Friday, November 18, 2011

Beacon Power devalues N.Y. plant by 77%

By Galen Moore, Boston Business Journal

Just a couple of weeks into its bankruptcy process, Beacon Power Corp. has written down the value of its Stephentown, N.Y., energy storage plant as it moves toward a liquidation of its assets, according to court and regulatory documents filed this week. Beacon Power formerly traded on the Nasdaq under the ticker symbol ‘BCON.’

The Tyngsborough-based maker of flywheel-based energy storage technology has a plant up and running, in Stephentown, N.Y. In a regulatory filing this week, the firm wrote down the value of that plant by $41.9 million, to $12.6 million, citing price uncertainty in New York’s market for frequency regulation – in which entities such as Beacon Power provide ready access to power that can balance supply and demand on the energy grid.

“In general, we expect regulation pricing to increase in the future, but we are unable to assess whether the recent pricing trend in New York is reflective of a temporary or a permanent change in the pricing structure,” the company noted in its filing.

At stake is $39.1 million, the remaining principal of $43.1 million in loans written by the Federal Financing Bank (FFB) and guaranteed by the Department of Energy, which Beacon Power closed in August, 2010. “Should frequency regulation pricing remain at current levels in New York, it is unlikely that we would be able to pay the FFB loan,” Beacon Power said in the filing.

Meanwhile, a Bankruptcy court in the District of Delaware this week filed a proposed final order that would require Beacon Power to prepare bid procedures to sell its assets, beginning Nov. 23, if the company can’t find a way to pay off $3 million in cash collateral it has appropriated to continue operations. Beacon Power filed for Chapter 11 bankruptcy protection on Oct. 31.