On October 28, 2011, White House Chief of Staff, William Daley, announced that there will be an independent analysis of the Department of Energy (“DOE”) loan portfolio, and particularly more than two dozen renewable energy loans and loan guarantees made by the DOE program. The review will be led by Herb Allison, a former U.S. Treasury official.
The DOE loan guarantee program has faced heightened scrutiny in the wake of the bankruptcy of Solyndra, Inc., the first renewable energy company to receive a loan guarantee of this kind. See September 23, 2011 edition of the WER. The White House has refused to turn over all its internal communication concerning Solyndra, despite requests from the House Energy and Commerce Committee. On November 3, 2011, the House Energy and Commerce Committee moved to issue a subpoena to William Daley, or appropriate custodian of records, and Bruce Reed, Chief of Staff to the Vice President, or appropriate custodian of records concerning the loan guarantee made to Solyndra, Inc. by the DOE. The news of an independent analysis and the subpoena comes as another loan guarantee recipient, Beacon Power Corp. (“Beacon”), filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware on October 30, 2011.
Beacon is a flywheel energy storage system manufacturer that received a $43 million loan guarantee from the DOE, $2 million from the New York State Energy Research and Development Authority and a $5 million grant from the Commonwealth of Pennsylvania. In an October 31, 2011 filing with the Securities and Exchange Commission, Beacon cited a poor economic and political investment climate as the cause for its bankruptcy filing. Beacon, however, unlike Solyndra, could benefit from an influx of revenue in the wake of the Federal Energy Regulatory Commission’s (“FERC” or the “Commission”) recent ruling concerning frequency regulation service. See October 31, 2011 edition of the WER. Additionally, Beacon plans to reorganize and could regain its solvency due to FERC’s recent order.
A copy of Beacon’s SEC filing is available here.
A copy of the subpoena is available here.