YOUNGSTOWN Council to hear business's rate request

In 2001, Thermal asked for a 9-percent increase but council granted 7 percent.
By PETER H. MILLIKEN
and ROGER G. SMITH
VINDICATOR STAFF WRITERS
YOUNGSTOWN -- City council will conduct a public hearing in its chamber at city hall on Youngstown Thermal Limited Partnership's request for a 15-percent rate increase retroactive to Jan. 1.
"Economic times are tough downtown right now," observed Carol Rimedio-Righetti, D-4th chairwoman of Council's public utilities committee.
Any time such a large increase is proposed, she said she believes it's necessary to hear what members of the downtown business community have to say about it. The committee voted Monday to conduct the hearing. The hearing date and time will be announced later, she said.
Rising natural-gas and water rates, coal prices up 33 percent compared with a year ago and higher employee benefit costs prompted the request, said Mark A. Butta, Youngstown Thermal's vice president of project development.
The company needs the increase to balance its budget, he said.
Thermal could have made an argument for a 22-percent increase, he said. That seemed too high, however, so the company trimmed the request, he said.
If approved, the company will collect about half as much as it would have if Thermal made the request in the fall, he said.
About the business
Youngstown Thermal supplies steam heat and cooling to many buildings in and near the city's downtown. The average downtown building uses between 100,000 and 300,000 pounds of steam per winter heating month. For 300,000 pounds, a customer pays $1,840, he said. With the rate increase, that would rise to about $2,100 a month, Butta said.
Council last increased rates for the company in November 2001. That year, Thermal asked for a 9-percent increase but council granted 7 percent, saying the full request was too high. The company noted at the time it probably would have to make its next request higher to make up for the 2-percent difference.
Council granted 5-percent increases in 1999 and 2000 after freezing rates for 12 years.
Thermal probably should have asked for an increase in the past two years and avoided a large request, Butta said. Post-Sept. 11 uncertainty and a down economy, however, made the company hold off, he said.
"The timing just wasn't right," Butta said. "We thought we could struggle through."
Despite higher rates, Butta argued that steam remains a good value. Steam costs a fraction of gas and businesses that use steam don't need to have or maintain expensive boilers, he said.