Beacon agrees to sell plant

Nov 22 - McClatchy-Tribune Regional News - Larry Rulison Times Union, Albany, N.Y.

Beacon Power is going to put its 20-megawatt flywheel plant in Stephentown up for sale after reaching an agreement with the U.S. Department of Energy, which has provided the bankrupt company with $39 million through its loan program.

The decision was made on Friday in federal bankruptcy court in Delaware.

Even though Beacon had wanted to maintain ownership of the Stephentown facility, the DOE -- under considerable political pressure following the collapse of another loan recipient, California solar panel manufacturer Solyndra -- pushed Beacon hard in court to return its money. Beacon had drawn down $39.1 million of a $43 million loan backed by DOE.

Divesting itself of the Stephentown plant shouldn't impact Beacon's business plan because the company is planning to sell flywheel equipment to utilities or grid operators.

The flywheel plant in Stephentown, located in eastern Rensselaer County near the border with Massachusetts, absorbs excess power from the electrical grid and sends it back when additional power is needed to keep voltage on the transmission system balanced. The flywheels use kinetic energy to store power in spinning rotors that can send power back to the grid using generators.

The plant began earning revenue this year from the New York Independent System Operator, a nonprofit that oversees the state's electrical grid, for what's known as "frequency regulation." The plant pulls and pushes power on and off the grid to help keep voltage at 60 hertz, which helps prevent outages.

Under the DOE agreement, a sale of the Stephentown facility will take place by the end of January.

"Our goal was to reach a settlement agreement with the DOE Loan Programs Office and we have done that," said Bill Capp, Beacon's chief executive. "We will now focus on attracting new capital to reorganize our company."

A Beacon spokesman last week said that its flywheel machines can be moved, so it is possible the buyer of the Stephentown plant could move the flywheels elsewhere, although the company has received nearly $2 million in state money for the Stephentown site, including a visitors center. The facility requires no employees.

The Stephentown plant has 200 individual flywheels, two of which malfunctioned over the summer. Beacon has been testing all of the flywheels for flaws that caused the breakdown.

Reach Larry Rulison at 454-5504 or at lrulison@timesunion.com.