Fuel-cell deal a spark for Plug Power stock

Publication Date:17-June-2005
10:35 AM US Eastern Timezone 
Source:Dan Higgins-Times Union

 

Good news comes from Florida purchase of units, Schumer bill
 
COLONIE -- Plug Power Inc. saw its stock price rise on heavy volume Thursday after receiving two pieces of positive news.

First, the Latham-based maker of fuel cells reported that the Florida Department of Environmental Protection will purchase 12 of its $15,000 GenCore units, representing one of the largest commercial sales to date.

Second, the office of U.S. Sen. Charles Schumer, D-N.Y., said an amendment he wrote to the tax portion of an energy bill includes a tax credit for telecommunication companies that buy fuel-cell backup equipment like the GenCore system. Schumer sits on the Senate Finance Committee.

On Wall Street, traders responded to the news by buying. Plug shares (Nasdaq: PLUG) closed at $7.18 Thursday, up 13 cents, as more than 1.7 million shares changed hands. On an average day, volume is about 662,000 shares.

Gerry Conway, Plug's general counsel, said the 30 percent tax credit -- if passed into law -- would make the GenCore systems less expensive than a comparably powered lead-acid battery backup system.

The GenCore systems are used by telecommunications companies to provide backup power at sites such as cellphone towers. Currently, most companies use a series of large batteries -- similar to car batteries, only bigger -- to provide emergency power.

"If we can reduce the capital cost of the fuel cell, the person making the buying decision would be more inclined to like the technology,'' Conway said.

Schumer said the tax credit is intended to give the company a jump-start so it can commercialize its main product more quickly.

"Fuel cells are a new technology ... we think this could be a major breakthrough for them,'' Schumer said. "It could help bring them more contracts, as well as many more good-paying jobs to the Capital Region.''

The tax portion of the energy bill is likely to go to the Senate floor next week, he said.

The 12 GenCore systems sold to Florida's environmental agency will be used as backup power for its offices around the state.

Plug officials said the sale to hurricane-prone Florida means it will only be a matter of time before the GenCore systems are given a chance to prove their worth in a natural disaster.

The sale also means the company is now listed as a supplier to the state, allowing other Florida agencies to buy the product.

Roger Saillant, Plug president and chief executive, said earlier this year that the company hoped to sell 300 GenCore systems in 2005, triple what it has sold up to now.

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