Another Energy Department loan 'success' story - Beacon Power goes belly-up
Man, those bureaucrats can sure pick 'em, eh? We should hire these Energy Department guys to choose the Super Bowl winner. We just bet on the opposing team.
Beacon Power Corp filed for bankruptcy on Sunday, just a year after the energy storage company received a $43 million loan guarantee from a controversial Department of Energy program.
The bankruptcy comes about two months after Solyndra -- a solar panel maker with a $535 million loan guarantee -- also filed for Chapter 11, creating a political embarrassment for the administration of President Barack Obama, which has championed the loans as a way to create "green energy" jobs.
Beacon Power drew down $39 million of its government-guaranteed loan to fund a portion of a $69 million, 20-megawatt flywheel energy storage plant in Stephentown, New York.
There are several key differences between the two loans, an Energy Department spokesman said on Sunday, noting the Beacon plant continues to operate, unlike Solyndra, which shut down shortly before filing for bankruptcy.
The Energy Department also had agreed to restructure Solyndra's debt in a last-ditch effort to keep the company alive, a deal which put taxpayers behind $75 million in private investment. But for the Beacon project, the government loan is the first debt the company must pay, the spokesman said.
Frankly, I'm not terribly concerned about the $43 million which, apparently, taxpayers are going to get back anyway. Congress sneezes and spends $43 million so the dollar amount shouldn't be at issue.
What should be worrisome is the track record of these numbskulls who keep loaning money to companies on the cusp of bankruptcy. The federal government should not put itself in the position of choosing winners and losers in the marketplace. This loan program is a flat failure because the people in charge haven't a clue about how the market itself is sorting out the winners and losers in "green" energy, despite their attempted intervention.
Beacon Power will probably limp along for a while, but it's clear that its days are numbered. As Reuters reports, "Beacon currently operates at a loss and its revenues are not enough to support its operations, it said in court documents."
The same could be said for most of the "green" companies who get guaranteed loans through the Energy Department.