Beacon Power, the energy storage company that received a federal loan and later declared bankruptcy, said it intends to sell off its assets to repay the loan.
The Tyngsboro, Mass.-based company said yesterday it reached an agreement with the Department of Energy where it will sell the Stephentown, N.Y., flywheel storage facility financed by a DOE loan guarantee. The sale of that facility need to be before January 30 next year.
Beacon Power owes $39.1 million on a $43 million loan guarantee it secured to build a 20-megawatt power plant that uses spinning flywheels to supply quick bursts of power to the grid, a job normally done by increasing generation at natural gas plants. It's the same loan guarantee program, designed to bring new technologies to market, that provided a $535 million loan to Solyndra, a solar company that shut down and went bankrupt.
Beacon Power declared bankruptcy at the end of October and is now in the process of trying to raise private capital so that it can build more plants and generate revenue. It had hoped to retain the Stephentown plant, but the Energy Department's highest priority was to recover as much of the loan as possible, according to Beacon Power. The company could also sell other assets for repayment.
"Our goal was to reach a settlement agreement with the DOE Loan Programs Office and we have done that. We will now focus on attracting new capital to reorganize our company," CEO Bill Capp said in a statement.
Revenue from the Stephentown plant has gone down in the past months, according to a regulatory filing from last week. In the past few months, the prices for the frequency regulation services it provides have slid downward, which led Beacon Power to lower the estimated value of its plant.
A regulatory change, however, could significantly increase revenue from the Stephentown plant and flywheel-based frequency regulation services, it said. A change Federal Energy Regulatory Commission, which will take effect in New York in January, will compensate how quickly a provider can supply power, not only the total amount of energy, a change that should benefit Beacon Power.