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Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations
Commission, 888 First Street NE, Washington, DC 20426, 202 502
6196, thomas.dautel@ferc.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction 1. In this final rule, the Federal Energy Regulatory Commission Commission revises its regulations PURPA Regulations 1 implementing sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978
PURPA 2 in light of the development of fuel cell systems with integrated hydrocarbon reformation equipment as a technical evolution of cogeneration.
2. On October 15, 2020, the Commission issued a notice of proposed rulemaking NOPR proposing to modify the PURPA Regulations.3 Bloom Energy, Edison Electric Institute EEI, and FuelCell Energy, Inc. FuelCell Energy responded with comments and the California Public Utilities Commission filed a notice of intervention. Bloom Energy also filed a motion to submit reply comments, and reply comments, to the comments of FuelCell Energy and EEI.
3. This final rule addresses the comments received in response to the NOPR. With one modification, we adopt the proposed revisions in the NOPR.
II. Background 4. PURPA was part of a legislative package Congress enacted in 1978 to address the energy crisis then facing the country.4 As the Supreme Court explained in FERC v. Mississippi,5
Congress was aware that domestic oil production had lagged behind demand, and the country had become increasingly dependent on foreign oil which could jeopardize the countrys economy and undermine its independence.6 Roughly a third of the nations electricity was generated using oil and natural gas,7 and Congress concluded that increased reliance on cogeneration and small power production could significantly contribute to conserving this energy.8
1 18

CFR part 292.
U.S.C. 796, 824a3.
3 Fuel Cell Thermal Energy Output, Notice of Proposed Rulemaking, 85 FR 67,699 Oct. 26, 2020, 175 FERC 61,050 2020 NOPR.
4 See Public Law 95617, 92 Stat. 3117 1978. In addition to PURPA, that legislative package included: The Energy Tax Act of 1978, Public Law 95618, 92 Stat. 3174; the National Energy Conservation Policy Act, Public Law 95619, 92
Stat. 3206; the Powerplant and Industrial Fuel Use Act of 1978, Public Law 95620, 92 Stat. 3289; and the Natural Gas Policy Act of 1978, Public Law 95
621, 92 Stat. 3351.
5 456 U.S. 742 1982.
6 Id. at 756.
7 Id. at 745.
8 Id. at 757.

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As recognized by the Supreme Court, Congress passed PURPA to address the impacts of oil and natural gas shortages and electric utilities decreasing efficiency in their generating capacities on customer rates and the economy as a whole.9
5. PURPA section 210 was intended to address the energy crisis by encouraging the development of QFs and thereby reducing the countrys demand for traditional fossil fuels.10 PURPA section 210a thus directed that the Commission prescribe, and from time to time thereafter revise, such rules as the Commission determines necessary to encourage cogeneration and small power production. 11
6. In 1980, the Commission issued Order No. 70, which promulgated rules that, as relevant here, largely remain in effect today.12 Order No. 70 established the criteria and procedures by which small power producers and cogeneration facilities can obtain qualifying status to receive the rate benefits and exemptions contained in PURPA section 210.13 As relevant here, the Commission established criteria for a cogeneration QF, a facility that, as required by the statute, produces i electric energy, and ii steam or forms of useful energy such as heat which are used for industrial, commercial, heating or cooling purposes. 14
7. In enacting PURPA, Congress could not, and did not, predict specific technological developments that would occur in future years but instead recognized the Commissions discretion by directing the Commission to from time to time thereafter revise such rules as it determines necessary to encourage cogeneration. 15 Although in 1978 the predominant form of cogeneration was a more traditional combined heat and power, Congress did not limit the 9 Id.

at 74546.
at 750.
11 16 U.S.C. 824a3a.
12 Small Power Production and Cogeneration FacilitiesQualifying Status, Order No. 70, 45 FR
17959 Mar. 20, 1980, FERC Stats. & Regs. 30,134
cross-referenced at 10 FERC 61,230, order on rehg, Order No. 70A, 45 FR 33603 May 20, 1980, FERC Stats. & Regs. 30,159 cross-referenced at 11
FERC 61,119, order on rehg, Order No. 70B, 45
FR 52779 Aug. 4, 1980, FERC Stats. & Regs.
30,176 cross-referenced at 12 FERC 61,128, order on rehg, 45 FR 66784 Oct. 8, 1980 FERC
Stats. & Regs. 30,192 1980 cross-referenced at 12
FERC 61,306, amending regulations, Order No.
70D, 46 FR 11251 Feb. 6, 1981, FERC Stats. &
Regs. 30,234 cross-referenced at 14 FERC
61,076, amending regulations, Order No. 70E, 46 FR 33025 Jun. 26, 1981 FERC Stats. & Regs.
30,274 1981 cross-referenced at 15 FERC
61,281.
13 Order No. 70, FERC Stats. & Regs. 30,134 at 30,933.
14 16 U.S.C. 79618; accord 18 CFR 292.202c.
15 16 U.S.C. 824a3a.
10 Id.

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definition of qualifying cogeneration facilities to the particular technologies then in existence. Instead, as described above, Congress defined a cogeneration facility as a facility that produces: 1
Electric energy; and 2 steam or forms of useful energy, such as heat, which are used for industrial, commercial, heating or cooling purpose.16 Congress otherwise left it for the Commission, from time to time, to determine the types of facilities that would qualify as cogeneration facilities under the statute.
8. Unlike more traditional electric generation that relies on combustion of fossil fuels to produce electric energy, fuel cells convert the chemical energy in hydrogen to electric energy without combustion. This conversion has been characterized as a significant improvement in the efficiency of electric generation.17 More specifically, hydrogen fuelwhich can be produced from the application of heat and steam to hydrocarbons such as natural gas enters the anode side of the fuel cell.
Simultaneously, ambient air enters the cathode side of the fuel cell. The hydrogen fuel on the anode attracts oxygen ions from the cathode. The resulting electrochemical reaction produces electricity plus heat and steam that can be used up front to reform natural gas on-site to produce the hydrogen that fuels the fuel cell.18
9. If the natural gas reformation equipment were instead located offsite, then waste heat in the form of steam from the electricity production by the fuel cell would not be available to aid the reformation process to fuel the cell.
In this offsite reformation scenario, we would expect the external reformation process to require additional natural gas to be burned to create steam so that the remainder of the input natural gas could be reformed into hydrogen.19 This would be inefficient and inconsistent with Congresss goal in enacting PURPA, as discussed above.
10. Stated another way, integrating the natural gas reformation process into a fuel cell generating facility results in significant progress in the development of efficient electric energy generating technology. 20
III. NOPR Proposal 11. In the NOPR, the Commission stated that the statutory definition of 16 See
supra note 14.
Energy Petition at 8.

17 Bloom 18 Id.

19 Furthermore, because hydrogen is frequently compressed or liquified for shipment to the point of consumption, more energy would be needed for these activities. Id. at 8 & App. B.
20 Id. at 1, 3, 7, 16 citing 16 U.S.C. 824a 3n1Aiii.

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