A Massachusetts company that wants to build a $53 million flywheel energy storage plant in Hazle Township filed for bankruptcy Sunday, but hopes to complete the local project after restructuring its operations.
Beacon Power Corp. had received $43 million in loan guarantees from the Department of Energy; the bankruptcy filing followed one by Solyndra Inc., a California solar energy company that had received a half-billion-dollar loan from the Obama administration and Beacon officials said controversy surrounding that company had contributed to Beacon’s inability to raise funds needed to continue its plans.
In April, Beacon announced plans to build the plant on 5.5 acres in the Humboldt Industrial Park. Tax breaks available in the Keystone Opportunity Zone property were a factor in choosing the site over one near Chicago, company officials said.
Beacon was awarded a $24 million Smart Grid stimulus grant in 2009 to build the Hazle Township plant, and Pennsylvania kicked in an additional grant of $5 million.
“We’re working toward getting all necessary permits. Some are in hand, some are in process,” company spokesman Gene Hunt said Friday in an e-mail. “We estimate that it would take 12-18 months to build.”
Hunt estimated about 60 construction jobs would be created.
On Wednesday, a Delaware judge gave Beacon Power permission to use cash collateral for the loan to help pay operating expenses during its reorganization.
Objecting to the use of DOE funds for operations, Matthew Troy, a Justice Department attorney representing the department, said Beacon is sitting on $700,000 of its own unrestricted cash that it doesn’t want to spend.
Troy also argued that the DOE loan was made directly to a Beacon subsidiary for construction and operation of a 200-flywheel, 20-megawatt frequency regulation facility in Stephentown, N.Y.
“DOE ... did not lend to Beacon Power to pursue other projects,” said Troy, who suggested the company might use collateral on the DOE loan to help pay for construction of the Hazle Township facility.