As an investigation unfolds over a controversial U.S. Department of Energy (DOE) loan guarantee program, another "green" loan recipient lingers at the brink of financial collapse. Massachusetts energy firm Beacon Power Corporation, which develops "flywheel-based" energy storage systems, filed for bankruptcy Sunday after receiving a $43 million Energy Department loan guarantee in August 2010 — only months after taxpayers were put on the hook for a $535 million loan guarantee granted to the now-defunct solar energy company Solyndra.
Beacon Power’s bankruptcy filing arrived just two days after the White House ordered a 60-day "independent analysis" of the DOE’s loan program, where officials will evaluate and improve the monitoring process to "ensure" that government leaders are being "strong stewards of taxpayer dollars."
In August 2010, the Treasury Department’s Federal Financing Bank awarded Beacon Power the loan guarantee to finance a new energy storage plant in Stephentown, New York. But the company claims a run of bad fortune has burdened its financial standing, especially after it was delisted by the Nasdaq following an 80-percent plunge in its shares this year. "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 (pictured) alleged in papers filed during Sunday’s bankruptcy proceedings.
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Photo: President and CEO of the Beacon Power Corporation, Bill Capp, beside a grid display and flywheels for the Smart Energy Matrix system, Dec. 6, 2005, at a Pacific Gas & Electric facility in San Ramon, Calif.: AP Images