PUCO Staff Seeks Receiver to Run Youngstown Thermal
YOUNGSTOWN, Ohio — The Public Utilities Commission of Ohio will meet today to review whether a receiver should be appointed to manage debt-laden Youngstown Thermal LLC and Youngstown Thermal Cooling LLC. and continue to provide services to the company’s customer base.
Youngstown Thermal provides steam heat and cooling to about 50 customers in the downtown area.
Last year the company lost its biggest account, Youngstown State University, which accounted for 60% of its revenue. Earlier this week, Thermal’s CEO, Carl Avers, announced he plans to sell its assets to an entity interested in developing a “world-class energy system for Youngstown.”
In a report released Thursday, the PUCO staff said it conducted a review of Thermal’s financial condition and determined the company “is unable to pay utility suppliers, debt service and employee payroll when those expenses come due. Additionally, the company’s magnitude of debt exceeds its revenue without any one of three sizable customers in its customer base. Therefore, staff determined the company is permitting or about to permit a breach of its duty to furnish adequate service to its customers … and is instead insolvent or in imminent danger of insolvency.”
According to the PUCO staff report, Thermal notified the regulatory agency this month that its financial condition is precarious “due to the loss of YSU, collection delays of certain alleged receivables from various customers, and the cancellation” of a demonstration project with the Department of Energy.
“On June 15, 2017, members of the staff traveled to Youngstown Thermal to discuss the issues … During this meeting the company updated staff on the cash flow issues. Staff does not believe that the company’s revenues going forward will be sufficient to pay the company’s current bills with the loss of YSU and the DOE project and with [Mercy Health Youngstown] not coming on the system.”
Youngstown Thermal’s financial problems first came to light in July 2015 when it was learned that the loss of YSU would reduce the company’s $5 million in annual revenues by $2.3 million. 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.
CLICK HERE to read PUCO staff report
BACKGROUND
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
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