YOUNGSTOWN, Ohio (WYTV) – The business that provides heating and cooling for most of the buildings in downtown Youngstown is in such bad financial shape, a state agency has stepped in to help.
The Public Utilities Commission of Ohio voted Friday to provide some help to the Youngstown Thermal Company. The meeting in Columbus lasted a short two and half minutes but created the process for a long-term plan to fix its finances.
“In very short order, the PUCO staff conducted a review of Youngstown Thermal’s finances and determined that the utility is insolvent or in the imminent danger of insolvency,” said PUCO Chairman Asim Haque.
The commission voted to ask Ohio Attorney General Mike DeWine to seek the appointment of a receiver to solve the company’s financial problems.
A PUCO investigation showed cash flow problems, utility disconnect notices, missed payroll, and a failure to pay debts.
Youngstown Thermal provides the steam that heats and cools most of downtown Youngstown, including city hall.
“I would imagine with this receivership in place, at some point in time, it could be sold, it could be run by somebody else,” Youngstown Mayor John McNally said.
But even with the PUCO using words like “insolvency,” Youngstown Thermal CEO Carl Avers said there’s no immediate threat of the company closing.
“The Public Utility Commission’s responsibility is to continue service so there is no concern about the discontinuing of service of any kind,” Avers said.
Late Friday afternoon, Avers emailed WKBN a statement, saying Youngstown Thermal has saved businesses $5 million a year in fuel costs for most of the last 35 years:
Some of our managers reactivated coal use with a clean coal technology burning operation at Youngstown Thermal in 1980 when Youngstown Thermal acquired the then fuel oil burning North Avenue Steam Plant from Ohio Edison. From 1979 to 2007 Youngstown Thermal saved the Central Business District approximately $140,000,000 in fuel savings. This reactivation was made possible with the installation of the then state-of-the-art pollution control systems which turned out to be the fore runner of today’s most modern coal burning systems. Youngstown State University, City Buildings, County Buildings, YMCA and most of downtown’s CBD have been the benefactor of low cost fuels not technically possible without a district steam network. Youngstown Thermal steam rates historically have been among the lowest steam rates in the country and provided an economic incentive for Youngstown’s Central Business District. In 2006 it would have cost $5,000,000 more each year if the CBD buildings used natural gas for their fuel source for heating instead of clean coal. Incidentally in about 2008 the combustion/control technology at Youngstown Thermal was adopted as “best available technology” for the State of Pennsylvania.
Avers said he asked the PUCO to put Youngstown Thermal in receivership, in part because he said four companies — which he would not identify — owe him a million dollars and he hopes receivership will help him collect the money.
Mayor McNally said the Attorney General will likely begin legal proceedings in a week or so in Mahoning County Common Pleas Court.
“I actually think this is a good thing to happen. I think it’s something that us here in city hall have quietly been waiting to see happen over the past two years,” McNally said.
It isn’t yet known if the receivership will be a single person or more than one person. That’s up to the judge.
Editor’s note: This story has been corrected to attribute quotes to the proper person. WYTV regrets the error.