Tuesday, January 3, 2012

Pocatello Hoku plant gets temporary reprieve

Hoku Corp.'s $390 million plant in Pocatello has received a temporary reprieve.

Idaho Power Co. threatened to shut off electricity after the Honolulu-based polysilicon maker missed a $1.9 million payment in November because of cash problems. But on Tuesday the Idaho Public Utilities Commission announced it will hear the dispute, with arguments set for next week. As long as the case is pending, regulators say Idaho Power can't shut off electricity.

Hoku has warned that losing power in the middle of a freezing winter could jeopardize just-completed facilities. Idaho Power says allowing Hoku to continue to receive electricity without paying its bills puts the utility at risk of losing millions in the deal.

Can this marriage be saved? We'll see. In the meantime, here is some background, found at www.greentechmedia.com

Hoku is a subsidiary of Tianwei New Energy Holdings, an affiliate of China South Industries Group Corp., a mammoth firm with 191,000 employees. Tianwei manufactures polysilicon, wafers, cells and modules. Hoku started out as a fuel cell company, went public in 2005, and in 2011 pivoted into being a solar manufacturer with $2 million in "service and license revenue."

According to its most recent 10-K filing, as of Sept. 30, 2011, Hoku had cash and cash equivalents on hand of $3.2 million and current liabilities of $241.8 million.

Hoku has received $280 million in prepayments from PV panel manufacturers such as Hanwa SolarOne, Tianwei New Energy, Jinko Solar, and a small prepayment from Suntech for polysilicon to be delivered between 2012 and 2016. The SEC 10-K form shows amendments made to the prepayment purchase agreements as the price of polysilicon dropped.

On the last day of 2011, Hoku's stock was trading at $0.57 with a market cap of $31.3 million.

Hoku Corp.'s CFO, Darryl Nakamoto, resigned last week.