Usually, scientists warn about "black holes", stars so dense that no light can escape.
It seems that we now have a new rival - green holes. These are alternative energy companies that are so bad, that guaranteed loan money can't get out.
NEW YORK (CNNMoney) -- Another alternative energy company that received a loan guarantee from the U.S. government has filed for bankruptcy.
Beacon Power, which makes energy storage devices used to help the power grid become more efficient, filed for bankruptcy protection Sunday, according to a filing with the Securities and Exchange Commission. The company received a $43 million loan guarantee from the Department of Energy last August..."
Some will be sure to jump on the "good" in the story, such as:
"...DOE spokesman Damien LaVere noted that, unlike Solyndra, which closed up shop on the day they declared bankruptcy, Beacon has an operational facility in Stephentown, New York that has long term contracts which it can use to generate money.
Plus, the company has cash reserves, and the government is first in line to get paid back..."
They initially said the same about Solyndra, till the bankruptcy plans were "altered", putting private investors first. How long before this one is changed, too?
So what caused their problem?
"...Beacon's finances came under pressure thanks to low rates government regulators forced it to charge utilities.
As a regulated industry, utilities were only allowed to pay a fixed rate set by government regulators for Beacon's services, the DOE said. The rate was not high enough for the company to survive..."
A company, backed by a Gov't loan forced by Gov't regulators to accept lower rates. What makes them think these rates are going to be allowed to go up?
"...Also, the low price of natural gas, which could be used to generate additional power and is thus a competitor to energy storage, was also a factor..."
Again, in an effort to lower energy costs to others, the competition was allowed to undercut the prices. The only way this company can make money is if the price of natural gas goes back up. Makes their product better, but raises everybody's costs.
"...The Federal Energy Regulatory Commission recently increased the rates companies like Beacon can charge, but the hike has yet to take effect, the DOE said..."
So in order for this company to make money and pay off their Gov't loan, those increased prices have to passed down to the consumer. They win, we lose.
But here's the main thing people will hit on:
"...The loan program was started by President Bush..."
And they'll gloss over or ignore the following:
"...and expanded under President Obama...
The other part of the story you should remember is this:
"...Stearns and other critics say the Solyndra guarantee was made improperly. They say the Obama administration put private creditors ahead of the government when it comes to being paid back and that the loan may have been made due to political connections between one of the company's main backers and the administration.
Watch out for further money going down the "green hole".
Updated: 2:50 AM GMT on November 01, 2011
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