SecProbe.io

Mail Stop 6010

March 31, 2006

VIA U.S. MAIL AND FAX (203) 825-6100

Mr. Joseph G. Mahler
Senior Vice President and Chief Financial Officer
Fuelcell Energy, Inc.
3 Great Pasture Road
Danbury, Connecticut 06813

 Re: Fuelcell Energy, Inc.
  Form 10-K for the year ended October 31, 2005
  Filed January 17, 2006
  File No. 001-14204

Dear Mr. Mahler:

We have reviewed your response filed March 9, 2006 and have the following comments.
We have limited our review to only your financ ial statements and related disclosures and will
make no further review of your documents. In our  comments, we asked you to provide us with
supplemental information so we may better unders tand your disclosure.  After reviewing this
information, we may or may not raise additional comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirem ents and to enhance the overall disclosure in
your filing.  We look forward to working with you in these respects.  We welcome any questions
you may have about our comment or on any other aspect  of our review.  Feel free to call us at the
telephone numbers listed at the end of th is letter.

Mr. Joseph G. Mahler
Fuelcell Energy, Inc.
March 31, 2006 Page 2
Form 10-K for the year ended October 31, 2005

Financial Statements

Consolidated Balance Sheets, page 67

1. Please refer to our prior comment 1.  We not e that under Section 11(g) of your Amended
Certificate of Designation for the 5% Series B cumulative convertible perpetual preferred stock that your option to pa y the redemption amount of the stock is conditioned upon the
stock being registered under the Securities Act and eligible for immediate sale in the
public market by non-affiliates of your company.  As such, please tell us in more detail
how you were able to conclude that the sh ares should not be re flected as temporary
equity under EITF Topic D-98.

2. Additionally, we note that if you redeem the preferred stock in shares of your common
stock the redemption amount is based upon a di scount of 5% from the market price of
your common stock.  Please provide us with your consideration of whether the put option
should be separated from the host contract under SFAS 133 and EITF 00-19.

3. Please also tell us your consideration of EITF 03-6, Participating Securities and the Two-
Class Method under FASB Statement No. 128 .

Note 12. Shareholders’ Equity, page 85

4. Please refer to prior comments 2, 3 and 5.  We note that you classified the Series 1
preferred shares of your subsidiary w ithin equity because of the following:

⋅ You own 100% of the voting equity in Fu elCell Energy, Ltd., the issuer of the
preferred shares.
⋅ There are no voting minority interest holders.
⋅ The preferred shares are convertible into common stock at the option of FuelCell.
⋅ The preferred shareholders do not share in either the earnings of FuelCell or
FeulCell Energy, Ltd.

As such, you do not reflect these shares as a minority interest and exclude the amount from your consolidated shareholders’ equit y.  And dividends on th e preferred stock are
not charged to expense (minority  interest in income of subs idiary) in your consolidated
statements of operations.

Please respond to the following comments:

⋅ Please tell us and disclose in future filings  all of the significant terms of the Series
1 preferred stock, including all of the condi tions that may result in adjustments to
the conversion rate.

Mr. Joseph G. Mahler
Fuelcell Energy, Inc.
March 31, 2006 Page 3
⋅ Please revise future filings to disclo se the valuation method and significant
assumptions, including discount rates, unde rlying your valuation of the preferred
stock.

⋅ Please reconcile your statement that the pr eferred shares are convertible at your
option with the disclosure on page 87 stating that the shares are convertible at the
option of the holder.

⋅ Please reconcile your statement that the sh areholders do not shar e in earnings of
FuelCell or FuelCell Energy, Ltd. with the disclosure on page 87 stating that you
are required to pay/accrue quarterly dividends of C$312,500.

⋅ Please provide us with the conceptual support in U.S. accounting literature for
your classification of the preferred shares  and the related dividends and discuss
how you considered Rule 5-02.27 of Regul ation S-X.  Discuss whether the
accounting would be different if you were  to account for FuelCell Energy under
the equity method.  That is, discuss whethe r your equity in the income of FuelCell
would be computed after providing for the dividends to outside preferred
shareholders of that subsidiar y.  See paragraph 19(k) of APB 18.

⋅ Please tell us the nature of the assets  and operations of FuelCell Energy, Ltd.
Discuss whether the preferred shareholders of this subsidiary have a senior claim
on its assets.

⋅ With respect to the fair value discount,  it appears that you “accrete” the discount
by debiting APIC and crediting preferre d stock.  Please discuss why you believe
that this method is appropriate by ci ting the accounting literature upon which you
relied and how you applied that literatu re to your facts and circumstances.

⋅ Tell us and disclose how you determine the number of shares to be issued when
the dividends are paid in sh ares.  Tell us whether those shares must be registered
and readily marketable.

⋅ Please show us your calculations and journa l entries with respect  to these shares
and the accretion of fair value and divi dends.  Please explain how you calculated
the amounts.  Please reconcile to your  October 31, 2005 and January 31, 2006
financial statements and the amount of di vidends reflected in those statements.

5. Please refer to our prior comment 4. We s ee that you cancelled the Series 2 Preferred
shares and replaced them with equivalent Se ries 1 Preferred Shares. Please tell us how
you effected the cancellation.  For example, tell us whether you redeemed the Series 2
Preferred Shares and then subsequently issued the Series 1 Preferred Shares.  In addition,
tell us how you determined the value of the Series 1 Preferred Shares on the date of
issuance.  We note your reference to SFAS 141 fo r the valuation of th e Series 1 preferred

Mr. Joseph G. Mahler
Fuelcell Energy, Inc.
March 31, 2006 Page 4
shares.  Explain why SFAS 141 applies to the Series 1 issuance in May 2004 for your acquisition of Global in November 2003.  It a ppears that SFAS 141 was inly applicable to
the Series 2 preferred shares.  Please also  address the rights and obligations of each
series.  Discuss whether the Series 2 preferre d shares were for stoc k of your subsidiary,
Global, or you.  Explain why you transferred the assets to FuelCell Energy, Ltd. and why
they issued the Series 1 pr eferred shares instead of you.

Item 9A. Controls and Procedures, page 98

6. Please refer to prior comment 6.  We note your proposed disclosure that your "principal
executive officer and principal financial o fficer have concluded that the Company’s
disclosure controls and procedures were effective to provide a reasonable level of
assurance in timely alerting them to material information required to be included in [y]our periodic SEC reports."  Please note th at all language that appears following the
word "effective" must be consistent with th e language that appear s in the definition of
"disclosure controls and procedures" set forth in Rule 13a-15(e) of the Exchange Act.
Since you disclose that your disclo sure controls and procedures are designed to  provide
reasonable assurance of achie ving their objectives, your pr incipal executive officer and
principal financial officer shoul d continue to conclude whet her the disclosure controls
and procedures are effective at that reasonabl e assurance level.  Please refer to Section
II.F.4 of Management’s Reports on Internal C ontrol Over Financial Reporting and
Certification of Disclosure in  Exchange Act Periodic Reports , SEC Release No. 33-8238,
available on our website at <
http://www.sec.gov/rules/final/33-8238.htm >.  Please
similarly revise your Form 10-Q for th e quarterly period ended January 31, 2006.

Acknowledgements

7. We note that you did not provide  the three acknowledgements requested at the end of our
prior letter dated February 10, 2006.  Please provide all three acknow ledgements in the
form previously requested.  In that letter we ask that when res ponding to our comments
you provide, in writing, a statement from the company acknowledging that:

‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filings;

‚ staff comments or changes to disclosure  in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and

‚ the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.

As appropriate, please respond to these comments within 10 business days or tell us when

Mr. Joseph G. Mahler
Fuelcell Energy, Inc.
March 31, 2006 Page 5
you will provide us with a response.  Please furnis h a cover letter that keys your responses to our
comments and provides any requested supplemental information.  Detailed cover letters greatly
facilitate our review.  Please file your cover letter on EDGA R as correspondence.  Please
understand that we may have additional comments after reviewing your responses to our comments.

You may contact Julie Sherma n, Staff Accountant, at (202)  551-3640 or me at (202) 551-
3604 if you have any questions regarding these comments.  In this regard, do not hesitate to contact Martin James, Senior Assist ant Chief Accountant, at (202) 551-3671.

        S i n c e r e l y ,

        K a t e  T i l l a n
        Assistant Chief Accountant