When the juice ran out of Coda Holdings Inc.’s electric-car initiative, the company started charging up its lesser-known business: energy storage.
The timing could be just right for the L.A. company. The California Public Utilities Commission announced a proposal last week that would require utilities in the state to procure storage capacity by 2020 in order to accommodate a required shift to alternative energy with a deadline that year.
After a review period with public comments, the proposal will go to the commission for a ruling in October.
Janice Lin, executive director of the California Energy Storage Alliance advocacy group in the Bay Area, said it was a big advancement for energy storage companies and could benefit Coda.
“It’s a very big, diverse market and there’s room for a lot of different participants,” she said. “The very fact that Coda has commercially deployed their solutions, they have a good start.”
Also last week, Coda’s assets were purchased at a bankruptcy proceeding for $25 million by Fortress Investment Group of New York, which paid $1.7 million in cash and the rest in debt it was owed.
Coda announced its plans to exit the car business when it filed for Chapter 11 bankruptcy reorganization last month. The purchase by Fortress confirmed the plan will be carried out.
“The board, management team and senior lending group have concluded that focusing on the company’s energy storage business presents the best opportunity moving forward,” Coda Chief Executive Phil Murtaugh said in a statement.
Coda was launched in 2009 but its only vehicle to hit the market was an electric sedan based on an old model that cost $37,500. It failed to impress critics and consumers alike and was stymied by production delays and recalls. Less than 100 of the vehicles were sold.
The company’s new focus is on energy storage systems, which use lithium-ion batteries. The systems are for sale to building operators, utilities or residential customers.
Coda has been in the energy storage business for two years through its Coda Energy division. Last month, Coda Energy announced a deal to supply energy storage systems to two InterContinental hotels in San Francisco.
The company sees utility companies as potential buyers because they’re beginning to supply more energy from renewable sources such as wind and solar. The energy from those sources has to be stored because it isn’t generated in a constant stream. By 2020, California utilities such as Southern California Edison Co. will be required to supply one-third of their energy from renewable sources.