Posted on 11/01/2011 4:37:45 PM PDT by Iam1ru1-2
By Randall Chase November 1, 2011 6:35 am Print Tell a Friend Text Size: A A A
DOVER, Del. (AP) - A Massachusetts energy storage company that received a $24 million federal stimulus grant and a $43 million loan guarantee from the Department of Energy has filed for bankruptcy protection.
Beacon Power Corp. of Tyngsboro, Mass., filed for Chapter 11 protection on Sunday in bankruptcy court in Delaware, listing assets of $72 million and debts of $47 million.
Beacon makes flywheel energy storage systems used to keep power frequency steady on electrical grids by absorbing excess power, then returning the energy when needed.
Beacon said its long-term financial prospects are strong, but that efforts to build its business have been capital intensive, and that those costs have contributed to operating losses.
"In addition, the current economic and political climate, the financing terms mandated by DOE, and Beacon's recent delisting notice from Nasdaq have together severely restricted Beacon's access to additional investments through the equity markets," CEO F. William Capp said in an affidavit accompanying the bankruptcy petition.
Beacon has drawn $39.1 million from last year's DOE loan guarantee for construction and operation of a 200-flywheel, 20-megawatt frequency regulation facility in Stephentown, N.Y.
The company was awarded a $24 million Smart Grid stimulus grant in 2009 to build a similar facility in Hazle Township, Pa., with Pennsylvania kicking in an additional grant of $5 million.
"The debtors believe that, when operational, the Hazle facility will generate significant revenue and, if strategically appropriate, able to attract equity capital or be sold on advantageous terms," Capp said in his affidavit.
Beacon also received a $4.6 million loan from Massachusetts in 2008 for expansion of its Tyngsboro facility, with an outstanding balance of $3.45 million as of June 30.
DOE officials were quick to draw distinctions between Beacon and Solyndra Inc., a California solar energy company that sought bankruptcy protection in Delaware after receiving a half-billion-dollar loan guarantee from the Obama administration.
Solyndra, which is the subject of investigations by the FBI and congressional Republicans, ceased operations upon filing for bankruptcy in September and is planning to sell its manufacturing assets. Beacon, on the other hand, is seeking to reorganize and to continue operations at the Stephentown plant.
"That doesn't mean there won't be layoffs, but it is important to note that the plant we funded is going to continue providing a valuable service," DOE spokesman Damien LaVera noted in an email.
Also, while private investors moved ahead of taxpayers for repayment in the event of a default by Solyndra as the result of a February loan restructuring, the DOE has a first priority lien on the assets of Beacon's Stephentown facility.
Capp and DOE officials also noted that an Oct. 20 ruling by the Federal Energy Regulatory Commission should prove favorable to Beacon's bottom line. The ruling ties the market price paid to frequency regulation providers to the speed at which they respond to changes in supply and demand on the electrical grid. Beacon says its flywheel systems can react within seconds to a grid operator's signal, much faster than conventional fossil-fuel based regulation resources.
Let me see....a huge superconducting magnetically levitated disc spinning in a vacuum chamber at high speed......
Paging Fred "Homer Simpson" Flintstone.....
what could possibly go wrong...?
No problem.. the democrats will just print some more money..
Bold mine
Gee I hope those poor executives were able to able to pay off their homes and pad up their retirement accounts before they filed for the bankruptcy! I’m sure they were able to write those checks to the Obama reelection campaign before that too...
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