- - Tuesday, September 17, 2013

Taxpayer-backed green energy company ECOtality filed for chapter 11 bankruptcy protection on Monday following weeks of turmoil in which the company laid off employees and ceased filling orders for its electric vehicle charging stations.

The Department of Energy (DOE), which awarded the company about $115 million in stimulus funds to produce those chargers, suspended payments last month.

DOE has already paid $96 million of its $115 million commitment to the company.

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ECOtality announced the bankruptcy in a Monday filing with the Securities and Exchange Commission. The bankruptcy proceedings will take place in the United States Bankruptcy Court for the District of Arizona, the company said.

The company’s work in building and installing electric vehicle charging stations was integral to the Obama administration’s attempts to get a million electric vehicles on the road by 2015. That goal has been walked back as its achievability came into question.

Rep. Lamar Smith (R., Texas), chairman of the House Committee on Science, Space and Technology, said the failure of the company is another demonstration of the administration’s disastrous policies.

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“How many bankruptcies will it take for DOE to finally recognize that picking winners and losers in the energy marketplace simply doesn’t work?” Smith asked in an emailed statement.

“Mistakes can be forgiven, but there is no excuse for repeating these failures over and over,” he added. “American taxpayers deserve better.”

DOE spokesman Bill Gibbons defended the department’s support for ECOtality in a Tuesday statement.

Federal support for the company, Gibbons said, was “meant to establish the seeds of infrastructure needed to support a growing market for advanced vehicles, [and] the company installed more than 12,500 charging stations in 18 US cities—or approximately 95% of their goal.”

ECOtality revealed in its Monday filing that Brandon Hurlbut, a company director, resigned on Sunday. Hurlbut was the chief of staff for former Energy Secretary Steven Chu, and led the transition to its current secretary, Ernest Moniz, before departing for the private sector.

Hurlbut’s role at the company underscored criticism of what some described as ECOtality’s overtly political business model.

“Government is terrible at picking winners and losers for a simple reason: Politics always interferes,” said William Yeatman, an energy policy expert at the Competitive Enterprise Institute, in response to the bankruptcy news.

“That news is only the latest costly reminder that Energy Department bureaucrats shouldn’t be running a taxpayer-backed investment bank for green energy,” Yeatman said in an email.

Jonathan Read, the company’s former CEO, styled himself as a “political beast.” Read boasted about his political connections, and received bonus payments contingent on ECOtality winning DOE support.

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