130 FERC ¶ 61,214

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

18 CFR Parts 131 and 292

(Docket No. RM09-23-000; Order No. 732)

Revisions to Form, Procedures, and Criteria for Certification of

Qualifying Facility Status for a Small Power Production or Cogeneration Facility

(Issued March 19, 2010)

AGENCY: Federal Energy Regulatory Commission.

ACTION: Final Rule.

SUMMARY: The Federal Energy Regulatory Commission (Commission) is revising its

regulations, which prior to this Final Rule provided the FERC Form No. 556 that is used

in the certification of qualifying status for an existing or proposed small power

production or cogeneration facility. The adopted revisions remove the contents of the

Form No. 556 from the regulations, and, in their place, provide that an applicant seeking

to certify qualifying facility (QF) status of a small power production or cogeneration

facility must complete, and electronically file, the Form No. 556 that is in effect at the

time of filing. We also revise and reformat the Form No. 556 to clarify the content of the

form and to take advantage of newer technologies that will reduce both the filing burden

for applicants and the processing burden for the Commission. We also adopt an

exemption, for generating facilities with net power production capacities of 1 MW or

less, from the requirement that a generating facility, to be a QF, file either a notice of

self-certification or an application for Commission certification, and codify the

Commission’s authority to waive the QF certification requirement for good cause.

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Finally, we clarify, simplify or correct certain sections of the regulations relating to

certifying QF status.

EFFECTIVE DATE: This rule will become effective [insert date that is 60 days after

publication in the FEDERAL REGISTER].

FOR FURTHER INFORMATION CONTACT:

Kenneth Thomas (Technical Information)

Division of Tariffs and Market Development – Central

Office of Energy Market Regulation

Federal Energy Regulatory Commission

888 First Street, NE, Washington, DC 20426

Telephone: (202) 502-8698, E-mail: kenneth.thomas@ferc.gov

Paul Singh (Technical Information)

Division of Tariffs and Market Development - Central

Office of Energy Market Regulation

Federal Energy Regulatory Commission

888 First Street, NE, Washington, DC 20426

Telephone: (202) 502-8576, E-mail: paul.singh@ferc.gov

S.L. Higginbottom (Legal Information)

Office of the General Counsel

Federal Energy Regulatory Commission

888 First Street, NE, Washington, DC 20426

Telephone: (202) 502- 8561, E-mail: samuel.higginbottom@ferc.gov

SUPPLEMENTARY INFORMATION

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UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Jon Wellinghoff, Chairman;

Marc Spitzer, Philip D. Moeller,

and John R. Norris.

Revisions to Form, Procedures, and Criteria for Docket No. RM09-23-000

Certification of Qualifying Facility Status for a

Small Power Production or Cogeneration Facility

ORDER NO. 732

FINAL RULE

(Issued March 19, 2010)

I. Introduction

1. In this Final Rule, the Commission is removing from § 131.80 of its regulations

1

the contents and general instructions of the Form No. 556 used in the certification of

qualifying status for an existing or proposed small power production or cogeneration

facility, and, in their place, providing that an applicant seeking to certify qualifying

facility (QF) status of a small power production or cogeneration facility must complete

and file the Form No. 556 that is in effect at the time of filing (which will be made

available for download from the Commission’s QF website).2 The Commission also is

requiring that the Form No. 556 be submitted to the Commission electronically.

1 18 CFR 131.80.

2 http://www.ferc.gov/QF.

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2. The Commission also is revising and reformatting the Form No. 556 to clarify the

content of the form and to take advantage of newer technologies to reduce both the filing

burden for applicants and the processing burden for the Commission.

3. Additionally, the Commission is revising the procedures, standards and criteria for

QF status provided in Part 292 of its regulations to accomplish the following: (1)

exemption of generating facilities with net power production capacities of 1 MW or less

from the requirement that a generating facility, to be a QF, must file either a notice of

self-certification or an application for Commission certification; (2) codification of the

Commission’s authority to waive the QF certification requirement for good cause; (3)

extension to all applicants for QF certification the requirement (currently applicable only

to applicants for self-certification of QF status) to serve a copy of a filed Form No. 556

on the affected utilities and state regulatory authorities; (4) elimination of the requirement

for applicants to provide a draft notice suitable for publication in the Federal Register;

and (5) clarification, simplification or correction of certain sections of the regulations.

3

4. Finally, the Commission is changing the exemption of QFs from the Federal

Power Act,

4

and to the exemption of QFs from the Public Utility Holding Company Act

of 2005 (PUHCA) and certain State laws and regulations

5 to make clear that certain small

3 18 CFR Part 292.

4 18 CFR 292.601.

5 18 CFR 292.602.

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power production facilities that satisfy the criteria of section 3(17)(E) of the Federal

Power Act qualify for those exemptions.

5. The Commission is adopting the revisions described above, as they will: (1) make

the Form No. 556 easier and less time consuming to complete and submit; (2) decrease

opportunities for confusion and error in completing the form; (3) improve consistency

and quality of the data collected by the form; (4) decrease Commission resources

dedicated to managing errors and omissions in submitted forms; and (5) clarify and

correct the regulations governing the requirements for obtaining and maintaining QF

status.

6. The revisions to the Form No. 556 and the procedures for filing the Form No. 556

are informed by the Commission’s experience both with administering the Form No. 556

and with new technologies for electronic data collection that have become available since

the Form No. 556 was first established by Order No. 575 in 1995.

6 The changes will

increase the effectiveness of the Commission’s policies encouraging cogeneration and

small power production, as required by section 210 of the Public Utility Regulatory

Policies Act of 1978 (PURPA).

7

6 Streamlining of Regulations Pertaining to Parts II and III of the Federal Power

Act and the Public Utility Regulatory Policies Act of 1978, Order No. 575, 60 FR 4831

(Jan. 25, 1995), FERC Stats. & Regs. ¶ 31,014, order on reh’g, Order No. 575-A,

71 FERC ¶ 61,121 (1995).

7 16 U.S.C. 824a-3.

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II. Background

7. When the Commission first implemented section 201 of PURPA, it provided two

paths to QF status: self certification (which, as discussed below, required no filing with

the Commission) and Commission certification.

8 The procedures for self-certification are

contained in § 292.207(a) of the Commission’s regulations.

9 When a small power

production facility or cogeneration facility self-certifies (or self-recertifies),

10 it certifies

that it satisfies the requirements for QF status. The Commission does not formally

review the self-certification. Instead, the self-certification is assigned a docket number,

and Commission staff looks at the filing to determine that the self-certifier has provided

the information required by the regulations.

8. Self-certification was an essential part of the Commission’s implementation of

PURPA, and was intended, in part, to make the certification process quick and not unduly

burdensome. Thus, when the Commission first implemented section 201 of PURPA in

Order No. 70,

11 the Commission rejected a proposal to adopt a case-by-case Commission

8 There is no fee for self-certification; there is, however, a fee for Commission

certification. 18 CFR 381.505. The Commission will not process an application for

Commission certification without receipt of the applicable fee.

9 18 CFR 292.207(a).

10 Because recertification is a type of certification, policies applicable to selfcertification and application for Commission certification also apply to selfrecertification and application for Commission recertification.

11 Small Power Production and Cogeneration Facilities -- Qualifying Status, Order

No. 70, FERC Stats. & Regs., Regulations Preambles 1977-1981 ¶ 30,134 (1980), order

on reh'g, Order Nos. 69-A and 70-A, FERC Stats. & Regs., Regulations Preambles 1977-

(continued...)

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certification requirement for all QFs, but instead provided that facilities that met the

requirements for QF status need only furnish notice to the Commission of QF status.

12

This notice (the self-certification) was purely for informational purposes and to help the

Commission monitor the market penetration of QFs. QF status, however, was established

by meeting the requirements for such status and did not depend on the filing. Indeed, the

Commission noted that QFs and purchasing utilities could agree that a generating facility

met the requirements for QF status, and the facility would qualify for the benefits of

PURPA without making any filing with the Commission.

9. The Commission recognized, however, that the self-certification process would

not always satisfy all those interested in a particular facility’s status. Accordingly, the

Commission also established, in § 292.207(b) of the regulations,

13 an “optional

procedure” for QF status. Under this optional procedure, an entity may file an

application for a determination by the Commission that a facility meets the requirements

for QF status. Such an application requires a filing fee.

14 After receiving an application

1981 ¶ 30,160 (1980), aff'd in part and vacated in part, American Electric Power Service

Corp. v. FERC, 675 F.2d 1226 (D.C. Cir. 1982), rev'd in part, American Paper Institute,

Inc. v. American Electric Power Service Corp., 461 U.S. 402 (1983).

12 Order No. 70, FERC Stats. & Regs. ¶ 30,134 at 30,954. As discussed below, the

Commission, in 2005, added a requirement that a cogeneration facility or small power

production facility either self-certify or receive Commission certification to have QF

status. See 18 CFR 292.203(a)(3), (b)(2).

13 18 CFR 292.207(b).

14 18 CFR 381.505.

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for Commission certification and the required fee, the Commission assigns the filing a

docket number and notices the filing in the Federal Register, providing an opportunity for

interventions and protests. The Commission’s regulations provide that it will act on an

application within 90 days of the filing (or of its supplement or amendment). The process

gives those that need assurance of a facility’s QF status (or lack of such status) a

Commission order certifying (or denying) QF status. This optional procedure is

commonly known as an application for Commission certification. In its original

regulations, the Commission also provided that, once a facility was certified by the

Commission, its qualifying status could be revoked by the Commission, upon the

Commission’s own motion, or upon the motion of any person.

15 This combination of

encouraging self-certifications, while providing for both Commission-certification and an

opportunity to seek revocation of QF status, would assure, the Commission believed, that

only those generation facilities that meet the criteria for QF status would receive and

retain that status.

15 See 18 CFR 292.207(d)(ii). A similar opportunity for the Commission to

revoke the QF status of a self-certified facility on the Commission’s own motion, or on

the motion of another party, was not expressly provided in the regulations; the

Commission, however, allowed others to seek the revocation of a self-certified QF by

filing a petition for declaratory order. In Order No. 671, infra note 17, the right to file a

motion seeking revocation of a self-certification was added to the Commission’s

regulations. A motion seeking revocation requires a filing fee as a declaratory order.

Chugach Electric Association, Inc., 121 FERC ¶ 61,287, at P 51-54 (2007). The filing

fee for a declaratory order is provided in 18 CFR 381.302.

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10. As noted above, the Commission, when it first enacted its regulations, had hoped

that self-certifications would be the primary means for obtaining QF status, but

recognized that there would be instances in which a Commission ruling on QF status

would be desirable. While the Commission later, in Order No. 575, required QFs to

provide more detailed information about self-certifying QFs, through Form No. 556, the

Commission continued to encourage self-certification, but also recognized that there

would be reasons that a QF may want or need Commission certification (including the

requirement of some lenders, electric utilities, or state regulators that a generator seeking

QF status and the benefits of PURPA be Commission-certified). The Commission thus

sought to make the self-certification process more informative about the nature of the

self-certified QFs while keeping the process relatively simple.

11. Following the enactment of the Energy Policy Act of 2005 (EPAct 2005), which

imposed new requirements for QF status for “new” cogeneration facilities,

16 the

Commission issued Order No. 671,

17

which implemented those new requirements. As

part of that implementation, for the first time, notices of self-certifications for new

16 A “new” cogeneration facility is defined as any cogeneration facility that was

either not a qualifying cogeneration facility on or before August 8, 2005, or that had not

filed a notice of self-certification, self-recertification or an application for Commission

certification or Commission recertification as a qualifying cogeneration facility prior to

February 2, 2006. 16 U.S.C. 824a-3(n)(2)(B); 18 CFR 292.205(d).

17 Revised Regulations Governing Small Power Production and Cogeneration

Facilities, Order No. 671, 71 FR 7852 (Feb. 15, 2006), FERC Stats. & Regs. ¶ 31,203

(2006), order on reh’g, Order No. 671-A, 71 FR 30585 (May 30, 2006), FERC Stats.

& Regs. ¶ 31,219 (2006).

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cogeneration facilities were required to be published in the Federal Register; selfcertifications, other than for new cogeneration facilities, are not published in the Federal

Register. In addition, as noted above, for the first time, the Commission required the

filing of a notice of self-certification or an application for Commission certification as a

requirement for QF status.

18

III. Revisions to Regulations

A. General

NOPR Proposal

12. The Commission proposed in the NOPR19 to revise its regulations and the Form

No. 556 to improve and simplify the QF certification process. In particular, the

Commission proposed to remove the contents of the Form No. 556 from the regulations,

and, in their place, to provide that an applicant seeking to certify QF status of a small

power production or cogeneration facility must complete, and electronically file, the

Form No. 556 that is in effect at the time of filing. The Commission also proposed to

revise and reformat the Form No. 556 to clarify the content of the form and to take

advantage of newer technologies that will reduce both the filing burden for applicants and

the processing burden for the Commission. The Commission also proposed to exempt

18 See 18 CFR 292.203(a)(3), (b)(2).

19 Revisions to Form, Procedures, and Criteria for Certification of Qualifying

Facility Status for a Small Power Production or Cogeneration Facility, Notice of

Proposed Rulemaking (NOPR).74 FR 54,503 (Oct. 22, 2009), FERC Stats. & Regs.

¶ 32,648 (2009).

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generating facilities with net power production capacities of 1 MW or less from the QF

certification requirement, and to codify the Commission’s authority to waive the QF

certification requirement for good cause. Finally, the Commission proposed to clarify,

simplify or correct certain sections of the regulations.

Comments

13. Seven parties filed comments in response to the NOPR.

20 The following sections

provide a detailed discussion of the parties’ comments, however, commenters generally

express support for the Commission’s proposals regarding the Form No. 556 and to

clarify, simplify or correct certain sections of the regulations. In particular, most of the

commenters support the Commission’s proposal to remove the contents of the Form No.

556 from the regulations and require applicants to electronically file the Form No. 556

that is in effect at the time of filing, with the exception of certain concerns expressed by

Interstate Renewable and objections raised by Southern. Commenters also generally

support the Commission’s proposal to revise and reformat the Form No. 556 to clarify the

content of the form and to take advantage of newer technologies.

14. The issue most-discussed in parties’ comments is the proposed exemption of

generating facilities with a net power production capacity of 1 MW or less from the

20 Interstate Renewable Energy Council and SolarCity (Interstate Renewable); Sun

Edison LLC (Sun Edison); The National Rural Electric Cooperative Association

(NRECA); Edison Electric Institute (EEI); U.S. Clean Heat & Power Association (U.S. 

Clean Heat & Power); Southern Company, Inc. (Southern); and Tayrn Rucinski (an

individual). Southern filed on behalf of Alabama Power Company, Georgia Power

Company, Gulf Power Company, and Mississippi Power Company.

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requirement to file a Form No. 556 in order to be a QF. Most of the commenters agree in

concept with the Commission’s proposal to establish a threshold at or below which

generating facilities would be exempt from the requirement to make a filing in order to be

a QF. However, the parties differ on the appropriate size of such a threshold.

Commission Determination

15. The Commission adopts the NOPR proposals to: (1) remove the contents of the

Form No. 556 from the regulations, and, in their place, to provide that an applicant

seeking to certify the QF status of a small power production or cogeneration facility must

complete, and electronically file, the Form No. 556 that is in effect at the time of filing;

(2) revise and reformat the Form No. 556 to clarify the content of the form and to take

advantage of newer technologies; (3) exempt generating facilities with net power

production capacities of 1 MW or less from the QF certification requirement; (4) codify

the Commission’s authority to waive the QF certification requirement for good cause; (5)

extend to all applicants for QF certification the requirement (currently applicable only to

applicants for self-certification of QF status) to serve a copy of a filed Form No. 556 on

the affected utilities and state regulatory authorities; (6) eliminate the requirement for

applicants to provide a draft notice suitable for publication in the Federal Register; (7)

clarify, simplify or correct certain sections of the regulations; and (8) change to the

exemption of QFs from the Federal Power Act,

21

and to the exemption of QFs from the

21 18 CFR 292.601.

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Public Utility Holding Company Act of 2005 (PUHCA) and certain State laws and

regulations

22 to make clear that certain small power production facilities that satisfy the

criteria of section 3(17)(E) of the Federal Power Act qualify for those exemptions.

16. The revisions to the Form No. 556 and the procedures for filing the Form No. 556

are informed by the Commission’s experience both with administering the Form No. 556

and with new technologies for electronic data collection that have become available since

the Form No. 556 was first established by Order No. 575 in 1995.

23 The changes will

increase the effectiveness of the Commission’s policies encouraging cogeneration and

small power production, as required by section 210 of the Public Utility Regulatory

Policies Act of 1978 (PURPA).

24

B. Revisions to 18 CFR 131.80

NOPR Proposal

17. Currently, § 131.80 of the Commission regulations contains the text of Form No.

556 as well as instructions on how to complete the form. In the NOPR, the Commission

proposed that § 131.80 of the Commission’s regulations will no longer contain Form No.

556. In place of the current language, we proposed to require in § 131.80(a) that any

22 18 CFR 292.602.

23 Streamlining of Regulations Pertaining to Parts II and III of the Federal Power

Act and the Public Utility Regulatory Policies Act of 1978, Order No. 575, 60 FR 4831

(Jan. 25, 1995), FERC Stats. & Regs. ¶ 31,014, order on reh’g, Order No. 575-A,

71 FERC ¶ 61,121 (1995).

24 16 U.S.C. 824a-3.

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person seeking to certify a facility as a QF must complete and electronically file the Form

No. 556 then in effect and in accordance with the instructions then incorporated in that

form.

18. The Commission also proposed to require, through proposed § 131.80(c), that

applicants submit their QF applications (whether initial certifications or recertifications,

and whether self-certifications or applications for Commission certification)

electronically via the Commission’s eFiling website.

Comments

19. Most commenters support the Commission’s proposal to remove the contents of

the Form No. 556 from the regulations and to require applicants to electronically file the

Form No. 556 that is in effect at the time of filing.

20. Interstate Renewable supports the proposal that future changes to the form not

require a rulemaking, but would be reviewed by the Office of Management and Budget

following a solicitation of comments from the public on any proposed changes, but

requests assurance that the parties interested in commenting on future proposed changes

to Form No. 556 would receive the same notice and opportunity to comment that they

would have under a formal rulemaking. Southern requests the Commission not make

future changes to Form No. 556 without a formal rulemaking proceeding, arguing that if

Form No. 556 can be revised without a formal rulemaking it could harm QFs and

applicants by creating confusion.

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Commission Determination

21. The Commission adopts its proposal to remove the contents of the Form No. 556

from its regulations, and, in their place, to provide that an applicant seeking to certify QF

status of a small power production or cogeneration facility must complete, and

electronically file, the Form No. 556 that is in effect at the time of filing. Revising §

131.80, as proposed, will make it easier to clarify and correct the form, should such

changes prove necessary or appropriate in the future. Future changes to the form would

be reviewed by the Office of Management and Budget following a solicitation of

comments from the public on proposed changes, but would not require a formal

rulemaking. This treatment is consistent with how a number of other Commission

information collections are managed, including FERC Form Nos. 1, 1-F, 3-Q, 60, 80,

714, and 715, as well as the FERC Form No. 580 Interrogatory.

25

22. An electronic filing process will be faster, easier, less costly and less resourceintensive than hardcopy filing. An applicant filing electronically will receive an

acknowledgement that the Commission has received the application and a docket number

for the submittal much more quickly than it would by filing in hardcopy format. Also,

electronic filing will allow the Commission to electronically process QF applications,

dramatically reducing required staff resources and human error, and allowing the

Commission to identify patterns of reporting errors and noncompliance that would be

25 18 CFR 366.23.

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difficult to detect through manual processing. Finally, electronic filing of QF

applications will facilitate the compilation of QF data that could be made available to the

public. Each year Commission staff fields a number of requests for QF certification data

from private organizations, researchers and other government agencies. Requiring

applicants to file in electronic format will make it possible to respond to many more such

requests, and/or to publish compiled QF data on the Commission’s website.

23. In response to Interstate Renewable’s comments, we note that parties will have an

opportunity in response to a solicitation for comments under the Paperwork Reduction

Act to comment on any future proposed revisions to the Form No. 556. We note that this

is similar to the comment procedures currently provided under the Commission’s

rulemaking process. For this reason, we also deny Southern’s request to maintain the

Form No. 556 in the regulations and to continue to require a Commission rulemaking for

any changes to the form.

C. Revisions to 18 CFR 292.203

NOPR Proposal

24. Section 292.203 of our regulations

26 lists the general requirements for QF status.

For a qualifying small power production facility, those requirements currently state that

the facility must meet the maximum size criteria specified in § 292.204(a), meet the fuel

use criteria specified in § 292.204(b), and must have filed a notice of self-certification or

26 18 CFR 292.203.

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an application for Commission certification that has been granted. For a qualifying

cogeneration facility, those requirements currently state that the facility must meet any

applicable operating and efficiency standards provided in § 292.205(a) and (b), and that

the facility must have filed a notice of self-certification or an application for Commission

certification that has been granted.

25. In the NOPR, the Commission proposed to correct an inadvertent error in §

292.203(b)(1) of our regulations.

27 Order No. 671 implemented additional technical

requirements for certain cogeneration facilities in § 292.205(d), but § 292.203(b)(1) was

not updated to reflect that a facility must comply with these new requirements (if

applicable) in order to be a qualifying cogeneration facility. The Commission proposed

to add the reference to § 292.205(d) in § 292.203(b). Because the technical requirements

of § 292.205(d) are not “operating and efficiency standards,” the Commission proposed

to amend § 292.203(b) to delete the phrase “operating and efficiency standards” and to

replace it with the phrase “standards and criteria.”

26. Finally, the Commission sought comments on whether to add a § 292.203(d)

which would (1) exempt certain small facilities from the requirement to make a filing for

qualifying status, and (2) would make explicit the Commission’s authority to grant

waiver of the filing requirement upon a showing of good cause.

28

27 18 CFR 292.203(b)(1).

28 Citing Ashland Windfarm, LLC, 124 FERC ¶ 61,068 (2008) (Commission

granted waiver of the filing requirement for QF status).

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27. The Commission also proposed a Form No. 556 exemption with a 1 MW

threshold. The Commission explained that, while electronic filing of QF certifications

has many benefits, some of the parties submitting applications for certification of QF

status are small entities that consider the cost of legal representation to be burdensome

and/or that lack access to the computer facilities necessary to make an electronic filing.

To address this concern, the Commission proposed to amend § 292.203 to exempt the

applicants with a net power production capacity of 1 MW or less, from the requirement to

make any filing with the Commission in order to be a QF.

Comments

28. No commenters oppose codifying the Commission’s authority to waive the QF

certification requirement for good cause.

29. Commenters generally agree in concept with the Commission’s proposal to

establish a net power production capacity threshold at or below which generating

facilities would be exempt from a filing requirement in order to be a QF. However, they

differ on what threshold the Commission should establish. NRECA agrees with the

proposal to set a threshold of 1 MW for solar, wind, and hydropower facilities. However,

NRECA requests the Commission establish a 50 kW threshold for facilities relying on

other resources that are subject to significant requirements covering the type of fuel used

as a primary energy source, fuel efficiency, and/or the fundamental use of the energy

produced. Sun Edison and Interstate Renewables request a higher threshold of 2 MW to

(among other things) conform with the Commission’s Small Generator Interconnection

Procedures (SGIP) “Fast Track” threshold, and, according to Sun Edison to cover all

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retail solar installations. Also, Interstate Renewables seeks clarification that the

Commission will allow small power production facilities to file an application for

Commission certification notwithstanding the proposed exemption.

30. EEI and Southern request the Commission to establish the threshold at 100 kW.

EEI argues that the 1 MW threshold is too high and does not accurately reflect the typical

production capacity of the small residential generation technologies the Commission

appears to be targeting. EEI suggests on-site residential power generation technologies

(such as solar panels) are typically on the order of 5 kW output. Southern argues that

most residential generators (e.g., solar panels on houses), for which this exemption may

be appropriate, have a nameplate capacity of 10 kW or less and that an exemption up to 1

MW could allow many businesses which should have access to the legal representation

and computer facilities needed to electronically file a Form No. 556 to avoid the QF

certification process. Taryn Rucinski also requests that the Commission significantly

decrease the proposed 1 MW threshold, if the Commission’s intention is to exempt

residential or truly small facilities.

31. Southern requests the following clarifications: (1) QFs that are exempt from filing

a Form No. 556 may still be required to provide notice or attestation to the relevant

electric utilities that the facility is in fact a QF; (2) a utility may rely upon such a notice

or attestation; and (3) an exempt QF should be required to provide important information

to the electric utility, including principal components of the facility (electric generators,

transformers, switchyard equipment), fuel type, maximum gross and net output, expected

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installation and operation dates as required to determine the impact of the QF on the

safety and reliability of the electric system.

32. EEI also requests clarification on a number of matters related to an exemption

threshold. Specifically, EEI requests the Commission also provide the following: (1)

clarification that utilities and/or state commissions may require proof that a facility meets

the requirements to become a QF and may still require the facility to provide “necessary

technical design information” through “another form of attestation” that the facility meets

the eligibility requirements to be a QF; (2) clarification that disputes regarding the QF

eligibility of facilities that are not required to submit filings may be brought to the

Commission for resolution; (3) clarification that a utility may terminate or otherwise

abrogate the QF contract of a facility that is exempt from filing requirements if it finds

that the facility in fact does not meet the criteria to be considered a QF, or the facility

owner made fraudulent or false representations regarding its satisfaction of QF eligibility

criteria; (4) that any increase in power production capacity requires a new

Interconnection Request and that certain changes other than power production capacity

increase also may trigger the Material Modification provisions of the Commission’s

Interconnection Procedures; (5) revision to § 292.310 of the Commission’s regulations to

require a utility that is seeking relief from PURPA mandatory purchase obligations to

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provide only the name and address of any QF that is exempt from filing with the

Commission to obtain QF status.

29

Commission Determination

33. The Commission adopts the NOPR proposal to update § 292.203(b) to reflect that

a qualifying cogeneration facility must comply with any applicable requirements in

§ 292.205(d), and to make explicit the Commission’s authority to grant waiver of the

filing requirement upon a showing of good cause.

34. The Commission also adopts the NOPR proposal to add a § 292.203(d) to exempt

facilities with a net power production capacity of 1 MW or less from the requirement to

make a filing with the Commission in order to be a QF. The Commission notes that, until

the effective date of Order No. 671, no filing, either of a self-certification or an

application for Commission certification, was needed for a facility to claim QF status.

30

In instituting a filing requirement for QF status in Order No. 671, the Commission,

among other things, explained that requiring a filing would help ensure that a “new”

29 EEI notes that § 292.310 information collection is the subject of the

Commission’s current request for OMB renewal of FERC-912 in Docket IC09-912-000.

30 While not required, a facility seeking to claim QF status had the option of filing

a self-certification or an application for Commission certification, and many facilities

chose to do so. Here, as we explain below, we are adopting an exemption from the

requirement to file for facilities with a net power production capacity of 1 MW or less.

As before, though, while not required, a facility with a net power production capacity of 1

MW or less seeking to claim QF status has the option of filing a self-certification or an

application for Commission certification should it choose to do so.

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cogeneration facility would not be able to claim QF status without making a filing;

31 the

Commission believed that the Congressional mandate to tighten the standards for

cogeneration facilities required that a filing, either a self-certification or an application

for Commission certification, be made by an entity claiming QF status.

32 However, for

facilities that are comparatively small, such as solar generation facilities installed at

residences or other relatively small electric consumers such as retail stores, hospitals, or

schools (and, in fact, many of the filings received in recent years involve just such small

solar and wind-powered facilities), there may not be as compelling a need for filings with

the Commission for QF status.

35. The Commission adopts the originally-proposed 1 MW filing threshold for

exemption from the requirement to make a filing for QF status. We find that a 1 MW

threshold, consistent with PURPA’s mandate,

33 encourages QFs – both cogeneration and

small power production – by eliminating the burden of filing. And a 1 MW threshold

appropriately balances the competing claims of those seeking a lower threshold and those

seeking a higher threshold. A lower threshold, while perhaps exempting facilities

installed at residences, would nevertheless continue to impose a requirement to file on

31 As noted below, over the last five years, the percentage of facilities that are

cogeneration facilities 1 MW or smaller filing for QF status has proven to be

comparatively small.

32 Order No. 671, FERC Stats. & Regs. ¶ 31,203 at P 81.

33 See 16 U.S.C. 824a-3(a).

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facilities, such as facilities installed at retail stores, hospitals, or schools, that are among

the small facilities that PURPA was equally intended to promote. Facilities larger than 1

MW, however, represent a significant departure from the smallest generation (residential,

retail, hospitals, schools, etc.) and such larger facilities should not find the filing

requirement for QF status to represent an undue burden. Facilities over 1 MW would

typically require a significant capital outlay, on the order of hundreds of thousands or

millions of dollars, and the additional burden, both financial and otherwise, of filing with

the Commission will be comparatively minimal. Moreover, looking at QF filings for the

last five years, we see that a substantial portion of such QF filings are from smaller

facilities. QF certification filings from facilities 1 MW or smaller represented

approximately 48 percent of all QF filings. The filings from these facilities, however,

represented only a small percentage of the total capacity being certified as QFs; filings

from facilities 1 MW or smaller represented only approximately one half of one percent

of QF capacity certified. Given these figures, the need for filings from such facilities is

equally small; such facilities, whether or not they are required to file a Form 556, would

rarely, if ever, not be in compliance with the standards and criteria for QF status.

36. We see no significant benefit to NRECA’s suggestion that we adopt a 1 MW

threshold for facilities fueled by renewable resources but a separate, lower threshold for

facilities fueled by other resources. In this regard we note that from 2006 to date there

were 2,142 Form 556 filings made by facilities 1 MW and smaller. Of those, only three

percent were made by cogeneration facilities, with the rest being small power production

facilities, and 90 percent were made by solar-powered and wind-powered small power

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production facilities (the rest were made by other small power production facilities).

Thus, the vast majority of the 1 MW and smaller QFs are the solar-powered and windpowered facilities that NRECA agrees should have a 1 MW threshold. To the extent that

NRECA and others believe that small facilities fueled by other resources should be

subject to the higher level of scrutiny that a Form 556 filing enables, we discuss below

means to monitor compliance with the criteria for QF status that are available to

purchasing utilities.

37. In exempting smaller generating facilities from the requirement to file a Form 556

in order to obtain QF status, the Commission is simply reverting, for these 1 MW and

below facilities only, back to the policy that existed prior to Order No. 671, where QF

status did not depend on such a filing. At that time, a facility’s QF status was dependent

only on whether the facility met the technical criteria for QF status, and was not

dependent upon the applicant having made a certification filing with the Commission.

38. A transacting utility, of course, needs necessary technical information from a QF

in order to safely and reliably interconnect and transact with the QF, and we would

expect a QF to provide such information.

34 And a purchasing electric utility currently

may contest a facility’s QF status if it does not agree with the facility’s claim to that

34 Such information would include principal components of the facility (electric

generators, transformers, switchyard equipment), fuel type, maximum gross and net

output, expected installation and operation dates as required to determine the impact of

the QF on the safety and reliability of the electric system. A purchasing utility may also

ask a QF that has not filed a Form 556 to provide the utility an attestation that the QF

meets the requirements for QF status.

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status. Thus, utilities currently may file a petition for revocation of QF status for any

facility that holds itself out as a QF but which the utility reasonably believes does not

meet the requirements for QF status,

35 just as they could prior to Order No. 671. The

Commission has not proposed to change these regulations in this proceeding.

39. Electric utilities, however, may not refuse to purchase electric energy from a QF

that is exempt from the requirement that it file a Form 556, or unilaterally terminate or

otherwise abrogate a legally enforceable obligation or a contract with a QF that is exempt

from the requirement that it file a Form 556, absent a favorable finding by the

Commission in response to a petition for revocation of QF status.

40. The Commission agrees with Interstate Renewables that facilities exempt from the

QF filing requirement for QF status may (at their option) file a self-certification or an

application for Commission certification notwithstanding the exemption.

41. The Commission declines to address, as beyond the scope of this proceeding,

EEI’s requests (1) to modify 18 C.F.R. § 292.310 to require a utility that is seeking relief

from PURPA mandatory purchase obligations to provide only the name and address of

any QF that is exempt from filing with the Commission to obtain QF status,

36 and (2) for

35 18 CFR 292.207(d).

36 We note, however, that the Commission does not expect a utility to provide, in a

PURPA section 210(m) filing, a QF docket number for a potentially-affected QF that has

not filed, or not yet filed, for QF status. Similarly, in a PURPA section 210(m) filing,

where the potentially affected QF’s plans are not sufficiently definite such that the QF

does not, in fact, know the information required for the filing so that a filing utility does

(continued...)

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the Commission to remind QFs that “any increase in MW requires a new Interconnection

Request and that certain changes other than MW increase also may trigger the Material

Modification provisions of the Commission’s Interconnection Procedures.”

D. Revisions to 18 CFR 292.204

NOPR Proposal

42. Section 3(17)(E) of the Federal Power Act provides that an “eligible solar, wind,

waste or geothermal facility” is a facility which produces electric energy solely by the

use, as a primary energy source, of solar energy, wind energy, waste resources or

geothermal resources, but only if such facility meets certain criteria for dates of

certification and construction. Section 3(17)(A) of the Federal Power Act provides that

any eligible solar, wind, waste, or geothermal facility is a small power production

facility, regardless of its size. The Commission implemented these sections of the

Federal Power Act in § 292.204(a), including the statement that there are no size

limitations for “eligible” solar, wind or waste facilities,

37

as defined by section 3(17)(E)

of the Federal Power Act. The regulation then states that, for “a non-eligible facility,” the

size limitation for a qualifying small power production facility is 80 MW.

not have information required by section 292.310 of our regulations, the filing utility may

state that it does not have the information and state why the information is not available.

37 The Commission pointed out in the NOPR that “geothermal” was inadvertently

omitted when the regulation was written. However, the Commission explained that the

proposed changes obviate the need to correct this omission.

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43. In the NOPR, the Commission explained that the wording of § 292.204(a) has

created confusion for many applicants. Applicants not familiar with section 3(17)(A) or

(E) of the Federal Power Act frequently confuse the statutory concept of “eligibility”

with more general questions of whether a facility is eligible for QF status. They often

assume that an “eligible facility” is any facility that is eligible for qualifying status. In an

attempt to reduce such confusion, the Commission proposed to revise § 292.204(a) to be

more clear (avoiding using the term “eligible”) while achieving the same regulatory

outcome as the current § 292.204(a).

Comments

44. No comments were received on the Commission’s proposal to clarify the wording

of § 292.204(a). However, EEI requests that the Commission revisit the “one-mile rule”

used to determine whether two facilities are part of the same QF for purposes of

§ 292.204(a), and asks that the Commission adopt a rebuttable presumption that facilities

on sites located more than one mile apart are independent for purposes of QF

certification, but that utilities would be allowed to rebut this presumption upon a showing

that the facilities, although located more than a mile apart, are “part of a common

enterprise” and should thus be considered as a single entity, not entitled to more separate

certifications of QF status.

Commission Determination

45. The Commission adopts the NOPR proposal to revise § 292.204(a) to be more

clear (avoiding using the term “eligible”) while achieving the same regulatory outcome.

The Commission declines, as beyond the scope of this proceeding, the request by EEI to

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adopt a presumption that facilities on sites located more than one mile apart are

independent for purposes of QF certification, and that such presumption be rebuttable

based on considerations EEI enumerates.

38

E. Revisions to 18 CFR 292.205

NOPR Proposal

46. In the NOPR, the Commission explained that the text of § 292.205(d) of the

Commission’s regulations

39 contains an error in the description of the new cogeneration

facilities that are subject to the requirements of §§ 292.205(d)(1) and (2). Section

292.205(d) provides that the following facilities are subject to these requirements:

any cogeneration facility that was either not certified as a qualifying cogeneration

facility on or before August 8, 2005, or that had not filed a notice of selfcertification, self-recertification or an application for Commission certification or

Commission recertification as a qualifying cogeneration facility under § 292.207

of this chapter prior to February 2, 2006, and which is seeking to sell electric

energy pursuant to section 210 of the Public Utility Regulatory Policies Act of

1978, 16 U.S.C. 824a-1. [

40

]

47. From this language, the criteria for QF status include whether or not a

cogeneration facility was “certified as” a qualifying cogeneration facility by August 8,

2005.

41 However, the text of section 210(n)(2) of PURPA states that the Commission’s

38 We note that the one-mile rule has been part of the Commission’s regulations

since the initial implementation of PURPA.

39 18 CFR 292.205(d).

40 Id. (emphasis added).

41 The significance of August 8, 2005 is that it is the date on which the Energy

Policy Act of 2005 was signed into law.

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prior cogeneration requirements shall continue to apply to any facility that “was a

qualifying cogeneration facility on [August 8, 2005].”

42 Furthermore, at the time of

enactment of EPAct 2005, the Commission’s regulations did not require that a facility

that complied with the requirements for QF status be self or Commission certified in

order to be a QF.

43 As such, there were many facilities that were QFs on August 8, 2005,

even though they were not self or Commission certified as QFs by that date. To correct

this error, the Commission proposed to strike the words “certified as” from the first

sentence of § 292.205(d).

48. Section 210(n)(2) of PURPA also states that the Commission’s prior cogeneration

requirements will continue to apply to any facility that “had filed with the Commission a

notice of self-certification, self recertification or an application for Commission

certification under 18 CFR § 292.207 prior to [February 2, 2006].”

44 The Commission

implemented this provision in § 292.205(d) by not applying the new cogeneration

requirements to any cogeneration facility that had filed “a notice of self-certification,

self-recertification or an application for Commission certification or Commission

recertification as a qualifying cogeneration facility under § 292.207 of this chapter prior

to February 2, 2006.” Because any facility that had recertified (either by selfrecertification or application for Commission recertification) prior to February 2, 2006

42 16 U.S.C. 824a-3(n)(2)(A) (emphasis added).

43 See Order No. 671, FERC Stats. & Regs. ¶ 31,203 at P 81.

44 16 U.S.C. 824a-3(n)(2)(B).

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must necessarily have made its original certification prior to February 2, 2006, the

Commission proposed in the NOPR that the inclusion of “self-recertification” and

“application for Commission recertification” in this provision is unnecessary. The

Commission proposed to simplify § 292.205(d) to state that the new cogeneration

requirements will not apply to any facility that had filed “a notice of self-certification or

an application for Commission certification as a qualifying cogeneration facility under §

292.207 of this chapter prior to February 2, 2006.”

Comments

49. No comments were filed on this proposal.

Commission Determination

50. The Commission adopts the NOPR proposals to strike the words “certified as”

from the first sentence of § 292.205(d) and to simplify § 292.205(d) to state that the new

cogeneration requirements will not apply to any facility that had filed “a notice of selfcertification or an application for Commission certification as a qualifying cogeneration

facility under § 292.207 of this chapter prior to February 2, 2006.” The proposed

revisions achieve the intended regulatory result of the existing regulatory text while

decreasing the complexity of the regulatory text, and thus the opportunities for confusion.

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F. Revisions to 18 CFR 292.207

1. Elimination of Pre-Authorized Commission Recertification

NOPR Proposal

51. In the NOPR, the Commission proposed to eliminate the procedure for preauthorized Commission recertification contained in § 292.207(a)(2).

45 That procedure

was established to give applicants for facilities that have been certified under the

procedures for Commission certification in § 292.207(b) a list of insubstantial alterations

and modifications that would not result in the revocation of QF status previously granted

by the Commission. Section 292.207(a)(2)(ii) also requires those making the changes

listed in § 292.207(a)(2)(i) to notify the Commission and each affected utility and State

regulatory authority of each such change.

52. The Commission explained in the NOPR that the pre-authorized Commission

recertification process did not require the use of Form No. 556, and that historically the

very few applicants that filed pre-authorized Commission recertifications did so in the

form of a letter describing the changes to their facilities. The Commission further

explained that, in this rulemaking, we were implementing procedures to require that selfcertifications or applications for Commission certification be made through the electronic

submission of a Form No. 556, and that removing the pre-authorized recertification

option ensures that all QF certification filings will be made electronically using a Form

45 18 CFR 292.207(a)(2).

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No. 556. The Commission explained that it could opt to revise the procedure for the preauthorized Commission recertification to require such filings to be made electronically

using a Form No. 556, but that such a revised procedure would be essentially identical to

the procedure for self-certification. The Commission explained that having such a

duplicative procedure appeared unjustified, particularly given the increase in complexity

to the Form No. 556 and the Commission’s regulations that would result from such a

procedure.

53. The Commission further noted that the types of changes listed in

§ 292.207(a)(2)(i) were somewhat misleading, as a strict reading of that list implied that

almost any change to a QF, no matter how small, would require notice to the Commission

and to the affected utilities and State regulatory authorities. In reality, the Commission

explained, changes falling below a certain level of importance were not significant

enough to justify the burden on the applicant of the recertification requirement.

Comments

54. EEI and Southern support the proposal to eliminate the procedure for preapproved Commission reauthorization.

55. Sun Edison, on the other hand, requests that the Commission retain a list of preapproved QF changes that would not require QF recertification, and otherwise clarify the

trigger threshold for recertification. In this regard, Sun Edison requests clarification of

what the Commission meant in the NOPR by its statement that “changes falling below a

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certain level of importance are not significant enough to justify the burden on the

applicant of the recertification requirement.”

46 In particular, Sun Edison argues that

changes in ownership should not trigger a re-filing requirement. Sun Edison suggests

that, if the Commission does not eliminate the reporting requirement for ownership

information as requested by Sun Edison and addressed below, the Commission consider

requiring that the applicant only provide ownership information once in Form No. 556

and that no subsequent change in QF ownership require a refiling of Form No. 556, or

that, for subsequent change in QF ownership, the applicant only provide the Commission

with a list of affected QF dockets, rather than submit an entire new Form No. 556 for

each QF in which it owns an interest. Finally, Sun Edison requests that for all or some

small power QFs, especially those without fuel or size limitations, the Commission grant

a “continued presumption” of QF status as long as such facilities continue to comply with

the criteria for QF status (other than the filing requirements) and do not change their

essential nature.

Commission Determination

56. The Commission will adopt the proposal to eliminate pre-authorized Commission

certification. The procedure was little used. Moreover, because pre-authorized

recertifications were usually filed in letter format, and the Commission is in this

46 NOPR Revision to Form, Procedures, and Criteria for Certification of

Qualifying Facility Status for a Small Power Production or Cogeneration Facility, 74 FR

54503 (Oct. 22, 2009), FERC Stats. & Regs. ¶ 32,648 at P 28.

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rulemaking requiring that all self-certifications and Commission certifications be made

through an electronic submission of a Form No. 556, removal of the pre-authorized

recertification option ensures that all QF certification filings will be made electronically

using a From No. 556.

57. The Commission declines Sun Edison’s request to include a list in the regulations

of specific changes that would not require QF recertification. Section 292.207(d) of the

Commission’s regulations provides that “if a qualifying facility fails to conform with any

material facts or representations presented by the cogenerator or small power producer in

its submittals to the Commission, the [applicant’s certification] may no longer be relied

upon.” This standard will continue to provide the basis for when recertification of

facilities is necessary, i.e., when facilities fail to conform with any material facts or

representations presented in an applicant’s previous certification.

47 This standard has

been in place for decades and, in our experience, has provided the guidance needed to

QFs to decide whether to make a recertification filing; in the absence of any evidence that

the process requires modification, we decline to do so at this time.

48

47 In response to Sun Edison’s request, we clarify that this standard also

establishes the “certain level of importance” (referred to in P 28 of the NOPR) of a

change below which the burden on the applicant of the recertification requirement is not

justified. NOPR at P 28.

48 We note that Commission staff may be contacted by QFs for informal guidance

whether a particular change to a QF may require a recertification.

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58. The Commission also denies Sun Edison’s request that the Commission consider

requiring that applicants need only provide ownership information in the initial

certification filing, and that no subsequent changes in QF ownership need be reported.

The Commission notes that the Commission determined in Order No. 671 that, despite

the elimination in EPAct 2005 of the ownership restrictions, ownership information

assists the Commission in monitoring potential discrimination in the provision of service

to customers and assists the Commission in reviewing the extent to which various QFs

should continue to be exempt from various provisions of the FPA and state laws.

49

Although the revised Form No. 556 adopted in this Final Rule relaxes, to some extent,

when a QF is required to disclose its owners,

50 the Commission’s finding in Order No.

671 about the usefulness of ownership information continues to be true today. Thus, we

will continue the QF ownership reporting requirement, including the requirement that any

change in material facts and representations triggers a recertification requirement. We

clarify, however, that the Commission will not consider a change in ownership to be a

change in material facts and representations made in the previous filing if no owner

49 Order No. 671 at P 110.

50 While the Commission found that utility owners should be disclosed, see id., the

Form No. 556 adopted in this Final Rule does not require disclosure of any owners with

less than a 10 percent equity interest in the facility.

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increases their equity interest by at least 10 percent from the equity interest previously

reported.

51

59. We also decline Sun Edison’s request that applicants be allowed, in

recertifications reporting ownership changes, to only provide the Commission with a list

of affected QF dockets rather than submit a new Form No. 556 for each QF in which it

owns a reportable interest. The Commission may, however, on a case-by-case basis,

choose to waive requirement to file Form No. 556.

2. Elimination of Procedures for Referring to Information From

Previous Certifications

NOPR Proposal

60. Section 292.207(a)(1)(iii) provides that subsequent notices of self-recertification

for the same facility may reference prior self-certifications or prior Commission

certifications, and need only refer to changes which have occurred with respect to the

facility since the prior notice or the prior Commission certification. In the NOPR, the

Commission proposed to delete this provision, and, as a result, to change the

Commission’s policy so that applicants are required to provide all of the information for

their facility in each Form No. 556 they submit with a self-recertification or an

application for Commission recertification.

51 To avoid any confusion, we note that the addition of an owner not previously

reported and that holds an equity interest of 10 percent or more would be a material

change that would require recertification.

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Comments

61. EEI concurs with the Commission’s proposal to delete § 292.207(a)(1)(iii) and

suggests the Commission also require all currently-certified QFs to re-file their

information electronically within two years after a final rule becomes effective.

62. On the other hand, U.S. Clean Heat & Power disagrees with the NOPR proposal,

and requests that the Commission retain the ability to reference prior notices or prior

Commission certifications and to refer only to changes which have occurred with respect

to the facility since the prior notice or certification. U.S. Clean Heat & Power argues

that, although the Commission characterizes the submission of all of the required

information as a “small, one-time burden,” for many applicants compiling such

information would require a significant amount of time.

Commission Determination

63. The Commission adopts the NOPR proposal to require applicants to provide all of

the information for their facility in each Form No. 556 they submit with a selfrecertification or an application for Commission recertification. The Commission adopts

the NOPR proposal to delete the provision in § 292.207(a)(1)(iii) that provides that

subsequent notices of self-recertification for the same facility may reference prior selfcertifications or prior Commission certifications, and need only refer to changes which

have occurred with respect to the facility since the prior notice or the prior Commission

certification.

64. This proposed change will result in greater transparency: during the processing of

routine QF petitions and periodic compliance reviews of self-certifications, the

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Commission frequently finds that the original certification data for some facilities

(particularly facilities originally certified in the 1980s) can be difficult to obtain.

Notwithstanding U.S. Clean Heat & Power’s claim, requiring the provision of full data in

a recertification would be a small, one-time burden for applicants, because applicants

may, after their first recertification subsequent to a Final Rule implementing this

proposal, simply download their previous electronically-filed Form No. 556 from

eLibrary and update the relevant responses to generate their new Form No. 556. Given

the significant benefit and the small, one-time burden, deletion of § 292.207(a)(1)(iii) is

appropriate.

65. We disagree with U.S. Clean Heat & Power’s assessment of the time requirements

associated with adopting this proposal, and find that, for most facilities that are properly

monitoring their compliance with the relevant QF standards, the burden even of

recreating the most complex cogeneration portions of the Form No. 556 is not

unreasonable.

52 Qualifying cogeneration facilities are, after all, required to comply with

operating and efficiency standards for both the 12-month period beginning with the date

the facility first produces electric energy, and any calendar year subsequent to the year in

which the facility first produces electric energy.

53 Applicants properly monitoring

52 U.S. Clean Heat & Power, representing the interests of combined heat and

power facilities, is presumably concerned with the relatively complex operating and

efficiency data that must be reported for qualifying cogeneration facilities.

53 18 C.F.R. §§ 292.205(a)(1), (a)(2) and (b); Order No. 671 at P 51.

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compliance with the QF requirements should have the data necessary to complete the

Form No. 556 reasonably accessible. We clarify, to the extent necessary, that applicants

which have archived their original filings need not necessarily undertake extensive

searches for those original filings, or undertake extensive efforts to recreate the data in

those original filings. Rather, current operating data can (and should) be used when

recertifying a facility, particularly if any material changes have been made to the

operation of the facility.

66. For small power production facilities the burden on applicants should be minimal,

and we note that no parties representing the interests of small power production facilities

have objected to this proposal.

67. We will not, however, impose the requirement, suggested by EEI, that existing

QFs not seeking recertification nevertheless be required to file a new Form 556 within

two years of the issuance of the Final Rule; where recertification is neither necessary nor

sought, the burden of such a filing is unjustified.

3. Elimination of Requirement to Provide a Draft Notice Suitable

for Publication in the Federal Register

NOPR Proposal

68. Section 292.207(a)(1)(iv) of our regulations

54

currently requires that notices of

self-certifications and self-recertifications for new cogeneration facilities be published in

54 18 CFR 292.207(a)(1)(iv).

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the Federal Register. Similarly, § 292.207(b)(4) of our regulations

55 requires that notices

of applications for Commission certification or recertification be published in the

Federal Register. For these applications that require publication of notices in the

Federal Register, §§ 292.207(a)(1)(iv) and (b)(4) require that applicants provide with

their filing a draft notice suitable for publication in the Federal Register on electronic

media.

69. In the NOPR, the Commission proposed to continue to publish notices of selfcertification and self-recertification for new cogeneration facilities and applications for

Commission certification and recertification in the Federal Register, and included that

requirement in the proposed § 292.207(c). However, the Commission proposed to delete

§§ 292.207(a)(1)(iv) and (b)(4) in order to eliminate the requirement that applicants for

those types of filings provide a draft notice suitable for publication in the Federal

Register.

Comments

70. No comments were received on this issue.

Commission Determination

71. The Commission adopts the NOPR proposal to delete §§ 292.207(a)(1)(iv) and

(b)(4) in order to eliminate the requirement that applicants for those types of filings

provide a draft notice suitable for publication in the Federal Register. The Commission

55 18 CFR 292.207(b)(4).

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will be able to automatically generate Federal Register notices directly from the

electronic Form No. 556 data, without requiring a draft notice be submitted by the

applicant.

4. Requirement to Serve a Copy of a Form No. 556 on Affected

Utilities and State Commissions

NOPR Proposal

72. Currently applicants for self-certification are required to serve a copy of their QF

self-certification filings on each electric utility with which they expect to interconnect,

transmit or sell electric energy to, or purchase supplementary, standby, back-up and

maintenance power from, and the State regulatory authority of each state where the

facilities and each affected electric utility is located.

56 No such requirement currently

exists for applications for Commission certification.

73. In the NOPR, the Commission proposed to amend the regulations to require that

any applicant filing a self-certification, self-recertification, application for Commission

certification or application for Commission recertification must serve a copy of its filing

on each affected electric utility and State regulatory authority.

56 18 CFR 292.207(a)(ii).

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Comments

74. Interstate Renewables suggests exempting small QFs that will be exempt under

proposed § 202.203(d)(1) from the requirement to file a Form 556 from the notice

requirements contained in proposed § 292.207(c)(2).

75. Interstate Renewables also requests that proposed § 292.207(c)(2) be modified to

provide that a utility is not required to purchase electric energy from a facility until 5

days (rather than 90 days) after the facility meets the notice requirements in section (c)(1)

of this section.

Commission Determination

76. The Commission adopts the proposal to require that any applicant filing an

application for Commission certification, or an application for Commission

recertification, in addition to those filing for self-certification or self-recertification, must

serve a copy of its filing on each affected electric utility and State regulatory authority.

We see no justification for those filing an application for Commission certification or

Commission certification to be exempt from this requirement.

77. The Commission denies Interstate Renewables’s request to decrease the time

provided in § 292.207(c)(2) for an electric utility to begin purchasing electric energy

from 90 days to 5 days; 90 days has long been part of the Commission’s regulations and

we are not persuaded to change it. However, we instead adopt in § 292.207(c)(2) the

regulatory text more closely aligned with that § 292.207(c), so that § 292.207(c)(2) will

read as follows:

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(2) Facilities of 500 kW or more. An electric utility is not required to purchase

electric energy from a facility with a net power production capacity of 500 kW or

more until 90 days after the facility notifies the utility that it is a qualifying

facility, or 90 days after the utility meets the notice requirements in paragraph

(c)(1) of this section.

As a result of adopting this language, § 292.207(c)(2) will maintain the current policy

that the 90-day requirement can be satisfied with notification to the utility, instead of

tying it to a filing with the Commission. In light of this change, we also decline Interstate

Renewables’ proposal to begin § 292.207(c)(2) with the phrase “Except for a facility

exempt under § 202.203(d)(1).” Because, as explained above, a facility will be able to

notify the electric utility without necessarily having to make a Form No. 556 filing with

the Commission, we see no reason to modify this 500 kW threshold.

5. Other Proposed Changes

NOPR Proposal

78. In the NOPR, the Commission proposed to remove reference to “pre-authorized

Commission recertification” in the title of § 292.207(a) and in the text of

§ 292.207(d)(1)(i). The Commission also proposed to delete the current § 292.207(a)(1),

and to replace it, in § 292.207(a), with a procedure for self-certification that incorporates

clear reference to proposed § 131.80 and to the notice requirements in § 292.207(c).

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Comments

79. No comments were received on this issue.

57

Commission Determination

80. The Commission adopts the NOPR proposal to remove reference to “preauthorized Commission recertification” in the title of § 292.207(a) and in the body text of

§ 292.207(d)(1)(i). The Commission also adopts the NOPR proposal to delete the current

§ 292.207(a)(1), and to replace it, in § 292.207(a), with a procedure for self-certification

that incorporates clear reference to proposed § 131.80 and to the notice requirements in

§ 292.207(c).

G. Revisions to 18 CFR 292.601

NOPR Proposal

81. In the NOPR, the Commission proposed to amend § 292.601(a) of its regulations

58

to make clear the exemption from the specified Federal Power Act sections is applicable

to any facility that meets the definition of an “eligible solar, wind, waste or geothermal

facility” under section 3(17)(E) of the Federal Power Act. Section 4 of the Solar, Wind,

57 Sun Edison did file comments, summarized and discussed above, opposing the

elimination of the pre-authorized Commission recertification procedure from the

regulations; however, in the current section the Commission addresses only the editorial

revisions to the regulations to accommodate the policy determinations made by the

Commission above.

58 18 CFR 292.601(a).

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Waste, and Geothermal Power Production Incentives Act of 1990 (Incentives Act)

59

provides that “eligible facilities” shall not be subject to the size limitations contained in

§ 292.601(b) of the Commission’s regulations, unless the Commission otherwise

specifies. The Commission there explained that it had found that the size limitation for

eligibility for the exemptions contained in §§ 292.601 and 292.602, otherwise applicable

to other small power production facilities, does not apply to “eligible facilities.”60

Comments

82. No comments were filed on this proposal.

Commission Determination

83. The Commission adopts the NOPR proposal to amend § 292.601(a) of its

regulations to make clear the exemption from the specified Federal Power Act sections is

applicable to any facility that meets the definition of an “eligible solar, wind, waste or

geothermal facility” under section 3(17)(E) of the Federal Power Act.

84. We note that, because § 292.602(a) states that the exemption from the PUHCA

and State laws and regulations provided by that section applies to any QF described in

§ 292.601(a), and because the QFs described by § 292.601(a) include all QFs other than

those described by § 292.601(b), the Incentives Act’s exemption of “eligible facilities”

59 Pub. L. No. 101-575, 104 Stat. 2834 (1990), as amended by Pub. L. No. 102-46,

105 Stat. 249 (1991).

60 Cambria Cogen Co., 53 FERC ¶ 61,459, at 62,619 (1990).

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from the size limitation contained in § 292.601(b) also has the effect of making such

facilities eligible for the exemptions from PUHCA and State laws and regulations.

H. Revisions to 18 CFR 292.602

NOPR Proposal

85. In the NOPR, the Commission proposed to amend § 292.602(c)(1) to clarify that it

is only the QFs described in paragraph (a) of that section that may take advantage of the

exemptions provided in § 292.602, and to correct a typographical error. Finally, the

Commission proposed to correct a typographical error in the title of § 292.602.

Comments

86. No comments were filed on this proposal.

Commission Determination

87. The Commission adopts the NOPR proposal to amend § 292.602(c)(1) to clarify

that it is only the QFs described in paragraph (a) of that section that may take advantage

of the exemptions provided in § 292.602, and to correct a typographical error. The

Commission also adopts the NOPR proposal to correct a typographical error in the title of

§ 292.602.

IV. Proposed Revisions to the Form No. 556

A. General

NOPR Proposal

88. In the NOPR, the Commission proposed to make a number of changes to the

content and organization of the Form No. 556. The proposed revised Form No. 556 was

made available for download from the Commission’s QF website, and was published in

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the Federal Register.

61 As discussed above, the Commission did not propose to include

the content of the Form No. 556 in the Commission’s regulations. Rather, the

Commission proposed that the changed Form No. 556, once approved, will become “the

Form No. 556 then in effect” for purposes of proposed § 131.80. The Commission

therefore gave notice of its proposed changes to Form No. 556, and explained that it

intended to submit the revised Form No. 556 for OMB approval pursuant to the

provisions of the Paperwork Reduction Act,

62

after receiving and considering comments

on those changes.

89. In addition to the structure of the proposed Form No. 556, the Commission

proposed to include in the Final Rule version of the form data controls, automatic

calculations, error handling and other programmatic features to assist applicants and

maintain data quality.

90. The Commission explained that most of the proposed changes to the Form No.

556 were intended to make use of new electronic data structuring. The Commission

further explained that while, in most cases, it proposed to collect the same data that is

currently collected in the Form No. 556, the new form would allow the Commission to

more efficiently administer the QF program. The Commission explained that staff

spends a significant amount of time working with applicants that either misunderstand the

61 http://www.ferc.gov/QF. The revised Form No. 556, as adopted, will not be

attached to the Microsoft Word version of this Final Rule, but will be published in the

Federal Register.

62 44 U.S.C. 3507(d).

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current form, pay insufficient attention to the informational requirements on the current

form, or both. The Commission explained that, by making Form No. 556 easier to

understand, it would make the submission of Form No. 556 less burdensome to

applicants.

91. The Commission further explained that its experience had been that the openended nature of the current Form No. 556 data collection—where applicants are able to

type any answer or no answer in response to an item—often resulted in applicants

incorrectly answering or skipping items or portions of items that they mistakenly feel do

not apply to them. The Commission proposed to implement improved instructions, use a

greater number of questions which are individually narrower in scope, and use certain

electronic data controls and validation options, such as checkboxes and data entry fields

that only accept data formatted in the appropriate way to minimize these problems.

Comments

92. No comments were filed on this proposal.

Commission Determination

93. We will adopt the new revised Form No. 556, as proposed in the NOPR, with

minor clarifications and corrections. As explained in the NOPR, we expect that the

revised form both will be less burdensome to those filling out the form and will provide

the Commission with information that is more accurate and readily accessible.

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B. Name of Form

NOPR Proposal

94. In Order No. 575, the Commission adopted San Diego Gas and Electric

Company’s suggestion to title the Form No. 556 to make clear that it applies to proposed

as well as to existing facilities.

63 In the NOPR, the Commission did not propose to

change the applicability of the form to proposed and existing facilities; however, as part

of its attempt to make the Form No. 556 as simple and clear as possible, the Commission

proposed to shorten the name of the form to “Certification of Qualifying Facility (QF)

Status for a Small Power Production or Cogeneration Facility.”

Comments

95. No comments were filed on this proposal.

Commission Determination

96. The Commission adopts the NOPR proposal to shorten the name of the Form No.

556 to “Certification of Qualifying Facility (QF) Status for a Small Power Production or

Cogeneration Facility.”

C. Geographic Coordinates

NOPR Proposal

97. In the NOPR, the Commission explained that, over the years, it had received a

number of inquiries from the public seeking certain information about QFs. Many of

63 Order No. 575, 60 FR 4831 (Jan. 13, 1995), FERC Stats. & Regs. ¶ 31,014, at

31,282 and 31,285.

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these inquiries were from academics, research organizations or other government entities

performing studies of the effectiveness of PURPA and the Commission’s regulations

implementing PURPA. Often such inquiries have involved the locations of the QFs. The

Commission explained that, currently, location information is collected only through the

street address of the facility, even though some facilities in rural or wilderness areas do

not have a street address.

98. The Commission explained that it may be useful to researchers (as well as the

public in general, and affected electric utilities and State regulatory authorities in

particular) to have specific locational data for QFs, even for facilities that do not have

street addresses. The Commission explained that, in addition to having value for

researchers, such specific locational data would also provide a transparent means of

determining compliance with the size requirement for small power production facilities,

which is based in part on the distance between adjacent generating facilities. As such, the

Commission proposed to include a new line 3c that will require applicants for facilities

without a street address to provide the geographic coordinates (latitude and longitude) of

their facilities.

Comments

99. Southern supported this proposal. No other comments were filed on this proposal.

Commission Determination

100. The Commission adopts the NOPR proposal to include a new line 3c that will

require applicants for facilities without a street address to provide the geographic

coordinates (latitude and longitude) of their facilities. The text of line 3c directs

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applicants to the Geographic Coordinates section of the instructions on page 4 which

discusses several different ways through which applicants might obtain the geographic

coordinates of their facilities: through certain free online map services (with links

available through the Commission’s QF website); a GPS device; Google Earth; a

property survey; various engineering or construction drawings; a property deed; or a

municipal or county map showing property lines. Applicants are directed in line 3c to

provide their geographic coordinates to three decimal places, and are given a simple

formula for how to convert degrees, minutes and seconds to decimal degrees.

D. Ownership

NOPR Proposal

101. In Order No. 671, the Commission eliminated the limitation on electric utility and

electric utility holding company ownership of QFs, but maintained the requirement that

applicants provide ownership information in the Form No. 556.

64

102. In the NOPR, the Commission explained that the wording of item 1c of the current

Form No. 556 has proven confusing with respect to the collection of ownership

information. In particular, the Commission explained that item 1c did not specify the

amount of equity interest in the facility above which the applicant is required to identify

the owner. For facilities with many owners, this can prove burdensome, particularly if

the ownership changes frequently.

64 Order No. 671, FERC Stats. & Regs. ¶ 31,203 at P 110.

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103. The Commission also explained that experience had shown that the current

wording of item 1c proves confusing to applicants with respect to which types of owners

(direct or upstream) they are supposed to identify.

104. The Commission proposed to clarify both the level of ownership above which

applicants are required to identify owners, and which information must be provided for

direct and upstream owners. First, while maintaining the current requirement that

applicants indicate the percentage of direct ownership held by any electric utility

65 or

holding company,

66 the Commission proposed to clarify in line 5a of the proposed Form

No. 556 that an applicant need only provide information for direct owners that hold at

least 10 percent equity interest in the facility.

67 Second, the Commission proposed to

require in line 5b that applicants identify all upstream owners that both (1) hold at least a

10 percent equity interest in the facility and (2) are electric utilities or holding companies.

Comments

105. EEI and Southern support the Commission’s clarification of level of ownership.

As discussed above, Sun Edison requests the Commission consider the legal basis for

65 As defined in section 3(22) of the Federal Power Act. 16 U.S.C. 796(22).

66 As defined in section 1262(8) of the Public Utility Holding Company Act of

2005. 42 U.S.C 16451(8)

67 The Commission explained in the NOPR that the 10 percent ownership

threshold was proposed to be consistent with the 10 percent ownership thresholds used in

the definition of a “holding company” in section 1262(8) of the Public Utility Holding

Company Act of 2005, 42 U.S.C. 16451(8), and in the definition of “affiliate” in 18 CFR

35.36(a)(9).

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requiring that ownership be tracked by the Commission and asks that changes in

ownership not trigger a re-filing requirement, or that the Commission consider requiring

that the QF owner only provide ownership information once in the original Form No. 556

and that no subsequent change in QF ownership require a refiling of Form No. 556, or

that, for a subsequent change in QF ownership, the QF owner only provide the

Commission with a list of affected QF dockets, rather than submit an entire new Form

No. 556 for each QF in which it owns an interest.

Commission Determination

106. The Commission adopts the NOPR proposal to clarify the level of ownership

above which applicants are required to identify owners, and which information must be

provided for direct and upstream owners. Specifically, the Commission, while

maintaining the requirement that applicants indicate the percentage of direct ownership

held by any electric utility

68 or holding company,69 the Commission adopts the NOPR

proposal to clarify in line 5a of Form No. 556 that an applicant need only provide

information for direct owners that hold at least 10 percent equity interest in the facility.

Also, the Commission adopts the NOPR proposal to require in line 5b that applicants

identify all upstream owners that both (1) hold at least a 10 percent equity interest in the

facility and (2) are electric utilities or holding companies.

68 As defined in section 3(22) of the Federal Power Act. 16 U.S.C. 796(22).

69 As defined in section 1262(8) of the Public Utility Holding Company Act of

2005. 42 U.S.C 16451(8)

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107. We deny Sun Edison’s requests that we either not collect this information, or

collect it only in connection with the original Form No. 556, or otherwise narrow the

collection of this information, for the reasons stated earlier in this Final Rule.

E. Fuel Use for Small Power Production Facilities

NOPR Proposal

108. Section 292.204(b) of the Commission’s regulations

70 allows small power

production facilities to use oil, natural gas or coal in amounts up to and including 25

percent of the total energy input to the facility as calculated during the 12-month period

beginning with the date the facility first produces electric energy and any calendar year

subsequent to the year in which the facility first produces electric energy. Such use of

oil, natural gas or coal is limited to certain purposes specified in section 3(17)(B) of the

Federal Power Act as implemented in § 292.204(b)(2) of the Commission’s regulations.

71

109. Item 7 of the current Form No. 556 requires applicants to describe “how fossil fuel

use will not exceed 25 percent of the total annual energy input limit,” and “how the use of

fossil fuel will be limited to the following purposes to conform to Federal Power Act

section 3(17)(B): ignition, start-up, flame stabilization, control use, and minimal

amounts of fuel required to alleviate or prevent unanticipated equipment outages and

emergencies directly affecting the public.” In the NOPR, the Commission explained that

experience with this item had indicated two problems. First, because applicants have

70 18 CFR 292.204(b).

71 18 CFR 292.204(b)(2).

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significant latitude in how they respond in the current Form No. 556, they often make

statements which do not, on their face, commit themselves to fuel use that would meet

the Commission’s requirements for qualifying small power production facilities. While

these responses are unlikely to represent an intentional attempt on the part of applicants

to circumvent the Commission’s regulations for fuel use, the statements could make

enforcement of the Commission’s regulations more difficult.

110. On the other hand, the Commission explained, applicants who were very specific

in their response to item 7 may have felt that they have committed themselves to only

engage in the particular uses they specified in their Form No. 556, despite the fact that the

Commission’s regulations may permit more flexibility in the use of fossil fuel.

111. The Commission thus proposed a simpler method of certifying compliance with

the Commission’s fuel use requirements for small power production facilities, one

intended to avoid these problems. Rather than requiring applicants to describe how they

will comply, the Commission proposed to simply state what the fuel use requirements

are, and to require the applicant to certify, by checking a box next to each requirement,

that they will comply. The Commission explained that this proposal will obligate the

applicant to comply with the stated requirements, while not creating an impression that

the applicant must limit its fuel use to some standard which is more stringent than that

established in the Commission’s regulations.

Comments

112. No comments were received on this issue.

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Commission Determination

113. Rather than continuing to require applicants to describe how they will comply with

the fuel use, the Commission adopts the NOPR proposal that Form No. 556 will simply

state what the fuel use requirements are, and require the applicant to certify, by checking

a box next to each requirement, that they will comply.

F. Mass and Heat Balance Diagrams for Cogeneration Facilities

NOPR Proposal

114. Item 10 of the current Form No. 556 requires applicants for qualifying

cogeneration facility status to provide a mass and heat balance diagram depicting average

annual hourly operating conditions. As part of item 10, applicants are required to provide

the following on their mass and heat balance diagrams: all fuel flow inputs in Btu/hr.

specified using lower heating value, separately indicating fuel inputs for supplementary

firing; average net electric output in kW or MW; average net mechanical output in

horsepower; number of hours of operation used to determine the average annual hourly

facility inputs and outputs; and working fluid flow conditions at input and output of

prime mover(s) and at delivery to and return from each useful thermal application.

Working fluid flow conditions required to be provided include the following: flow rates

in lbs./hr.; temperature in °F; pressure in psia; and enthalpy in Btu/lb.

115. In the NOPR, the Commission explained that some applicants had complained

that, for relatively simple cogeneration facilities, some of the information required is

meaningless or not known. For example, small diesel generators utilizing jacket water

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cooling systems to capture waste heat were often certified as qualifying cogeneration

facilities. Such systems typically have no steam at any point in the system, and instead

use pressurized water or an antifreeze solution to recover the waste heat and transport it

to the useful thermal application. For such systems, applicants had complained that

specifying pressure has no significance, since the effect of pressure on enthalpy (a

measure of thermal energy content) is negligible for liquids at standard conditions.

Likewise, applicants had complained that, since pressure in all-liquid systems is not an

important design variable, it was often not known to any degree of accuracy in such

systems.

116. The Commission also explained that some applicants had pointed out that, in

systems which were all liquid water, the extra effort required to determine and specify

enthalpy was not necessary. Since enthalpy in liquid water is a nearly linear function of

temperature (because the specific heat of water does not vary significantly under standard

conditions), specification of temperature at each required location and a specification of

the specific heat of the working fluid (usually water) is all that is necessary to describe

the energy balance of the cogeneration facility.

117. Agreeing with these points, the Commission proposed in the NOPR to include

language in new line 10b of the Form No. 556 indicating that, for systems where the

working fluid is liquid only (no vapor at any point in the cycle) and where the type of

liquid and specific heat of that liquid is clearly indicated on the diagram or in the

Miscellaneous section of the Form No. 556, only mass flow rate and temperature (not

pressure and enthalpy) need be specified.

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118. The Commission explained that its experience had shown that a relatively high

level of deficiency and rejection letters for QF applications were a result of

noncompliance with the requirements for the mass and heat balance diagram. The

Commission stated that this was likely due to a combination of the fact the requirements

for the mass and heat balance diagram were long, technical and not always clear, and the

fact that some applicants did not put sufficient effort and attention into ensuring

compliance. To improve reporting and to decrease future noncompliance, the

Commission proposed to require applicants for qualifying cogeneration facility status to

certify compliance with each of the requirements for the mass and heat balance diagram

by checking a box next to each written requirement. The Commission expected that, by

requiring applicants to proceed box by box through the individual requirements, which

would be stated more clearly than in the current Form No. 556, reporting would improve

and noncompliance would drop dramatically.

Comments

119. No comments were filed on this proposal.

Commission Determination

120. The Commission adopts the NOPR proposal to include language in new line 10b

of the Form No. 556 indicating that, for systems where the working fluid is liquid only

(no vapor at any point in the cycle) and where the type of liquid and specific heat of that

liquid is clearly indicated on the diagram or in the Miscellaneous section of the Form No.

556, only mass flow rate and temperature (not pressure and enthalpy) need be specified.

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121. The Commission also adopts the NOPR proposal to require applicants for

qualifying cogeneration facility status to certify compliance with each of the

requirements for the mass and heat balance diagram by checking a box next to each

written requirement. This should improve reporting and decrease noncompliance.

G. EPAct 2005 Cogeneration Facilities

NOPR Proposal

122. In response to EPAct 2005, the Commission implemented in Order No. 671

additional requirements for new cogeneration facilities selling power pursuant to section

210 of PURPA.

72 The Commission implemented the “productive and beneficial” and

“fundamental use” requirements of EPAct 2005 through the inclusion of a new section in

the Form No. 556 that required applicants to respond to the text of the statute, providing

applicants space to demonstrate compliance with EPAct 2005’s requirements. In the

NOPR, the Commission explained that, in practice, Form No. 556 had not provided

sufficient guidance to applicants whether their facilities enjoy a presumption of

compliance under § 292.205(d)(4) of the Commission’s regulations, or whether such

facilities fall within the safe harbor established by the “fundamental use test” in

§ 292.205(d)(3).

72 Congress in EPAct 2005, and the Commission in implementing EPAct 2005,

referred to the facilities subject to the EPAct 2005 requirements as “new” cogeneration

facilities. 16 U.S.C. 824a-3(n); 18 CFR 292.205(d). To avoid confusion that this “new”

label will create as time passes and such facilities are not “new” anymore (except with

respect to the date of the implementation of EPAct 2005), we will refer in the Form No.

556 to such facilities as “EPAct 2005 cogeneration facilities.”

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123. The Commission noted in the NOPR that, in implementing the “productive and

beneficial” requirement of EPAct 2005, the Commission essentially maintained its longstanding “usefulness” standard, except that what it deemed as presumptively useful was

now rebuttable.

73 The Commission explained that the current Form No. 556 requirement

that applicants demonstrate compliance both with the “productive and beneficial”

standard (in item 15) and the “useful” standard (in items 12, 13 and/or 14) could be

condensed and streamlined without degrading the information provided or the level of

Commission and public oversight of the QF program. The Commission proposed to

consolidate these requirements into the portion of the proposed Form No. 556 where

applicants demonstrate the “usefulness” of the thermal output (lines 12a, 12b, 14a, and

14b of the proposed form).

124. The Commission explained that the “fundamental use” requirement for EPAct

2005 cogeneration facilities, on the other hand, involved data collection that was specific

to EPAct 2005 facilities. As such, the Commission proposes to implement a new section

of the Form No. 556 entitled “EPAct 2005 Requirements for Fundamental Use of Energy

Output from Cogeneration Facilities.” This section would replace the current “For New

Cogeneration Facilities” section. The Commission proposed this new section to facilitate

an applicant’s determination, in accordance with the applicable regulations (1) whether

the EPAct 2005 cogeneration requirements apply to its facility, given the date on which

73 Order No. 671, FERC Stats. & Regs. ¶ 31,203 at P 17.

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the facility was originally a QF or originally filed for QF certification; (2) whether (if

applicable) its pre-EPAct 2005 facility is subject to EPAct 2005 by virtue of changes to

the facility which essentially make it a “new” EPAct 2005 facility; (3) whether its facility

is excluded from the “fundamental use” requirement by virtue of the fact that power will

not be sold from the facility pursuant to section 210 of PURPA; (4) whether its facility

enjoys a rebuttable presumption of compliance with the “fundamental use” requirement

by virtue of its small electric output; and/or (5) whether its facility complies with the

fundamental use requirement by virtue of meeting the fundamental use test established in

§ 292.205(d)(3) of the Commission’s regulations. If an applicant’s facility is found to be

subject to the EPAct 2005 requirements, but to fail the fundamental use test, then the

applicant is instructed by line 11d of the proposed Form No. 556 to provide a narrative

explanation of and support for why its facility meets the requirement that the electrical,

thermal, chemical and mechanical output of an EPAct 2005 cogeneration facility is used

fundamentally for industrial, commercial, residential or institutional purposes and is not

intended fundamentally for sale to an electric utility, taking into account technological,

efficiency, economic, and variable thermal energy requirements, as well as state laws

applicable to sales of electric energy from a QF to its host facility.

125. Additionally, in proposed line 11c, applicants are required to provide information

to be used in determining whether a modification to a pre-EPAct 2005 cogeneration

facility might be so significant that the facility should be considered a new facility that

would be subject to the additional requirements (if applicable) for EPAct 2005

cogeneration facilities. In Order No. 671, the Commission established a rebuttable

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presumption that a pre-EPAct 2005 cogeneration facility does not become an EPAct 2005

cogeneration facility merely because it files for recertification; however, the Commission

cautioned that “changes to an existing cogeneration facility could be so great (such as an

increase in capacity from 50 MW to 350 MW) that what an applicant is claiming to be an

existing facility should, in fact, be considered a ‘new’ cogeneration facility at the same

site.”

74 The Commission explained in the NOPR that it will continue this rebuttable

presumption, but also that it was proposing to require that an applicant filing a selfrecertification or an application for Commission recertification for a pre-EPAct 2005

cogeneration facility provide sufficient information about any changes to the facility to

evaluate whether in fact the changes are so significant that the facility should be

considered an EPAct 2005 cogeneration facility.

126. Thus, under the Commission’s proposal, an applicant for recertification of a preEPAct 2005 cogeneration facility which intends to rely upon the rebuttable presumption

that recertification of its existing facility does not make the facility subject to EPAct

2005’s requirements must provide a description of the relevant changes to the facility,

including the purpose of the changes, and an explanation why the facility should not be

considered an EPAct 2005 cogeneration facility.

74 Id. P 115.

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Comments

127. EEI requests clarifications regarding the threshold above which changes to a

facility would be deemed significant enough to render a facility “new” for the purposes of

the new cogeneration requirements. Specifically, EEI requests that a facility be found to

be “new” if (1) there has been a material change in the electrical characteristics (such as

size and/or number of generators), or (2) there has been a material change in the

utilization of thermal energy (such as reduction in useful thermal output). EEI

recommends that the Commission consider establishing a rebuttable presumption that a

20 percent or greater sustained change in electrical or thermal output of a QF is a material

change that would render it an EPAct 2005 cogeneration facility, but that an existing

certified cogeneration facility would have the opportunity to provide evidence to rebut

this presumption.

Commission Determination

128. The Commission adopts the NOPR proposal to consolidate the requirements for

the “productive and beneficial” use of thermal output into that portion of the proposed

Form No. 556 where applicants demonstrate the “usefulness” of the thermal output (lines

12a, 12b, 14a, and 14b of the form).

129. The Commission also adopts the NOPR proposal to implement a new section of

the Form No. 556, entitled “EPAct 2005 Requirements for Fundamental Use of Energy

Output from Cogeneration Facilities.” However, we reject requests to specify exactly

what types of changes would make an existing facility a “new” facility for the purposes

of the additional EPAct 2005 requirements in § 292.205(d). The Commission finds EEI’s

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requests for clarifications and EEI’s related proposals with respect to the threshold above

which changes to a facility would render a facility “new” for the purposes of the

§ 292.205(d) requirements to be beyond the scope of this rulemaking.

130. The Commission, in its NOPR proposal, intended only to ensure that adequate

information is being sought to make an informed decision regarding a QF’s status as a

new or existing cogeneration facility. The Commission did not propose to modify, and

does not modify here, the standard for making that determination. The Commission

indicated in Order No. 671 that such determinations would be made on a case-by-case

basis, considering the extent of each individual change. There will be cases where the

correct determination is not obvious, and hence a case-by-case approach will continue to

be used. However, we note that, in the four years that Order No. 671 has been in effect,

the current standards have not presented a problem with respect to the determination of

whether an existing cogeneration facility has been so substantially changed that it now

constitutes a “new cogeneration facility.”

131. If an applicant’s facility is found to be subject to the EPAct 2005 requirements,

but to fail the fundamental use test, then the applicant is instructed by line 11d of the

Form No. 556 to provide a narrative explanation of and support for why its facility meets

the requirement that the electrical, thermal, chemical and mechanical output of an EPAct

2005 cogeneration facility is used fundamentally for industrial, commercial, residential or

institutional purposes and is not intended fundamentally for sale to an electric utility,

taking into account technological, efficiency, economic, and variable thermal energy

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requirements, as well as state laws applicable to sales of electric energy from a QF to its

host facility.

132. The Commission adopts the NOPR proposal to continue the rebuttable

presumption that a pre-EPAct 2005 cogeneration facility does not become an EPAct 2005

cogeneration facility merely because it files for recertification, but also to require that an

applicant filing a self-recertification or an application for Commission recertification for

a pre-EPAct 2005 cogeneration facility provide sufficient information about any changes

to the facility to evaluate whether in fact the changes are so significant that the facility

should be considered an EPAct 2005 cogeneration facility. Going forward, an applicant

for recertification of a pre-EPAct 2005 cogeneration facility which intends to rely upon

the rebuttable presumption that recertification of its existing facility does not make the

facility subject to the EPAct 2005 requirements must provide a description of the relevant

changes to the facility, including the purpose of the changes, and an explanation why the

facility should not be considered an EPAct 2005 cogeneration facility. We stress that not

every facility that has undergone a change should be considered an EPAct 2005

cogeneration facility; however, an applicant filing a self-recertification or an application

for Commission recertification for a pre-EPAct 2005 cogeneration facility must provide

enough information about any changes to the facility to allow the Commission and the

public to evaluate the changes. The Commission finds EEI’s requests for clarifications

and EEI’s related proposals to be beyond the scope of this rulemaking, concerning the

threshold above which changes to a facility would be deemed significant enough to

render a facility “new” for the purposes of the new cogeneration requirements.

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V. Information Collection Statement

133. The collection of information contained in this Final Rule has been submitted to

the Office of Management and Budget for review under section 3507(d) of the Paperwork

Reduction Act.

75 The Commission solicited comments on the Commission’s need for

this information, whether the information will have practical utility, the accuracy of the

burden estimates, ways to enhance the quality, utility and clarity of the information to be

collected or retained, and any suggested methods for minimizing respondents’ burden,

including the use of automated information techniques.

Estimated Annual Burden

134. The Commission has previously broken down its estimated annual burden for

completing the Form No. 556 by filing type (self-certification or Commission

certification). We believe that breaking down the filings by facility type (small power

production facility or cogeneration facility) in addition to filing type will result in a

significantly improved burden estimate. Using this method, the total estimated annual

time for the collection of information associated with the Form No. 556 is 2,156 hours,

calculated as follows:

75 44 U.S.C. 3507(d).

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Facility Type Filing Type

Number of

Respondents

Hours per

Respondent

Total

Annual

Hours

cogeneration

facility

> 1 MW

self-certification 100 8 800

cogeneration

facility

> 1 MW

application for

Commission

certification

3 50 150

small power

production

facility > 1 MW

self-certification 400 3 1200

small power

production

facility > 1MW

application for

Commission

certification

1 6 6

Information Collection Costs: In response to the NOPR, the Commission received no

comments concerning its estimates for burden and costs and will use those estimates here

in the Final Rule. As almost all of the regulation changes are intended to make seeking

certification easier, and because we are exempting applicants for facilities not greater

than 1 MW from the certification requirement, the Commission estimates that the

collection costs associated with the new form will be less burdensome than with the

existing form. Although the length of the form has increased, this is a result of the

proposal to change the form to more effectively “walk” applicants through the

certification and compliance determinations that they currently have to research and

process on their own.

135. Title: FERC Form No. 556, “Certification of qualifying facility (QF) status for

small power production or cogeneration facility.”

Action: Information collection.

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OMB Control No. 1902-0075.

Respondents: Residences, businesses or other for profit entities, and government

agencies.

Frequency of responses: On occasion.

Necessity of the information: The Form No. 556 was originally established in

Order No. 575 to allow an applicant to self-certify that or to request the Commission to

determine that a facility meets the criteria for qualifying small power production or

cogeneration status under the Commission’s regulations, and thus whether the applicant

is eligible to receive the benefits available to it under PURPA.

Internal review: The Commission has reviewed its proposed changes to the

requirements pertaining to the certification of qualifying small power production and

cogeneration facilities and determined the proposed changes appear to decrease the

existing burden on applicants. These proposed requirements conform to the

Commission’s plan for efficient information collection, communication and management

within the energy industry.

136. Interested persons may obtain information on the reporting requirements by

contacting: Federal Energy Regulatory Commission, 888 First Street, NE, Washington,

DC 20426 [Attention: Ellen Brown, Office of the Deputy Chief Information Officer,

phone: (202) 502-8663, fax: (202) 273-0873, email: DataClearance@ferc.gov].

Comments concerning the collection of information and the associated burden estimates,

should be sent to the contact listed above and to the Office of Management and Budget,

Office of Information and Regulatory Affairs, Washington, DC 20503 [Attention: Desk

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Officer for the Federal Energy Regulatory Commission, phone: (202) 395-4638; fax:

(202) 395-7285].

VI. Environmental Analysis

137. 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.

76 No environmental consideration is needed for the

promulgation of a rule that addresses information gathering, analysis, and

dissemination.

77 This Final Rule involves information gathering, analysis, and

dissemination. Consequently, neither an Environmental Impact Statement nor

Environmental Assessment is required.

VII. Regulatory Flexibility Act

138. The Regulatory Flexibility Act of 1980 (RFA)

78 requires rulemakings to contain

either a description or analysis of the effect that the rule will have on small entities or a

certification that the rule will not have a significant economic impact on a substantial

number of small entities. In this Final Rule, we implement three different types of

regulatory changes, and we address each in turn.

76 See Regulations Implementing the National Environmental Policy Act of 1969,

Order No. 486, FERC Stats. & Regs. ¶ 30,783 (1987).

77 See 18 CFR 380.4(a)(5).

78 5 U.S.C. 601-12.

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139. First, we clarify and streamline the Form No. 556. These changes make the form

easier for applicants, whether large or small, to complete, because the new form leads

applicants step-by-step through the compliance determinations.

140. Second, we require certain limited additional disclosures of information. In

particular, we implement (1) collection of the geographic coordinates of facilities that do

not have a street address, and (2) collection of certain information used to determine

applicability of the EPAct 2005 cogeneration requirements that was not previously

explicitly required to be included in Form No. 556.

141. The requirement to report in line 3g geographic coordinates is applicable only to

those facilities that do not have a street address and is therefore not generally applicable

to all applicants. Moreover, in most cases, geographic coordinates can be obtained from

a simple web search (with help provided by the instructions and the Commission’s

website); a GPS device (including some cellular phones); the use of free computer

programs (such as Google Earth); or the review of certain documents, such as a property

survey, various engineering or construction drawings, a property deed, or a municipal or

county map showing property lines.

142. The new information to be collected from applicants for cogeneration facilities

serves to guide the applicants through the determination whether the EPAct 2005

cogeneration requirements apply to their facilities. The process of completing lines 11a

through 11f replicates, but in a clearer and more concise manner, the process that such

applicants already have to go through in completing the current form. Completing lines

11a through 11f should substantially decrease the burden of complying with the EPAct

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2005 cogeneration requirements for most or all applicants for cogeneration facilities. In

the absence of this step-by-step guide adopted in lines 11a through 11f, applicants

(particularly small applicants) must independently research the requirements and

determine compliance with the relatively complex EPAct 2005 cogeneration

requirements.

143. Third, we require applicants for certification of QF status to submit their Forms

No. 556 electronically, via the Commission’s eFiling website. However, we also exempt

applicants for facilities with net power production capacities of 1 MW and smaller from

any filing requirement. Thus, the electronic filing requirement does not apply to

applicants for relatively small QFs. We believe that any applicant for a facility larger

than 1 MW should have access to the resources needed to make an electronic filing.

VIII. Document Availability

144. 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 document via the Internet through the Commission’s home page

(http://www.ferc.gov) and in the Commission’s Public Reference Room during normal

business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street, NE, Room 2A,

Washington, DC 20426.

145. From the Commission’s home page on the Internet, this information is available in

the Commission’s document management system, eLibrary. The full text of this

document is available on eLibrary in PDF and Microsoft Word format for viewing,

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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.

146. User assistance is available for eLibrary and the Commission’s web site during

normal business hours. For assistance, please contact FERC Online Support at 1-866-

208-3676 (toll free) or 202-502-6652 or email at ferconlinesupport@ferc.gov, or the

Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email at

public.referenceroom@ferc.gov.

IX. Effective Date

147. These regulations are effective [insert date 60 days after publication in the

FEDERAL REGISTER]. The Commission has determined, with the concurrence of the

Adminstrator of the Office of Information and Regulatory Affairs of OMB, that this rule

is not a “major rule” as defined in section 251 of the Small Business Regulatory

Enforcement Fairness Act of 1996. The Commission will submit the Final Rule to both

houses of Congress and the General Accounting Office.

List of subjects in 18 CFR Part 131

Electric power, Natural gas, Reporting and Recordkeeping requirements.

List of subjects in 18 CFR Part 292

Electric power, Electric power plants, Electric utilities

By the Commission.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.

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In consideration of the foregoing, the Commission amends parts 131 and 292 of

Title 18 of the Code of Federal Regulations, as set forth below:

SUBCHAPTER D – APPROVED FORMS, FEDERAL POWER ACT AND

PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978

PART 131-FORMS

1. The authority citation for part 131 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.

2. Section 131.80 is revised to read as follows:

§ 131.80 FERC Form No. 556, Certification of qualifying facility (QF) status for

a small power production or cogeneration facility.

(a) Who must file. Any person seeking to certify a facility as a qualifying

facility pursuant to sections 3(17) or 3(18) of the Federal Power Act, 16 U.S.C.

796(3)(17), (3)(18), unless otherwise exempted or granted a waiver by Commission rule

or order pursuant to § 292.203(d), must complete and file the Form of Certification of

Qualifying Facility (QF) Status for a Small Power Production or Cogeneration Facility,

FERC Form No. 556. Every Form of Certification of Qualifying Status must be

submitted on the FERC Form No. 556 then in effect and must be prepared in accordance

with the instructions incorporated in that form.

(b) Availability of FERC Form No. 556. The currently effective FERC Form

No. 556 shall be made available for download from the Commission’s website.

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(c) How to file a FERC Form No. 556. All applicants must file their FERC

Forms No. 556 electronically via the Commission’s eFiling website.

SUBCHAPTER K – REGULATIONS UNDER THE PUBLIC UTILITY

REGULATORY POLICIES ACT OF 1978

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:

Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42 U.S.C. 7101-

7352.

2. In Section 292.203 paragraphs (a) through (c) are revised and paragraph (d) is

added to read as follows:

§ 292.203 General requirements for qualification.

(a) Small power production facilities. Except as provided in paragraph (c) of

this section, a small power production facility is a qualifying facility if it:

(1) Meets the maximum size criteria specified in § 292.204(a);

(2) Meets the fuel use criteria specified in § 292.204(b); and

(3) Unless exempted by paragraph (d), has filed with the Commission a notice

of self-certification, pursuant to § 292.207(a); or has filed with the Commission an

application for Commission certification, pursuant to § 292.207(b)(1), that has been

granted.

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(b) Cogeneration facilities. A cogeneration facility, including any diesel and

dual-fuel cogeneration facility, is a qualifying facility if it:

(1) Meets any applicable standards and criteria specified in §§ 292.205(a), (b)

and (d); and

(2) Unless exempted by paragraph (d), has filed with the Commission a notice

of self-certification, pursuant to § 292.207(a); or has filed with the Commission an

application for Commission certification, pursuant to § 292.207(b)(1), that has been

granted.

(c) Hydroelectric small power production facilities located at a new dam or

diversion. (1) A hydroelectric small power production facility that impounds or diverts

the water of a natural watercourse by means of a new dam or diversion (as that term is

defined in § 292.202(p)) is a qualifying facility if it meets the requirements of:

(i) Paragraph (a) of this section; and

(ii) Section 292.208.

(2) [Reserved]

(d) Exemptions and waivers from filing requirement. (1) Any facility with a

net power production capacity of 1 MW or less is exempt from the filing requirements of

paragraphs (a)(3) and (b)(2) of this section.

(2) The Commission may waive the requirement of paragraphs (a)(3) and

(b)(2) of this section for good cause. Any applicant seeking waiver of paragraphs

(a)(3)and (b)(2) of this section must file a petition for declaratory order describing in

detail the reasons waiver is being sought.

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3. In § 292.204, paragraph (a)(1) is revised and paragraph (a)(4) is added to read as

follows:

§ 292.204 Criteria for qualifying small power production facilities.

(a) Size of the facility—(1) Maximum size. Except as provided in paragraph

(a)(4) of this section, the power production capacity of a facility for which qualification is

sought, together with the power production capacity of any other small power production

facilities that use the same energy resource, are owned by the same person(s) or its

affiliates, and are located at the same site, may not exceed 80 megawatts.

* * * * *

(4) Exception. Facilities meeting the criteria in section 3(17)(E) of the Federal

Power Act (16 U.S.C. 796(17)(E)) have no maximum size, and the power production

capacity of such facilities shall be excluded from consideration when determining the

maximum size of other small power production facilities within one mile of such

facilities.

* * * * *

4. In § 292.205, paragraph (d) is revised to read as follows:

§ 292.205 Criteria for qualifying cogeneration facilities.

* * * * *

(d) Criteria for new cogeneration facilities. Notwithstanding paragraphs

(a) and (b) of this section, any cogeneration facility that was either not a qualifying

cogeneration facility on or before August 8, 2005, or that had not filed a notice of selfcertification or an application for Commission certification as a qualifying cogeneration

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facility under § 292.207 of this chapter prior to February 2, 2006, and which is seeking to

sell electric energy pursuant to section 210 of the Public Utility Regulatory Policies Act

of 1978, 16 U.S.C. 824a–1, must also show:

* * * * *

5. In § 292.207, paragraphs (a) through (d)(1)(i) are revised to read as follows:

§ 292.207 Procedures for obtaining qualifying status.

(a) Self-certification. The qualifying facility status of an existing or a proposed

facility that meets the requirements of § 292.203 may be self-certified by the owner or

operator of the facility or its representative by properly completing a Form No. 556 and

filing that form with the Commission, pursuant to § 131.80 of this chapter, and

complying with paragraph (c) of this section.

(b) Optional procedure—(1) Application for Commission certification. In lieu

of the self-certification procedures in paragraph (a) of this section, an owner or operator

of an existing or a proposed facility, or its representative, may file with the Commission

an application for Commission certification that the facility is a qualifying facility. The

application must be accompanied by the fee prescribed by part 381 of this chapter, and

the applicant for Commission certification must comply with paragraph (c) of this

section.

(2) General contents of application. The application must include a properly

completed Form No. 556 pursuant to § 131.80 of this chapter.

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(3) Commission action. (i) Within 90 days of the later of the filing of an

application or the filing of a supplement, amendment or other change to the application,

the Commission will either: inform the applicant that the application is deficient; or issue

an order granting or denying the application; or toll the time for issuance of an order.

Any order denying certification shall identify the specific requirements which were not

met. If the Commission does not act within 90 days of the date of the latest filing, the

application shall be deemed to have been granted.

(ii) For purposes of paragraph (b) of this section, the date an application is filed

is the date by which the Office of the Secretary has received all of the information and

the appropriate filing fee necessary to comply with the requirements of this Part.

(c) Notice requirements—(1) General. An applicant filing a self-certification,

self-recertification, application for Commission certification or application for

Commission recertification of the qualifying status of its facility must concurrently serve

a copy of such filing on each electric utility with which it expects to interconnect,

transmit or sell electric energy to, or purchase supplementary, standby, back-up or

maintenance power from, and the State regulatory authority of each state where the

facility and each affected electric utility is located. The Commission will publish a notice

in the Federal Register for each application for Commission certification and for each

self-certification of a cogeneration facility that is subject to the requirements of

§ 292.205(d).

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(2) Facilities of 500 kW or more. An electric utility is not required to purchase

electric energy from a facility with a net power production capacity of 500 kW or more

until 90 days after the facility notifies the utility that it is a qualifying facility or 90 days

after the utility meets the notice requirements in paragraph (c)(1) of this section.

(d) Revocation of qualifying status. (1)(i) If a qualifying facility fails to

conform with any material facts or representations presented by the cogenerator or small

power producer in its submittals to the Commission, the notice of self-certification or

Commission order certifying the qualifying status of the facility may no longer be relied

upon. At that point, if the facility continues to conform to the Commission's qualifying

criteria under this part, the cogenerator or small power producer may file either a notice

of self-recertification of qualifying status pursuant to the requirements of paragraph (a) of

this section, or an application for Commission recertification pursuant to the requirements

of paragraph (b) of this section, as appropriate.

* * * * *

6. In § 292.601, paragraphs (a) is revised to read as follows:

§ 292.601 Exemption to qualifying facilities from the Federal Power Act

(a) Applicability. This section applies to qualifying facilities, other than those

described in paragraph (b) of this section. This section also applies to qualifying

facilities that meet the criteria of section 3(17)(E) of the Federal Power Act (16 U.S.C.

796(17)(E)), notwithstanding paragraph (b).

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* * * * * *

7. In § 292.602, the title and paragraph (c)(4) are revised to read as follows:

§292.602 Exemption to qualifying facilities from the Public Utility Holding

Company Act of 2005 and certain State laws and regulations.

* * * * *

(c) Exemption from certain State laws and regulations. (1) Any qualifying

facility described in paragraph (a) of this section shall be exempted (except as provided in

paragraph (c)(2) of this section) from State laws or regulations respecting:

* * * * *

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NOTE: The following Appendix will not be published in the Code of Federal

Regulations or in the Microsoft Word version of this document.

Appendix A

Proposed FERC Form No. 556

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Document Content(s)

RM09-23-000.DOC.......................................................1-81

RForm556 RM09-23-000.doc.PDF..........................................82-80

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