[Federal Register: March 30, 2010 (Volume 75, Number 60)]
[Rules and Regulations]
[Page 15949-15986]
[DOCID:fr30mr10-19]

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Part IV

 Department of Energy

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Federal Energy Regulatory Commission

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18 CFR Parts 131 and 292

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

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DEPARTMENT OF ENERGY

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.

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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. Finally, we clarify, simplify
or correct certain sections of the regulations relating to certifying
QF status.

DATES: Effective Date: This rule will become effective June 1, 2010.

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:<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>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:<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>S.L. Higginbottom (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street, NE, Washington,
DC 20426, Telephone:<PHONE_NUMBER>, e-mail:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Before Commissioners: Jon Wellinghoff, Chairman; Marc Spitzer,
Philip D. Moeller, and John R. Norris.

I. Introduction

    1. In this Final Rule, the Commission is removing from Sec.  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 Web site).\2\ The Commission also is
requiring that the Form No. 556 be submitted to the Commission
electronically.
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    \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\
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    \3\ 18 CFR Part 292.
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    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 power production
facilities that satisfy the criteria of section 3(17)(E) of the Federal
Power Act qualify for those exemptions.
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    \4\ 18 CFR 292.601.
    \5\ 18 CFR 292.602.
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    5. The Commission is 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\
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    \6\ Streamlining of Regulations Pertaining to Parts II and III
of the Federal Power Act and the Public Utility Regulatory Policies
Act of 1978, Order No. 575, 60 FR 4831 (Jan. 25, 1995), FERC Stats.
& Regs. ] 31,014, order on reh'g, Order No. 575-A, 71 FERC ] 61,121
(1995).
    \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 Sec.  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.
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    \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 self-certification and application for
Commission certification also apply to self-recertification and
application for Commission recertification.
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    8. Self-certification was an essential part of the Commission's
implementation of PURPA, and was intended, in part, to make the
certification process quick and not unduly burdensome. Thus, when the
Commission first implemented section 201 of PURPA in Order No. 70,\11\
the Commission rejected a proposal to adopt a case-by-case Commission
certification requirement for all QFs, but instead provided that
facilities that met the requirements for QF status need only furnish
notice to the Commission of QF status.\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.
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    \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 1977-1981 ]
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).
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    9. The Commission recognized, however, that the self-certification
process would not always satisfy all those interested in a particular
facility's status. Accordingly, the Commission also established, in
Sec.  292.207(b) of the regulations,\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 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.
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    \13\ 18 CFR 292.207(b).
    \14\ 18 CFR 381.505.
    \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 cogeneration facilities were required to be published in the
Federal Register; self-certifications, other than for new cogeneration
facilities, are not published in the Federal Register. In addition, as
noted above, for the first time, the Commission required the filing of
a notice of self-certification or an application for Commission
certification as a requirement for QF status.\18\
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    \16\ A ``new'' cogeneration facility is defined as any
cogeneration facility that was either not a qualifying cogeneration
facility on or before August 8, 2005, or that had not filed a notice
of self-certification, self-recertification or an application for
Commission certification or Commission recertification as a
qualifying cogeneration facility prior to February 2, 2006. 16
U.S.C. 824a-3(n)(2)(B); 18 CFR 292.205(d).
    \17\ Revised Regulations Governing Small Power Production and
Cogeneration Facilities, Order No. 671, 71 FR 7852 (Feb. 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).
    \18\ See 18 CFR 292.203(a)(3), (b)(2).
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III. Revisions to Regulations

A. General

NOPR Proposal
    12. The Commission proposed in the NOPR \19\ 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 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.
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    \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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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.
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    \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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    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 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 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.
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    \21\ 18 CFR 292.601.
    \22\ 18 CFR 292.602.
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    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\
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    \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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B. Revisions to 18 CFR 131.80

NOPR Proposal
    17. Currently, Sec.  131.80 of the Commission regulations contains
the text of Form No. 556 as well as instructions on how to complete the
form. In the NOPR, the Commission proposed that Sec.  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 Sec.  131.80(a) that
any 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 Sec.
131.80(c), that applicants submit their QF applications (whether
initial certifications or recertifications, and whether self-
certifications or applications for Commission certification)
electronically via the Commission's eFiling Web site.
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.
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 Sec.  131.80, as proposed, will make it easier to clarify and
correct the form, should such changes prove necessary or appropriate in
the future. Future changes to the form would be reviewed by the Office
of Management and Budget following a solicitation of comments from the
public on proposed changes, but would not require a formal rulemaking.
This treatment is consistent with how a number of other Commission
information collections are managed, including FERC Form Nos. 1, 1-F,
3-Q, 60, 80, 714, and 715, as well

as the FERC Form No. 580 Interrogatory.\25\
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    \25\ 18 CFR 366.23.
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    22. An electronic filing process will be faster, easier, less
costly and less resource-intensive than hardcopy filing. An applicant
filing electronically will receive an acknowledgement that the
Commission has received 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 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 Web site.
    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 Sec.  292.204(a), meet the
fuel use criteria specified in Sec.  292.204(b), and must have filed a
notice of self-certification or an application for Commission
certification that has been granted. For a qualifying cogeneration
facility, those requirements currently state that the facility must
meet any applicable operating and efficiency standards provided in
Sec.  292.205(a) and (b), and that the facility must have filed a
notice of self-certification or an application for Commission
certification that has been granted.
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    \26\ 18 CFR 292.203.
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    25. In the NOPR, the Commission proposed to correct an inadvertent
error in Sec.  292.203(b)(1) of our regulations.\27\ Order No. 671
implemented additional technical requirements for certain cogeneration
facilities in Sec.  292.205(d), but Sec.  292.203(b)(1) was not updated
to reflect that a facility must comply with these new requirements (if
applicable) in order to be a qualifying cogeneration facility. The
Commission proposed to add the reference to Sec.  292.205(d) in Sec.
292.203(b). Because the technical requirements of Sec.  292.205(d) are
not ``operating and efficiency standards,'' the Commission proposed to
amend Sec.  292.203(b) to delete the phrase ``operating and efficiency
standards'' and to replace it with the phrase ``standards and
criteria.''
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    \27\ 18 CFR 292.203(b)(1).
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    26. Finally, the Commission sought comments on whether to add a
Sec.  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\
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    \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 Sec.
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 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 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 Sec.  292.310 of the
Commission's regulations 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.\29\
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    \29\ EEI notes that Sec.  292.310 information collection is the
subject of the Commission's current request for OMB renewal of FERC-
912 in Docket IC09-912-000.
---------------------------------------------------------------------------

Commission Determination
    33. The Commission adopts the NOPR proposal to update Sec.
292.203(b) to reflect that a qualifying cogeneration facility must
comply with any applicable requirements in Sec.  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 Sec.
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'' 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.
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    \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.
    \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.
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    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 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.
---------------------------------------------------------------------------

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

    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 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 wind-powered
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 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.
---------------------------------------------------------------------------

    \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.
    \35\ 18 CFR 292.207(d).
---------------------------------------------------------------------------

    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 CFR 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 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.''
---------------------------------------------------------------------------

    \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 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.
---------------------------------------------------------------------------

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
Sec.  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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    43. In the NOPR, the Commission explained that the wording of Sec.
292.204(a) has created confusion for many applicants. Applicants not
familiar with section 3(17)(A) or (E) of the Federal Power Act
frequently confuse the statutory concept of ``eligibility'' with more
general questions of whether 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 Sec.  292.204(a) to be more clear
(avoiding using the term ``eligible'') while achieving the same
regulatory outcome as the current Sec.  292.204(a).
Comments
    44. No comments were received on the Commission's proposal to
clarify the wording of Sec.  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 Sec.  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 Sec.
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 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\
---------------------------------------------------------------------------

    \38\ We note that the one-mile rule has been part of the
Commission's regulations since the initial implementation of PURPA.
---------------------------------------------------------------------------

E. Revisions to 18 CFR 292.205

NOPR Proposal
    46. In the NOPR, the Commission explained that the text of Sec.
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 Sec. Sec.  292.205(d)(1) and (2). Section
292.205(d) provides that the following facilities are subject to these
requirements:
---------------------------------------------------------------------------

    \39\ 18 CFR 292.205(d).

    any cogeneration facility that was either not certified as a
qualifying cogeneration facility on or before August 8, 2005, or
that had not filed a notice of self-certification, self-
recertification or an application for Commission certification or
Commission recertification as a qualifying cogeneration facility
under Sec.  292.207 of this chapter prior to February 2, 2006, and
which is seeking to sell electric energy pursuant to section 210 of
the Public Utility Regulatory Policies Act of 1978, 16 U.S.C. 824a-
1.\40\
---------------------------------------------------------------------------

    \40\ Id. (emphasis added).

    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 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 Sec.  292.205(d).
---------------------------------------------------------------------------

    \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.
    \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.
---------------------------------------------------------------------------

    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 Sec.  292.205(d) by not applying the new
cogeneration requirements to any cogeneration facility that had filed
``a notice of self-certification, self-recertification or an
application for Commission certification or Commission recertification
as a qualifying cogeneration facility under Sec.  292.207 of this
chapter prior to February 2, 2006.'' Because any facility that had
recertified (either by self-recertification or application for
Commission recertification) prior to February 2, 2006 must necessarily
have made its original certification prior to February 2, 2006, the
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
Sec.  292.205(d) to state that the new cogeneration requirements will
not apply to any facility that had filed ``a notice of self-
certification or an application for Commission certification as a
qualifying cogeneration facility under Sec.  292.207 of this chapter
prior to February 2, 2006.''
---------------------------------------------------------------------------

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

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 Sec.  292.205(d) and to
simplify Sec.  292.205(d) to state that the new cogeneration
requirements will not apply to any facility that had filed ``a notice
of self-certification or an application for Commission certification as
a qualifying cogeneration facility under Sec.  292.207 of this chapter
prior to February 2, 2006.'' 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.

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 pre-authorized Commission recertification contained in Sec.
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 Sec.  292.207(b) a list of insubstantial
alterations and modifications that would not result in the revocation
of QF status previously granted by the Commission. Section
292.207(a)(2)(ii) also requires those making the changes listed in
Sec.  292.207(a)(2)(i) to notify the Commission and each affected
utility and State regulatory authority of each such change.
---------------------------------------------------------------------------

    \45\ 18 CFR 292.207(a)(2).
---------------------------------------------------------------------------

    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 self-certifications 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 No. 556. The Commission explained that it could opt to
revise the procedure for the pre-authorized Commission recertification
to require such filings to be made electronically using a Form No. 556,
but 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 Sec.  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 pre-approved Commission reauthorization.
    55. Sun Edison, on the other hand, requests that the Commission
retain a list of pre-approved 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 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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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 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 Form 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.
---------------------------------------------------------------------------

    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 increases their
equity interest by at least 10 percent from the equity interest
previously reported.\51\
---------------------------------------------------------------------------

    \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.
    \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.
---------------------------------------------------------------------------

    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.
Comments
    61. EEI concurs with the Commission's proposal to delete Sec.
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 self-recertification or an application for
Commission recertification. The Commission adopts the NOPR proposal to
delete the provision in Sec.  292.207(a)(1)(iii) that 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.
    64. This proposed change will result in greater transparency:
During the processing of routine QF petitions and periodic compliance
reviews of self-certifications, the Commission frequently finds that
the original certification data for some facilities (particularly
facilities originally certified in the 1980s) can be difficult to
obtain. 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 Sec.  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 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.
---------------------------------------------------------------------------

    \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 CFR 292.205(a)(1), (a)(2) and (b); Order No. 671 at P
51.
---------------------------------------------------------------------------

    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 the Federal Register.
Similarly, Sec.  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, Sec. Sec.
292.207(a)(1)(iv) and (b)(4) require that applicants provide with their
filing a draft notice suitable for publication in the Federal Register
on electronic media.
---------------------------------------------------------------------------

    \54\ 18 CFR 292.207(a)(1)(iv).
    \55\ 18 CFR 292.207(b)(4).
---------------------------------------------------------------------------

    69. In the NOPR, the Commission proposed to continue to publish
notices of self-certification 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 Sec.  292.207(c). However, the Commission
proposed to delete Sec. Sec.  292.207(a)(1)(iv) and (b)(4) in order to
eliminate the requirement that applicants for those types of filings
provide a draft notice suitable for publication in the Federal
Register.
Comments
    70. No comments were received on this issue.
Commission Determination
    71. The Commission adopts the NOPR proposal to delete Sec. Sec.
292.207(a)(1)(iv) and (b)(4) in order to eliminate the requirement that
applicants for those types of filings provide a draft notice suitable
for publication in the Federal Register. The Commission 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.
---------------------------------------------------------------------------

    \56\ 18 CFR 292.207(a)(ii).
---------------------------------------------------------------------------

    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.
Comments
    74. Interstate Renewables suggests exempting small QFs that will be
exempt under proposed Sec.  202.203(d)(1) from the requirement to file
a Form 556 from the notice requirements contained in proposed Sec.
292.207(c)(2).
    75. Interstate Renewables also requests that proposed Sec.
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 Sec.  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 Sec.
292.207(c)(2) the regulatory text more closely aligned with that Sec.
292.207(c), so that Sec.  292.207(c)(2) will read as follows:

    (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 facility meets the notice requirements in
paragraph (c)(1) of this section.

    As a result of adopting this language, Sec.  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 Sec.  292.207(c)(2) with the
phrase ``Except for a facility exempt under Sec.  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 Sec.
292.207(a) and in the text of Sec.  292.207(d)(1)(i). The Commission
also proposed to delete the current Sec.  292.207(a)(1), and to replace
it, in Sec.  292.207(a), with a procedure for self-certification that
incorporates clear reference to proposed Sec.  131.80 and to the notice
requirements in Sec.  292.207(c).
Comments
    79. No comments were received on this issue.\57\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

Commission Determination
    80. The Commission adopts the NOPR proposal to remove reference to
``pre-authorized Commission recertification'' in the title of Sec.
292.207(a) and in the body text of Sec.  292.207(d)(1)(i). The
Commission also adopts the NOPR proposal to delete the current Sec.
292.207(a)(1), and to replace it, in Sec.  292.207(a), with a procedure
for self-certification that incorporates clear reference to proposed
Sec.  131.80 and to the notice requirements in Sec.  292.207(c).

G. Revisions to 18 CFR 292.601

 NOPR Proposal
    81. In the NOPR, the Commission proposed to amend Sec.  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, 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 Sec.  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
Sec. Sec.  292.601 and 292.602, otherwise applicable to other small
power production facilities, does not apply to ``eligible facilities.''
\60\
---------------------------------------------------------------------------

    \58\ 18 CFR 292.601(a).
    \59\ Pub. L. 101-575, 104 Stat. 2834 (1990), as amended by Pub.
L. 102-46, 105 Stat. 249 (1991).
    \60\ Cambria Cogen Co., 53 FERC ] 61,459, at 62,619 (1990).
---------------------------------------------------------------------------

Comments
    82. No comments were filed on this proposal.
Commission Determination
    83. The Commission adopts the NOPR proposal to amend Sec.
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 Sec.  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 Sec.  292.601(a), and
because the QFs described by Sec.  292.601(a) include all QFs other
than those described by Sec.  292.601(b), the Incentives Act's
exemption of ``eligible facilities'' from the size limitation contained
in Sec.  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 Sec.
292.602(c)(1) to clarify that it is only the QFs described in paragraph
(a) of that section that may take advantage of the exemptions provided
in Sec.  292.602, and to correct a typographical error. Finally, the
Commission proposed to correct a typographical error in the title of
Sec.  292.602.
 Comments
    86. No comments were filed on this proposal.
 Commission Determination
    87. The Commission adopts the NOPR proposal to amend Sec.
292.602(c)(1) to clarify that it is only the QFs described in paragraph
(a) of that section that may take advantage of the exemptions provided
in Sec.  292.602, and to correct a typographical error. The Commission
also adopts the NOPR proposal to correct a typographical error in the
title of Sec.  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 Web site, and was published in 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 Sec.  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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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 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 open-ended nature of the current Form No. 556 data
collection--where applicants are able to type any answer or no answer
in response to an

item--often 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.

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.''
---------------------------------------------------------------------------

    \63\ Order No. 575, 60 FR 4831 (Jan. 13, 1995), FERC Stats. &
Regs. ] 31,014, at 31,282 and 31,285.
---------------------------------------------------------------------------

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 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 applicants to the Geographic
Coordinates section of the instructions on page 4 which discusses
several different ways through which applicants might obtain the
geographic coordinates of their facilities: Through certain free online
map services (with links available through the Commission's QF Web
site); a GPS device; Google Earth; a property survey; various
engineering or construction drawings; a property deed; or a municipal
or county map showing property lines. Applicants are directed in line
3c to provide their geographic coordinates to three decimal places, and
are given a simple formula for how to convert degrees, minutes and
seconds to decimal degrees.

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\
---------------------------------------------------------------------------

    \64\ Order No. 671, FERC Stats. & Regs. ] 31,203 at P 110.
---------------------------------------------------------------------------

    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.
    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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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 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).
---------------------------------------------------------------------------

    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 Sec.  292.204(b)(2) of the Commission's regulations.\71\
---------------------------------------------------------------------------

    \70\ 18 CFR 292.204(b).
    \71\ 18 CFR 292.204(b)(2).
---------------------------------------------------------------------------

    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
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.
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 [deg]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 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.
    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.
    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 Sec.
292.205(d)(4) of the Commission's regulations, or whether such
facilities fall within the safe harbor established by the ``fundamental
use test'' in Sec.  292.205(d)(3).
---------------------------------------------------------------------------

    \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.''
---------------------------------------------------------------------------

    123. The Commission noted in the NOPR that, in implementing the
``productive and beneficial'' requirement of EPAct 2005, the Commission
essentially maintained its long-standing ``usefulness'' standard,
except that what it deemed as presumptively useful was now
rebuttable.\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).
---------------------------------------------------------------------------

    \73\ Order No. 671, FERC Stats. & Regs. ] 31,203 at P 17.
---------------------------------------------------------------------------

    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 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 Sec.
292.205(d)(3) of the Commission's regulations. If an applicant's
facility is found to be subject to the EPAct 2005 requirements, but to
fail the 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
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 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.
---------------------------------------------------------------------------

    \74\ Id. P 115.
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    126. Thus, under the Commission's proposal, 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 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.
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 Sec.  292.205(d). The
Commission finds EEI's 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 Sec.
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 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.

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.
---------------------------------------------------------------------------

    \75\ 44 U.S.C. 3507(d).
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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:

----------------------------------------------------------------------------------------------------------------
                                                                     Number of       Hours per     Total annual
           Facility type                     Filing type            respondents     respondent         hours
----------------------------------------------------------------------------------------------------------------
cogeneration facility > 1 MW.......  self-certification.........             100               8             800
cogeneration facility > 1 MW.......  application for Commission                3              50             150
                                      certification.
small power production facility > 1  self-certification.........             400               3           1,200
 MW.
small power production facility > 1  application for Commission                1               6               6
 MW.                                  certification.
----------------------------------------------------------------------------------------------------------------

    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.
    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:<PHONE_NUMBER>, fax:
(202) 273-0873, e-mail<EMAIL_ADDRESS>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 Officer for the Federal Energy
Regulatory Commission, phone:<PHONE_NUMBER>; fax:<PHONE_NUMBER>].

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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \78\ 5 U.S.C. 601-12.
---------------------------------------------------------------------------

    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 Web
site); 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 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
Web site. 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 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, 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<PHONE_NUMBER> or e-
mail at<EMAIL_ADDRESS>or the Public Reference Room at
(202) 502-8371, TTY<PHONE_NUMBER>. Email at
<EMAIL_ADDRESS>
IX. Effective Date

    147. These regulations are effective June 1, 2010. 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

18 CFR Part 131

    Electric power, Natural gas, Reporting and recordkeeping
requirements.

18 CFR Part 292

    Electric power, Electric power plants, Electric utilities.

    By the Commission.
Nathaniel J. Davis, Sr.,
Deputy Secretary.

0
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

0
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.

0
2. Section 131.80 is revised to read as follows:

Sec.  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 Sec.
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
Web site.
    (c) How to file a FERC Form No. 556. All applicants must file their
FERC Forms No. 556 electronically via the Commission's eFiling Web
site.

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

0
1. The authority citation for part 292 continues to read as follows:

    Authority:  16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42
U.S.C. 7101-7352.

0
2. Section 292.203 is revised to read as follows:

Sec.  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 Sec.  292.204(a);
    (2) Meets the fuel use criteria specified in Sec.  292.204(b); and
    (3) Unless exempted by paragraph (d), has filed with the Commission
a notice of self-certification, pursuant to Sec.  292.207(a); or has
filed with the Commission an application for Commission certification,
pursuant to Sec.  292.207(b)(1), that has been granted.
    (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
Sec. Sec.  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 Sec.  292.207(a); or has
filed with the Commission an application for Commission certification,
pursuant to Sec.  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 Sec.
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