![]() We published evidence that LIPA cancelled the awards due to the impact of the recently enacted New York Climate Leadership and Community Protection Act (CLCPA), which made natural gas-powered fuel cells ineligible for renewable energy credits without which the projects became economically unattractive for LIPA. The wins were significant with 32.4 MW of rated capacity and $636m of future revenues, compared to FuelCell’s current operating portfolio of 32.6 MW and trailing revenue of only $71m – these awards were a significant part of FuelCell’s bull case, providing evidence of demand for the company’s technology and ability to execute. The Brookhaven Rail Terminal (LIPA 2) and Clare Rose (LIPA 3) projects were awarded to FuelCell in July 2017. In light of this, we believe investors should discount the value of FuelCell’s backlog in addition to current and future project awards. We also believe current disclosures lack full transparency and omit material information. We have new evidence which proves that management was aware of the LIPA award losses while it issued millions of shares to investors. And only after our report did FuelCell begin disclosing the possibility of the project cancellations. After we published evidence of the award losses, FuelCell responded by claiming our report was “misleading” but failed to mention a single inaccuracy. ![]() Despite learning of LIPA’s decision, management continued to cite the awards in filings and conference calls as significant business that would soon enter official backlog. ![]() FuelCell Energy (NASDAQ: NASDAQ: FCEL) lost two large power project awards in 2019 with the Long Island Power Authority (LIPA) but never disclosed this to investors. ![]()
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