Beacon Power Files for Bankruptcy; Second Government Backed Energy Firm to File for Bankruptcy this year (BCON)

Beacon Power Corp. (NASDAQ: BCON), a Tyngsboro, Massachusetts-based company engaged in the designing, manufacturing and operation of flywheel-based energy storage systems, became the second government-backed energy company to file for bankruptcy this year.

Beacon Power, which received a $43 million loan guarantee from the Department of Energy, filed for bankruptcy on Sunday. Beacon Power’s bankruptcy follows that of solar energy company Solyndra.

Solyndra, which manufactured solar panels, filed for bankruptcy about two months ago. Solyndra had received a $535 million loan guarantee from the Department of Energy.

However, a Department of Energy spokesman noted that there are some differences between the two loans. The DOE spokesman also noted that Beacon Power’s 20 MW flywheel energy storage plant in Stephentown, New York continues to operate, unlike Solyndra’s plant, which was shut down before the filing of bankruptcy.

Beacon Power has used $39 million of the DOE loan guarantee to finance a part of the $69 million Stephentown plant.

In the case of Solyndra, the DOE also agreed to restructure the company’s debt to avert a bankruptcy. However, no such efforts were made for Beacon Power. For the Beacon Power plant, the government loan is the first debt the company must pay, the DOE spokesman noted.

Beacon Power was engaged in the development of a new technology that enabled energy storage plant to rapidly absorb electricity from New York’s power grid when demand falls and inject energy back into the grid when the demand rises.

In its bankruptcy filing, Beacon Power said that it has been operating at a loss and its revenue is not sufficient to sustain operations. The company also said in the bankruptcy filing that it had $72 million in assets and $47 million in debts. The company cited its inability to attract additional investments for the bankruptcy.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.