FERC has issued a final rule,
Order No. 874, expanding the eligibility criteria for Qualifying Facilities (QFs) as defined under the Public Utility Regulatory Policies Act of 1978 (PURPA) to enable certain fuel cell–based electric generation to receive QF status. The final rule amends the definition of useful thermal energy output of a topping-cycle cogenerator in its regulations implementing PURPA by adding a new paragraph to specifically include thermal energy that is used by a fuel cell system with an integrated steam hydrocarbon reformation process for production of fuel for electricity generation. This new paragraph, along with the rest of Order No. 874, removes ambiguity as to whether such fuel cell technology may be included in the eligibility criteria for a cogeneration facility to be a QF.
Background
On December 17, 2020, the Federal Energy Regulatory Commission (“FERC”) issued a final rule (“Order No. 874”) amending the definition of “useful thermal energy” in its regulations under the Public Utility Regulatory Policies Act of 1978 (“PURPA”) concerning the eligibility criteria for a cogeneration facility to be a Qualifying Facility (“QF”). The final rule addresses specifically a petition for rulemaking filed by Bloom Energy Corporation (“Bloom”). Bloom sought revision to the eligibility criteria in order for its Bloom Box modules to qualify for QF treatment under FERC’s regulations.
FERC’s regulations and precedent have been to require “useful thermal energy” to include thermal output that is delivered to a separate “host” industrial commercial heating or cooling purpose that is distinct from the integrated power generation process through which the thermal energy is created. That is, FERC has construed the term “useful thermal
E-1 – Omitted
E-2 – Cybersecurity Incentives (Docket No. RM21-3-000). Agenda item E-2 may be a new docket relating to a Notice of Proposed Rulemaking (NOPR) on Cybersecurity Incentives. The NOPR proceeding may expand and formalize the concepts outlined in a Commission staff white paper issued on June 18, 2020, which explored certain transmission incentive policy proposals designed to encourage utility spending on protocols that would ostensibly improve security and compliance with critical infrastructure protection requirements.
E-3 – California Independent System Operator Corporation (Docket No. EL21-19-000). Agenda item E-3 may be a new docket relating to a Show Cause proceeding brought by the Commission against California Independent System Operator Corporation (CAISO). The Commission may issue an order to CAISO pertaining to an investigation and identifying possible civil penalties or sanctions for the alleged matter.
Overview
Hydrogen has over the last century enjoyed repeated bouts of interest as a fuel source. Though these have repeatedly fallen flat, hydrogen-based production has recently enjoyed a renaissance, due to a trifecta of improving political, economic, and technological conditions. Importantly, hydrogen presents an answer to a major problem in the energy transition debate: decarbonizing fuel sources while maintaining energy security and reliability. While electrification has a first-mover advantage in certain areas (e.g., light-duty vehicles), hydrogen is seen as particularly viable in “hard-to-decarbonize” sectors such as heavy-duty transportation, which requires fuel supply for substantial distance and payloads.
These trends are still nascent. There has long been a small hydrogen market, primarily for industrial applications;