Beacon Power To Sell Stephentown Plant

by David Flint
Beacon Power will put the Stephentown frequency regulation plant up for sale. The company, which filed for bankruptcy three weeks ago, reached an agreement with the U.S. Department of Energy’s Loan Programs Office (LPO) to conduct the sale of the facility by January 30, 2012.
Beacon has been attempting in Delaware Bankruptcy Court to work out an arrangement with the LPO to repay their $39.1 million loan balance while still reorganizing the company and keeping it viable. Beacon requested that LPO support its restructuring efforts to preserve Beacon as an organization, maintain the value of the Stephentown 20 MW flywheel plant and enable Beacon to complete its reorganization as quickly and efficiently as possible. But the LPO has insisted on recovering as much of the loan balance as soon as possible, leading to the agreement to sell the plant.
The LPO relented on its objections to Beacon’s use of approximately $3 million in cash collateral to fund the Company’s business operations. Beacon will have full access to that cash to fund its weekly operations at an agreed upon reduced budget. In addition, Beacon’s bankruptcy counsel and financial advisors have agreed to defer their fees, enabling the company to allocate more of the cash collateral toward operations.
The court approved Beacon’s request that it be allowed to list its other assets for sale, although the company may choose not to do so, or only sell some individual assets, if it is able to raise sufficient new capital by the end of January. Beacon is in preliminary discussions with several strategic investors and private equity firms that have expressed an interest in making a significant investment in the restructured company.
Beacon believes that the value of the Stephentown plant will be increased as a recent ruling takes effect from the Federal Energy Regulatory Commission that provides for incentive compensation for fast responding energy storage resources. They also believe that Beacon Power’s singular expertise in developing, operating and maintaining grid-scale flywheel systems adds unique value to the plant.
“Our goal was to reach a settlement agreement with the DOE Loan Programs Office,” said Bill Capp, President and CEO of Beacon Power. “We have done that. We will now focus on attracting new capital to reorganize our company.”