Nearly three months after the demise of Solyndra, which received a $535 million loan guarantee from taxpayers before going bankrupt, the second company to receive a loan under this program has filed for bankruptcy. The Hill reports:
A Massachusetts company that received a $43 million Energy Department loan guarantee last year filed for bankruptcy Sunday, a step certain to fuel criticism of federal green energy financing in the wake of the solar company Solyndra’s collapse.
Beacon Power Corp., which develops energy storage systems, filed for bankruptcy protection in the U.S. Bankruptcy Court in Delaware.
Beacon Power had received federal loan guarantee to help build an energy storage plant in Stephentown, New York that began operating in January. The Treasury Department’s Federal Financing Bank provided the loan.
Beacon sought bankruptcy protection two days after the White House ordered an independent 60-day evaluation of the Energy Department’s loan programs aimed at ensuring effective management and monitoring.
The review, conducted by a former Treasury Department official, will include examination of how Beacon’s project is performing going forward, and whether there are additional steps that can be taken to protect taxpayers, according to the Obama administration.
This “review” appears to be a chance for the federal government to influence business decisions in the private sector, reminiscent of its role in the bailouts of the auto and finance sectors.
Timing is important here — and not timing related to the Solyndra scandal. The table below shows how many loans were given by month. The program ended on September 30th. As you can see, the government can be very efficient when it sees a deadline looming. The vast majority — nearly two-thirds — of the loans given out were awarded in August and September of this year.
|
Date |
# of loans |
% of total |
|
September 2011 |
13 |
46% |
|
August 2011 |
5 |
18% |
|
April 2011 |
1 |
4% |
|
February 2011 |
2 |
7% |
|
December 2010 |
2 |
7% |
|
October 2010 |
1 |
4% |
|
August 2010 |
2 |
7% |
|
July 2010 |
1 |
4% |
|
September 2009 |
1 |
4% |
Solyndra was the first loan in September 2009. Beacon became the third loan recipient when it was awarded in August 2010. So as it stands, two of the first three loans given out in the green energy financing program have declared bankruptcy. If they get the congressional support to reauthorize funding for this program, maybe the department can get the rights to the song “Two Out of Three Ain’t Bad” for their next loan award or the next bankruptcy filing in Delaware.
And don’t be surprised if this program, which appears to be red meat for the chopping block, gets authorized for more funding in the future:
“We will continue to support the development and deployment of innovative energy systems like this energy storage project that support our goal of expanding renewable energy generation and reducing greenhouse gas emissions,” Energy Secretary Steven Chu said when announcing the finalization of the agreement in August of 2010.
This sentiment continues to come from the administration, the department, and democrats. Meanwhile, the House Oversight and Investigations Subcommittee is expected to vote Thursday to subpoena internal White House messages related to the Solyndra deal and Secretary Chu is expected to testify before a House committee in mid-November.