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Associated Press photo by Mike Groll

Green in the red

Technology | Another taxpayer-backed energy company goes bankrupt

Issue: "Border bandits," Dec. 3, 2011

Beacon Power became the second federal "green energy" loan guarantee recipient to declare bankruptcy when it filed for Chapter 11 protection on Oct. 30. Using $39.1 million from a Department of Energy loan awarded last year, Beacon built an electricity storage facility in Stephentown, N.Y., that has generated power for the grid-but hasn't generated profit.

The Energy Department's loan guarantee commitments, totaling $36 billion, have been touted by the Obama administration as creating jobs and making America a leader in green energy technology, but they came under scrutiny after the August bankruptcy of Solyndra, a startup that received $528 million to build cylindrical solar panels that proved unmarketable.

Beacon's technology is certainly attractive in theory: The company builds rotors called flywheels that spin with minimal friction inside a vacuum-sealed tube. When power demand on the grid is low, excess electricity is used to accelerate the flywheels. When demand peaks, the momentum of the rotors sends electricity back into the grid.

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Although utilities buy Beacon's power, an independent federal agency governs how much the company can earn. Just 10 days before the bankruptcy, the Federal Energy Regulatory Commission agreed to increase the amount companies like Beacon can charge-but it was too late to prevent the default.

In 2005 Beacon's stock shares traded for as much as $47.40 apiece. Throughout October they were worth less than a dollar. Beacon blames the economy and the "political climate" for its lack of profitability and its recent inability to attract private investors: "We got caught in the Solyndra firestorm," company lawyer William Baldiga said in federal bankruptcy court in Delaware.

In a press release the company took pains to distinguish itself from Solyndra: Although Solyndra fired some 1,100 employees and shut down its factory when it went bankrupt, Beacon's employees have merely taken 20 percent pay cuts and are still operating its flywheel plant.

Over objections from the Energy Department, bankruptcy judge Kevin Carey decided to let Beacon use cash collateral locked up by the loan terms to pay operating expenses at least until a Nov. 18 final hearing.

Beacon, based in Tyngsboro, Mass., has also received $3.45 million from its home state. Another renewable energy company in Massachusetts, Evergreen Solar, went bankrupt in August after receiving millions in state subsidies.

Dates served fast

As a sign of our progressive times, a smattering of mobile phone applications have become popular over the last six months by arranging local dates. Some singles have grown impatient with traditional online dating, a ritual that may involve "a month" of messaging someone-according to a female student at St. John's University in New York City-before actually meeting him.

Apps like OkCupid Locals, Blendr, and Jazzed (launched in August by popular matchmaking service eHarmony) all integrate the location-based functionality of smartphones, allowing a user to find and contact someone else in town who may be interested in grabbing dinner or a movie at a moment's notice.

That "someone" might be a stranger, so the apps advertise controls to protect privacy and match people with compatible interests. The software creators hope to shake the stigma that such services are primarily used in arranging one-night stands. - Daniel James Devine

Daniel James Devine
Daniel James Devine

Daniel is managing editor of WORLD Magazine and lives in Indiana. Follow Daniel on Twitter @DanJamDevine.


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