NEW YORK – SunEdison, a one-time star in the alternative energy field, is filing for bankruptcy protection after years of rapid-fire acquisitions left the solar company in a desperate cash situation.
The company, which has permits for five wind farm projects in Maine, filed with the Bankruptcy Court for the Southern District of New York on Thursday.
John Lamontagne, spokesman for SunEdison in Massachusetts, said the bankruptcy filing “should have little impact” on wind energy facilities already operating in Maine.
The five wind farms that SunEdison was involved with – back when the company was known as First Wind – are now owned by TerraForm and TerraNova Partners. While TerraForm is a so-called “yieldco” of SunEdison, that firm has not filed for Chapter 11 bankruptcy. TerraNova Partners, which is majority held by JP Morgan Infrastructure Fund, also owns the wind energy projects under construction in Bingham and Hancock.
Lamontagne said he could not provide any additional information on wind energy projects still under development by SunEdison, apart from saying the company plans to move forward with development. But he said existing projects are on stable finances.
“The operating and construction projects all have existing contracts to deliver clean energy to various utilities and therefore have certain revenues that will ensure the projects will meet their obligations in terms of community benefits, taxes and more,” Lamontagne wrote in a statement. “For projects that are in construction but no operating, they have been financed and therefore will be completed. Once completed, they have contracts to deliver clean energy to utilities.”
Just last week, an audit committee reviewing operations at the Maryland Heights, Missouri, company found an “overly optimistic culture and its tone at the top.” The committee also said that at SunEdison, “cash forecasting efforts lack sufficient controls and processes.”
SunEdison also reportedly is being investigated by the Securities and Exchange Commission over whether the company might have overstated to investors how much cash it had on hand in November.
Patrick Woodcock, director of the Governor’s Energy Office and the chief energy advisor to Gov. Paul LePage, agreed with Lamontagne that the bankruptcy will likely have limited effects on operating wind farms owned by the other firms.
“I do think it could have significant implications on pending projects in different stages of development by SunEdison, the most notable being the Aroostook County project known as King Pine,” Woodcock said.
The King Pine proposal, which is still in the development stages, envisions 174 turbines with a maximum generation capacity of 600 megawatts.
One possibility is that another wind power developer could step in to take over King Pine or other projects that have not yet received permits or are not under construction.
Woodcock was not surprised by the bankruptcy filing, saying he and other observers recognized that SunEdison was in a “precarious situation” since last fall. He added that the situation is unique to SunEdison – rather than a broader issue within the industry – because the company had amassed a large debt load as it attempted to grow rapidly.
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