YOUNGSTOWN, Ohio – Members of City Council will consider a resolution next Wednesday requesting help from the state of Ohio for financially troubled SOBE Thermal Energy Systems LLC, but a state representative cast doubt Thursday on prospects for assistance from the state.
The resolution, co-sponsored by council members Julius Oliver, Patrick Kelly, Amber White and Mike Ray, would declare “a local energy and public utility emergency” arising from SOBE’s “financial crisis” and urging “immediate intervention and assistance by the state of Ohio.”
SOBE, which provides steam heat for 23 downtown customers, including several buildings owned by the city, reported in late May that it would be incapable of funding its operations past October if it didn’t secure new funding through an emergency tariff increase or other assistance.
“As the legislative body, we want to make sure that we are bringing attention to the situation and showing that we’re working together and supporting finding a solution,” Ray, 4th Ward councilman, said. “It’s very important to reiterate that we’re a customer of the steam system, and the city is taking a leadership role in trying to bring resolution to this dysfunctional system and legacy problem.”
The resolution specifically requests that the governor, state General Assembly, Public Utilities Commission of Ohio, Ohio Department of Development “and all appropriate state agencies immediately evaluate and implement all available emergency measures, funding opportunities, grants, loans, infrastructure programs and other resources” to preserve utility services for downtown.
The company is providing services using trailers it is leasing. Its assets are being managed by John Collins, a court-appointed receiver who filed a motion May 21 requesting an emergency rate increase for SOBE. Six days later, the commission directed its staff to prepare a report proposing emergency rates.
“I expect PUCO’s technical staff to file said report in the near future. There is no specific deadline, but we are working expeditiously,” Matt Schilling, director of PUCO’s office of public affairs, said in an email Thursday. Once the report is filed, the commission will make a ruling or determine next steps.
“We are monitoring the situation,” Dan Tierney, deputy director of media relations for Gov. Mike DeWine, said in an emailed statement. He also said he was unaware of “any legislative efforts regarding an appropriation regarding this situation.”
State Rep. Lauren McNally of Youngstown, D-58th, questioned whether there was any appetite for intervention at the state level, noting she and others had sought a meeting with DeWine since September and didn’t get one until February. Once the receiver and PUCO put together a dollar amount for what would be required to address the situation, the information was presented to the governor’s office, which subsequently “went completely silent” until late last week, when a spokesperson told media outlets the office was monitoring the situation but no money was being provided.
“There isn’t an option for the legislature,” McNally said. Sobe wouldn’t qualify for capital budget funds because it is a private business and because those are bonded funds. Any project has to outlast the 20-year term of the bond, so the rented trailers wouldn’t qualify.
She said assistance “has to come from the administration, which in my opinion it should anyway, because the administration is in charge of the PUCO, and the PUCO is who failed, in my opinion.”
Ray said he hopes the state government will intervene given the uniqueness of the situation. He was unaware of a similar failed public utility of this nature in recent times.
“This is going to require a different approach,” he remarked.
Also during the meeting, there will be a second reading for an ordinance authorizing the hiring of Roetzel & Andress Associates for $130,000 “to assess SOBE’s functionality and identify financially sustainable long-term solutions ensuring that the steam system operates safely and reliably.”