YOUNGSTOWN, Ohio – A Mahoning County Common Pleas Court has appointed a new receiver to manage the assets of SOBE Thermal Energy LLC, the troubled district heating and cooling company that serves more than two dozen buildings downtown.
Judge Anthony Donofrio on Tuesday granted a motion filed last week by the Public Utilities Commission of Ohio seeking that the court remove Reg Martin of Columbus as the company’s receiver and appoint attorney John C. Collins of Akron in his place. The court also authorized Collins to engage Michael Moran of Cuyahoga Falls as the receiver’s counsel.
Collins would be paid a rate of $300 per hour as receiver, according to court papers, while counsel would receive $350 per hour.
Martin, in a joint agreement with the PUCO, had agreed to resign, according to court documents.
Martin’s removal comes after customers – including City Hall – lost steam heat service to their buildings during one of the most severe winter cold blasts in recent memory. Three weeks ago, temperatures plunged to 17 degrees below zero at points, as SOBE struggled to maintain adequate heating for downtown buildings and their tenants. A ruptured water line led to the complete shutdown of the company’s two mobile boilers. A third, 800-horsepower boiler was secured during the first week of February.
However, that boiler experienced a system failure Feb. 8 while a second, 650-horsepower unit at the site also shut down. That left a single boiler with just 200-horsepower capacity in operation, which was inadequate to supply steam heat to customers.
The debacle forced several organizations and businesses to temporarily close.
The district heating company was placed into receivership in late September after the PUCO determined that it could no longer deliver mandated services to its customers.
An 800-horsepower mobile boiler was disconnected and repossessed by its owners Sept. 30 after SOBE management failed to make payments on its lease obligations, leaving customers without heat or hot water.
The court appointed 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.
Meanwhile, customers and officials pressed the PUCO to intervene and replace Martin as receiver, questioning his management of the company.
As of this posting, heat had been restored to downtown customers.