Loading...

Tuesday, November 01, 2011

Beacon Power Corporation Files For Bankruptcy

Beacon Power Corporation (BPC) of Massachusetts received a $43 million U.S. loan guarantee from the U.S. Department of Energy and has filed for bankruptcy protection.  This collapse follows solar-panel maker Solyndra LLC two months ago. BPC used the U.S. backing to build a plant outside Albany, N.Y., designed to store power and help electric companies manage minute-by-minute movements in supply and demand.

Compared with Solyndra, Beacon's Chapter 11 filing, made on Sunday, will be less costly. The company has drawn down $39 million of its U.S.-guaranteed loan, which carries the New York plant as collateral. Unlike the Solyndra case, in which the government agreed to take second place behind other creditors for some assets, the U.S. has first priority on the Beacon collateral. The 2009 economic-stimulus bill provided funding for the Solyndra and Beacon guarantees. Solyndra received $535 million in loan guarantees and had drawn down about $527 million when it filed for bankruptcy protection in September.

Beacon's plant takes excess electrical energy from the power grid and converts it into the energy of a series of spinning flywheels. It has sought to win contracts from grid operators to supply power when needed to even out the flow of electricity.

Beacon Power was also awarded a $24 million Smart Grid stimulus grant in 2009 to build a plant outside Wilkes-Barre, Pa. That plant hasn't been built yet but could "attract equity capital or be sold on advantageous terms" once it begins operating, the company said in court papers.

Beacon, which employs 65 people and is based in Tyngsboro, Mass., trades on Nasdaq but has been warned by the exchange that it faces delisting. It told investors earlier this year that its survival was at risk if it failed to raise more capital. (WSJ, 11/1/2011)

No comments: