Revisions to Form, Procedures, and Criteria for Certification of Qualifying Facility Status for a Small Power Production or Cogeneration Facility, 54503-54533 [E9-25261]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 74, Number 203 (Thursday, October 22, 2009)]
[Proposed Rules]
[Pages 54503-54533]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-25261]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 131 and 292

[Docket No. RM09-23-000]


Revisions to Form, Procedures, and Criteria for Certification of 
Qualifying Facility Status for a Small Power Production or Cogeneration 
Facility

October 15, 2009.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this Notice of Proposed Rulemaking, the Federal Energy 
Regulatory Commission (Commission) proposes to revise its regulations, 
which currently provide the FERC Form No. 556 (Form 556) that is used 
in the certification of qualifying status for an existing or proposed 
small power production or cogeneration facility. The Commission 
proposes to revise its regulations to remove the contents of the Form 
No. 556 from the regulations, and, in their place, to provide that an 
applicant seeking to certify qualifying facility (QF) status of a small 
power production or cogeneration facility must complete, and 
electronically file, the Form No. 556 that is in effect at the time of 
filing. We propose to revise and reformat the Form No. 556 to clarify 
the content of the form and to take advantage of newer technologies 
that will reduce both the filing burden for applicants and the 
processing burden for the Commission. We also propose to exempt 
generating facilities with net power production capacities of 1 MW or 
less from the QF certification requirement, and to codify the 
Commission's authority to waive the QF certification requirement for 
good cause. Finally, we propose to clarify, simplify or correct certain 
sections of the regulations.

DATES: Comments must be filed on or before December 21, 2009.

ADDRESSES: You may submit comments, identified by Docket No. RM09-23-
000, by one of the following methods:
    Agency Web site: https://www.ferc.gov. Follow the instructions for 
submitting comments via the eFiling link found in the Comment 
Procedures Section of the preamble.
    Mail: Commenters unable to file comments electronically must mail 
or hand deliver an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Secretary of the Commission, 888 First 
Street, NE., Washington, DC 20426. Please refer to the Comment 
Procedures Section of the preamble for additional information on how to 
file paper comments.

FOR FURTHER INFORMATION CONTACT:

Tom Dautel (Technical Information), Division of Economic and Technical 
Analysis, Office of Energy Policy and Innovation, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
Telephone: (202) 502-6196, E-mail: thomas.dautel@ferc.gov.
Paul Singh (Technical Information), Division of Tariffs and Market 
Development--West, Office of Energy Market Regulation, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426, 
Telephone: (202) 502-8576, E-mail: paul.singh@ferc.gov.
S.L. Higginbottom (Legal Information), Office of the General Counsel, 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, Telephone: (202) 502-8561, E-mail: 
samuel.higginbottom@ferc.gov.

SUPPLEMENTARY INFORMATION:

I. Introduction

    1. The Commission proposes to revise Sec.  131.80 of its 
regulations,\1\ which currently sets forth the FERC Form No. 556 (Form 
556) that is used in the certification of qualifying status for an 
existing or proposed small power production or cogeneration facility. 
Section 131.80 now contains Form No. 556 and general instructions for 
completing the form. The Commission proposes to revise Sec.  131.80 of 
its regulations to remove the contents of the Form No. 556 and, in 
their place, provide that an applicant seeking to certify qualifying 
facility (QF) status of a small power production or cogeneration 
facility must complete and file the Form No. 556 that is in effect at 
the time of filing, which will be made available for download from the 
Commission's QF Web site.\2\ The Commission also proposes to require 
that the Form No. 556 be submitted to the Commission electronically.
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    \1\ 18 CFR 131.80.
    \2\ https://www.ferc.gov/QF.
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    2. The Commission proposes to revise and reformat the Form No. 556 
to clarify the content of the form and to take advantage of newer 
technologies that will reduce both the filing burden for applicants and 
the processing burden for the Commission.
    3. The Commission also proposes revisions to the procedures, 
standards and criteria for QF status provided in Part 292 of its 
regulations to accomplish

[[Page 54504]]

the following: (1) Exemption of generating facilities with net power 
production capacities of 1 MW or less from the QF certification 
requirement; (2) codification of the Commission's authority to waive 
the QF certification requirement for good cause; (3) extension to all 
applicants for the QF certification requirement (currently applicable 
only to applicants for self certification of QF status) to serve a copy 
of a filed Form No. 556 on the affected utilities and state regulatory 
authorities; (4) elimination of the requirement for applicants to 
provide a draft notice suitable for publication in the Federal 
Register; and (5) clarification, simplification or correction of 
certain sections of the regulations.\3\
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    \3\ 18 CFR Part 292.
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    4. Finally, the Commission proposes a change to the exemption of 
QFs from the Federal Power Act,\4\ and to the exemption of QFs from the 
Public Utility Holding Company Act of 2005 (PUHCA) and certain State 
laws and regulations \5\ to make clear that certain small power 
production facilities that satisfy the criteria of section 3(17)(E) of 
the Federal Power Act qualify for those exemptions.
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    \4\ 18 CFR 292.601.
    \5\ 18 CFR 292.602.
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    5. The Commission is proposing the revisions described above with 
the following goals: (1) Making the Form No. 556 easier and less time 
consuming to complete and submit; (2) decreasing opportunities for 
confusion and error in completing the form; (3) improving consistency 
and quality of the data collected by the form; (4) decreasing 
Commission resources dedicated to managing errors and omissions in 
submitted forms; and (5) clarifying and correcting the regulations 
governing the requirements for obtaining and maintaining QF status.
    6. The proposed revisions to the Form No. 556 and the procedures 
for filing the Form No. 556 are informed by the Commission's experience 
both with administering the Form No. 556 and with new technologies for 
electronic data collection that have become available since the Form 
No. 556 was first established by Order No. 575 in 1995.\6\ We believe 
that the proposed changes will increase the effectiveness of the 
Commission's policies encouraging cogeneration and small power 
production, as required by section 210 of the Public Utility Regulatory 
Policies Act of 1978 (PURPA).
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    \6\ Streamlining of Regulations Pertaining to Parts II and III 
of the Federal Power Act and the Public Utility Regulatory Policies 
Act of 1978, Order No. 575, 60 FR 4831 (Jan. 25, 1995), FERC Stats. 
& Regs. ] 31,014, order on reh'g, Order No. 575-A, 71 FERC ] 61,121 
(1995).
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II. Background

    7. When the Commission first implemented section 201 of PURPA, it 
provided two paths to QF status: self-certification and Commission 
certification.\7\ The procedures for self-certification are contained 
in Sec.  292.207(a) of the Commission's regulations.\8\ When a small 
power production facility or cogeneration facility self-certifies (or 
self-recertifies),\9\ it certifies that it satisfies the requirements 
for QF status. The Commission does not formally review the self-
certification. Instead, the self-certification is assigned a docket 
number, and Commission staff looks at the filing to determine that the 
self-certifier has provided the information required by the 
regulations.
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    \7\ There is no fee for a self-certification; there is, however, 
a fee for Commission certification. 18 CFR 381.505. The Commission 
will not process an application for Commission certification without 
receipt of the applicable fee.
    \8\ 18 CFR 292.207(a).
    \9\ Because recertification is a type of certification, policies 
applicable to self-certification and application for Commission 
certification also apply to self-recertification and application for 
Commission recertification.
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    8. Self-certification was an essential part of the Commission's 
implementation of PURPA, and was intended, in part, to make the 
certification process quick and not unduly burdensome. Thus, when the 
Commission first implemented section 201 of PURPA in Order No. 70,\10\ 
the Commission rejected a proposal to adopt a case-by-case Commission 
certification requirement for all QFs, but instead provided that 
facilities that met the requirements for QF status need only furnish 
notice to the Commission of QF status.\11\ This notice (the self-
certification) was purely for informational purposes and to help the 
Commission monitor the market penetration of QFs. QF status, however, 
was established by meeting the requirements for such status and did not 
depend on the filing. Indeed, the Commission noted that QFs and 
purchasing utilities could agree that a generation facility met the 
requirements for QF status, and the facility would qualify for the 
benefits of PURPA without making any filing with the Commission.
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    \10\ Small Power Production and Cogeneration Facilities--
Qualifying Status, Order No. 70, FERC Stats. & Regs., Regulations 
Preambles 1977-1981 ] 30,134 (1980), order on reh'g, Order Nos. 69-A 
and 70-A, FERC Stats. & Regs., Regulations Preambles 1977-1981 ] 
30,160 (1980), aff'd in part and vacated in part, American Electric 
Power Service Corp. v. FERC, 675 F.2d 1226 (D.C. Cir. 1982), rev'd 
in part, American Paper Institute, Inc. v. American Electric Power 
Service Corp., 461 U.S. 402 (1983).
    \11\ Order No. 70, FERC Stats. & Regs. ] 30,134 at 30,954. As 
discussed below, the Commission, in 2005, added a requirement that a 
cogeneration facility or small power production facility either 
self-certify or receive Commission certification to have QF status. 
See 18 CFR 292.203(a)(3), (b)(2).
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    9. The Commission recognized, however, that the self-certification 
process would not always satisfy all those interested in a particular 
facility's status. Accordingly, the Commission also established, in 
Sec.  292.207(b) of the regulations,\12\ the ``optional procedure'' for 
QF status. Under the optional procedure, an entity may file an 
application for a determination by the Commission that a facility meets 
the requirements for QF status. Such an application requires a filing 
fee.\13\ After receiving an application for Commission certification 
and the required fee, the Commission assigns the filing a docket number 
and notices the filing in the Federal Register, providing an 
opportunity for interventions and protests. The Commission's 
regulations provide that it will act on an application within 90 days 
of the filing (or of its supplement or amendment). The process gives 
those that need assurance of a facility's QF status (or lack of such 
status) a Commission order certifying (or denying) QF status. This 
optional procedure is commonly known as an application for Commission 
certification. In its original regulations, the Commission also 
provided that, once a facility was certified by the Commission, its 
qualifying status could be revoked by the Commission, upon the 
Commission's own motion, or upon the motion of any person.\14\ This 
combination of encouraging self-certifications, while providing for 
both Commission-certification and an opportunity to seek revocation of 
QF status, would assure, the Commission believed, that only those 
generation facilities that meet the criteria for QF status would 
receive and retain that status.
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    \12\ 18 CFR 292.207(b).
    \13\ 18 CFR 381.505.
    \14\ See 18 CFR 292.207(d)(ii). A similar opportunity for the 
Commission to revoke the QF status of a self-certified facility on 
the Commission's own motion, or on the motion of another party, was 
not expressly provided in the regulations; the Commission, however, 
allowed others to seek the revocation of a self-certified QF by 
filing a petition for declaratory order. In Order No. 671, infra 
note 18, the right to file a motion seeking revocation of a self-
certification was added to the Commission's regulations. A motion 
seeking revocation requires a filing fee as a declaratory order. 
Chugach Electric Association, Inc., 121 FERC ] 61,287, at P 51-54 
(2007). The filing fee for a declaratory order is provided in 18 CFR 
381.302.

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[[Page 54505]]

    10. As noted above, the Commission, when it first enacted its 
regulations, had hoped that self-certifications would be the primary 
means for obtaining QF status, but recognized that there would be 
instances in which a Commission ruling on QF status would be desirable. 
While the Commission later, in Order No. 575, required QFs to provide 
more detailed information about self-certifying QFs, in Form No. 556, 
the Commission continued to encourage self-certification, but also 
recognized that there would be reasons that a QF may want or need 
Commission certification (including the requirement of some lenders, 
electric utilities, or state regulators that a generator seeking QF 
status and the benefits of PURPA be Commission-certified). The 
Commission thus sought to make the self-certification process more 
informative about the nature of the self-certified QFs while keeping 
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the process relatively simple. The Commission stated the following:

    The Commission continues to believe that self-certification 
should be retained as an option; it is unnecessary to conduct a full 
review of each facility, even in instances where outside lenders and 
investors will be involved. However, in consideration of the various 
comments, and in recognition of the various other clarifications 
being made in this final rule, the Commission will not adopt the 
proposed affidavit requirement. Instead, the Commission will modify 
the self-certification process to: (a) incorporate the Form 556 
information requirement that the Commission is also adopting for 
applications for Commission certification; and (b) require that 
cogenerators and small power producers provide copies of the notice 
of self-certification to each affected state commission and to each 
affected electric utility. The self-certifying cogenerator or small 
power producer must also specify the utility services that it 
intends to request (see item 3b of Form 556).[\15\]
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    \15\ Order No. 575, FERC Stats. & Regs. ] 31,014 at 31,275.

    11. Following the enactment of the Energy Policy Act of 2005 (EPAct 
2005), which imposed new requirements for QF status for ``new'' 
cogeneration facilities,\16\ the Commission issued Order No. 671,\17\ 
which implemented those new requirements. As part of that 
implementation, for the first time, notices of self-certifications for 
new cogeneration facilities were required to be published in the 
Federal Register; self-certifications, other than for new cogeneration 
facilities, are not published in the Federal Register. In addition, as 
noted above, for the first time, the Commission required the filing of 
a notice of self-certification or an application for Commission 
certification as a requirement for QF status.\18\
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    \16\ A ``new'' cogeneration facility is defined as any 
cogeneration facility that was either not a qualifying cogeneration 
facility on or before August 8, 2005, or that had not filed a notice 
of self-certification, self-recertification or an application for 
Commission certification or Commission recertification as a 
qualifying cogeneration facility prior to February 2, 2006. 16 
U.S.C. 824a-3(n)(2)(B); 18 CFR 292.205(d).
    \17\ Revised Regulations Governing Small Power Production and 
Cogeneration Facilities, Order No. 671, 71 FR 7852 (Feb. 2, 2006), 
FERC Stats. & Regs. ] 31,203 (2006), order on reh'g, Order No. 671-
A, 71 FR 30585 (May 22, 2006), FERC Stats. & Regs. ] 31,219 (2006).
    \18\ See 18 CFR 292.203(a)(3), (b)(2).
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III. Proposed Revisions to Regulations

A. Revisions to 18 CFR 131.80

    12. Currently, Sec.  131.80 of the Commission regulations contains 
the text of Form No. 556 as well as instructions on how to complete the 
form. We propose that Sec.  131.80 of the Commission's regulations will 
no longer contain Form No. 556. In place of the current language, we 
propose to require in Sec.  131.80(a) that any person seeking to 
certify a facility as a QF must complete and file the Form No. 556 then 
in effect and in accordance with the instructions then incorporated in 
that form.
    13. Revising Sec.  131.80 as proposed will make it easier to 
clarify and correct the form, should such changes prove necessary or 
appropriate in the future. Future changes to the form would be reviewed 
by the Office of Management and Budget following a solicitation of 
comments from the public on proposed changes, but would not require a 
formal rulemaking. This treatment is consistent with how a number of 
other Commission information collections are managed, including FERC 
Form Nos. 1, 1-F, 3-Q, 60, 80, 423, 714, and 715, as well as the FERC 
Form No. 580 Interrogatory.\19\
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    \19\ 18 CFR 366.23.
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    14. We are also proposing to require, through proposed Sec.  
131.80(c), that applicants submit their QF applications (whether 
initial certifications or recertifications, and whether self-
certifications or applications for Commission certification) 
electronically via the Commission's eFiling website. We make this 
proposal for several reasons. First, for most applicants, the 
electronic filing process will be faster, easier, less costly and less 
resource-intensive than hardcopy filing. An applicant filing 
electronically will receive an acknowledgement that the Commission has 
received their application and a docket number for their submittal much 
more quickly than they would by filing in hardcopy format. Also, 
electronic filing will allow the Commission to electronically process 
QF applications, dramatically reducing required staff resources and 
human error, and allowing the Commission to identify patterns of 
reporting errors and noncompliance that would be difficult to detect 
through manual processing. Finally, electronic filing of QF 
applications would facilitate the compilation of QF data that could be 
made available to the public. Each year Commission staff field a number 
of requests for QF certification data from private organizations, 
researchers and other government agencies. Requiring applicants to file 
in electronic format would make it possible to respond to many more 
such requests, and/or to publish compiled QF data on the Commission's 
website.
    15. While electronic filing of QF certifications has many benefits, 
we recognize that some of the parties submitting applications for 
certification of QF status are small entities that consider the cost of 
legal representation to be burdensome and/or that lack access to the 
computer facilities necessary to make an electronic filing.
    16. To address this concern, we propose to amend Sec.  292.203 to 
exempt the smallest applicants, those with a net power production 
capacity less than or equal to 1 MW, from the requirement to make any 
filing with the Commission in order to be a QF. Facilities larger than 
1 MW represent a significant departure from residential power 
generation, and we would expect entities certifying such facilities to 
have access to the legal representation and the computer facilities 
needed to electronically file a Form No. 556. We seek comments on this 
proposal, and, in particular, on whether a 1 MW threshold is the 
appropriate threshold. We note that until the effective date of Order 
No. 671, no filing, either of a self-certification or an application 
for Commission certification, was needed for QF status. In instituting 
the filing requirement for QF status, the Commission, among other 
things, explained that requiring a filing would help ensure that a 
``new'' cogeneration facility would not be able to claim QF status 
without making a filing; the Commission believed that the Congressional 
mandate to tighten the standards for cogeneration facilities required 
that a filing, either a self-certification or an application for 
Commission certification, be made by an entity claiming QF status.\20\ 
While, as discussed above, the data submitted on Form No. 556 are 
valuable, there may not be as compelling reasons for

[[Page 54506]]

facilities that are very small, such as solar generation facilities 
installed at residences or other relatively small electric consumers 
such as retail stores, hospitals, or schools, to make filings with the 
Commission for QF status.
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    \20\ Order No. 671, FERC Stats. & Regs. ] 31,203 at P 81.
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    17. Alternatively, we could maintain a hardcopy filing requirement 
for small facilities instead of exempting small facilities from any 
certification requirement; however, such a policy would add 
considerably to the complexity of the Commission's regulations. The 
very limited benefit of such a policy does not seem to justify this 
added complexity or the burden on the affected parties.

B. Revisions to 18 CFR 292.203

    18. Section 292.203 of our regulations \21\ lists the general 
requirements for QF status. For a qualifying small power production 
facility, those requirements currently state that the facility must 
meet the maximum size criteria specified in Sec.  292.204(a), meet the 
fuel use criteria specified in Sec.  292.204(b), and must have filed a 
notice of self-certification or an application for Commission 
certification that has been granted. For a qualifying cogeneration 
facility, those requirements currently state that the facility must 
meet any applicable operating and efficiency standards provided in 
Sec.  292.205(a) and (b), and that the facility must have filed a 
notice of self-certification or an application for Commission 
certification that has been granted.
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    \21\ 18 CFR 292.203.
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    19. We propose to correct an inadvertent error in Sec.  
292.203(b)(1) of our regulations.\22\ Order No. 671 implemented 
additional technical requirements for certain cogeneration facilities 
in Sec.  292.205(d), but Sec.  292.203(b)(1) was not updated to reflect 
that a facility must comply with these new requirements (if applicable) 
in order to be a qualifying cogeneration facility. We propose to add 
the reference to Sec.  292.205(d) in Sec.  292.203(b). Because the 
technical requirements of Sec.  292.205(d) are not ``operating and 
efficiency standards,'' we propose to amend Sec.  292.203(b) to delete 
the phrase ``operating and efficiency standards'' and to replace it 
with the phrase ``standards and criteria.''
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    \22\ 18 CFR 292.203(b)(1).
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    20. Finally, as mentioned above, we seek comments on whether to add 
a Sec.  292.203(d) which would exempt certain very small facilities 
from the requirement to make a filing for qualifying status and would 
make explicit the Commission's authority to grant waiver of the filing 
requirement upon petition where good cause is shown.\23\ As discussed 
above, certain very small facilities may find the filing requirement 
for obtaining QF status to be unduly burdensome. On the other hand, 
there is value to the data received in a self-certification, the self-
certification process has been designed to be and is relatively easy, 
and we intend to make it easier with the adoption of an easier-to-use 
Form No. 556.
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    \23\ See Ashland Windfarm, LLC, 124 FERC ] 61,068 (2008) 
(Commission granted waiver of the filing requirement for QF status).
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C. Revisions to 18 CFR 292.204

    21. Section 3(17)(E) of the Federal Power Act provides that an 
``eligible solar, wind, waste or geothermal facility'' is a facility 
which produces electric energy solely by the use, as a primary energy 
source, of solar energy, wind energy, waste resources or geothermal 
resources, but only if such facility meets certain criteria for dates 
of certification and construction. Section 3(17)(A) of the Federal 
Power Act provides that any eligible solar, wind, waste, or geothermal 
facility is a small power production facility, regardless of its size. 
The Commission implemented these sections of the Federal Power Act in 
Sec.  292.204(a), including the statement that there are no size 
limitations for ``eligible'' solar, wind or waste facilities,\24\ as 
defined by section 3(17)(E) of the Federal Power Act. The regulation 
then states that, for ``a non-eligible facility,'' the size limitation 
for a qualifying small power production facility is 80 MW.
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    \24\ ``Geothermal'' was inadvertently omitted when the 
regulation was written. The change we are proposing obviates the 
need to correct this omission.
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    22. The wording of Sec.  292.204(a) has created confusion for many 
applicants. Applicants not familiar with section 3(17)(A) or (E) of the 
Federal Power Act frequently confuse the statutory concept of 
``eligibility'' with more general questions of whether their facility 
is eligible for QF status. They often assume that an ``eligible 
facility'' is any facility that is eligible for qualifying status. In 
an attempt to reduce such confusion, we propose to revise Sec.  
292.204(a) to be more clear while achieving the same regulatory outcome 
as the current Sec.  292.204(a); the proposed revision avoids using the 
term ``eligible.''

D. Revisions to 18 CFR 292.205

    23. The text of Sec.  292.205(d) of the Commission's regulations 
\25\ contains an error in the description of the new cogeneration 
facilities that are subject to the requirements of Sec. Sec.  
292.205(d)(1) and (2). Section 292.205(d) provides that the following 
facilities are subject to these requirements:
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    \25\ 18 CFR 292.205(d).

    Any cogeneration facility that was either not certified as a 
qualifying cogeneration facility on or before August 8, 2005, or 
that had not filed a notice of self-certification, self-
recertification or an application for Commission certification or 
Commission recertification as a qualifying cogeneration facility 
under Sec.  292.207 of this chapter prior to February 2, 2006, and 
which is seeking to sell electric energy pursuant to section 210 of 
the Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 824a-
1.[\26\]
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    \26\ Id. (emphasis added).

    24. From this language, the criteria for QF status include whether 
or not a cogeneration facility was ``certified as'' a qualifying 
cogeneration facility by August 8, 2005.\27\ However, the text of 
section 210(n)(2) of PURPA states that the Commission's prior 
cogeneration requirements shall continue to apply to any facility that 
``was a qualifying cogeneration facility on [August 8, 2005].'' \28\ 
Furthermore, at the time of enactment of EPAct 2005, the Commission's 
regulations did not require that a facility that complied with the 
requirements for QF status be certified in order to be a QF.\29\ As 
such, there were many facilities that were QFs on August 8, 2005, even 
though they were not certified as QFs by that date. To correct this 
error, we propose to strike the words ``certified as'' from the first 
sentence of Sec.  292.205(d).
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    \27\ The significance of August 8, 2005 is that it is the date 
on which the Energy Policy Act of 2005 was signed into law.
    \28\ 16 U.S.C. 824a-3(n)(2)(A) (emphasis added).
    \29\ See Revised Regulations Governing Small Power Production 
and Cogeneration Facilities, Order No. 671, 71 FR 7852 at P 81 (Feb. 
2, 2006), FERC Stats. & Regs. ] 31,203, at P 81 (2006).
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    25. Section 210(n)(2) of PURPA also states that the Commission's 
prior cogeneration requirements will continue to apply to any facility 
that ``had filed with the Commission a notice of self-certification, 
self recertification or an application for Commission certification 
under 18 CFR 292.207 prior to [February 2, 2006].'' \30\ The Commission 
implemented this provision in Sec.  292.205(d) by not applying the new 
cogeneration requirements to any cogeneration facility that had filed 
``a notice of self-certification, self-recertification or an 
application for Commission certification or Commission recertification 
as a qualifying cogeneration facility under Sec.  292.207 of this 
chapter prior to February 2, 2006.'' Because any facility

[[Page 54507]]

that had recertified (either by self-recertification or application for 
Commission recertification) prior to February 2, 2006 must necessarily 
have made its original certification prior to February 2, 2006, the 
inclusion of ``self-recertification'' and ``application for Commission 
recertification'' in this provision is unnecessary. We propose to 
simplify Sec.  292.205(d) to state that the new cogeneration 
requirements will not apply to any facility that had filed ``a notice 
of self-certification or an application for Commission certification as 
a qualifying cogeneration facility under Sec.  292.207 of this chapter 
prior to February 2, 2006.'' This proposed revision would achieve the 
same regulatory result while decreasing the complexity of the 
regulatory text, and thus the opportunities for confusion.
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    \30\ 16 U.S.C. 824a-3(n)(2)(B).
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E. Revisions to 18 CFR 292.207

1. Elimination of Pre-Authorized Commission Recertification
    26. We propose to eliminate the procedure for pre-authorized 
Commission recertification contained in Sec.  292.207(a)(2).\31\ That 
procedure was established to give applicants for facilities that have 
been certified under the procedures for Commission certification in 
Sec.  292.207(b) a list of insubstantial alterations and modifications 
that would not result in the revocation of QF status previously granted 
by the Commission. Section 292.207(a)(2)(ii) also requires those making 
the changes listed in Sec.  292.207(a)(2)(i) to notify the Commission 
and each affected utility and State regulatory authority of each such 
change.
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    \31\ 18 CFR 292.207(a)(2).
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    27. The pre-authorized Commission recertification process does not 
currently require the use of Form No. 556, and historically the very 
few applicants that have filed pre-authorized Commission 
recertifications have done so in the form of a letter describing the 
changes to their facilities. In this rulemaking, we are implementing 
procedures to require that self-certifications or applications for 
Commission certification be made through the electronic submission of a 
Form No. 556. Removing the pre-authorized recertification option 
ensures that all QF certification filings will be made electronically 
using Form No. 556. We could opt to revise the procedure for the pre-
authorized Commission recertification to require such filings to be 
made electronically using a Form No. 556, but such a revised procedure 
would be essentially identical to the procedure for self-certification. 
Having such a duplicative procedure appears unjustified, particularly 
given the increase in complexity to the Form No. 556 and the 
Commission's regulations that would result.
    28. Furthermore, we note that the types of changes listed in Sec.  
292.207(a)(2)(i) may be somewhat misleading, as a strict reading of 
that list may imply that almost any change to a QF, no matter how 
small, would require notice to the Commission and to the affected 
utilities and State regulatory authorities. In reality, changes falling 
below a certain level of importance are not significant enough to 
justify the burden on the applicant of the recertification requirement.
2. Elimination of Procedures for Referring to Information From Previous 
Certifications
    29. Section 292.207(a)(1)(iii) provides that subsequent notices of 
self-recertification for the same facility may reference prior notices 
or prior Commission certifications, and need only refer to changes 
which have occurred with respect to the facility since the prior notice 
or the prior Commission certification. We propose to delete this 
provision, and, as a result, to change the Commission's policy so that 
applicants are required to provide all of the information for their 
facility in each Form No. 556 they submit with a self-recertification 
or an application for Commission recertification. We believe this 
proposed change will result in greater transparency. During the 
processing of routine QF petitions and periodic compliance reviews of 
self-certifications, the Commission frequently finds that the original 
certification data for some facilities (particularly facilities 
originally certified in the 1980s) can be difficult to obtain. And 
requiring the provision of full data in a recertification would be a 
small, one-time burden for applicants, because applicants may, after 
their first recertification subsequent to a Final Rule implementing 
this proposal, simply download their previous electronically-filed Form 
No. 556 from eLibrary and update the relevant responses to generate 
their new Form No. 556. Given the significant benefit and the small, 
one-time burden, deletion of Sec.  292.207(a)(1)(iii) appears 
appropriate.
3. Elimination of Requirement to Provide a Draft Notice Suitable for 
Publication in the Federal Register
    30. Section 292.207(a)(1)(iv) of our regulations \32\ currently 
requires that notices of self-certifications and self-recertifications 
for new cogeneration facilities be published in the Federal Register. 
Similarly, Sec.  292.207(b)(4) of our regulations \33\ requires that 
notices of applications for Commission certification or recertification 
be published in the Federal Register. For these applications that 
require publication of notices in the Federal Register, Sec. Sec.  
292.207(a)(1)(iv) and (b)(4) require that applicants provide with their 
filing a draft notice suitable for publication in the Federal Register 
on electronic media.
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    \32\ 18 CFR 292.207(a)(1)(iv).
    \33\ 18 CFR 292.207(b)(4).
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    31. We propose to continue to publish notices self-certification 
and self-recertification for new cogeneration facilities and 
applications for Commission certification and recertification in the 
Federal Register, and we include that requirement in the proposed Sec.  
292.207(c). However, we propose to delete Sec. Sec.  292.207(a)(1)(iv) 
and (b)(4) in order to eliminate the requirement that applicants for 
those types of filings provide a draft notice suitable for publication 
in the Federal Register. We have found that there is a significant 
amount of confusion among many QF applicants--particularly smaller 
applicants--about exactly what a Federal Register notice is, and how to 
provide a draft of such a notice on electronic media. Furthermore, 
because under the proposed changes to Sec.  131.80 applicants would 
file their Forms 556 electronically, the Commission can automatically 
generate Federal Register notices directly from the Form No. 556 data, 
without requiring a draft notice submitted by the applicant. We expect 
this proposed amendment will result in a decrease in the burden to 
small QF applicants.
4. Requirement to Serve a Copy of a Form No. 556 on Affected Utilities 
and State Commissions
    32. Currently applicants for self-certification are required to 
serve a copy of their QF self-certification filings on each electric 
utility with which they expect to interconnect, transmit or sell 
electric energy to, or purchase supplementary, standby, back-up and 
maintenance power from, and the State regulatory authority of each 
state where the facilities and each affected electric

[[Page 54508]]

utility is located.\34\ No such requirement currently exists for 
applications for Commission certification.
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    \34\ 18 CFR 292.207(a)(ii).
---------------------------------------------------------------------------

    33. We propose to amend the regulations to require that any 
applicant filing a self-certification, self-recertification, 
application for Commission certification or application for Commission 
recertification must serve a copy of its filing on each affected 
electric utility and State regulatory authority. Specifically, we 
propose to make the following revisions: (1) Delete Sec.  
292.207(a)(1)(ii); (2) rename Sec.  292.207(c) ``Notice requirements'' 
instead of the current ``Notice requirements for facilities of 500 kW 
or more''; (3) insert Sec.  292.207(c)(1) before the current first 
paragraph in Sec.  292.207(c), that would establish that any applicant 
for self-certification, self-recertification, Commission certification 
or Commission recertification must serve on each affected utility and 
state regulatory authority a copy of its filing; and (4) revise the 
existing text of Sec.  292.207(c), which will become Sec.  
292.207(c)(2), requiring facilities of 500 kW or more to provide that 
an electric utility is not required to purchase electric energy from a 
facility with a net power production capacity of 500 kW or more until 
90 days after the facility meets the notice requirements in Sec.  
292.207(c)(1).
5. Other Proposed Changes
    34. We propose to remove reference to ``pre-authorized Commission 
recertification'' in the title of Sec.  292.207(a) and in the body text 
of Sec.  292.207(d)(1)(i). We also propose to delete the current Sec.  
292.207(a)(1), and to replace it, in Sec.  292.207(a), with a procedure 
for self-certification that incorporates clear reference to proposed 
Sec.  131.80 and to the notice requirements in Sec.  292.207(c).

F. Revisions to 18 CFR 292.601

    35. We propose to amend Sec.  292.601(a) of our regulations \35\ to 
make clear the exemption from the specified Federal Power Act sections 
is applicable to any facility that meets the definition of an 
``eligible solar, wind, waste or geothermal facility'' under section 
3(17)(E) of the Federal Power Act. Section 4 of the Solar, Wind, Waste, 
and Geothermal Power Production Incentives Act of 1990 (Incentives Act) 
\36\ provides that ``eligible facilities'' shall not be subject to the 
size limitations contained in Sec.  292.601(b) of the Commission's 
regulations, unless the Commission otherwise specifies. The Commission 
has found that the size limitation for eligibility for the exemptions 
contained in Sec. Sec.  292.601 and 292.602, otherwise applicable to 
other small power production facilities, does not apply to ``eligible 
facilities.'' \37\ We propose to amend Sec.  292.601(a) to make that 
clear.\38\
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    \35\ 18 CFR 292.601(a).
    \36\ Public Law 101-575, 104 Stat. 2834 (1990), as amended by 
Public Law 102-46, 105 Stat. 249 (1991).
    \37\ Cambria Cogen Co., 53 FERC ] 61,459, at 62,619 (1990).
    \38\ Because 18 CFR 292.602(a) states that the exemption from 
PUHCA and State laws and regulations provided in that section 
applies to any QF described in 18 CFR 292.601(a), and because the 
QFs described by 18 CFR 292.601(a) include all QFs other than those 
described by 18 CFR 292.601(b), the Incentives Act's exemption of 
``eligible facilities'' from the size limitation contained in 18 CFR 
292.601(b) has the effect of making such facilities also eligible 
for the exemptions from PUHCA and State laws and regulations in 18 
CFR 292.602.
---------------------------------------------------------------------------

G. Revisions to 18 CFR 292.602

    36. We propose to amend Sec.  292.602(c)(1) to clarify that it is 
only the QFs described in paragraph (a) of that section that may take 
advantage of the exemptions provided in Sec.  292.602, and to correct a 
typographical error. Finally, we propose to correct a typographical 
error in the title of Sec.  292.602.

IV. Proposed Revisions to the Form No. 556

A. General

    37. We propose to make a number of changes to the content and 
organization of the Form No. 556. A proposed revised Form No. 556 is 
included as Attachment A to this document, and will be available for 
download from the Commission's QF Web site.\39\ As discussed above, we 
are not proposing to include the content of the Form No. 556 in the 
Commission's regulations, however, the changed Form No. 556, once 
approved, will become ``the Form No. 556 then in effect'' for purposes 
of the proposed Sec.  131.80. We are therefore giving notice of our 
proposed changes to Form No. 556, which after receiving and considering 
comments on those changes, we will submit for OMB approval pursuant to 
the provisions of the Paperwork Reduction Act of 1995.\40\
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    \39\ https://www.ferc.gov/QF. The proposed revised Form No. 556 
will not be attached to the Microsoft Word version of this document.
    \40\ 44 U.S.C. 3507(d).
---------------------------------------------------------------------------

    38. In addition to the structure of the proposed Form No. 556, we 
propose to include (in the Final Rule version of the form) data 
controls, automatic calculations, error handling and other programmatic 
features to assist applicants and maintain data quality. We request 
comment on any specific features that interested persons would find 
useful, and that should be included in the form.
    39. Most of the proposed changes to the Form No. 556 are intended 
to make use of new electronic data structuring. While, in most cases, 
we propose to collect the same data that is currently collected in the 
Form No. 556, the new form will allow the Commission to more 
efficiently administer the QF program. Commission staff spends a 
significant amount of time working with applicants that either 
misunderstand the current form, pay insufficient attention to the 
informational requirements on the current form, or both. By making Form 
No. 556 easier to understand, we will make the submission of Form No. 
556 less burdensome to applicants.
    40. Our experience has been that the open-ended nature of the 
current Form No. 556 data collection--where applicants are able to type 
any answer or no answer in response to an item--often results in 
applicants incorrectly answering or skipping items or portions of items 
that they mistakenly feel do not apply to them. Improved instructions, 
the use of a greater number of questions which are individually 
narrower in scope, and the use of certain electronic data controls and 
validation options, such as checkboxes and data entry fields that only 
accept data formatted in the appropriate way, are proposed to minimize 
these problems.
    41. We seek comments on any aspect of the proposed form. While many 
of the changes to the form are self-explanatory, we discuss the more 
significant changes below.

B. Name of Form

    42. In Order No. 575, the Commission adopted San Diego Gas and 
Electric Company's suggestion to title the Form No. 556 to make clear 
that it applies to proposed as well as to existing facilities.\41\ We 
are not proposing to change the applicability of the form to proposed 
and existing facilities; however, as part of our attempt to make the 
Form No. 556 as simple and clear as possible, we propose to shorten the 
name of the form to ``Certification of Qualifying Facility (QF) Status 
for a Small Power Production or Cogeneration Facility.''
---------------------------------------------------------------------------

    \41\ Order No. 575, 60 FR 4831 (Jan. 13, 1995), FERC Stats. & 
Regs. ] 31,014, at 31,282 and 31,285.
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C. Geographic Coordinates

    43. Over the years we have received a number of inquiries from the 
public seeking certain information about QFs. Many of these inquiries 
were from academics, research organizations or

[[Page 54509]]

other government entities performing studies of the effectiveness of 
PURPA and the Commission's regulations implementing PURPA. Often such 
inquiries have involved the dates that applications for different types 
of QFs were filed (particularly relative to certain changes in 
policies) and the locations of the QFs. Currently, location information 
is collected only through the street address of the facility, even 
though some facilities in rural or wilderness areas do not have a 
street address.
    44. We believe it may be useful to researchers (as well as the 
public in general, and affected electric utilities and State regulatory 
authorities in particular) to have specific locational data for QFs, 
even for facilities that do not have street addresses. In addition to 
having value for researchers, such specific locational data would also 
provide a transparent means of determining compliance with the size 
requirement for small power production facilities, which is based in 
part on the distance between adjacent generating facilities. As such, 
we propose to include a new line 3c that will require applicants for 
facilities without a street address to provide the geographic 
coordinates (latitude and longitude) of their facilities. The text of 
the proposed line 3c directs applicants to the Geographic Coordinates 
section of the instructions on page 4 which discusses several different 
ways through which applicants might obtain the geographic coordinates 
of their facilities: Through certain free online map services (with 
links available through the Commission's QF Web site); a GPS device; 
Google Earth; a property survey; various engineering or construction 
drawings; a property deed; or a municipal or county map showing 
property lines. Applicants are directed in line 3c to provide their 
geographic coordinates to three decimal places, and are given a simple 
formula for how to convert degrees, minutes and seconds to decimal 
degrees. We solicit comments on the submission of locational 
information for facilities that do not have a street address.

D. Ownership

    45. In Order No. 671, the Commission eliminated the limitation on 
electric utility and electric utility holding company ownership of QFs, 
but maintained the requirement that applicants provide ownership 
information in the Form No. 556.\42\
---------------------------------------------------------------------------

    \42\ Revised Regulations Governing Small Power Production and 
Cogeneration Facilities, Order No. 671, 71 FR 7852 (Feb. 2, 2006), 
FERC Stats. & Regs. ] 31,203 (2006), order on reh'g, Order No. 671-
A, 71 FR 30585 (May 22, 2006), FERC Stats. & Regs. ] 31,219 (2006).
---------------------------------------------------------------------------

    46. The wording of item 1c of the current Form No. 556 has proven 
confusing with respect to the collection of ownership information. In 
particular, item 1c does not specify the amount of equity interest in 
the facility above which the applicant is required to identify the 
owner. For facilities with many owners, this can prove burdensome, 
particularly if the ownership changes frequently.
    47. Experience has also shown that the current wording of item 1c 
proves confusing to applicants with respect to which types of owners 
(direct or upstream) they are supposed to identify.
    48. We propose to clarify both the level of ownership above which 
applicants are required to identify owners, and which information must 
be provided for direct and upstream owners. First, while maintaining 
the current requirement that applicants indicate the percentage of 
direct ownership held by any electric utility \43\ or holding 
company,\44\ we propose to clarify in line 5a of the proposed Form No. 
556 that applicants need only provide information for direct owners 
that hold at least 10 percent equity interest in the facility.\45\ 
Second, we propose to require in line 5b that applicants identify all 
upstream owners that both (1) hold at least a 10 percent equity 
interest in the facility and (2) are electric utilities or holding 
companies.
---------------------------------------------------------------------------

    \43\ As defined in section 3(22) of the Federal Power Act. 16 
U.S.C. 796(22).
    \44\ As defined in section 1262(8) of the Public Utility Holding 
Company Act of 2005. 42 U.S.C. 16451(8).
    \45\ The 10 percent ownership threshold is proposed to be 
consistent with the 10 percent ownership thresholds used in the 
definition of a ``holding company'' in section 1262(8) of the Public 
Utility Holding Company Act of 2005, 42 U.S.C. 16451(8), and in the 
definition of ``affiliate'' in 18 CFR 35.36(a)(9). However, we seek 
comments on whether a different threshold would be more appropriate 
in this context.
---------------------------------------------------------------------------

    49. We seek comments on these changes to the ownership requirement. 
In particular, we seek comment on whether the 10 percent equity 
interest threshold is the proper threshold.

E. Fuel Use for Small Power Production Facilities

    50. Section 292.204(b) of the Commission's regulations \46\ allows 
small power production facilities to use oil, natural gas or coal in 
amounts up to and including 25 percent of the total energy input to the 
facility as calculated during the 12-month period beginning with the 
date the facility first produces electric energy and any calendar year 
subsequent to the year in which the facility first produces electric 
energy. Such use of oil, natural gas or coal is limited to certain 
purposes specified in section 3(17)(B) of the Federal Power Act as 
implemented in Sec.  292.204(b)(2) of the Commission's regulations.\47\
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    \46\ 18 CFR 292.204(b).
    \47\ 18 CFR 292.204(b)(2).
---------------------------------------------------------------------------

    51. Item 7 of the current Form No. 556 requires applicants to 
describe ``how fossil fuel use will not exceed 25 percent of the total 
annual energy input limit,'' and ``how the use of fossil fuel will be 
limited to the following purposes to conform to Federal Power Act 
Section 3(17)(B): Ignition, start-up, flame stabilization, control use, 
and minimal amounts of fuel required to alleviate or prevent 
unanticipated equipment outages and emergencies directly affecting the 
public.'' Experience with this item has indicated two problems. First, 
because applicants have significant latitude in how they respond, they 
often make statements which do not, on their face, commit themselves to 
fuel use that would meet the Commission's requirements for qualifying 
small power production facilities. While these responses are unlikely 
to represent an intentional attempt on the part of applicants to 
circumvent the Commission's regulations for fuel use,\48\ the 
statements could make enforcement of the Commission's regulations more 
difficult.
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    \48\ Particularly since the wording of the current item 7 of the 
Form No. 556 states the fuel use requirements of the Commission's 
regulations, we would find unconvincing any argument that an 
applicant was justified in violating the fuel use requirements of 
the Commission's regulations by virtue of its statements in item 7.
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    52. On the other hand, applicants who are very specific in their 
response to item 7 may feel that they have committed themselves to only 
engage in the particular uses they specified in their Forms 556, 
despite the fact that the Commission's regulations may permit more 
flexibility in the use of fossil fuel.
    53. We propose a simpler method of certifying compliance with the 
Commission's fuel use requirements for small power production 
facilities that should avoid these problems. Rather than requiring 
applicants to describe how they will comply, we propose to simply state 
what the fuel use requirements are, and to require the applicant to 
certify, by checking a box next to each requirement, that they will 
comply. This proposal will, we believe, obligate the applicant to 
comply with the stated requirements, while not creating an impression 
that the applicant must limit its fuel use to some standard which is 
more stringent than

[[Page 54510]]

that established in the Commission's regulations.

F. Mass and Heat Balance Diagrams for Cogeneration Facilities

    54. Item 10 of the current Form No. 556 requires applicants for 
qualifying cogeneration facility status to provide a mass and heat 
balance diagram depicting average annual hourly operating conditions. 
As part of item 10, applicants are required to provide the following on 
their mass and heat balance diagrams: All fuel flow inputs in Btu/hr. 
specified using lower heating value, separately indicating fuel inputs 
for supplementary firing; average net electric output in kW or MW; 
average net mechanical output in horsepower; number of hours of 
operation used to determine the average annual hourly facility inputs 
and outputs; and working fluid flow conditions at input and output of 
prime mover(s) and at delivery to and return from each useful thermal 
application. Working fluid flow conditions required to be provided 
include the following: Flow rates in lbs./hr.; temperature in [deg]F; 
pressure in psia; and enthalpy in Btu/lb.
    55. Some applicants have complained that, for relatively simple 
cogeneration facilities, some of the information required is 
meaningless or not known. For example, small diesel generators 
utilizing jacket water cooling systems to capture waste heat are often 
certified as qualifying cogeneration facilities. Such systems typically 
have no steam at any point in the system, and instead use pressurized 
water or an antifreeze solution to recover the waste heat and transport 
it to the useful thermal application. For such systems, applicants have 
complained that specifying pressure has no significance, since the 
effect of pressure on enthalpy (a measure of thermal energy content) is 
negligible for liquids at standard conditions. Likewise, applicants 
have complained that, since pressure in all-liquid systems is not an 
important design variable, it is often not known to any degree of 
accuracy in such systems.
    56. Some applicants have also pointed out that, in systems which 
are all liquid water, the extra work required to determine and specify 
enthalpy is not necessary. Since enthalpy in liquid water is a nearly 
linear function of temperature (because the specific heat of water does 
not vary significantly under standard conditions), specification of 
temperature at each required location and a specification of the 
specific heat of the working fluid (usually water) is all that is 
necessary to describe the energy balance of the cogeneration facility.
    57. We agree. We propose to include language in new line 10b of the 
Form No. 556 indicating that, for systems where the working fluid is 
liquid only (no vapor at any point in the cycle) and where the type of 
liquid and specific heat of that liquid is clearly indicated on the 
diagram or in the Miscellaneous section of the Form No. 556, only mass 
flow rate and temperature (not pressure and enthalpy) need be 
specified.
    58. Our experience has shown that a relatively high level of 
deficiency and rejection letters for QF applications are a result of 
noncompliance with the requirements for the mass and heat balance 
diagram. This is likely due to a combination of the fact the 
requirements for the mass and heat balance diagram are long, technical 
and not always clear, and the fact that some applicants do not put 
sufficient effort and attention into ensuring compliance. To improve 
reporting and to decrease future noncompliance, we propose to require 
applicants for qualifying cogeneration facility status to certify 
compliance with each of the requirements for the mass and heat balance 
diagram by checking a box next to each written requirement. We expect 
that, by requiring applicants to proceed box by box through the 
individual requirements, which will be stated more clearly than in the 
current Form No. 556, reporting will improve and noncompliance will 
drop dramatically.

G. EPAct 2005 Cogeneration Facilities

    59. In response to EPAct 2005, the Commission implemented in Order 
No. 671 additional requirements for new cogeneration facilities selling 
power pursuant to section 210 of PURPA.\49\ The Commission implemented 
the ``productive and beneficial'' and ``fundamental use'' requirements 
of EPAct 2005 through the inclusion of a new section in the Form No. 
556 that required applicants to respond to the text of the statute, 
providing applicants space to demonstrate compliance with EPAct 2005's 
requirements. In practice, Form No. 556 has not provided sufficient 
guidance to applicants through the determination of whether EPAct 2005 
applies to their facilities, whether their facilities enjoy a 
presumption of compliance under Sec.  292.205(d)(4) of the Commission's 
regulations, or whether such facilities fall within the safe harbor 
established by the ``fundamental use test'' in Sec.  292.205(d)(3).
---------------------------------------------------------------------------

    \49\ Congress in EPAct 2005, and the Commission in implementing 
EPAct 2005, referred to the facilities subject to the EPAct 2005 
requirements as ``new'' cogeneration facilities. 16 U.S.C. 824a-
3(n); 18 CFR 292.205(d). To avoid confusion that this ``new'' label 
will create as time passes and such facilities are not ``new'' 
anymore (except with respect to the date of the implementation of 
EPAct 2005), we will refer in the proposed Form No. 556 to such 
facilities as ``EPAct 2005 cogeneration facilities.''
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    60. We note that, in implementing the ``productive and beneficial'' 
requirement of EPAct 2005, the Commission essentially maintained its 
long-standing ``usefulness'' standard, except that what it deemed as 
presumptively useful was now rebuttable.\50\ The current Form No. 556 
requirement that applicants demonstrate compliance both with the 
``productive and beneficial'' standard (in item 15) and the ``useful'' 
standard (in items 12, 13 and/or 14) can be condensed and streamlined 
without degrading the information provided or the level of Commission 
and public oversight of the QF program. We propose to consolidate these 
requirements into the portion of the proposed Form No. 556 where 
applicants demonstrate the ``usefulness'' of the thermal output (lines 
12a, 12b, 14a, and 14b of the proposed form).
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    \50\ Order No. 671, FERC Stats. & Regs. ] 31,203 at P 17 (2006).
---------------------------------------------------------------------------

    61. The ``fundamental use'' requirement for EPAct 2005 cogeneration 
facilities, on the other hand, does involve data collection that is 
specific to EPAct 2005 facilities. As such, we propose to implement a 
new section of the Form No. 556 entitled ``EPAct 2005 Requirements for 
Fundamental Use of Energy Output from Cogeneration Facilities.'' This 
section would replace the current ``For New Cogeneration Facilities'' 
section. We propose this new section to facilitate an applicant's 
determination (1) whether the EPAct 2005 cogeneration requirements 
apply to its facility, given the date on which the facility was 
originally a QF or originally filed for QF certification; (2) whether 
its pre-EPAct 2005 facility (if applicable) is subject to EPAct 2005 by 
virtue of changes to the facility which essentially make it a ``new'' 
EPAct 2005 facility; (3) whether its facility is excluded from the 
``fundamental use'' requirement by virtue of the fact that power will 
not be sold from the facility pursuant to section 210 of PURPA; (4) 
whether its facility enjoys a rebuttable presumption of compliance with 
the ``fundamental use'' requirement by virtue of its small electric 
output; and/or (5) whether its facility complies with the fundamental 
use requirement by virtue of meeting the fundamental use test 
established in Sec.  292.205(d)(3) of the Commission's regulations. If 
an applicant's facility is found to be subject to the EPAct 2005 
requirements, but to fail the

[[Page 54511]]

fundamental use test, then the applicant is instructed by line 11d of 
the proposed Form No. 556 to provide a narrative explanation of and 
support for why its facility meets the requirement that the electrical, 
thermal, chemical and mechanical output of an EPAct 2005 cogeneration 
facility is used fundamentally for industrial, commercial, residential 
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 QF to its host 
facility.
    62. We seek comments on the proposed ``EPAct 2005 Requirements for 
Fundamental Use of Energy Output from Cogeneration Facilities'' 
section. In particul