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Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations
carbonate or solid oxide should be irrelevant.33
20. EEI requests that the Commission not move forward with this final rule, arguing that the Commission cannot expand the statutory definition of a cogeneration facility.34 EEI asserts that fuel cell technology does not meet the statutory requirements to be certified as a cogeneration facility. EEI agrees that the Commission is charged with implementing PURPA through adoption of regulations but argues that, in doing so, the Commission is limited by the statutory requirements. EEI states that, to qualify as a QF, a cogeneration facility must meet the statutory definition of a cogeneration facility, i.e., it must be a facility which produces: 1
Electric energy and 2 steam or forms of useful energy such as heat which are used for industrial, commercial, heating or cooling purposes.35
21. EEI also points out that the statute requires that the Commission establish regulations that ensure that:
i The thermal energy output of a new qualifying cogeneration facility is used in a productive and beneficial manner;
ii the electrical, thermal, and chemical output of the cogeneration facility is used fundamentally for industrial, commercial, or institutional purposes and is not intended fundamentally for sale to an electric utility, taking into account technological, efficiency, economic, and variable thermal energy requirements, as well as State laws applicable to sales of electric energy from a qualifying facility to its host facility; and iii continuing progress in the development of efficient electric energy generating technology.36

22. EEI argues that this statutory language indicates that, contrary to the Commissions statement in the NOPR, the definition of cogeneration is not open-ended. 37 EEI recognizes that other technologies may qualify as cogeneration facilities under the statute but argues that the fuel cell technology described in the NOPR does not meet the statutory requirement.38
23. EEI explains that the solid oxide fuel cell system described in the NOPR
appears to be a self-contained reaction that is designed to produce electricity and thus is inconsistent with the statutory requirement.39 EEI explains that, in Order No. 70, the Commission
produces electric energy and steam or forms of useful energy such as heat which are used for industrial, commercial, heating, or cooling purposes. Thus, cogeneration facilities simultaneously produce two forms of useful energy, namely electric power and heat. Cogeneration facilities can use significantly less fuel to produce electricity and steam or other forms of energy than would be needed to produce the two separately. By using the fuels more efficiently cogeneration facilities can make a significant contribution to the Nations effort to conserve its energy resources.40

24. Further, EEI explains that there is an explicit requirement for the sequential use of energy in cogeneration facilities. This means that rejected heat from a power production or heating process is used in another power production or heating process.
It is precisely this cascading use of energy in sequential processes that gives rise to the energy conserving characteristics of cogeneration.41

25. EEI explains that, in adopting this provision in Order No. 70, the Commission clarified the facilities eligible for QF status did not include natural gas-fired combined-cycle combustion plants even though the sequential use of heat is used to produce more electricity.42 EEI argues that the main difference between a solid oxide fuel cell and a natural gas-fired combined-cycle facility is that the solid oxide fuel cell produces electricity from natural gas through a chemical reaction instead of combustion, which is not a meaningful distinction because if the thermal energy uses were not required to be completely independent of the power production processes many conventional generating facilities could be considered cogeneration facilities and may be eligible for the benefits of section 210 of PURPA. 43
26. EEI argues that allowing solid oxide fuel cells to now qualify as cogeneration is inconsistent with the rationale behind encouraging cogeneration under PURPA. EEI
explains that, in Order No. 70, the Commission recognized that the goal was to promote conservation by recognizing that the production of electricity often creates a byproduct, thermal energy, and with minimal additional fuel the cogenerators could produce large amounts of thermal energy that could be used in other
33 Id.

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at 5.
Comments at 2.
35 Id. at 4 quoting 16 U.S.C. 79618.
36 Id. quoting16 U.S.C. 824a3n.
37 Id. referencing NOPR, 175 FERC 61,050 at P
3.
38 Id.
39 Id. at 6.

defined a cogeneration facility as one that
34 EEI

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40 Id. quoting Order No. 70, FERC Stats. & Regs.
30,134 at 30,93132.
41 Id. quoting Order No. 70, FERC Stats. & Regs.
30,134 at 30,934.
42 Id. at 67.
43 Id. at 7 quoting EG&G, Inc., 16 FERC 61,060, at 61,104 1981.

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processes.44 EEI asserts that solid oxide fuel cells primary purpose is to produce more electricity instead of using the thermal energy for another, independent purpose.
27. Finally, EEI argues that, in the past, the Commission has remained technology neutral; yet, here, the Commission is proposing to change its PURPA Regulations to endorse a specific technology. EEI requests that, instead of changing the regulations to accommodate specific technologies, the Commission evaluate new technologies under statutory criteria and the goals of PURPA to ensure a level playing field for all technologies.
28. Bloom Energy filed comments reiterating its support for the revision of the Commissions PURPA Regulations, contending that the revised definition represents a narrow, targeted form of regulatory relief necessary to ensure continuing progress in the development of efficient electric energy generating technology and . . . would not impact the application of the fundamental use test or the existing operating standards applicable to cogeneration facilities. 45
Bloom Energy asserts that fuel cells provide several public policy benefits such as grid reliability and resiliency of electric supply. Bloom Energy includes a Joint Declaration from former Commissioners Vicky A. Bailey, Norman C. Bay, Nora Mead Brownell, Suedeen G. Kelly, and William L.
Massey, who note their support of the NOPR and state that the proposed change is consistent with the statutory text of PURPA and the definition of cogeneration facility in the FPA. . . . 46 Subsequently, Bloom Energy filed reply comments in response to the comments of FuelCell Energy and EEI.
V. Discussion 29. In this final rule, we adopt a revision to the definition of a toppingcycle cogeneration facility in section 292.202h of the PURPA Regulations, as proposed in the NOPR, with one modification, to include all fuel cells that use waste heat in an integrated fuel reforming process, instead of limiting the type of eligible fuel cells to only solid oxide fuel cells.47
44 Id.
45 Bloom Energy Comments at 7 referencing Bloom Energy Petition at 12 internal quotations omitted.
46 Bloom Energy Comments, Joint Declaration at 3.
47 We recognize that the integrated fuel reforming process can use hydrocarbons other than just natural gas but also, e.g., bio-gas. The regulatory texts reference to an integrated steam hydrocarbon reformation process thus encompasses not only
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