On February 2, the Federal Energy Regulatory Commission (FERC) issued another set of rules implementing the Energy Policy Act of 2005 (EPAct 2005). The rules eliminate the restriction on utility ownership of qualifying cogeneration and small power production facilities (QFs) and provide standards for determining when a new cogeneration power plant has satisfied the EPAct 2005 requirements that 1) the thermal output is used in a "productive and beneficial" manner and 2) the "fundamental" use of a facility’s electrical, thermal, chemical, and mechanical output be something other than to produce power for sales to a utility. Importantly, this new rule, which will become effective 30 days after it is published in the Federal Register, creates a safe harbor for new cogeneration facilities and a process for determining on a case-by-case basis whether facilities not covered by the safe harbor qualify. Finally, the rules eliminate certain exemptions from the Federal Power Act previously
