The energy industry has come to recognize the name Bloom Energy. It's been associated with big customers like Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG), and eBay (NASDAQ: EBAY), to name a few. And its Bloom Box fuel cells offer on-site power generation using a variety of fuels including natural gas.
But now the company's name is in headlines for a different reason.
On Wednesday, Delaware resident Jack Nichols and Connecticut company FuelCell Energy (NASDAQ: FCEL) filed a lawsuit against Delaware Governor Jack Markell and five other state officials for working with a “crony company.”
According to the plaintiffs:
The REPSA [Renewable Energy Portfolio Standards Act], which was amended in 2011 in consideration for a promise by Bloom Energy, Inc. (“Bloom”), to manufacture fuel cells in Delaware, discriminates against FuelCell Energy and other similarly situated out-of-state renewable energy companies, denying them equal footing and burdening interstate commerce.
It claims that the state is unfairly taxing certain residents to support Bloom's Delaware plant, and that the amendments favor Bloom and exclude other fuel cell companies, particularly those located out of state.
Bloom is building a $16 million facility at the location of the former Chrysler plant in Newark, Delaware, a project that has been ongoing for a year.
And Delaware is allowing energy from Bloom Boxes to be considered part of its renewable energy plan, despite the fact that they use natural gas and still release some, albeit smaller, emissions.
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The project is funded by state subsidies (one of the issues that set the plaintiffs off) particularly because of this renewable qualification and the promised job creation. The complaint says:
In consideration for Bloom's promise to build a fuel cell factory in Delaware employing 900 full-time employees, the REPSA shields a particular company, Bloom, from out-of-state competition, and Bloom will receive a grant award of up to $16.5 million and a firm order for thirty megawatts (MW) of fuel cell power plants.
But a number of people have said these claims are ridiculous, including Forbes contributor William Pentland. Pentland calls the complaint “bogus” and says Nichols is and “injustice collector.
Brian Selander, a spokesman for Governor Markell, says the defendants are not going to let this go easily. He told CBS:
“We intend to fight these efforts vigorously to protect these important jobs.”
Bloom Energy has been around since 2001 and is based in Sunnyvale, California.
Despite rumors and interest, the company has not indicated any intention to file for IPO.
It did, however, recently announce plans to add an additional $150 million in venture capital, which would bring its total venture capital up to $800 million and put it at a valuation of approximately $3 billion.