WASHINGTON -- A Massachusetts energy-storage company that received a $43 million Department of Energy loan guarantee has become the second green tech company backed by U.S. government financing to file for bankruptcy court protection in two months.
Beacon Power's filing for Chapter 11 late Sunday comes in the shadow of the collapse of Solyndra, a $535 million DOE loan guarantee winner that left the Obama administration's clean-energy policy vulnerable to Republican criticism. GOP lawmakers have pointed to Solyndra's bankruptcy and dissolution as evidence that the Obama administration's $35.9 billion program to boost investment in green technology was misguided.
News of Beacon, which makes flywheels that manage energy moving through a power grid, follows the White House announcement last week that it was enlisting Herbert Allison, a former Treasury Department official who has worked in Democratic and Republican administrations, to audit the entire loan program.
On Monday, Obama administration officials were quick to note differences between Beacon and Solyndra, which Republican critics said benefited from political connections. One of Solyndra's top investors was a foundation tied to Obama fundraiser George Kaiser.
Unlike Solyndra, Beacon plans to reorganize and remain in business. A recent rule change by the Federal Energy Regulatory Commission was also expected to increase revenues for energy storage providers, including Beacon, according to company CEO William Capp. The DOE is a first-priority creditor on the assets of Beacon's facility in Stephentown, N.Y.
"It is important to note that this plant itself, which is operational and generating revenue, is a valuable collateral asset," said DOE spokesman Damien LaVera.
Beacon, records show, has been backed by Democrats and Republicans.
Massachusetts Democrats — including the late Sen. Edward Kennedy and Sen. John Kerry— wrote to the DOE on behalf of Beacon's loan application in 2009 and 2006, according to two letters to the Energy Department obtained by USA TODAY.
Beacon also won a $24 million Smart Grid stimulus grant in 2009 to build a flywheel facility in Hazle Township, Pa., and the company won a $5 million grant from the office of Pennsylvania Gov. Tom Corbett, a Republican.
"Projects like this will bring significant economic, environmental and efficiency benefits to Pennsylvania's power grid," said Rep. Lou Barletta, R-Pa., in August. "It will also create new jobs and boost the local economy."