Fuel Cell Thermal Energy Output; Bloom Energy Corporation, 8133-8140 [2021-01988]
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Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations
the Commission’s Public Reference
Room due to the President’s March 13,
2020 proclamation declaring a National
Emergency concerning the Novel
Coronavirus Disease (COVID–19).
13. From the Commission’s Home
Page on the internet, this information is
available on eLibrary. The full text of
this document is available on eLibrary
in PDF and Microsoft Word format for
viewing, printing, and downloading. To
access this document in eLibrary, type
the docket number (excluding the last
three digits) in the docket number field.
14. User assistance is available for
eLibrary and the Commission’s website
during normal business hours from the
Commission’s Online Support at (202)502–6652 (toll free at 1–866–208–3676)
or email at ferconlinesupport@ferc.gov,
or the Public Reference Room at (202)
502–8371, TTY (202) 502–8659,
public.referenceroom@ferc.gov.
VII. Effective Date and Congressional
Notification
15. For the same reasons the
Commission has determined that public
notice and comment are unnecessary,
impractical, and contrary to the public
interest, the Commission finds good
cause to adopt an effective date that is
less than 30 days after the date of
publication in the Federal Register
pursuant to the Administrative
Procedure Act,18 and therefore, the
regulation is effective upon publication
in the Federal Register.
16. The Commission has determined,
with the concurrence of the
Administrator of the Office of
Information and Regulatory Affairs of
the Office of Management and Budget,
that this rule is not a ‘‘major rule’’ as
defined in section 351 of the Small
Business Regulatory Enforcement
Fairness Act of 1996. This final rule is
being submitted to the Senate, House,
and Government Accountability Office.
In consideration of the foregoing, the
Commission amends parts 250 and 385,
chapter I, title 18, Code of Federal
Regulations as follows:
PART 250—FORMS
1. The authority citation for part 250
continues to read as follows:
■
Authority: 15 U.S.C. 717–717w, 3301–
3432; 42 U.S.C. 7101–7352; 28 U.S.C. 2461
note.
2. Revise § 250.16(e)(1) to read as
follows:
■
§ 250.16 Format of compliance plan for
transportation services and affiliate
transactions.
*
*
*
*
*
(e) * * *
(1) Any person who transports gas for
others pursuant to subpart B or G of part
284 of this chapter and who knowingly
violates the requirements of §§ 358.4
and 358.5 of this chapter, this section,
or § 284.13 of this chapter will be
subject, pursuant to sections 311(c), 501,
and 504(b)(6) of the Natural Gas Policy
Act of 1978, to a civil penalty, which
the Commission may assess, of not more
than $1,307,164 for any one violation.
*
*
*
*
*
PART 385—RULES OF PRACTICE AND
PROCEDURE
3. The authority citation for part 385
continues to read as follows:
■
Authority: 5 U.S.C. 551–557; 15 U.S.C.
717–717w, 3301–3432; 16 U.S.C. 791a–825v,
2601–2645; 28 U.S.C. 2461; 31 U.S.C 3701,
9701; 42 U.S.C. 7101–7352, 16441, 16451–
16463; 49 U.S.C. 60502; 49 App. U.S.C. 1–85
(1988); 28 U.S.C. 2461 note (1990); 28 U.S.C.
2461 note (2015).
4. Revise § 385.1504(a) to read as
follows:
■
List of Subjects
§ 385.1504
1504).
18 CFR Part 250
(a) Except as provided in paragraph
(b) of this section, the Commission may
assess a civil penalty of up to $23,607
for each day that the violation
continues.
*
*
*
*
*
■ 5. Revise § 385.1602 to read as
follows:
Natural gas, Reporting and
recordkeeping requirements.
18 CFR Part 385
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Issued: January 8, 2021.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
Administrative practice and
procedure, Electric power, Penalties,
Pipelines, Reporting and recordkeeping
requirements.
By the Commission. Commissioner
Clements is not participating. Commissioner
Christie is not participating.
18 5
U.S.C. 553(d)(3).
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Maximum civil penalty (Rule
§ 385.1602 Civil penalties, as adjusted
(Rule 1602).
The current inflation-adjusted civil
monetary penalties provided by law
within the jurisdiction of the
Commission are:
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8133
(a) 15 U.S.C. 3414(b)(6)(A)(i), Natural
Gas Policy Act of 1978: $1,307,164.
(b) 16 U.S.C. 823b(c), Federal Power
Act: $23,607 per day.
(c) 16 U.S.C. 825n(a), Federal Power
Act: $3,083.
(d) 16 U.S.C. 825o–1(b), Federal
Power Act: $1,307,164 per day.
(e) 15 U.S.C. 717t–1, Natural Gas Act:
$1,307,164 per day.
(f) 49 App. U.S.C. 6(10) (1988),
Interstate Commerce Act: $1,368 per
offense and $69 per day after the first
day.
(g) 49 App. U.S.C. 16(8) (1988),
Interstate Commerce Act: $13,685 per
day.
(h) 49 App. U.S.C. 19a(k) (1988),
Interstate Commerce Act: $1,368 per
day.
(i) 49 App. U.S.C. 20(7)(a) (1988),
Interstate Commerce Act: $1,368 per
day.
[FR Doc. 2021–00679 Filed 2–3–21; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
18 CFR Part 292
[Docket Nos. RM21–2–000 and RM20–20–
000; Order No. 874]
Fuel Cell Thermal Energy Output;
Bloom Energy Corporation
Federal Energy Regulatory
Commission, Department of Energy.
ACTION: Final rule.
AGENCY:
In this final rule, the Federal
Energy Regulatory Commission amends
the definition of useful thermal energy
output in its regulations implementing
the Public Utility Regulatory Policies
Act of 1978 to recognize the technical
evolution of cogeneration.
DATES: This rule is effective April 5,
2021.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Lawrence R. Greenfield (Legal
Information), Office of the General
Counsel, Federal Energy Regulatory
Commission, 888 First Street NE,
Washington, DC 20426, (202) 502–
6415, lawrence.greenfield@ferc.gov
Helen Shepherd (Technical
Information), Office of Energy Market
Regulation, Federal Energy Regulatory
Commission, 888 First Street NE,
Washington, DC 20426, (202) 502–
6176, helen.shepherd@ferc.gov
Thomas Dautel (Technical Information),
Office of Energy Policy and
Innovation, Federal Energy Regulatory
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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 country’s
economy and undermine its
independence.6 Roughly a third of the
nation’s 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, 824a–3.
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 95–617, 92 Stat. 3117 (1978). In
addition to PURPA, that legislative package
included: The Energy Tax Act of 1978, Public Law
95–618, 92 Stat. 3174; the National Energy
Conservation Policy Act, Public Law 95–619, 92
Stat. 3206; the Powerplant and Industrial Fuel Use
Act of 1978, Public Law 95–620, 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 country’s demand for
traditional fossil fuels.10 PURPA section
210(a) 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 Commission’s 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 745–46.
at 750.
11 16 U.S.C. 824a–3(a).
12 Small Power Production and Cogeneration
Facilities—Qualifying Status, Order No. 70, 45 FR
17959 (Mar. 20, 1980), FERC Stats. & Regs. ¶ 30,134
(cross-referenced at 10 FERC ¶ 61,230), order on
reh’g, Order No. 70–A, 45 FR 33603 (May 20, 1980),
FERC Stats. & Regs. ¶ 30,159 (cross-referenced at 11
FERC ¶ 61,119), order on reh’g, Order No. 70–B, 45
FR 52779 (Aug. 4, 1980), FERC Stats. & Regs.
¶ 30,176 (cross-referenced at 12 FERC ¶ 61,128),
order on reh’g, 45 FR 66784 (Oct. 8, 1980) FERC
Stats. & Regs. ¶ 30,192 (1980) (cross-referenced at 12
FERC ¶ 61,306), amending regulations, Order No.
70–D, 46 FR 11251 (Feb. 6, 1981), FERC Stats. &
Regs. ¶ 30,234 (cross-referenced at 14 FERC
¶ 61,076), amending regulations, Order No. 70–E,
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. 796(18); accord 18 CFR 292.202(c).
15 16 U.S.C. 824a–3(a).
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 fuel—which 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 Congress’s 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–
3(n)(1)(A)(iii)).
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cogeneration facilities requires that a
cogeneration facility produce ‘‘(i)
electric energy, and (ii) steam or forms
of useful energy (such as heat) which
are used for industrial, commercial,
heating or cooling purposes.’’ 21 This
definition provides for steam or other
forms of useful energy to be used for,
e.g., an industrial purpose. The creation
by a fuel cell system with an integrated
natural gas reformation process of a
commercially valuable fuel, as
described in the NOPR, would fit within
the scope of this statutory definition.
Consistent with the PURPA Regulations,
fuel cell systems with integrated natural
gas reformation equipment produce two
forms of energy: Electricity, and the
heat/steam (thermal energy) used to
create the hydrogen that fuels the fuel
cell system (a chemical energy).
12. The Commission’s PURPA
Regulations define a topping-cycle
cogeneration facility as a cogeneration
facility in which the energy input to the
facility is first used to produce useful
power output and at least some of the
reject heat from the power production
process is then used to provide useful
thermal energy.22
13. Fuel cell systems with integrated
natural gas reformation equipment
convert the chemical energy within
natural gas into electricity using a
steam-methane reformation process,23
which essentially converts the methane
in the natural gas input to hydrogen,
which then reacts with oxygen in the
fuel cell to produce electricity. The byproduct of the fuel cell’s production of
electricity is heat and steam, some of
which can be used in the steammethane reformation process to convert
more methane into hydrogen, which the
fuel cells use, in combination with
oxygen from the air, to produce
electricity.
14. As a cogeneration QF is one that
‘‘produces electric energy as well as
steam or forms of useful energy (such as
heat) which are used for industrial,
commercial, heating or cooling
purposes,’’ 24 consistent with the
PURPA Regulations, fuel cell systems
21 16
U.S.C. 796(18)(A).
CFR 292.202(d).
23 Industrial gas manufacturers also produce
hydrogen from natural gas using a steam-methane
reformation process, but must produce their own
steam, usually through combustion of some of the
input natural gas. Because the buyers of the
resulting hydrogen are usually remote from the
industrial gas manufacturer, this hydrogen is either
compressed or liquified in order to transport the
hydrogen to the end user. Integrating the natural gas
steam reformation process into a fuel cell system
increases efficiency and avoids the energy loss of
external reformation, and compression or
liquefaction for surface transportation. Bloom
Energy Petition at 8 & App. B.
24 16 U.S.C. 796(18).
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with integrated natural gas reformation
equipment generate two forms of useful
energy—electricity, and heat/steam
(thermal energy) that is used to produce
hydrogen (a chemical energy).
15. The PURPA Regulations identify
three categories of useful thermal output
from a topping-cycle cogenerator. They
are thermal energy (1) that is ‘‘made
available to an industrial or commercial
process . . .; (2) that is used in a heating
application . . .; or (3) that is used in
a space cooling application.’’ 25 In the
NOPR, the Commission proposed to
amend its regulations to provide that the
production of heat/steam by a solid
oxide fuel cell system for use in an
integrated natural gas reformation
process to produce hydrogen yields a
useful thermal energy output made
available to an industrial process that,
as described in the NOPR, entitles such
a system to be considered a topping
cycle cogeneration facility that qualifies,
subject to meeting the other relevant
requirements,26 to be a QF. The
Commission stated that the recent
technological advances in utilizing the
thermal energy from a solid oxide fuel
cell in an integrated steam hydrocarbon
reformation process were not known or
anticipated when the Commission
adopted its original definitions for
useful thermal energy, but that fact
should not stand in the way of the
Commission now recognizing such
advances and responding accordingly.27
16. In recognition of technological
advancements over the past 40 years
and Congress’s commitment to
‘‘continuing progress in the
development of efficient electric energy
generating technology,’’ 28 and in light
of the development and
commercialization of fuel cell systems
with integrated natural gas reformation
equipment since the original adoption
of the PURPA Regulations, the
Commission proposed in the NOPR to
amend section 292.202(h) of the PURPA
Regulations by adding a new paragraph
providing that useful thermal energy
output include the thermal energy that
is used by a solid oxide fuel cell system
with an integrated steam hydrocarbon
reformation process for production of
fuel for electricity generation.29
17. In proposing this change to its
regulations, the Commission did not
propose to revise section 292.205(d) of
the PURPA Regulations, which
establishes additional criteria for, in
particular, new cogeneration facilities
seeking to sell electric energy pursuant
to PURPA section 210.30 The
Commission proposed that any new
cogeneration facility that is a solid oxide
fuel cell system with an integrated
steam hydrocarbon reformation process
would be required to satisfy the existing
criteria of section 292.205(d) of the
PURPA Regulations if it seeks to make
sales of electric energy pursuant to
PURPA section 210.
IV. Comments
18. FuelCell Energy, which explains
that it operates fuel cell systems on
three continents that have generated
over 10 billion kWh of power, asks the
Commission to revise its regulations to
encompass more than just solid oxide
fuel cell systems. FuelCell Energy
asserts that Bloom Energy requested that
the Commission expand its current
definition of a cogeneration facility so
that Bloom Energy’s solid oxide fuel
cells qualify as a QF. FuelCell Energy
argues that the Commission should
revise the definition, so it can apply
more broadly to any fuel cell systems
that use waste heat for the reforming of
fuel to produce hydrogen, and not just
Bloom Energy’s solid oxide fuel cell
system.31
19. FuelCell Energy asserts that its
carbonate fuel cells use waste heat in an
integrated fuel reforming process to
produce hydrogen,32 just as Bloom
Energy’s solid oxide fuel cells do.
FuelCell Energy contends that, as long
as fuel cell systems use waste heat for
the reforming of hydrocarbon fuel to
produce hydrogen, the particular fuel
cell technology should not be exclusive
or exclusionary; so long as there is no
efficiency tradeoffs or additional
negative environmental impacts, the
type of fuel cell technology (whether
29 NOPR,
25 18
CFR 292.202(h).
26 See 18 CFR 292.203(b), 292.205. If the
cogeneration facility is a ‘‘new’’ qualifying
cogeneration facility ‘‘seeking to sell electric energy
pursuant to [PURPA section 210],’’ such facility
must meet certain additional requirements. 16
U.S.C. 824a–3(n); accord 18 CFR 292.205(d)
(implementing PURPA section 210(n), by requiring
an additional showing for certain cogeneration
facilities that are ‘‘seeking to sell electric energy
pursuant to [PURPA] section 210’’).
27 See infra note 53.
28 16 U.S.C. 824a–3(n)(1)(A)(iii).
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175 FERC ¶ 61,050 at PP 1, 3, 7, 10–11.
CFR 292.205(d); see also 18 CFR
292.205(d)(4) (‘‘For purposes of paragraphs (d)(1)
and (2) of this section, a new cogeneration facility
of 5 MW or smaller will be presumed to satisfy the
requirements of those paragraphs.’’). That
presumption for 5 MW or smaller facilities is a
rebuttable presumption, though.
Revised Regulations Governing Small Power
Production and Cogeneration Facilities, Order No.
671, 114 FERC ¶ 61,102, at PP 26, 60, order on reh’g,
Order No. 671–A, 115 FERC ¶ 61,225 (2006).
31 FuelCell Energy Comments at 5, 7.
32 Id. at 6.
30 18
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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
Commission’s 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 Nation’s 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 ‘‘[i]f 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. 796(18)).
36 Id. (quoting16 U.S.C. 824a–3(n)).
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 30,931–32).
41 Id. (quoting Order No. 70, FERC Stats. & Regs.
¶ 30,134 at 30,934).
42 Id. at 6–7.
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 Commission’s 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
292.202(h) 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 1–2) (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
text’s reference to ‘‘an integrated steam hydrocarbon
reformation process’’ thus encompasses not only
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30. The statutory definition of
cogeneration facilities requires only that
a cogeneration facility produce ‘‘(i)
electric energy, and (ii) steam or forms
of useful energy (such as heat) which
are used for industrial, commercial,
heating or cooling purposes . . . .’’ 48
This definition explicitly provides for
steam or other forms of useful energy to
be used for an industrial purpose.
Because, as described above, a fuel cell
system with an integrated hydrocarbon
reformation process creates useful
thermal energy in that it is used for an
industrial purpose—here, producing a
commercially valuable fuel, hydrogen—
it fits within this statutory definition.
Phrased differently, fuel cell systems
with integrated hydrocarbon
reformation equipment produce two
forms of useful energy: Electric energy
and heat/steam (thermal energy) which
can be used to produce hydrogen (from
which chemical energy can be used to
produce electric energy).
31. Currently, the Commission’s
PURPA Regulations as adopted in 1980
provide that a topping-cycle
cogeneration facility is a cogeneration
facility in which the energy input to the
facility is first used to produce useful
power output and at least some of the
reject heat from the power production
process is then used to provide useful
thermal energy.49 Fuel cell systems with
integrated hydrocarbon reformation
equipment convert the chemical energy
of the methane within natural gas into
hydrogen and, ultimately, electricity
using a steam-methane reformation
process,50 which converts the natural
gas input to hydrogen, which reacts
with oxygen in the fuel cell to produce
electricity. The by-product of the fuel
cell’s production of electricity is heat
and steam, some of which is used in the
integrated hydrocarbon reformation
process to convert more natural gas into
hydrogen, which the fuel cells use, in
combination with oxygen from the air,
to produce electricity.
32. A cogeneration facility is, per the
statute, one that ‘‘produces electric
energy as well as steam or forms of
useful energy (such as heat) which are
used for industrial, commercial, heating
or cooling purposes.’’ 51 Consistent with
this language, fuel cell systems with
integrated hydrocarbon reformation
equipment do exactly that and thus can
be cogeneration facilities. Fuel cells, as
noted above, generate two forms of
useful energy—electricity and the heat/
steam (thermal energy) that is used to
produce hydrogen. The Commission
thus amends its PURPA Regulations to
provide that the production of heat/
steam by a fuel cell system with an
integrated hydrocarbon reformation
process to produce hydrogen yields a
‘‘useful thermal energy output’’ made
available to an industrial process that
entitles such a system, consistent with
the statute’s requirements for a
cogeneration facility, to be considered a
topping cycle cogeneration facility that
can qualify, subject to meeting the other
relevant requirements,52 to be a QF. The
technological advances in fuel cells that
have occurred since 1980 were neither
known nor anticipated when the
Commission adopted its original
definitions for useful thermal energy,
but that fact should not stand in the way
of the Commission now recognizing
such advances and responding
accordingly.53
33. In sum, recognizing technological
advancements over the past 40 years
and Congress’s commitment to
‘‘continuing progress in the
development of efficient electric energy
generating technology,’’ 54 and in light
of the development and
commercialization of fuel cell systems
with integrated hydrocarbon
reformation equipment since the
original adoption of the PURPA
Regulations, we amend section
292.202(h) of the PURPA Regulations by
adding a new paragraph to provide that
‘‘useful thermal energy output’’ includes
the thermal energy that is used by a fuel
cell system with an integrated steam
hydrocarbon reformation process for
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51 16
use of natural gas in the reformation process but
also use of other hydrocarbons such as bio-gas.
48 16 U.S.C. 796(18)(A).
49 18 CFR 292.202(d).
50 As explained in the NOPR, and described again
above, industrial gas manufacturers also produce
hydrogen from natural gas using a steam-methane
reformation process but must produce their own
steam, usually through combustion of some of the
input natural gas. Because the buyers of the
resulting hydrogen are usually remote from the
industrial gas manufacturer, this hydrogen is either
compressed or liquified in order to transport the
hydrogen to the end user. Integrating the
hydrocarbon reformation process into a fuel cell
system increases efficiency and avoids the energy
loss of external reformation and compression or
liquefaction for surface transportation.
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U.S.C. 796(18).
18 CFR 292.203(b), 292.205. If the facility
is a ‘‘new’’ cogeneration facility that seeks to sell
electric energy pursuant to PURPA section 210, it
will also need to meet the additional requirements
applicable to such facilities. 16 U.S.C. 824a–3(n); 18
CFR 292.205(d).
53 We recognize that, in EG&G, Inc., the
Commission stated that, for cogeneration, ‘‘the use
of thermal energy must be completely independent
of the power production process.’’ EG&G, Inc., 16
FERC at 61,104. Even aside from the fact that that
order did not involve fuel cells, it was issued under
the regulations then effective, which we revise here.
See id. at 61,103–04. In short, it was based on the
regulations as adopted in 1980, and it has now been
overtaken by the change in the PURPA Regulations
adopted today.
54 16 U.S.C. 824a–3(n)(1)(A)(iii).
52 See
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8137
production of hydrogen to be used,
ultimately, as fuel for electricity
generation.
34. We also note that the thermal
energy output, i.e., the waste heat, from
the fuel cell that is used to reform
natural gas into hydrogen fuel is used in
a sequential process to create additional
electricity and is more efficient and uses
less fuel than fuel cells without
integrated fuel reforming systems. This
technology did not exist when the
Commission established the regulations
in Order No. 70. In this final rule, we
now update our cogeneration
regulations to include fuel cells with an
integrated steam hydrocarbon
reformation process. Combined-cycle
electric generation, while admittedly a
more efficient form of electric
generation than, for example, a
combustion turbine, is still not the same
thing as a fuel cell system with an
integrated steam hydrocarbon
reformation process and does not
warrant being identified as a qualifying
facility.
35. FuelCell Energy argues that the
NOPR proposal endorsed a specific
technology, solid oxide fuel cells,
instead of establishing standards that
would apply to all similar fuel cells. We
agree. The Commission has not
endorsed specific types of solar panels,
for example, in defining small power
production facilities. Here, as FuelCell
Energy recognizes, the focus should be
on the integrated use of waste heat for
reforming hydrocarbons to produce
hydrogen to fuel a fuel cell, instead of
the specific fuel cell technology utilized
to accomplish that goal (i.e., solid oxide
or carbonate). As such, we modify the
proposed definition in the NOPR to
state that useful thermal energy output
includes the thermal energy that is used
by a fuel cell system with an integrated
steam hydrocarbon reformation process
for production of fuel for electricity
generation.
36. Finally, as we have noted above,
we reiterate that ‘‘new’’ cogeneration
facilities seeking to sell electric energy
pursuant to PURPA section 210 must
meet the additional requirements
imposed by PURPA section 210 and the
implementing regulations, that the
‘‘thermal energy output . . . is used in
a productive and beneficial manner’’ 55
and that ‘‘[t]he electrical, thermal,
chemical and mechanical output of the
cogeneration facility is used
fundamentally for industrial,
commercial, residential or institutional
purposes and is not intended
fundamentally for sale to an electric
55 18
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collection requirements contemplated
by proposed rules (including deletion,
revision, or implementation of new
requirements).58 Upon approval of a
collection of information, OMB will
assign an OMB control number and an
expiration date. Respondents subject to
the filing requirements of a rule will not
be penalized for failing to respond to the
collection of information unless the
collection of information displays a
valid OMB control number.
Public Reporting Burden: The
Commission is revising its regulations
implementing PURPA. The revision
utility.’’ 56 These requirements apply to
fuel cell systems subject to the revised
regulations adopted in this final rule.
VI. Information Collection Statement
37. The Paperwork Reduction Act 57
requires each federal agency to seek and
obtain the Office of Management and
Budget’s (OMB) approval before
undertaking a collection of information
(including reporting, record keeping,
and public disclosure requirements)
directed to ten or more persons or
contained in a rule of general
applicability. OMB regulations require
approval of certain information
provides that useful thermal energy
outputs will now include the thermal
energy ‘‘that is used by a fuel cell
system with an integrated steam
hydrocarbon reformation process for
production of fuel for electricity
generation.’’ Below, the table includes
estimated changes to the burden and
cost of the FERC Form No. 556A 59 due
to this final rule. As demonstrated by
the table, we believe that some
respondents may file multiple Form No.
556As in order to avail themselves of
the revision in the regulations adopted
above.60
FERC–556A, CERTIFICATION OF QUALIFYING FACILITY STATUS FOR A SMALL POWER PRODUCTION OR COGENERATION
FACILITY,CHANGES DUE TO FINAL RULE IN DOCKET NOS. RM21–2–000 AND RM20–20–000 61
Facility type
Cogeneration
Facility ≤ 1
MW 62.
Cogeneration
Facility > 1
MW.
Cogeneration
Facility > 1
MW.
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FERC–
556A,
TOTAL
ADDITIONAL
BURDEN
AND
COST
DUE
TO final
rule in
RM21–
2 and
RM20–
20.
Filing type
Number of
respondents
Annual
number of
responses per
respondent
Total
number of
responses
Average
burden hours
& cost per
response
Total annual
burden hours &
total annual cost
Annual
cost per
respondent
($)
(1)
(2)
(1) * (2) = (3)
(4)
(3) * (4) = (5)
(5) ÷ (1)
Self-certification.
5
63 600
3,000
1.5 hrs.; $124.50 .....
4,500 hrs.; $373,500
Self-certification.
5
20
100
1.5 hrs.; $124.50 .....
1,500 hrs.; $12,450
2,490
Application for
FERC certification.
5
1
5
50 hrs.; $4,150 ........
250 hrs.; $20,750 ....
4,150
.......................
15
........................
3,105
.................................
6,250 hrs.; $406,700
....................
$74,700
Title: FERC–556A (Certification of
Qualifying Facility (QF) Status for a
Small Power Production or
Cogeneration Facility)
While FuelCell Energy also states that,
to date, it has over 250 MW of fuel cells
56 18 CFR 292.205(d)(2). See also Energy Policy
Act of 2005, Public Law 109–58, 1253, 119 Stat.
594, 967–70 (2005); Order No. 671, 114 FERC
¶ 61,102, order on reh’g, Order No. 671–A, 115
FERC ¶ 61,225.
57 44 U.S.C. 3501–21.
58 See 5 CFR 1320.11.
59 The change to the FERC–556 to reflect the
change in the regulations adopted by this final rule
is being submitted under a temporary interim
information collection number, FERC–556A (OMB
Control No. 1902–0316) because another change to
FERC–556 (OMB Control No. 1902–0075) is
pending OMB review and only one change per
OMB Control No. can be pending for OMB review
at a time.
60 The changes to the FERC Form No. 556 adopted
in Order No. 872 are pending OMB review (under
ICR #202006–1902–004). Those changes are
separate and are not affected by or addressed in this
final rule.
61 The figures in this table reflect estimated
changes to the current OMB-approved inventory for
the FERC Form No. 556. Commission Information
Collection Activities (FERC–556); Comment
Request; Extension, Docket No. IC19–16–000
(issued May 15, 2019 and approved by OMB on
November 18, 2019). The above table only reflects
cogeneration facilities because small power
production facilities will not be affected by the
changes in this final rule. The Commission staff
believes that the industry is similarly situated to the
Commission in terms of wages and benefits.
Therefore, cost estimates are based on FERC’s 2020
average hourly wage (and benefits) of $83.00/hour.
62 Such facilities are not required to file but have
the choice whether to do so.
63 Bloom Energy has stated they have 600
facilities, each with an average size of 0.6 MW, see
Bloom Energy Petition at 14, which, if they all were
in fact to file, would result in as many as 600 selfcertifications of below-1 MW facilities. The
Commission accordingly will adopt a conservative
approach and estimate 600 such responses over the
course of a year, which is especially conservative
given that the Commission’s regulations do not
require below-1 MW facilities to submit selfcertifications.
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(but of unknown size) installed, in
backlog, or under award on three
continents, our burden estimate of as
many as five respondents self-certifying
up to 600 units annually each is
sufficiently large to encompass any such
self-certifications.
Action: Revisions to existing
information collection FERC–556–A.64
OMB Control No.: 1902–0316.
Respondents: Facilities that are selfcertifying their status as a cogenerator or
that are submitting an application for
Commission certification of their status
as a cogenerator.
Frequency of Information: Ongoing.
Necessity of Information: The
Commission directs the changes in this
final rule in order to revise its
implementation of PURPA in light of
technological advancements in electric
generation since the enactment of
PURPA in 1978.
Internal Review: The Commission has
reviewed the proposed changes and has
determined that such changes are
necessary. These requirements conform
to the Commission’s ongoing need for
efficient information collection,
communication, and management
within the energy industry, in light of
technological advancements in electric
generation.
Interested persons may obtain
information on the reporting
requirements by contacting the Federal
Energy Regulatory Commission, 888
First Street NE, Washington, DC 20426
[Attention: Ellen Brown, Office of the
Executive Director], by email to
DataClearance@ferc.gov, or by phone
(202) 502–8663.
Please send comments concerning the
collection of information and the
associated burden estimates to: Office of
Information and Regulatory Affairs,
Office of Management and Budget
[Attention: Federal Energy Regulatory
Commission Desk Officer]. Due to
security concerns, comments should be
sent directly to www.reginfo.gov/public/
do/PRAMain. Comments submitted to
OMB should be sent within 30 days of
publication of this notice in the Federal
Register and should refer to FERC–556
(OMB Control No. 1902–0075).
VII. Environmental Analysis
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38. The Commission is required to
prepare an Environmental Assessment
or an Environmental Impact Statement
64 The FERC Form No. 556 is not being revised,
but respondents with fuel cell systems with
integrated natural gas reformation equipment who
are self-certifying or requesting Commission
certification as a cogenerator will use the FERC
Form No. 556. On page 8, item 6a of the FERC Form
No. 556, those respondents should indicate ‘‘Fossil
fuel, natural gas (not waste).’’
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for any action that may have a
significant adverse effect on the human
environment.65 Whether and how the
changes adopted here, however, would
affect QF development and the
environment is speculative.
39. The changes to the PURPA
Regulations do not authorize or fund
particular generation that may happen
to qualify as QFs, nor do they license or
issue permits for operation of generation
that may happen to qualify as QFs; such
generation can be built and operated
independent of, i.e., without, QF
certification. They do not authorize or
prohibit a generator’s use of any
particular technologies or fuels, nor do
they mandate or limit where QFs should
or should not be built. They do not
exempt QFs from any Federal, state or
local environmental, siting, or other
similar laws or regulatory requirements.
Given these facts any environmental
impact analysis of the revisions
proposed here would be speculative and
not meaningfully inform the
Commission or the public of the
revisions’ impact on QF development
or, correspondingly, of any associated
potential impacts on the environment;
there are, in short, no reasonably
foreseeable environmental impacts for
the Commission to consider.66
Moreover, the revisions proposed here
would apply only to a limited number
of QFs: Fuel cell systems with
integrated hydrocarbon reformation
equipment. Therefore, the Commission
will not prepare an environmental
document.
VIII. Regulatory Flexibility Act
40. The Regulatory Flexibility Act of
1980 (RFA) 67 generally requires a
description and analysis of final rules
that will have significant economic
impact on a substantial number of small
entities. In lieu of preparing a regulatory
flexibility analysis, an agency may
certify that a proposed rule will not
have a significant economic impact on
a substantial number of small entities.68
41. The Small Business
Administration’s (SBA) Office of Size
Standards develops the numerical
definition of a small business.69 The
65 Regulations Implementing the National
Environmental Policy Act, Order No. 486, 52 FR
47,897 (Dec. 17, 1987), FERC Stats. & Regs. ¶ 30,783
(1987)) (cross-referenced at 41 FERC ¶ 61,284).
66 While courts have held that NEPA requires
‘‘reasonable forecasting,’’ an agency is not required
‘‘to engage in speculative analysis’’ or ‘‘to do the
impractical, if not enough information is available
to permit meaningful consideration.’’ N. Plains Res.
Council v. Surface Transp. Board, 668 F.3d 1067,
1078 (9th Cir. 2011).
67 5 U.S.C. 601–12.
68 5 U.S.C. 605(b).
69 13 CFR 121.101.
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8139
SBA size standard for electric utilities is
based on the number of employees,
including affiliates.70 Under SBA’s
current size standards, the threshold for
a small entity (including its affiliates) is
250 employees for cogeneration in the
NAICS 71 category: NAICS code 221118
for Other Electric Power Generation.
42. This rule directly affects
cogeneration facilities, the majority of
which the Commission estimates are
small businesses. However, the
Commission does not expect the
revision to affect a substantial number
of small entities. This final rule directly
affects only certain QFs, i.e., those that
are fuel cell systems with integrated
steam hydrocarbon reformation
equipment; this rule is voluntary. That
is, this final rule expands the types of
cogenerators that would be eligible to
qualify as QFs to include fuel cell
systems with integrated steam
hydrocarbon reformation equipment,
but this final rule does not require fuel
cell systems with integrated steam
hydrocarbon reformation equipment to
file for QF certification. The
Commission does not anticipate that the
number of affected small entities would
be substantial, nor does the Commission
expect that any additional reporting
burden or cost imposed on QFs,
regardless of their status as a small or
large business, would be significant.72
The Commission estimates that annual
additional compliance costs on industry
(detailed above) will be approximately
$406,700 to comply with these
requirements.
43. Accordingly, pursuant to section
605(b) of the RFA, the Commission
certifies that this rule will not have a
significant economic impact on a
substantial number of small entities.
IX. Document Availability
44. In addition to publishing the full
text of this document in the Federal
Register, the Commission provides all
interested persons an opportunity to
view and/or print the contents of this
70 SBA final rule on ‘‘Small Business Size
Standards: Utilities,’’ 78 FR 77,343 (Dec. 23, 2013).
71 The North American Industry Classification
System (NAICS) is an industry classification system
that Federal statistical agencies use to categorize
businesses for the purpose of collecting, analyzing,
and publishing statistical data related to the U.S.
economy. United States Census Bureau, North
American Industry Classification System, https://
www.census.gov/eos/www/naics/ (accessed October
4, 2020).
72 The average cost per response is estimated to
vary from $124.50 for self-certifications to $4,150
for applications for FERC certification. The cost per
respondent will vary based on the respondent’s
number of facilities and related requests for selfcertification and applications for Commission
certification (with an estimated cost ranging from
$2,490 to $74,700 per respondent).
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Federal Register / Vol. 86, No. 22 / Thursday, February 4, 2021 / Rules and Regulations
document via the internet through the
Commission’s Home Page (https://
www.ferc.gov). At this time, the
Commission has suspended access to
the Commission’s Public Reference
Room due to the President’s March 13,
2020 proclamation declaring a National
Emergency concerning the Novel
Coronavirus Disease (COVID–19).
45. From the Commission’s Home
Page on the internet, this information is
available on eLibrary. The full text of
this document is available on eLibrary
in PDF and Microsoft Word format for
viewing, printing, and/or downloading.
To access this document in eLibrary,
type the docket number excluding the
last three digits of this document in the
docket number field.
46. User assistance is available for
eLibrary and the Commission’s website
during normal business hours from
FERC Online Support at 202–502–6652
(toll free at 1–866–208–3676) or email at
ferconlinesupport@ferc.gov, or the
Public Reference Room at (202) 502–
8371, TTY (202)502–8659. Email the
Public Reference Room at
public.referenceroom@ferc.gov.
Authority: 16 U.S.C. 791a–825r, 2601–
2645; 31 U.S.C. 9701; 42 U.S.C. 7101–7352.
X. Effective Date and Congressional
Notification
33 CFR Part 165
List of Subjects in 18 CFR Part 292
Electric power plants, Electric
utilities, Reporting and recordkeeping
requirements.
By the Commission. Commissioner
Clements is not participating.
Issued: December 17, 2020.
Kimberly D. Bose,
Secretary.
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In consideration of the foregoing, the
Commission amends part 292, chapter I,
title 18, Code of Federal Regulations, as
follows:
PART 292—REGULATIONS UNDER
SECTIONS 201 AND 210 OF THE
PUBLIC UTILITY REGULATORY
POLICIES ACT OF 1978 WITH REGARD
TO SMALL POWER PRODUCTION AND
COGENERATION
1. The authority citation for part 292
continues to read as follows:
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§ 292.202
Definitions.
*
*
*
*
*
(h) * * * :
(2) That is used in a heating
application (e.g., space heating,
domestic hot water heating);
(3) That is used in a space cooling
application (i.e., thermal energy used by
an absorption chiller); or
(4) That is used by a fuel cell system
with an integrated steam hydrocarbon
reformation process for production of
fuel for electricity generation.
*
*
*
*
*
[FR Doc. 2021–01988 Filed 2–3–21; 8:45 am]
BILLING CODE 6717–01–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
[Docket Number USCG–2021–0035]
47. These regulations are effective
April 5, 2021. The Commission has
determined, with the concurrence of the
Administrator of the Office of
Information and Regulatory Affairs of
OMB, that this rule is not a ‘‘major rule’’
as defined in section 351 of the Small
Business Regulatory Enforcement
Fairness Act of 1996. This final rule is
being submitted to the Senate, House,
Government Accountability Office, and
Small Business Administration.
■
2. Amend § 292.202 by revising
paragraphs (h)(2) and (3) and adding
paragraph (h)(4) to read as follows:
■
RIN 1625–AA00
Safety Zone; Power Plant Demolition;
Grand River, Grand Haven, MI
Coast Guard, DHS.
Temporary final rule.
AGENCY:
ACTION:
The Coast Guard is
establishing a temporary safety zone for
all navigable waters within 1400 feet of
a demolition site near the eastern bank
of the Grand River in Grand Haven, MI.
The safety zone is needed to protect
personnel, vessels, and the marine
environment from potential hazards
created by the controlled implosion of
the J.B. Sims power plant. Entry of
vessels or persons into this zone is
prohibited unless specifically
authorized by the Captain of the Port
Lake Michigan or a designated
representative.
SUMMARY:
This rule is effective from 9:30
a.m. on February 5 through 10:30 a.m.
on February 19, 2021. The rule will be
enforced from 9:30 a.m. to 10:30 a.m. on
both February 5 and February 19, 2021.
ADDRESSES: To view documents
mentioned in this preamble as being
available in the docket, go to https://
www.regulations.gov, type USCG–2021–
0035 in the ‘‘SEARCH’’ box, and click
‘‘SEARCH.’’ Click on Open Docket
Folder on the line associated with this
rule.
DATES:
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If
you have questions on this rule, call or
email Chief Petty Officer Jeromy
Sherrill, Sector Lake Michigan
Waterways Management Division, U.S.
Coast Guard; telephone 414–747–7148,
email Jeromy.N.Sherrill@uscg.mil.
SUPPLEMENTARY INFORMATION:
FOR FURTHER INFORMATION CONTACT:
I. Table of Abbreviations
CFR Code of Federal Regulations
DHS Department of Homeland Security
FR Federal Register
NPRM Notice of proposed rulemaking
§ Section
U.S.C. United States Code
II. Background Information and
Regulatory History
The Coast Guard is issuing this
temporary rule without prior notice and
opportunity to comment pursuant to
authority under section 4(a) of the
Administrative Procedure Act (APA)
(5 U.S.C. 553(b)). This provision
authorizes an agency to issue a rule
without prior notice and opportunity to
comment when the agency for good
cause finds that those procedures are
‘‘impracticable, unnecessary, or contrary
to the public interest.’’ Under 5 U.S.C.
553(b)(B), the Coast Guard finds that
good cause exists for not publishing a
notice of proposed rulemaking (NPRM)
with respect to this rule because the
Coast Guard not made aware of the
intended demolition project until
January 12, 2021, and immediate action
is needed to mitigate potential safety
hazards associated with the demolition
process. Delaying the effective date of
this rule to wait for a comment period
to run would be impracticable and
contrary to public interest by inhibiting
the Coast Guard’s ability to protect
against the known and anticipated
hazards.
Under 5 U.S.C. 553(d)(3), the Coast
Guard finds that good cause exists for
making this rule effective less than 30
days after publication in the Federal
Register. For the same reasons
discussed in the preceding paragraph,
waiting for a 30-day notice period to
elapse would be impracticable because
immediate action is needed to mitigate
potential safety hazards associated with
the controlled implosion of portion of
the power plant adjancent to the Grand
River.
III. Legal Authority and Need for Rule
The Coast Guard is issuing this rule
under authority in 46 U.S.C. 70034
(previously 33 U.S.C. 1231). The
Captain of the Port (COTP) Lake
Michigan has determined that potential
safety hazards associated with the
demolition of the J.B. Sims power plant
E:\FR\FM\04FER1.SGM
04FER1
]]>Agencies
[Federal Register Volume 86, Number 22 (Thursday, February 4, 2021)]
[Rules and Regulations]
[Pages 8133-8140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01988]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 292
[Docket Nos. RM21-2-000 and RM20-20-000; Order No. 874]
Fuel Cell Thermal Energy Output; Bloom Energy Corporation
AGENCY: Federal Energy Regulatory Commission, Department of Energy.
ACTION: Final rule.
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SUMMARY: In this final rule, the Federal Energy Regulatory Commission
amends the definition of useful thermal energy output in its
regulations implementing the Public Utility Regulatory Policies Act of
1978 to recognize the technical evolution of cogeneration.
DATES: This rule is effective April 5, 2021.
FOR FURTHER INFORMATION CONTACT:
Lawrence R. Greenfield (Legal Information), Office of the General
Counsel, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, (202) 502-6415, [email protected]
Helen Shepherd (Technical Information), Office of Energy Market
Regulation, Federal Energy Regulatory Commission, 888 First Street NE,
Washington, DC 20426, (202) 502-6176, [email protected]
Thomas Dautel (Technical Information), Office of Energy Policy and
Innovation, Federal Energy Regulatory
[[Page 8134]]
Commission, 888 First Street NE, Washington, DC 20426, (202) 502-6196,
[email protected].
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.
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\1\ 18 CFR part 292.
\2\ 16 U.S.C. 796, 824a-3.
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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\ Fuel Cell Thermal Energy Output, Notice of Proposed
Rulemaking, 85 FR 67,699 (Oct. 26, 2020), 175 FERC ] 61,050 (2020)
(NOPR).
---------------------------------------------------------------------------
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 country's economy and undermine its independence.\6\ Roughly a
third of the nation's 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\ 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\
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\4\ See Public Law 95-617, 92 Stat. 3117 (1978). In addition to
PURPA, that legislative package included: The Energy Tax Act of
1978, Public Law 95-618, 92 Stat. 3174; the National Energy
Conservation Policy Act, Public Law 95-619, 92 Stat. 3206; the
Powerplant and Industrial Fuel Use Act of 1978, Public Law 95-620,
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.
\9\ Id. at 745-46.
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5. PURPA section 210 was intended to address the energy crisis by
encouraging the development of QFs and thereby reducing the country's
demand for traditional fossil fuels.\10\ PURPA section 210(a) 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\
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\10\ Id. at 750.
\11\ 16 U.S.C. 824a-3(a).
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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\
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\12\ Small Power Production and Cogeneration Facilities--
Qualifying Status, Order No. 70, 45 FR 17959 (Mar. 20, 1980), FERC
Stats. & Regs. ] 30,134 (cross-referenced at 10 FERC ] 61,230),
order on reh'g, Order No. 70-A, 45 FR 33603 (May 20, 1980), FERC
Stats. & Regs. ] 30,159 (cross-referenced at 11 FERC ] 61,119),
order on reh'g, Order No. 70-B, 45 FR 52779 (Aug. 4, 1980), FERC
Stats. & Regs. ] 30,176 (cross-referenced at 12 FERC ] 61,128),
order on reh'g, 45 FR 66784 (Oct. 8, 1980) FERC Stats. & Regs. ]
30,192 (1980) (cross-referenced at 12 FERC ] 61,306), amending
regulations, Order No. 70-D, 46 FR 11251 (Feb. 6, 1981), FERC Stats.
& Regs. ] 30,234 (cross-referenced at 14 FERC ] 61,076), amending
regulations, Order No. 70-E, 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. 796(18); accord 18 CFR 292.202(c).
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7. In enacting PURPA, Congress could not, and did not, predict
specific technological developments that would occur in future years
but instead recognized the Commission's 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 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.
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\15\ 16 U.S.C. 824a-3(a).
\16\ See supra note 14.
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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 fuel--which 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\
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\17\ Bloom Energy Petition at 8.
\18\ Id.
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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 Congress's goal in
enacting PURPA, as discussed above.
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\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.
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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\
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\20\ Id. at 1, 3, 7, 16 (citing 16 U.S.C. 824a-3(n)(1)(A)(iii)).
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III. NOPR Proposal
11. In the NOPR, the Commission stated that the statutory
definition of
[[Page 8135]]
cogeneration facilities requires that a cogeneration facility produce
``(i) electric energy, and (ii) steam or forms of useful energy (such
as heat) which are used for industrial, commercial, heating or cooling
purposes.'' \21\ This definition provides for steam or other forms of
useful energy to be used for, e.g., an industrial purpose. The creation
by a fuel cell system with an integrated natural gas reformation
process of a commercially valuable fuel, as described in the NOPR,
would fit within the scope of this statutory definition. Consistent
with the PURPA Regulations, fuel cell systems with integrated natural
gas reformation equipment produce two forms of energy: Electricity, and
the heat/steam (thermal energy) used to create the hydrogen that fuels
the fuel cell system (a chemical energy).
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\21\ 16 U.S.C. 796(18)(A).
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12. The Commission's PURPA Regulations define a topping-cycle
cogeneration facility as a cogeneration facility in which the energy
input to the facility is first used to produce useful power output and
at least some of the reject heat from the power production process is
then used to provide useful thermal energy.\22\
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\22\ 18 CFR 292.202(d).
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13. Fuel cell systems with integrated natural gas reformation
equipment convert the chemical energy within natural gas into
electricity using a steam-methane reformation process,\23\ which
essentially converts the methane in the natural gas input to hydrogen,
which then reacts with oxygen in the fuel cell to produce electricity.
The by-product of the fuel cell's production of electricity is heat and
steam, some of which can be used in the steam-methane reformation
process to convert more methane into hydrogen, which the fuel cells
use, in combination with oxygen from the air, to produce electricity.
---------------------------------------------------------------------------
\23\ Industrial gas manufacturers also produce hydrogen from
natural gas using a steam-methane reformation process, but must
produce their own steam, usually through combustion of some of the
input natural gas. Because the buyers of the resulting hydrogen are
usually remote from the industrial gas manufacturer, this hydrogen
is either compressed or liquified in order to transport the hydrogen
to the end user. Integrating the natural gas steam reformation
process into a fuel cell system increases efficiency and avoids the
energy loss of external reformation, and compression or liquefaction
for surface transportation. Bloom Energy Petition at 8 & App. B.
---------------------------------------------------------------------------
14. As a cogeneration QF is one that ``produces electric energy as
well as steam or forms of useful energy (such as heat) which are used
for industrial, commercial, heating or cooling purposes,'' \24\
consistent with the PURPA Regulations, fuel cell systems with
integrated natural gas reformation equipment generate two forms of
useful energy--electricity, and heat/steam (thermal energy) that is
used to produce hydrogen (a chemical energy).
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\24\ 16 U.S.C. 796(18).
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15. The PURPA Regulations identify three categories of useful
thermal output from a topping-cycle cogenerator. They are thermal
energy (1) that is ``made available to an industrial or commercial
process . . .; (2) that is used in a heating application . . .; or (3)
that is used in a space cooling application.'' \25\ In the NOPR, the
Commission proposed to amend its regulations to provide that the
production of heat/steam by a solid oxide fuel cell system for use in
an integrated natural gas reformation process to produce hydrogen
yields a useful thermal energy output made available to an industrial
process that, as described in the NOPR, entitles such a system to be
considered a topping cycle cogeneration facility that qualifies,
subject to meeting the other relevant requirements,\26\ to be a QF. The
Commission stated that the recent technological advances in utilizing
the thermal energy from a solid oxide fuel cell in an integrated steam
hydrocarbon reformation process were not known or anticipated when the
Commission adopted its original definitions for useful thermal energy,
but that fact should not stand in the way of the Commission now
recognizing such advances and responding accordingly.\27\
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\25\ 18 CFR 292.202(h).
\26\ See 18 CFR 292.203(b), 292.205. If the cogeneration
facility is a ``new'' qualifying cogeneration facility ``seeking to
sell electric energy pursuant to [PURPA section 210],'' such
facility must meet certain additional requirements. 16 U.S.C. 824a-
3(n); accord 18 CFR 292.205(d) (implementing PURPA section 210(n),
by requiring an additional showing for certain cogeneration
facilities that are ``seeking to sell electric energy pursuant to
[PURPA] section 210'').
\27\ See infra note 53.
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16. In recognition of technological advancements over the past 40
years and Congress's commitment to ``continuing progress in the
development of efficient electric energy generating technology,'' \28\
and in light of the development and commercialization of fuel cell
systems with integrated natural gas reformation equipment since the
original adoption of the PURPA Regulations, the Commission proposed in
the NOPR to amend section 292.202(h) of the PURPA Regulations by adding
a new paragraph providing that useful thermal energy output include the
thermal energy that is used by a solid oxide fuel cell system with an
integrated steam hydrocarbon reformation process for production of fuel
for electricity generation.\29\
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\28\ 16 U.S.C. 824a-3(n)(1)(A)(iii).
\29\ NOPR, 175 FERC ] 61,050 at PP 1, 3, 7, 10-11.
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17. In proposing this change to its regulations, the Commission did
not propose to revise section 292.205(d) of the PURPA Regulations,
which establishes additional criteria for, in particular, new
cogeneration facilities seeking to sell electric energy pursuant to
PURPA section 210.\30\ The Commission proposed that any new
cogeneration facility that is a solid oxide fuel cell system with an
integrated steam hydrocarbon reformation process would be required to
satisfy the existing criteria of section 292.205(d) of the PURPA
Regulations if it seeks to make sales of electric energy pursuant to
PURPA section 210.
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\30\ 18 CFR 292.205(d); see also 18 CFR 292.205(d)(4) (``For
purposes of paragraphs (d)(1) and (2) of this section, a new
cogeneration facility of 5 MW or smaller will be presumed to satisfy
the requirements of those paragraphs.''). That presumption for 5 MW
or smaller facilities is a rebuttable presumption, though.
Revised Regulations Governing Small Power Production and
Cogeneration Facilities, Order No. 671, 114 FERC 61,102,
at PP 26, 60, order on reh'g, Order No. 671-A, 115 FERC ] 61,225
(2006).
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IV. Comments
18. FuelCell Energy, which explains that it operates fuel cell
systems on three continents that have generated over 10 billion kWh of
power, asks the Commission to revise its regulations to encompass more
than just solid oxide fuel cell systems. FuelCell Energy asserts that
Bloom Energy requested that the Commission expand its current
definition of a cogeneration facility so that Bloom Energy's solid
oxide fuel cells qualify as a QF. FuelCell Energy argues that the
Commission should revise the definition, so it can apply more broadly
to any fuel cell systems that use waste heat for the reforming of fuel
to produce hydrogen, and not just Bloom Energy's solid oxide fuel cell
system.\31\
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\31\ FuelCell Energy Comments at 5, 7.
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19. FuelCell Energy asserts that its carbonate fuel cells use waste
heat in an integrated fuel reforming process to produce hydrogen,\32\
just as Bloom Energy's solid oxide fuel cells do. FuelCell Energy
contends that, as long as fuel cell systems use waste heat for the
reforming of hydrocarbon fuel to produce hydrogen, the particular fuel
cell technology should not be exclusive or exclusionary; so long as
there is no efficiency tradeoffs or additional negative environmental
impacts, the type of fuel cell technology (whether
[[Page 8136]]
carbonate or solid oxide) should be irrelevant.\33\
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\32\ Id. at 6.
\33\ Id. at 5.
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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\
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\34\ EEI Comments at 2.
\35\ Id. at 4 (quoting 16 U.S.C. 796(18)).
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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\
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\36\ Id. (quoting16 U.S.C. 824a-3(n)).
22. EEI argues that this statutory language indicates that,
contrary to the Commission's 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\
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\37\ Id. (referencing NOPR, 175 FERC ] 61,050 at P 3).
\38\ Id.
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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
defined a cogeneration facility as one that
---------------------------------------------------------------------------
\39\ Id. at 6.
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 Nation's effort to conserve its energy
resources.\40\
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\40\ Id. (quoting Order No. 70, FERC Stats. & Regs. ] 30,134 at
30,931-32).
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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\
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\41\ Id. (quoting Order No. 70, FERC Stats. & Regs. ] 30,134 at
30,934).
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
``[i]f 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\
---------------------------------------------------------------------------
\42\ Id. at 6-7.
\43\ Id. at 7 (quoting EG&G, Inc., 16 FERC ] 61,060, at 61,104
(1981)).
---------------------------------------------------------------------------
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 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.
---------------------------------------------------------------------------
\44\ Id.
---------------------------------------------------------------------------
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 Commission's 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.
---------------------------------------------------------------------------
\45\ Bloom Energy Comments at 7 (referencing Bloom Energy
Petition at 1-2) (internal quotations omitted).
\46\ Bloom Energy Comments, Joint Declaration at 3.
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V. Discussion
29. In this final rule, we adopt a revision to the definition of a
topping-cycle cogeneration facility in section 292.202(h) 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\
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\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 text's reference to ``an integrated steam
hydrocarbon reformation process'' thus encompasses not only use of
natural gas in the reformation process but also use of other
hydrocarbons such as bio-gas.
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[[Page 8137]]
30. The statutory definition of cogeneration facilities requires
only that a cogeneration facility produce ``(i) electric energy, and
(ii) steam or forms of useful energy (such as heat) which are used for
industrial, commercial, heating or cooling purposes . . . .'' \48\ This
definition explicitly provides for steam or other forms of useful
energy to be used for an industrial purpose. Because, as described
above, a fuel cell system with an integrated hydrocarbon reformation
process creates useful thermal energy in that it is used for an
industrial purpose--here, producing a commercially valuable fuel,
hydrogen--it fits within this statutory definition. Phrased
differently, fuel cell systems with integrated hydrocarbon reformation
equipment produce two forms of useful energy: Electric energy and heat/
steam (thermal energy) which can be used to produce hydrogen (from
which chemical energy can be used to produce electric energy).
---------------------------------------------------------------------------
\48\ 16 U.S.C. 796(18)(A).
---------------------------------------------------------------------------
31. Currently, the Commission's PURPA Regulations as adopted in
1980 provide that a topping-cycle cogeneration facility is a
cogeneration facility in which the energy input to the facility is
first used to produce useful power output and at least some of the
reject heat from the power production process is then used to provide
useful thermal energy.\49\ Fuel cell systems with integrated
hydrocarbon reformation equipment convert the chemical energy of the
methane within natural gas into hydrogen and, ultimately, electricity
using a steam-methane reformation process,\50\ which converts the
natural gas input to hydrogen, which reacts with oxygen in the fuel
cell to produce electricity. The by-product of the fuel cell's
production of electricity is heat and steam, some of which is used in
the integrated hydrocarbon reformation process to convert more natural
gas into hydrogen, which the fuel cells use, in combination with oxygen
from the air, to produce electricity.
---------------------------------------------------------------------------
\49\ 18 CFR 292.202(d).
\50\ As explained in the NOPR, and described again above,
industrial gas manufacturers also produce hydrogen from natural gas
using a steam-methane reformation process but must produce their own
steam, usually through combustion of some of the input natural gas.
Because the buyers of the resulting hydrogen are usually remote from
the industrial gas manufacturer, this hydrogen is either compressed
or liquified in order to transport the hydrogen to the end user.
Integrating the hydrocarbon reformation process into a fuel cell
system increases efficiency and avoids the energy loss of external
reformation and compression or liquefaction for surface
transportation.
---------------------------------------------------------------------------
32. A cogeneration facility is, per the statute, one that
``produces electric energy as well as steam or forms of useful energy
(such as heat) which are used for industrial, commercial, heating or
cooling purposes.'' \51\ Consistent with this language, fuel cell
systems with integrated hydrocarbon reformation equipment do exactly
that and thus can be cogeneration facilities. Fuel cells, as noted
above, generate two forms of useful energy--electricity and the heat/
steam (thermal energy) that is used to produce hydrogen. The Commission
thus amends its PURPA Regulations to provide that the production of
heat/steam by a fuel cell system with an integrated hydrocarbon
reformation process to produce hydrogen yields a ``useful thermal
energy output'' made available to an industrial process that entitles
such a system, consistent with the statute's requirements for a
cogeneration facility, to be considered a topping cycle cogeneration
facility that can qualify, subject to meeting the other relevant
requirements,\52\ to be a QF. The technological advances in fuel cells
that have occurred since 1980 were neither known nor anticipated when
the Commission adopted its original definitions for useful thermal
energy, but that fact should not stand in the way of the Commission now
recognizing such advances and responding accordingly.\53\
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\51\ 16 U.S.C. 796(18).
\52\ See 18 CFR 292.203(b), 292.205. If the facility is a
``new'' cogeneration facility that seeks to sell electric energy
pursuant to PURPA section 210, it will also need to meet the
additional requirements applicable to such facilities. 16 U.S.C.
824a-3(n); 18 CFR 292.205(d).
\53\ We recognize that, in EG&G, Inc., the Commission stated
that, for cogeneration, ``the use of thermal energy must be
completely independent of the power production process.'' EG&G,
Inc., 16 FERC at 61,104. Even aside from the fact that that order
did not involve fuel cells, it was issued under the regulations then
effective, which we revise here. See id. at 61,103-04. In short, it
was based on the regulations as adopted in 1980, and it has now been
overtaken by the change in the PURPA Regulations adopted today.
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33. In sum, recognizing technological advancements over the past 40
years and Congress's commitment to ``continuing progress in the
development of efficient electric energy generating technology,'' \54\
and in light of the development and commercialization of fuel cell
systems with integrated hydrocarbon reformation equipment since the
original adoption of the PURPA Regulations, we amend section 292.202(h)
of the PURPA Regulations by adding a new paragraph to provide that
``useful thermal energy output'' includes the thermal energy that is
used by a fuel cell system with an integrated steam hydrocarbon
reformation process for production of hydrogen to be used, ultimately,
as fuel for electricity generation.
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\54\ 16 U.S.C. 824a-3(n)(1)(A)(iii).
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34. We also note that the thermal energy output, i.e., the waste
heat, from the fuel cell that is used to reform natural gas into
hydrogen fuel is used in a sequential process to create additional
electricity and is more efficient and uses less fuel than fuel cells
without integrated fuel reforming systems. This technology did not
exist when the Commission established the regulations in Order No. 70.
In this final rule, we now update our cogeneration regulations to
include fuel cells with an integrated steam hydrocarbon reformation
process. Combined-cycle electric generation, while admittedly a more
efficient form of electric generation than, for example, a combustion
turbine, is still not the same thing as a fuel cell system with an
integrated steam hydrocarbon reformation process and does not warrant
being identified as a qualifying facility.
35. FuelCell Energy argues that the NOPR proposal endorsed a
specific technology, solid oxide fuel cells, instead of establishing
standards that would apply to all similar fuel cells. We agree. The
Commission has not endorsed specific types of solar panels, for
example, in defining small power production facilities. Here, as
FuelCell Energy recognizes, the focus should be on the integrated use
of waste heat for reforming hydrocarbons to produce hydrogen to fuel a
fuel cell, instead of the specific fuel cell technology utilized to
accomplish that goal (i.e., solid oxide or carbonate). As such, we
modify the proposed definition in the NOPR to state that useful thermal
energy output includes the thermal energy that is used by a fuel cell
system with an integrated steam hydrocarbon reformation process for
production of fuel for electricity generation.
36. Finally, as we have noted above, we reiterate that ``new''
cogeneration facilities seeking to sell electric energy pursuant to
PURPA section 210 must meet the additional requirements imposed by
PURPA section 210 and the implementing regulations, that the ``thermal
energy output . . . is used in a productive and beneficial manner''
\55\ and that ``[t]he electrical, thermal, chemical and mechanical
output of the cogeneration facility is used fundamentally for
industrial, commercial, residential or institutional purposes and is
not intended fundamentally for sale to an electric
[[Page 8138]]
utility.'' \56\ These requirements apply to fuel cell systems subject
to the revised regulations adopted in this final rule.
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\55\ 18 CFR 292.205(d)(1).
\56\ 18 CFR 292.205(d)(2). See also Energy Policy Act of 2005,
Public Law 109-58, 1253, 119 Stat. 594, 967-70 (2005); Order No.
671, 114 FERC ] 61,102, order on reh'g, Order No. 671-A, 115 FERC ]
61,225.
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VI. Information Collection Statement
37. The Paperwork Reduction Act \57\ requires each federal agency
to seek and obtain the Office of Management and Budget's (OMB) approval
before undertaking a collection of information (including reporting,
record keeping, and public disclosure requirements) directed to ten or
more persons or contained in a rule of general applicability. OMB
regulations require approval of certain information collection
requirements contemplated by proposed rules (including deletion,
revision, or implementation of new requirements).\58\ Upon approval of
a collection of information, OMB will assign an OMB control number and
an expiration date. Respondents subject to the filing requirements of a
rule will not be penalized for failing to respond to the collection of
information unless the collection of information displays a valid OMB
control number.
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\57\ 44 U.S.C. 3501-21.
\58\ See 5 CFR 1320.11.
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Public Reporting Burden: The Commission is revising its regulations
implementing PURPA. The revision provides that useful thermal energy
outputs will now include the thermal energy ``that is used by a fuel
cell system with an integrated steam hydrocarbon reformation process
for production of fuel for electricity generation.'' Below, the table
includes estimated changes to the burden and cost of the FERC Form No.
556A \59\ due to this final rule. As demonstrated by the table, we
believe that some respondents may file multiple Form No. 556As in order
to avail themselves of the revision in the regulations adopted
above.\60\
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\59\ The change to the FERC-556 to reflect the change in the
regulations adopted by this final rule is being submitted under a
temporary interim information collection number, FERC-556A (OMB
Control No. 1902-0316) because another change to FERC-556 (OMB
Control No. 1902-0075) is pending OMB review and only one change per
OMB Control No. can be pending for OMB review at a time.
\60\ The changes to the FERC Form No. 556 adopted in Order No.
872 are pending OMB review (under ICR #202006-1902-004). Those
changes are separate and are not affected by or addressed in this
final rule.
FERC-556A, Certification of Qualifying Facility Status for a Small Power Production or Cogeneration Facility,Changes Due to Final Rule in Docket Nos. RM21-2-000 and RM20-20-000 \61\
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Annual cost
Number of Annual number Total number Average burden hours & cost per Total annual burden hours & total per
Facility type Filing type respondents of responses of responses response annual cost respondent
per respondent ($)
(1) (2) (1) * (2) = (4).............................. (3) * (4) = (5).................. (5) / (1)
(3)
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Cogeneration Facility <= 1 MW \62\.. Self-certification..... 5 \63\ 600 3,000 1.5 hrs.; $124.50................ 4,500 hrs.; $373,500............. $74,700
Cogeneration Facility > 1 MW........ Self-certification..... 5 20 100 1.5 hrs.; $124.50................ 1,500 hrs.; $12,450.............. 2,490
Cogeneration Facility > 1 MW........ Application for FERC 5 1 5 50 hrs.; $4,150.................. 250 hrs.; $20,750................ 4,150
certification.
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FERC-556A, TOTAL ADDITIONAL ....................... 15 .............. 3,105 ................................. 6,250 hrs.; $406,700............. ...........
BURDEN AND COST DUE TO final
rule in RM21-2 and RM20-20.
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Title: FERC-556A (Certification of Qualifying Facility (QF) Status
for a Small Power Production or Cogeneration Facility)
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\61\ The figures in this table reflect estimated changes to the
current OMB-approved inventory for the FERC Form No. 556. Commission
Information Collection Activities (FERC-556); Comment Request;
Extension, Docket No. IC19-16-000 (issued May 15, 2019 and approved
by OMB on November 18, 2019). The above table only reflects
cogeneration facilities because small power production facilities
will not be affected by the changes in this final rule. The
Commission staff believes that the industry is similarly situated to
the Commission in terms of wages and benefits. Therefore, cost
estimates are based on FERC's 2020 average hourly wage (and
benefits) of $83.00/hour.
\62\ Such facilities are not required to file but have the
choice whether to do so.
\63\ Bloom Energy has stated they have 600 facilities, each with
an average size of 0.6 MW, see Bloom Energy Petition at 14, which,
if they all were in fact to file, would result in as many as 600
self-certifications of below-1 MW facilities. The Commission
accordingly will adopt a conservative approach and estimate 600 such
responses over the course of a year, which is especially
conservative given that the Commission's regulations do not require
below-1 MW facilities to submit self-certifications.
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While FuelCell Energy also states that, to date, it has over 250 MW
of fuel cells
[[Page 8139]]
(but of unknown size) installed, in backlog, or under award on three
continents, our burden estimate of as many as five respondents self-
certifying up to 600 units annually each is sufficiently large to
encompass any such self-certifications.
Action: Revisions to existing information collection FERC-556-
A.\64\
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\64\ The FERC Form No. 556 is not being revised, but respondents
with fuel cell systems with integrated natural gas reformation
equipment who are self-certifying or requesting Commission
certification as a cogenerator will use the FERC Form No. 556. On
page 8, item 6a of the FERC Form No. 556, those respondents should
indicate ``Fossil fuel, natural gas (not waste).''
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OMB Control No.: 1902-0316.
Respondents: Facilities that are self-certifying their status as a
cogenerator or that are submitting an application for Commission
certification of their status as a cogenerator.
Frequency of Information: Ongoing.
Necessity of Information: The Commission directs the changes in
this final rule in order to revise its implementation of PURPA in light
of technological advancements in electric generation since the
enactment of PURPA in 1978.
Internal Review: The Commission has reviewed the proposed changes
and has determined that such changes are necessary. These requirements
conform to the Commission's ongoing need for efficient information
collection, communication, and management within the energy industry,
in light of technological advancements in electric generation.
Interested persons may obtain information on the reporting
requirements by contacting the Federal Energy Regulatory Commission,
888 First Street NE, Washington, DC 20426 [Attention: Ellen Brown,
Office of the Executive Director], by email to [email protected],
or by phone (202) 502-8663.
Please send comments concerning the collection of information and
the associated burden estimates to: Office of Information and
Regulatory Affairs, Office of Management and Budget [Attention: Federal
Energy Regulatory Commission Desk Officer]. Due to security concerns,
comments should be sent directly to www.reginfo.gov/public/do/PRAMain.
Comments submitted to OMB should be sent within 30 days of publication
of this notice in the Federal Register and should refer to FERC-556
(OMB Control No. 1902-0075).
VII. Environmental Analysis
38. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\65\ Whether
and how the changes adopted here, however, would affect QF development
and the environment is speculative.
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\65\ Regulations Implementing the National Environmental Policy
Act, Order No. 486, 52 FR 47,897 (Dec. 17, 1987), FERC Stats. &
Regs. ] 30,783 (1987)) (cross-referenced at 41 FERC ] 61,284).
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39. The changes to the PURPA Regulations do not authorize or fund
particular generation that may happen to qualify as QFs, nor do they
license or issue permits for operation of generation that may happen to
qualify as QFs; such generation can be built and operated independent
of, i.e., without, QF certification. They do not authorize or prohibit
a generator's use of any particular technologies or fuels, nor do they
mandate or limit where QFs should or should not be built. They do not
exempt QFs from any Federal, state or local environmental, siting, or
other similar laws or regulatory requirements. Given these facts any
environmental impact analysis of the revisions proposed here would be
speculative and not meaningfully inform the Commission or the public of
the revisions' impact on QF development or, correspondingly, of any
associated potential impacts on the environment; there are, in short,
no reasonably foreseeable environmental impacts for the Commission to
consider.\66\ Moreover, the revisions proposed here would apply only to
a limited number of QFs: Fuel cell systems with integrated hydrocarbon
reformation equipment. Therefore, the Commission will not prepare an
environmental document.
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\66\ While courts have held that NEPA requires ``reasonable
forecasting,'' an agency is not required ``to engage in speculative
analysis'' or ``to do the impractical, if not enough information is
available to permit meaningful consideration.'' N. Plains Res.
Council v. Surface Transp. Board, 668 F.3d 1067, 1078 (9th Cir.
2011).
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VIII. Regulatory Flexibility Act
40. The Regulatory Flexibility Act of 1980 (RFA) \67\ generally
requires a description and analysis of final rules that will have
significant economic impact on a substantial number of small entities.
In lieu of preparing a regulatory flexibility analysis, an agency may
certify that a proposed rule will not have a significant economic
impact on a substantial number of small entities.\68\
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\67\ 5 U.S.C. 601-12.
\68\ 5 U.S.C. 605(b).
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41. The Small Business Administration's (SBA) Office of Size
Standards develops the numerical definition of a small business.\69\
The SBA size standard for electric utilities is based on the number of
employees, including affiliates.\70\ Under SBA's current size
standards, the threshold for a small entity (including its affiliates)
is 250 employees for cogeneration in the NAICS \71\ category: NAICS
code 221118 for Other Electric Power Generation.
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\69\ 13 CFR 121.101.
\70\ SBA final rule on ``Small Business Size Standards:
Utilities,'' 78 FR 77,343 (Dec. 23, 2013).
\71\ The North American Industry Classification System (NAICS)
is an industry classification system that Federal statistical
agencies use to categorize businesses for the purpose of collecting,
analyzing, and publishing statistical data related to the U.S.
economy. United States Census Bureau, North American Industry
Classification System, https://www.census.gov/eos/www/naics/
(accessed October 4, 2020).
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42. This rule directly affects cogeneration facilities, the
majority of which the Commission estimates are small businesses.
However, the Commission does not expect the revision to affect a
substantial number of small entities. This final rule directly affects
only certain QFs, i.e., those that are fuel cell systems with
integrated steam hydrocarbon reformation equipment; this rule is
voluntary. That is, this final rule expands the types of cogenerators
that would be eligible to qualify as QFs to include fuel cell systems
with integrated steam hydrocarbon reformation equipment, but this final
rule does not require fuel cell systems with integrated steam
hydrocarbon reformation equipment to file for QF certification. The
Commission does not anticipate that the number of affected small
entities would be substantial, nor does the Commission expect that any
additional reporting burden or cost imposed on QFs, regardless of their
status as a small or large business, would be significant.\72\ The
Commission estimates that annual additional compliance costs on
industry (detailed above) will be approximately $406,700 to comply with
these requirements.
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\72\ The average cost per response is estimated to vary from
$124.50 for self-certifications to $4,150 for applications for FERC
certification. The cost per respondent will vary based on the
respondent's number of facilities and related requests for self-
certification and applications for Commission certification (with an
estimated cost ranging from $2,490 to $74,700 per respondent).
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43. Accordingly, pursuant to section 605(b) of the RFA, the
Commission certifies that this rule will not have a significant
economic impact on a substantial number of small entities.
IX. Document Availability
44. In addition to publishing the full text of this document in the
Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this
[[Page 8140]]
document via the internet through the Commission's Home Page (https://www.ferc.gov). At this time, the Commission has suspended access to the
Commission's Public Reference Room due to the President's March 13,
2020 proclamation declaring a National Emergency concerning the Novel
Coronavirus Disease (COVID-19).
45. From the Commission's Home Page on the internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number excluding the last three digits of this document in
the docket number field.
46. User assistance is available for eLibrary and the Commission's
website during normal business hours from FERC Online Support at 202-
502-6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202)502-8659. Email the Public Reference Room at
[email protected].
X. Effective Date and Congressional Notification
47. These regulations are effective April 5, 2021. The Commission
has determined, with the concurrence of the Administrator of the Office
of Information and Regulatory Affairs of OMB, that this rule is not a
``major rule'' as defined in section 351 of the Small Business
Regulatory Enforcement Fairness Act of 1996. This final rule is being
submitted to the Senate, House, Government Accountability Office, and
Small Business Administration.
List of Subjects in 18 CFR Part 292
Electric power plants, Electric utilities, Reporting and
recordkeeping requirements.
By the Commission. Commissioner Clements is not participating.
Issued: December 17, 2020.
Kimberly D. Bose,
Secretary.
In consideration of the foregoing, the Commission amends part 292,
chapter I, title 18, Code of Federal Regulations, as follows:
PART 292--REGULATIONS UNDER SECTIONS 201 AND 210 OF THE PUBLIC
UTILITY REGULATORY POLICIES ACT OF 1978 WITH REGARD TO SMALL POWER
PRODUCTION AND COGENERATION
0
1. The authority citation for part 292 continues to read as follows:
Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42
U.S.C. 7101-7352.
0
2. Amend Sec. 292.202 by revising paragraphs (h)(2) and (3) and adding
paragraph (h)(4) to read as follows:
Sec. 292.202 Definitions.
* * * * *
(h) * * * :
(2) That is used in a heating application (e.g., space heating,
domestic hot water heating);
(3) That is used in a space cooling application (i.e., thermal
energy used by an absorption chiller); or
(4) That is used by a fuel cell system with an integrated steam
hydrocarbon reformation process for production of fuel for electricity
generation.
* * * * *
[FR Doc. 2021-01988 Filed 2-3-21; 8:45 am]
BILLING CODE 6717-01-P
