The DOE agreed to extend the deadline for the company to use a federal grant to build a factory in Michigan.
Battered battery maker A123 got some much-needed good news this week, as the DOE agreed to extend the deadline for the company to use a federal grant to build a factory in Michigan. A recent string of misfortunes, topped off by a recall of some defective battery cells that may cost the company as much as $55 million, has caused A123’s stock (Nasdaq: AONE) to shed half its value, dropping below the dreaded one-dollar mark.
Well, the DOE at least believes that A123 will be around for another two years. As Reuters reported Wednesday, the company now has until December 2014 to use the money. A123 initially won the $249 million grant in 2009, and had received $127 million at the end of 2011.
“We see this as very positive because it allows us to continue on our growth path in Michigan,” A123 spokesman Dan Borgasano said.
In a related story, the New York Times reported that, six months after the expiration of a $16-billion loan guarantee program for renewable energy projects, the DOE has decided to offer a smaller set of guarantees by tapping another pot of money appropriated by Congress. About three dozen companies were told that they would not receive loan guarantees because the DOE had been unable to review their applications before the program expired. Now, the department says the companies can reapply under a program established under the Energy Policy Act of 2005 that is still in force.
On Thursday, a spokesman for Senator Lisa Murkowski of Alaska, who is the ranking Republican on the Energy and Natural Resources Committee, raised no immediate objections to the new round of loans but said Republicans were watching the program. “We’re always concerned when we’re using taxpayer money…but this is money that’s already been appropriated,” said Robert Dillon.
The Obama Administration has offered strong support to the EV and renewable energy industries in the form of federal loans and grants. Many of these have gone to risky startups, some of which will inevitably fail, triggering avalanches of bad publicity in an election year and, some observers fear, putting the whole concept of government support for high-tech energy in jeopardy. This week’s news indicates that the taps aren’t being turned off just yet.