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Council Rebukes Thermal Ventures for Rate Request
By Dan O'BrienYOUNGSTOWN, Ohio -- Already squeezed by higher costs for materials coupled with dwindling sales, Thermal Ventures Inc. was hit with one more obstacle as City Council all but denied its request for a 15% rate hike.During last night's finance committee meeting, members recommended moving to a second reading an ordinance that would increase rates for downtown customers by only 2% each year over five years. Council approved a second reading during its meeting last night.Thermal Ventures sought a one-time 15% increase for its tariff customers. The company is a district energy supplier of steam heat and coolant that serves 50 downtown clients, including Youngstown State University. Customers under contract received a 15% rate increase in November. Only rate changes affecting tariff customers require council's approval.Fourth Ward Councilwoman Carol Rimedio-Righetti, chairwoman of the public utilities committee, sponsored the legislation. The time frame on the ordinance could be changed to three years, or even one year, she said, but the 2% increase will stand.Righetti said Downtown businesses are struggling, Rimedio Righetti said, and a 15% rate hike would be too much for them to absorb. "Fifteen percent is a hardship on a business," she commented. "This time is not the right time. I think 2% is fair."Should the economic climate improve, Thermal Ventures can seek higher rates, Rimedio-Righetti said.Mark Butta, Thermal Ventures vice president of business development, informed the committee a 2% increase is not in line with the additional costs the company has had to assume over the last three years. "I wouldn't disagree that every business is struggling," he said, "but it's not fair that Thermal Ventures should have to balance the budget for organizations it has no control over."Thermal Ventures raised its rates by 5% in 1998 and 1999, Butta said. It raised them again in 2001 by 7%, but the company hasn't sought a rate increase since. Meantime, the price of insurance, natural gas and other materials have skyrocketed."Apparently, we've done a poor job communicating what we need," Butta stated.Butta told the committee two months ago his company has lost significant sales because several customers have either downsized or shut down. Five years ago, the company sold 366,081 pounds of steam. This year, Thermal Ventures is projecting sales of $3.1 million on only 275,000 pounds and a $14,000 deficit with the 15% rate hike factored in, he reported.To make matters worse, the costs of materials and services are up, Butta stated. Coal costs have risen 13%, natural gas 50%. Water and sewer utilities expenses have risen 8% and insurance doubled, he explained.These factors led the company to seek the 15% increase, Butta said.Contact Dan O'Brien at [email protected] "