co. were returned in June during the warmer months.
However, in order to provide adequate heat to customers for the winter, another 800 horsepower mobile boiler would be required, adding another $28,400 payment per month beginning in September. Thus, the Enbridge gift money will be likely exhausted by the end of October, the receiver’s report said.
In the interim, the PUCO has approved emergency rate increases submitted by SOBE in June that would hike customers’ payments by 163% in some cases during the cold-weather season. Bills reflecting the new tariffs were sent to customers at the beginning of August.
However, in July, the Ohio Consumers Council and the city of Youngstown filed motions to intervene, requesting the PUCO rehear the matter of SOBE’s rate increases. The motions were granted, and a rehearing is scheduled for Sept. 14.
Moreover, Collins said that SOBE’s income is compromised because some customers have not paid their invoices. According to the report, nine customers have not made payments on invoices dated July 31, 2026, two have made partial payments, nine have made full payments, and two have paid June invoices, but not July’s.
“Customers who have not been paying their invoices continue to significantly contribute to the financial problems of the company,” Collins’ report said.
Collins said the receiver has not pursued collection or disconnection of services to customers.
Public Sources
Other options include public funding, according to the report.
This would include assistance from the state of Ohio or other resources that would assist in a complete rebuild of the system, which constitutes an investment of between $25 million and $30 million. To reconstruct the steam plant alone would cost $13.5 million, the report said.
He noted that Youngstown Mayor Derrick McDowell and his administration have lobbied the state heavily for assistance regarding the condition of SOBE and its impact on downtown.
Failure to secure additional funds would leave SOBE little choice but to appeal to the PUCO and seek approval to abandon the entire system.
“If the emergency tariffs aren’t paid by its customers, and if funds for operating expenses are not provided to the receiver through public funding of some kind within the next 60 days, the receiver may be required to seek authorization from PUCO to allow abandonment of the steam pipelines and facility,” Collins concluded.
SOBE’s Troubles
SOBE’s problems began to emerge last summer, after an 800-horsepower mobile boiler was disconnected and repossessed by its owners Sept. 30, 2025, after SOBE management failed to make payments on its lease obligations, leaving customers without heat or hot water.
The court appointed Reg Martin as SOBE’s receiver Sept. 26. A 650-horsepower boiler was secured to serve customers on the district heating line during the first week of October. Martin, however, acknowledged that the boiler’s capacity was inadequate to serve customers during the winter months. In December, a second 200-horsepower boiler was added, as the team worked to acquire another 800-horsepower boiler for the system.
However, problems with the system resulted in customers losing steam service during one of the coldest winters in recent memory.
Martin resigned as receiver in February, and the court appointed Collins, an Akron attorney, to replace him.
“The financial crisis described in the first report of the receiver has only gotten worse,” Collins’ report said. “Unless the receiver receives funding to continue operating from a public source, like the state of Ohio, an agency of the federal government, Mahoning County, the city of Youngstown, or any other agency, SOBE Thermal will not be able to pay its expenses beginning sometime in November, 2026, if not before.”