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  (Source: benzinga.com)
Beacon Power received a nearly $43 million loan guarantee from the government in August 2010

The Solyndra failure has put alternative energy loans in a negative light as of late, and now the financial failure of yet another renewable energy company is here to add insult to injury. Beacon Power has claimed bankruptcy after receiving government loans as well.

Beacon Power, which creates flywheels to store power and increase grid efficiency by preventing blackouts, filed for bankruptcy protection on Sunday. The company received a nearly $43 million loan guarantee from the Department of Energy in August 2010.

More specifically, Beacon Power owes the Department of Energy $39.1 million and the state of Massachusetts $3.45 million. It received these loans because its technology was seen as aiding grid reliability.

Rep. Cliff Stearns (R-FL), who is leading the recent Solyndra investigation, was quick to attack the Department of Energy with its decision to give not just one bad alternative energy loan, but now two.

"This latest failure is a sharp reminder that DOE has fallen well short of delivering the stimulus jobs that were promised," said Stearns. "Now taxpayers find themselves millions of more dollars in the hole."

The Department of Energy defended its position with Beacon Power, saying that unlike Solyndra, Beacon Power has an operational facility in Stephentown, New York. Solyndra may have closed down completely the day it claimed bankruptcy, but Beacon Power has long term contracts with the Stephentown facility as well as cash reserves, which can be used to pay the government back.

"Protecting taxpayer dollars remains the top priority for Secretary [Stephen] Chu and the Department, which is why we were careful to include many protections for the taxpayer in the loan guarantee for the Stephentown project," said Damien LaVere, DOE spokesman.

While analysts such as Walter Nasde of Ardour Capital believe Beacon Power's technology was a good idea, CNN reports that the company couldn't survive due to the low rates that the government put in place for utilities. In other words, Beacon Power couldn't charge utilities any more than the rates the government set, and it wasn't enough to keep Beacon Power alive.

The low price of natural gas for generating additional power, its failure to attract investors, and an issue with one of its flywheels in July were also listed as nails in Beacon Power's coffin. In addition, Beacon Power's shares, which were down to $3.44 at the end of February and were recently at below $1 a share, led to a notification from NASDAQ that Beacon would be delisted. The company's shares traded for as much as $47.40 in 2005, but closed Monday at 10.7 cents a share, which gives Beacon Power a market value of $3 million.

"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," said Beacon Power CEO William Capp.

Beacon Power's revenues from the Stephentown plant were $525,000 in Q2 2011.

Back in September, Capp described the government's role in supporting the construction of the Stephentown plant, and how it would have been impossible without the loan.

"We absolutely couldn't have done it without support from the government, because no one was willing to do it," said Capp. "The projects are so huge, that's the problem. If you demonstrate an energy technology on a grid scale, that's $100 million."

The Beacon Power bankruptcy echoes Solyndra's recent failure, which is a solar panel manufacturer that received $535 million in loan guarantees back in 2009. Solyndra filed for bankruptcy two months ago, and there is an investigation looking into whether DOE properly assessed the risks before giving the loan and whether the Obama administration was pushing the loan despite risks in order to meet political deadlines.

Sources: CNN, Washington Post, GreenBiz.com



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RE: I'd like some cash too!
By YashBudini on 11/2/2011 2:33:25 PM , Rating: 3
quote:
But many of them are hippy college students who are brainwashed by their professors into believing in crap like Marx. Others are true Marxists and Socialists.


I've seen right and left wing extremists in schools. Both are whack jobs. To say or imply otherwise is the real brainwashing. Right wing extremists today essentially behave such that if you're not a total misanthrope you're a socialist. And another common phenomenon of the faux crowd is that the opposition can be 100% wrong, totally discredited. There's never been a human argument where that's true, but apparently it's true in US politics today. Must be that fair and balanced stuff we hear about.

quote:
I fully agree with the statement that some of those on Wall Street got greedy.

Lack of full disclose is beyond greed. They broke the law. The SEC slapped them on the wrist while giving them a hummer. If you really believe in fair play you'd address this accordingly, which is what those slobs of protesters are trying to do.

And those in charge that have robbed businesses blind or made a mess on Wall St, they come from non-Marxist business schools, or didn't you notice? Oh I keep forgetting the extremist pendulum only swings 1 way, yeah right.

You may want to address fair play with your congressman. They are exempt from insider trading laws regardless what party they are in.


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