Philadelphia's public transportation authority could lose the $24 million it spent to acquire a fleet of Proterra electric buses after the Biden-backed green energy company declared bankruptcy.
The Southeastern Pennsylvania Transportation Authority (SEPTA), which manages Philadelphia's public transportation system, in 2016 purchased 25 Proterra electric buses for nearly $1 million each. The fleet faced an array of issues—one even burst into flames last year—prompting SEPTA to sideline the buses and negotiate with Proterra to repair them. But after Proterra declared bankruptcy in August, the green energy company abruptly canceled the repair negotiations, SEPTA told the Philadelphia Inquirer. As a result, SEPTA does not know when the buses will be back on Philadelphia's streets, and it could lose the $24 million it spent on the buses.
The ordeal comes as an embarrassment to President Joe Biden, whose administration repeatedly promoted Proterra, even as Energy Secretary Jennifer Granholm held 240,000 shares in the company. Biden took part in an April 2021 virtual tour of a Proterra facility, saying during the event that the company was "getting us in the game." Biden, whose $1.9 trillion infrastructure plan included billions to boost the electric bus industry, later praised Proterra during a March 2022 speech. In February, the Democrat appointed Proterra CEO Gareth Joyce to serve on the President's Export Council.
Biden's Proterra promotions, however, were not enough to save the green energy company. Proterra in an August Chapter 11 filing cited "various market and macroeconomic headwinds" that led to its bankruptcy. Proterra shares tumbled more than 60 percent after the filing, though the freefall did not hurt Granholm. The Biden appointee sold her shares for $1.6 million in May 2021, just weeks after Biden touted the company. Granholm's stake would have yielded just $340,000 if the former Michigan governor sold her shares in the aftermath of Proterra's bankruptcy filing.
While Proterra's bankruptcy did not hurt Granholm, it is hurting Philadelphia. The city has not been able to use its Proterra buses since 2020, and now, its fleet may never return to the city's streets.
"At this point we don't know what the path forward would be and what SEPTA's remedies are, and we can't say when the buses would come back into service," SEPTA spokesman Andrew Busch told the Inquirer.
Proterra, which did not return a request for comment, is far from the only Democrat-backed green energy company to flounder financially this summer. Danish offshore wind giant Orsted announced last week that it's facing supply chain problems and other issues that could cause it to take a $2.3 billion hit to its U.S. portfolio. Orsted's chief executive said the company could "walk away from projects" in the United States as a result, even after Democrats in New Jersey and Connecticut showered Orsted with hundreds of millions of dollars in public funds to incentivize the company to build offshore wind farms in their waters.
For consulting firm Wood Mackenzie, other green energy companies will soon suffer similar financial fates.
"This will not be the last that we will see this year," the firm's head of offshore wind, Soeren Lassen, told the New York Times in August.