The Tyngsboro, Massachusetts-based Beacon Power Corporation of filed for Chapter 11 protection on Sunday in bankruptcy court in Delaware, listing assets of $72 million and debts of $47 million. The energy storage company that received a $24 million federal stimulus grant and a $43 million loan guarantee from the Department of Energy has now officially filed for bankruptcy protection.
Beacon makes flywheel energy storage systems used to set power frequency in place on electrical grids by absorbing all of the excess power, before returning the energy when needed. The firm says that its long-term financial prospects are strong, however, efforts to build its business have been extremely capital intensive, and that those costs have contributed much to operating losses.
The company has drawn $39.1 million from last year’s DOE loan guarantee for the construction and operation of a 200-flywheel, 20-megawatt frequency regulation facility in the town of Stephentown, New York.
The company was awarded a $24 million Smart Grid stimulus grant in 2009 to build a similar facility in the town of Hazle Township, Pennsylvania with that state kicking in an additional grant of $5 million.
Beacon also received a whopping $4.6 million loan from Massachusetts in 2008 for expansion of its Tyngsboro facility; that comes, however, with an outstanding balance of $3.45 million as of last summer.
DOE officials were decidedly hasty in drawing distinctions between Beacon and Solyndra Incorporated, a California solar energy company which sought bankruptcy protection in Delaware after receiving a half-billion-dollar loan guarantee from the Obama administration.
While, Beacon is seeking to reorganize and to continue operations at the Stephentown plant; now the subject of an investigation by congressional Republicans and the FBI and Solyndra has halted operations upon filing for bankruptcy in September and is now planning to sell its manufacturing assets.
Also, while a February loan restructuring for Solyndra gave priority to taxpayers for repayment of more than $69 million in private loans, the DOE now has a first priority lien on the assets of Beacon’s Stephentown facility.
Also, DOE and Capp officials noted that an October 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 for the electrical grid.