Beacon Power Is Sold
by David Flint
A U.S. Bankruptcy Court in Delaware on Tuesday approved the sale of the Beacon Power Corporation’s assets to Rockland Capital, a leading private equity firm.
Rockland, which focuses on energy related investments, was the successful bidder among several energy and technology firms in an auction of the 20 megawatt Stephentown frequency regulation plant that was completed just last June.
Sale of the plant was required under terms of the bankruptcy, but Rockland will acquire not only the plant but substantially all the assets of Beacon Power, including its intellectual property. The Federal Energy Regulatory Commission (FERC) must approve the sale of the Stephentown assets, but that is not expected to be an issue.
Beacon Power in a statement said that Rockland will pay $5.5 million in cash and another $25 million in a promissory note to Beacon Power and its subsidiary, Stephentown Regulation Services, along with additional guarantees and funding obligations to the US Department of Energy of $6.6 million. The US Department of Energy, which enabled the construction of the Stephentown plant with a $43 million loan guarantee, expects to recoup about 70% of the taxpayers’ investment from this sale.
A new private company named Beacon Power LLC, wholly owned by Rockland, will take over the assets of Beacon Power Corporation and will rehire a majority of the current Beacon staff. Rockland also intends to provide the capital to develop a second 20-Megawatt flywheel regulation plant in Hazle Township, Pennsylvania.
“We were attracted to Beacon Power,” said Scott Harlan, Managing Partner for Rockland Capital, “because of its effective, fast-response, grid-connected energy storage technology and its successful experience applying this technology as a frequency regulation resource in Stephentown. With the implementation later this year of FERC mandated pay-for-performance compensation for balancing services provided to the grid, both the Stephentown plant and the one we plan to build in Pennsylvania will realize much improved revenue. We’re pleased to make it possible for this company and its talented team to continue to innovate and grow and to provide a runway to facilitate a path to commercial success.”
Bill Capp, Beacon President and CEO, commented, “Rockland Capital is a well-capitalized company that has an excellent track record of successfully identifying undervalued electric power generating assets and applying its knowledge of the business and the capital necessary to develop the full potential of those assets. They recognized early on that Beacon was one such opportunity and our relationship has been positive and productive throughout their evaluation process. We’re grateful for their commitment to support Beacon, and we look forward to working together and achieving our commercial objectives.”
Stephentown Town Supervisor Larry Eckhardt said he was pleased that a company based here in the U.S. would be taking over the Grange Hall Road plant and would be hiring most of Beacon’s people. He had feared that some international interest might buy the plant, pack it up and ship it off somewhere, leaving the Town with an abandoned site. Rockland, he said, apparently operates power plants around the country and is interested in green energy.
Eckhardt did not know whether Beacon had paid its local property taxes this year. That is something he and the Town Board will be looking into at their next workshop meeting and seeking counsel as to what paperwork the Town might need to file in relation to this matter of the company changing hands.