US Govt $$ Not Enough To Save Beacon Power From Bankruptcy

By Boston Business Journal

If the U.S. government is picking winners and losers in alternative energy, Beacon Power Corp. (Nasdaq: BCON) may be one of the firms Uncle Sam has allowed to lose. Facing delisting from the Nasdaq for its rock-bottom stock price, the Tyngsboro, Mass. maker of smart grid technology has filed for Chapter 11 bankruptcy, following California-based Solyndra as another U.S. government-backed alternative energy company now seeking protection from creditors.

Beacon Power makes flywheel-based energy-storage devices designed to help regulate the flow of power into the electric grid from inconsistent alternative energy sources like solar power and wind power. The firm has received at least $67 million in grants and loan guarantees from the federal government â¿¿ far less than the $500 million-plus Solyndra reportedly received before it declared bankruptcy.

Beacon Power got $43 million in loan guarantees from the Department of Energy in 2010 to finance an energy storage plant in Stephenstown, N.Y. But last October the government denied its application for financing to build a second such facility in New York State. In April, however, Washington told Beacon Power it could use part of a $24 million smart grid grant, awarded in late 2009, toward a second facility, which is now planned for Pennsylvania.

including a $5 million from the state government, Beacon Power has secured just over half the $53 million it needs to build its second plant. Beacon Power has been seeking alternative financing to cover the gap.

Early this month, Beacon Power received a delisting warning from the Nasdaq Stock Market, after its stock price hung below $1 for much of September.

Beacon Power's loss widened in its second quarter, to $6.2 million, even as its Stephentown, N.Y. plant came to full capacity, bringing the company's quarterly revenue to $525,000. A U.S. government regulatory move announced earlier this month will increase the rates utilities must pay Beacon Power and other storage companies.

The bankruptcy filing numbers Beacon Power's creditors over 200, but less than 1,000, and says the company has debts up to $50 million, and assets of $50 million to $100 million.

Copyright 2011 American City Business Journals

http://www.bizjournals.com/boston/news/2011/10/31/beacon-power-declares-bankruptcy.html?ana=thestreet

Copyright bizjournals.com 2010

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