There’s a few things you need to remember about Bloom Energy. First, manufacturing fuel cells is a very difficult business, and one that is capital intensive with low margins. Fuel cells take fuel (natural gas or biogas) and combine it with oxygen and other chemicals to create an electrochemical reaction that produces electricity.

Customers can buy several Bloom Energy servers to deliver distributed power on site at a building, and that can have a lower carbon footprint than grid power. Competitors include ClearEdge Power, which recently scored a deal with Verizon, and the publicly-traded FuelCell Energy.

But Bloom Energy has actually gotten some breakthrough traction in the market over the past couple of years, particularly with data center operators. Apple, eBay, AT&T, Adobe, Google and others have bought Bloom fuel cells (or the power from the fuel cells) for both their data centers and building operations.

Primack reports that Bloom Energy’s latest funding was an extension of a round raised in 2011, at a pre-money valuation of $2.7 billion. The lead investor that put in $100 million wasn’t named, but Primack says that Credit Suisse put in $30 million of the round.

Because the fuel cell business is so difficult (read my The pain point for Bloom Energy and other fuel cell makers), Bloom Energy is most likely not profitable even after 11 years. Bloom Energy CFO Bill Kurtz told me that the company was “half way to break even” in the Summer of 2012. Primack previously reported that Bloom’s retained earnings through Q3 2012 stood at negative $873 million, with $113 million left in the bank, and with positive gross margins on a pro forma basis. Bloom has a goal to be profitable in 2013.

Existing investors did not participate in the round, according to the report. Previous investors included Kleiner Perkins, NEA, DAG Ventures and GSV Capital. Bloom Energy was previously working with broker Advanced Equities (like on this round in the Summer of 2012) to raise funds, but Advanced Equities has since shut down. The broker was charged for misleading investors back in 2009 for fund raising for Bloom Energy, was fined and shut its offices.

We’ll be interviewing Bloom Energy’s VP Mission Critical Systems, Peter Gross, and eBay’s VP, Global Foundation Services, Dean Nelson, at Structure in San Francisco next month.

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Verizon plans to buy fuel cells from ClearEdge Power and solar panels from SunPower. The amount of power from the solar panels and fuel cells, which will be installed across seven states, will be 70 million kilowatt hours of electricity. That’s enough to power 6,000 homes per year.

Fuel cells look like industrial refrigerators, and they use a chemical reaction to produce electricity and heat. They are filled with large stacks that are lined with catalysts (a metal, sometimes platinum), and a fuel (commonly natural gas) is inserted in one side and runs over the stack. Electricity and heat flow out the other side. The benefits of fuel cells are that the electricity can be created on site where it is used, and if the fuel used is biogas, then the electricity is also free of carbon emissions.

Verizon has been using a small amount of solar and fuel cell technology for awhile, but this move represents the company’s largest commitment to clean power projects to date. Verizon is looking to cut its carbon emissions footprint substantially by 2020.

Gowen told me in an interview that this initiative is being driven both by the desire to add energy resiliency to Verizon’s facilities as well as the company’s sustainability goals. During superstorm Sandy, a fuel cell installation that Verizon had in Long Island that powered a switching station (using fuel cells from UTC Power, which was acquired by ClearEdge Power) never went down. Gowen said he wanted that type of off-grid resiliency through out Verizon’s facilities.

All of the solar panel installations in 2013 will be pretty large ones. For example, Verizon is putting solar panels on the roof of a data center in New Jersey, as well as on the ground next to the data center. The return on investment for the combined clean power projects is supposed to be around ten years, said Gowen.

Deploying clean power technologies — both solar panels and fuel cells — at data centers is a growing trend for internet and telecom companies in the U.S. Apple (a AAPL), Google, eBay, and Microsoft are all deploying clean power at data centers to help add off grid resiliency, as well as lower carbon emissions.

Apple is building its own solar panel farms and fuel cell farms at its data center in Maiden, North Carolina. Google has spent over a $1 billion investing in clean power projects and recently started working with Duke Energy on a clean power initiative in North Carolina. AT&T has large fuel cell farms powering its operations in California and Connecticut, using technology from Bloom Energy.

In a call last week, ClearEdge Power’s CEO David Wright called Verizon’s commitment to clean power technology “a stake in the ground for other technology companies.”

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The move is unusual in that there’s few power companies and utilities buying fuel cell power in the U.S. at this point. Fuel cell power tends to be more expensive than centralized power from power plants that use low cost fossil fuels. But the deal between Dominion and the utility is a power purchase agreement over 15 years, so Connecticut Light and Power will buy the power over a decade and a half at a fixed low rate. The fuel cells in the project will also use natural gas as the fuel, and natural gas prices are really low right now.

Perhaps the combo of new financing models and cheap natural gas will lead to an era of more and more fuel cell getting put into the ground. Fuel cell startup Bloom Energy also sells fuel cell energy using power purchase agreements over long periods of time.

The fuel cell farm in Connecticut will be built in the city of Bridgeport on 1.7 acres of land and the first fuel cells will start to be installed in the Summer of 2013. The project is supposed to be operational by the end of 2013. FuelCell Energy says it will generate $125 million with the deal, including $56 million from selling the hardware and $69 million in services, and the project will also contribute to the state’s renewable energy mandates, and provide 160 jobs.

FuelCell Energy also sold a 11.2 MW fuel cell project project to Korean power producer Korean Electric Power Corporation (KEPCO) in Daegu City, South Korea. Bloom Energy has a planned 30 MW fuel cell deal with Delmarva Power.

Internet companies have been as active as utilities, when it comes to using fuel cells to power their data centers. Apple is building a huge fuel cell farm in North Carolina (of which it just doubled the size), eBay is building one, too, and Microsoft is also experimenting with the technology.

Images courtesy of FuelCell Energy.

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The 4.8 MW portion of the site has been up and testing since October, according to Apple, and the company expects the full 10 MW farm to be installed and online by January 2013. Apple filed to boost the size of the project last month. However, filings about the cost of the project were kept confidential.

When fully completed Apple’s fuel cell farm will be the largest out there that isn’t owned by a utility. eBay has also been building a large fuel cell farm for a data center — at 30 fuel cells and 6 MW — but now that Apple doubled its project, it has taken the fuel cell data center lead.

Apple’s massive solar farm in North Carolina, photo by WCNC-TV

Some other interesting tidbits of the projects have come out in the new filings. Apple says it plans to sell the power from the fuel cells to local utility Duke Energy, which means Apple won’t necessarily be using the fuel cell energy onsite to power the data center. The fuel cells will use biogas, and Apple can earn money by selling the power and associated Renewable Energy Credits to Duke. It’s unclear if Apple will also be selling the power from its solar farm to Duke Energy, too. Apple also boosted the size of its solar farm from 20 MW to 40 MW.

If Apple is using grid power from Duke Energy for its data center, and selling the clean power to Duke, then it puts Apple in an interesting position. The computer giant on one hand would be contributing significantly to adding clean power to North Carolina’s energy mix, but at the same time would be running its data center off of the state’s mostly dirty grid power (mostly coal and nuclear).

Apple also says in filings that it will source the biogas for its fuel cells from Element Markets Renewable Energy, and the biogas used will come from landfills, though Apple didn’t disclose which landfills would be used. The biogas will be “directed biogas” which means it will be injected into natural gas pipelines and not used directly in the actual fuel cells at the site.

Here’s some more background reading on these projects:

• The ultimate geek road trip: North Carolina’s mega data center cluster
• 10 reasons Apple, Facebook & Google chose North Carolina for their mega data centers
• The controversial world of clean power and data centers
• The story behind how Apple’s iCloud data center got built

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Bloom Energy is an 11-year-old company that has raised almost $1 billion in venture capital funding, to make fuel cells, which take fuel (natural gas or biogas) and combine it with oxygen and other chemicals to create an electrochemical reaction that produces electricity. Bloom Energy Bloom Boxes can deliver distributed power on site at a building, which can have a lower carbon footprint and potentially more electrical reliability than grid power.

Problem is, the Boxes cost a lot of money to make and deploy. According to Fortune Bloom’s third quarter earnings were as follows:

• Bloom generated $101 million in pro forma Q3 revenue.
• Bloom’s pro forma cost of goods was nearly $106 million, plus another $26 million in operating expenses.
• So the Q3 pro forma loss was about $32 million, which expands to more than $42 million on a GAAP basis.
• Bloom has a net cash loss of about $80 million for Q3, leaving it with around $113 million.
• On the other hand, the article also says Bloom has been able to cut its pro forma operating cash burn by 56 percent between Q2 and Q3 2012, and expects to cut it by more than half again in Q4.
• Bloom is also seeing a 26 percent quarter-over-quarter revenue increase, and was able to book 87 new commercial customers in Q3.
• Bloom’s CFO Bill Kurtz tells Fortune that “Bloom has become gross margin positive in 2012 and is on track with our goal to be profitable in 2013.”

Bloom’s financials have always sounded worrisome — from the day they launched. Their model has long been banking on getting the costs of making and operating their fuel cells down. But Bloom is actually in a major growth phase right now, so the question is how long will it take them to turn the corner to actually breaking even. Will it be 2013 like Kurtz says? Or will it take substantially longer, and force Bloom to raise more money?

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Advanced Equities has looked like a train about to wreck for the past six months. My big question is not why would the firm close up its broker shop. Rather, why did venture firms with solid reputations, like NEA and Kleiner Perkins, choose to associate with an investment firm with a questionable reputation? Advanced Equities raised funds for NEA and Kleiner’s portfolio companies electric car maker Fisker Automotive and fuel cell maker Bloom Energy, among other companies.

I’m also not exactly sure what Advanced Equities’ demise means for the startups it raised funding for, like Fisker and Bloom. I’ve reached out to these companies and am waiting to hear back. It’s unclear what will happen to any deals in progress, like potentially this one.

Update: Fisker says the event “is not expected to have a material impact on Fisker or the several Fisker investment funds previously established and administered by AEI,” and also says that the management of the investment funds will likely “be transferred to another investment group.” Fisker adds: “While AEI will, obviously, no longer be able to assist Fisker with financings, Fisker has strong investor support and plans to work with other qualified investment advisors to raise equity funding to support its business plans. . .”

The SEC charges were originally over statements made by Advanced Equities co-founder Dwight Badger, who said Bloom Energy had more deals and had hit more milestones than it actually had in 2009. Badger told investors that Bloom Energy had an order for “2,000 [units] from the CIA,” which would have generated $2 billion in revenue for the company. But in reality Bloom Energy didn’t have any orders from the CIA at that time.

As part of the settlement, Advanced Equities also sent letters to all investors in its funds Greentech III and Greentech IV — which raised money for Bloom Energy — explaining the charges and the settlement from the SEC and asking the investors if they want to sell their securities in the company.

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As part of the settlement, Advanced Equities sent letters to all investors in its funds Greentech III and Greentech IV — which raised money for Bloom Energy — explaining the charges and the settlement from the SEC and asking the investors if they want to sell their securities in the company. Between January and late March 2009, Advanced Equities raised around $122 million from about 609 individual investors in Greentech III and Greentech IV, according to the SEC settlement documents.

The letter, dated October 16 and titled “Re: Your Investment in Bloom Energy Corporation,” says:

Should you wish to sell your membership interests in Advanced Equities Greentech III, LLC, or Advanced Equities Greentech IV, we will use our best efforts to find a buyer to acquire such interests, at the cost you paid to acquire them.

Advanced Equities says in its settlement documents with the SEC that it promised to:

Deliver, within 30 days of the entry of this Order, by certified U.S. mail, a copy of the Commission’s Order in this matter to each customer of Advanced Equities who invested in Company A at any time between January 1, 2009 and December 31, 2010. . . . [And also] Use its best efforts to locate purchasers for any of its customers who purchased the securities of Company A through Greentech III or Greentech IV in 2009 and who wish to sell their securities at a price equivalent to their original purchase price. [Company A is Bloom Energy].

This letter could be a slight problem for Bloom because if a large chunk of these investors want to sell, and are expecting a certain price, it could add complications for Bloom’s overall fund raising. The company is very capital intensive and as of this summer was reported to be looking to raise another $150 million, which would bring its total funds raised to $800 million over its 11-year lifetime.

Bloom is in a major growth phase right now, meaning it needs more and more cash to deliver on its installations, particularly when it sells its Bloom boxes through its power purchase agreement model (meaning the customer doesn’t pay the upfront cost of the installation). The last thing Bloom needs is financing complications right now.

It’s also hard enough to raise money for greentech firms these days — venture firms are increasingly moving away from supporting greentech, and limited partners are even asking their investors not to use their funds for greentech. The SEC settlement around Bloom’s fund raise back in 2009 and 2010 just adds more suspicion for these investors.

At the same time, the valuation of the company this summer was reportedly $2.7 billion pre-money, which is considerably higher than the $1.45 billion pre-money valuation that Advanced Equities was selling it for back in early 2009. So the price itself might not be a huge concern.

However, SEC charges are never a great thing to be associated with any company when they need to raise money. Bloom Energy is one of the most capital intensive firms in greentech — rivaling fund raises by Solyndra and Fisker. And no doubt a lot of its investors have been hoping for an IPO soon.

The SEC charges were originally over statements made by Advanced Equities co-founder Dwight Badger, who said Bloom Energy had more deals and had hit more milestones than it actually had in 2009. Badger told investors that Bloom Energy had an order for “2,000 [units] from the CIA,” which would have generated $2 billion in revenue for the company. But in reality Bloom Energy didn’t have any orders from the CIA at that time.

The SEC settlement documents only refer to Bloom Energy as “Company A,” and says: “During 2009, Company A operated in “stealth mode” meaning that it provided scant information to the public about its finances, operations or technology.” This was the year before Bloom Energy emerged to the public — in February 2010, Bloom appeared on 60 Minutes, and held a huge launch event.

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As of Tuesday morning, around 7.5 million customers were without power across 15 states and Washington D.C. according to CNN. New York Mayor Michael Bloomberg said Tuesday morning that he expects power to be out for the next two or three days in New York, “or maybe even longer than that,” and he also said that getting the power grid back up and running (along with getting the transit system online) will be the city’s “biggest challenges.” New York Governor Andrew Cuomo publicly told New York utility ConEd that its initial estimates of restoring power within two weeks were “unacceptable.”

The stark contrasts between the resiliency of our data communication networks and our power grid in these situations is unnerving. The power grid is highly vulnerable — it’s still largely a centralized system, with little energy storage capacity at the edges of the network, and it still lacks a lot of the intelligence that Internet architecture has that can deliver self-healing and re-route around damaged systems. And that’s a problem.

Electrical explosion

To witness just how vulnerable the power grid can be, watch this YouTube video:

CNN reports that the video is of a tranformer that blew in lower Manhattan Monday night. As Nicholas Abi-Samra, chair of the IEEE Power & Energy Society’s San Diego chapter, explained in an interview with IEEE about how utilities were preparing for Hurricane Sandy, there’s no way to completely protect the grid against extreme flooding, winds, rains, downed trees and flying debris. In particular, when a substation filled with transformers (like the one that blew last night in New York) is damaged, it can take months to fully repair it.

It’s the intelligence of a utility’s grid that matters in the wake of a disaster like Hurricane Sandy — how quickly can they identify outages and how quickly can they repair them? For many utilities in the U.S., the process of identifying who has lost power and where is only partly automated. Until very recently, the standard way of finding grid outages was by getting a phone call from the customer saying their power was out.

Some utilities are starting to employ smart grid technologies that can help more quickly automate the process of healing the grid. For example, SmartGridNews points out that Chattanooga, Tennessee-based utility EPB has started installing a self-healing grid that can cut the length of power outages by 40 percent. Long Island Power Authority was also in the process of installing a new outage detection computer system, but given it won’t be working until next year; little good it did them through Hurricane Sandy.

The underlying architecture

But beyond adding computing capacity and smart software to the power grid to make it smarter, the internet is more resilient than the power grid by its very nature.

The power grid has traditionally been built so that utilities have to balance demand for energy (buildings and industry consuming energy) and the supply (centralized power plants burning mostly fossil fuels to produce electricity) at all times. When there are large fluctuations in demand or supply, created by things like a power plant shutting down or a transformer blowing, the cascading effect can bring down whole chunks of the network.

The internet doesn’t work that way. When data centers, servers and network devices fail, oftentimes web sites and service providers can shift traffic to other data centers and servers or route traffic to network gear that isn’t suffering from problems. If there’s heavy traffic, service providers can rapidly ramp up and down capacity through services like Akamai’s CDN. Data network outages can also usually be discovered immediately and most often times resolved shortly — hours in the most extreme cases (some of the outages at Amazon’s Web Services have been the exception).

The internet is a distributed system. It was designed that way (by DARPA) at its core to be resilient to attack. The power grid is not (yet) distributed. When the power grid has a massive spike in energy consumption (like during a hot summer afternoon), the network can potentially go down if it’s not quickly matched by expensive (and dirty) backup power generation from peaker power plants.

Energy storage

It should be noted that it’s easier and cheaper to move bits than electrons — it’s more an analogy for how a network should be designed. To make the power grid more resilient, smarter and more distributed, it will require a massive investment in power generation, transmission, distribution, smart grid software and energy storage.

A truly de-centralized power grid would require local power generation through solar panels or other means like fuel cells, microgrids that can isolate a neighborhood in the event of disasters, and energy storage systems (like batteries) that can bank power for buildings. Critical systems and buildings like data centers and hospitals have emergency backup power (when it works), mostly from diesel-power generators, but these are inefficient, dirty, costly and not widely used (or needed) by much of the population with reliable grid power.

It’s not as weird as it sounds to move to a more distributed power grid. Large companies in India are so used to rolling blackouts there that many of the largest have their own storage and backup systems and the biggest weren’t effected by the massive blackouts in India earlier this year. Solar panels are also cheaper than they have ever been, and are being installed on the roofs of U.S. homes and businesses at a rapid rate. Of course, solar panels won’t help in a nighttime storm, but if they’re matched with energy storage, they can bank daytime power for the nighttime critical use.

STILL, distributed power systems and energy storage units need to be far cheaper for this decentralized power grid to actually be viable. When fuel cell maker Bloom Energy launched years ago it painted the picture of a Bloom box in every home providing a mini power plant to all homes and businesses — but that’s a distant dream until the price of its fuel cells drops dramatically.

Clean power

There’s also another part of the story of the power grid and Hurricane Sandy. And that’s the need for a transformation of the grid to next-generation

Aerial view of Apple’s solar farm

energy technologies, like adding in more carbon emissions-free power generation and energy efficiency technologies. Leaders like Governor Cuomo are already describing Hurricane Sandy as an example of a new era of extreme weather, without even mentioning the politicized word climate change.

Cuomo said:

“There has been a series of extreme weather incidents. That is not a political statement. That is a factual statement. Anyone who says there’s not a dramatic change in weather patterns, I think is denying reality.”

Whatever combination is leading to more extreme weather (Mother Jones has a good take on the Sandy climate change argument), reducing the world’s carbon emissions is widely believed by scientists as something that can help address the problems of climate change. That means developing and deploying next-generation energy technologies that reduce energy consumption overall, and deliver low cost and viable clean power.

Even if you’re still not convinced about climate change, it’s actually an argument about infrastructure. The power grid needs a massive investment — at even a greater degree to the investment that’s been made in Internet infrastructure — to make it a more modern, digital, and resilient network. And hopefully, a cleaner network, too.

Image courtesy of NCDOTcommunications, and NASA.

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“There was a challenge around getting clean power,” says Nelson. Utah has less than 3 percent renewable energy and generates 82 percent of its power from coal, according to data from 2009 from the U.S. Energy Information Administration.

The question of how eBay would find clean power for its Utah data center — which is part of eBay’s global consolidation of its data centers into just three mega data centers in Utah, Arizona and Nevada — opened up another possibility: would it make more sense for the online marketplace to power its Utah data center by generating its own power and use the grid as backup?

The fuel cell finds a home

For the much larger Topaz data center, which is modular and built to scale to 30 megawatts, eBay has issued a 10 megawatt public RFI in the past couple months, seeking proposals to generate renewable energy for the data center. But for the adjacent smaller add on Quicksilver data center, eBay decided to have 6 megawatts of Bloom Energy’s solid oxide fuel cells installed on site, making the installation the country’s largest non-utility fuel cell installation. Bloom’s fuel cells generate power by combining natural gas and oxygen to produce carbon dioxide and water. EBay is operating a microgrid on site that will allow it to divert excess power from the fuel cells not used by the Quicksilver data center directly to the larger Topaz data center.

Nelson liked the design of fuel cells themselves because there are thousands of redundancy points built in. Each fuel cell produces 25 watts, is combined into a stack producing 40 kilowatts, and is part of a brick producing 200 kilowatts. If one or a group of fuel cells fails, the entire fuel cell brick doesn’t go down.

“Fuel cells are primary power for the computers and then the grid is used as backup. We have a higher available data center with this design than we would have with a traditional generator and UPS design. That was a big ah-ha moment for me,” said Nelson.

Aside from the redundancy of the fuel cells, Nelson was much more excited about the capital expense savings eBay’s getting from shifting his backup power source.

“We’re not putting UPS (uninterruptible power supply) or generators at Quicksilver. They’re completely removed,” says Nelson, referring to the Quicksilver data center, the smaller of the two data center projects in South Jordan, Utah. “This required us to completely change how we approach data center design. We’re using the fuel cells as the backup and the primary source.”

Nelson added that while the up front costs of fuel cells creates a scenario where the fuel cell power is more expensive than grid power, there were a number of cost avoidance returns from the fuel cells that made the economics work. Namely the elimination of UPS and generators along with the simplification of the building design that included changing the height of the building as well as the structural support needed. He noted that eBay examined the risk of an outage on the gas grid, and found it more reliable than the electrical grid. EBay also looked at large scale battery storage, which Nelson said wasn’t cost effective.

Generators and UPS exist at data centers in the event of a power outage and are used about 1 percent of the year. Generators themselves have been criticized. For example, the environmental impacts of Microsoft’s diesel generators in Santa Clara, California and Quincy, Washington were recently highlighted in a controversial New York Times article on data centers.

In terms of the broad pressure on leading webscale IT companies to move away from non-renewable sources of energy like coal power and diesel generators, fuel cells can be renewable if they use biogas. Biogas is reclaimed methane (CH4) from landfills or water treatment plants, rather than mined natural gas. It’s this reason why Microsoft has discussed the possibility of locating future data centers near water treatment plants, which wind up having to flare excess methane because it’s a 20 times more potent greenhouse gas than CO2.

There is currently no biogas produced in Utah, according to Nelson, and eBay is offsetting its natural gas use in Utah by paying a premium to enable biogas production elsewhere. Nelson said the offset will be “meter in/meter out,” meaning for whatever amount of natural gas eBay uses at its Utah data center it will enable that amount of biogas production elsewhere. EBay didn’t disclose the premium it’ll pay.

When the grid becomes backup power

Generating one’s own power is typically more expensive than grid power, which utilities generate at scale and from inexpensive coal, natural gas and nuclear energy. But there’s a growing amount of discussion from data center operators that being in control of one’s own power generation could lead to better uptime.

The June power outage in Virginia caused service problems for Amazon Web Services, impacting Instagram, Pinterest and Netflix. In places like India where the grid is inherently unreliable, companies have been generating their own power for years. Five of India’s biggest electricity consumers generate 96 percent of their own power, which is why major Indian conglomerates like Reliance Industries and Tata Motors were largely unimpacted by the massive blackout over the summer.

While getting off the grid was not eBay’s primary motivation for the fuel cell installation, Nelson did say, “If there are limitations within the grid, we’d like to not be bound to them. And we got the benefit of having the grid as backup.” Using the grid as backup creates a relatively safe redundancy, and if it enables the elimination of UPS and generators, data center operators can rethink the up front capital costs of installing costly on site power generation.

Bloom Energy

EBay is getting its fuel cells from Bloom Energy, which targets corporate customers interested in generating their own power on site. To address the hefty up front capital costs of buying fuel cells, the fuel cell pioneer now offers energy-as-a-service in which Bloom carries the upfront purchase cost of the fuel cells in exchange for a kilowatt hour power purchase agreement. We’re seeing this financing strategy in solar as well, as IPO hopeful SolarCity is actively pursuing a strategy in which it waives the costs of rooftop solar panels in exchange for a long term power purchase agreement. There’s even talk on Wall Street that bankers want to bundle the contracts and securitize them as debt products, to be known as solar backed securities though the market for fuel cells is likely too small for this type of securitization.

EBay actually opted to pay the upfront capital costs of the fuel cells combined with a 20-year guarantee from Bloom of minimal power generation, including maintenance obligations. The eBay deal is a major win for Bloom, which has dived headlong into the data center market this year, hiring Peter Gross to head up its data center group. Gross led data center design for EYP Mission Critical Facilities, which HP bought in 2007.

According to my colleague Katie Fehrenbacher’s August interview with Bloom Energy CFO Bill Kurtz, Bloom remains “halfway” to breaking even, and is in the process of raising another $150 million at a valuation of $2.7 billion. If successful, the raise would bring the lifetime capital raised for the eleven-year old company to $800 million. And it would also make Bloom number four on the top 10 U.S. venture-backed companies in terms of total equity raised, just ahead of Metro PCS and Facebook, but two slots behind Solyndra, which clocked close to a billion dollars in funding.

For the time being, Bloom will have to sell more data centers VPs on the idea that the extra expense of fuel cells has secondary benefits not evident in the initial cost of power. Like a decreased need for UPS and generators, and maybe even a data center less vulnerable to grid outages. And if the possibility of using reclaimed biogas ensures that the fuel source is renewable, all the better. For now all eyes will be on eBay, as well as Apple which is deploying a smaller fuel cell facility in North Carolina, to see how the fuel cells perform and whether they could be part of a rethinking of how to provide backup power for the modern data center.

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Bloom makes fuel cells that take fuel (natural gas or biogas) and combine it with oxygen and other chemicals to create an electrochemical reaction that produces electricity. Bloom Energy servers can deliver distributed power on site at a building, and this can have a lower carbon footprint and potentially more electrical reliability than grid power.

AT&T will use the fuel cells to power its operations in California and Connecticut, and AT&T is buying the power from the fuel cells, not buying the fuel cells themselves. Back in January of 2011, Bloom Energy launched its energy-as-a-service product, enabling customers to sign 10-year deals to buy the power from the fuel cells without having to pay the high upfront costs of buying the systems.

AT&T first announced its deal with Bloom back in the Summer of 2011. AT&T told me that it would use the fuel cells to power not just administration offices, but also data centers and facilities that house network equipment. Bloom Energy has begun to bring in a good number of data center customers including Apple, and eBay (and maybe Microsoft, too), and the company launched a data center focus to appeal to these Internet companies.

Ten-year-old Bloom is a prime example of a really capital-intensive cleantech company: it could potentially be a game changer for distributed cleaner power generation, but it has needed lots of capital to scale up manufacturing. If Bloom closes this recently reported round of $150 million, it will have raised at least $800 million over its lifetime. Bloom CFO Bill Kurtz told me earlier this year that Bloom is about “halfway” to breaking even and becoming profitable.

While AT&T is now Bloom Energy’s largest corporate deal, Delaware utility, Delmarva Power & Light, is Bloom’s official largest customer. Delmarva Power & Light has about 500,000 electricity customers and plans to buy 30 MW worth of fuel cells from Bloom.

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