November 3, 2011
By: John Clark
A Massachusetts energy company found itself filing for bankruptcy this week only months after receiving a $43 million loan from the federal government.
According to Washington, D.C. watchdog TheHill.com, Beacon Power Corp., which creates energy storage systems, filed for bankruptcy protection after running into debt problems while trying to construct an energy storage facility in Stephentown, New York.
The company was forced to file bankruptcy despite the recent loan from the Department of Energy, which has faced public criticism for offering loans to green energy companies that aren’t able to complete their projects.
Sources indicate that Beacon Power listed assets of $72 million and debts of $47 million. In addition, Beacon Power has reportedly used $39 million of the government-backed loan.
The latest bankruptcy comes on the heels of the bankruptcy filing by solar panel manufacturer Solyndra, which had received more than $500 million in guaranteed federal filing and had to lay off more than 1,000 workers due to its financial troubles.
In light of the recent energy company bankruptcies, the Obama Administration has ordered a review of the Department of Energy’s controversial green energy loan program, which was intended improve the management and operation of sustainable energy projects.
Opinions relating to the government’s loan program predictably fall along party lines, with Republican blasting the loans as evidence of government excess, and Democrats defending the program as a necessary step in the country’s move towards creating more sustainable sources of energy.
According to Rep. Cliff Stearns, a Republican from Florida, the loan program has fallen "well short" of the government’s goal to deliver the "stimulus jobs that were promised."
In addition, he lamented that taxpayers were now "millions of more dollars in the hole." Supporters of the program, however, observe that, despite its bankruptcy, Beacon Power still managed to actually construct the New York energy storage plant, which will provide a crucial energy resource for nearby residents.
Moreover, proponents of the sustainable energy loans claim that, without some government subsidies, forms of sustainable energy derived from resources such as the wind and sun would not be able to compete with more traditional forms of energy production.
Regardless of who is correct in this debate, the government may soon change its loan program, especially if its beneficiaries continue to need the assistance of bankruptcy lawyers.
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