SecProbe.io

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Mail Stop 6010
      June 26, 2006

VIA U.S. MAIL AND FACSIMILE 203.462.7599

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 responses dated June 1, and June 9,
2006
and filing and have the following comments.  In some of our
comments,
we may ask you to provide us with information so we may better
understand your disclosure.  After reviewing this information, we
may
raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements 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 comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

Form 10-K for the Year Ended October 31, 2005

Financial Statements

Consolidated Balance Sheets, page 67

Note 12. Shareholders` Equity, page 85

With respect to the following comments, please refer to prior
comment
1 from our May 25, 2006 letter to you.

1. Please tell us and disclose in future filings the significant
terms of the liquidation preference of the Series 1 preferred
shares
of your subsidiary.  For example, please clarify whether the
liquidation rights relate to the parent or the subsidiary.

2. In order to facilitate our evaluation of your classification of
the Series 1 preferred shares of subsidiary as equity of the
consolidated entity, please respond to the following comments.

* Please tell us how you believe the preferred shares would be
presented in the separate, stand-alone financial statements of the
subsidiary and the parent and to what extent you believe those
presentations inform the classification in the consolidated entity
financial statements and why.
* Please discuss how you considered paragraph 254 of Statement of
Financial Accounting Concepts ("CON") 6 and whether you believe
that
the instrument is a minority interest as defined in that
Statement.
In your response, please evaluate both the ownership interest and
residual interest aspects of that definition.
* If the preferred shares meet the CON 6, paragraph 254 definition
of
minority interest, please discuss how you reconciled your current
presentation of those shares as equity in the parent`s
consolidated
financial statements with the parent company approach to
consolidation under U.S. GAAP.  In your response, please help us
understand whether the effect of your presentation is that you are
following an entity approach to consolidation and, if so, whether
you
believe as a general matter the entity approach is a permissible
approach to consolidation under U.S. GAAP.

* Please tell us how you considered the substantive business
purposes
of setting up the Canadian subsidiary and issuing preferred shares
of
that subsidiary in your analysis of the appropriate accounting for
the preferred shares.  That is, tell us why you believe it is
inappropriate to present legal-form equity issued by an entity for
a
substantive business purpose as equity of that entity.
* Please provide in sufficient detail your analysis under FIN 46R
and
why you believe that this literature supports your accounting
classification for the preferred shares as equity of the
consolidated
entity.  That is, if the FIN 46R model suggests that a controlling
financial interest does not exist, but the ARB 51/SFAS 94 voting
interest model confirms that a controlling financial interest does
exist, help us understand why you believe the analogy to FIN 46R
is
indicative or determinative of the appropriate classification of
the
subsidiary preferred stock in the parent`s consolidated financial
statements.

3. With a view towards understanding the potential implications of
the reclassification of the shares outside of equity in the
parent`s
consolidated financial statements, please describe for us the
potential accounting ramifications that could result from the
reclassification.  For example, it appears that net income would
differ as a result of the requirement to subtract the minority`s
interest in the results of operation in order to arrive at net
income.  In addition, it appears that there are embedded
derivatives
in the subsidiary preferred stock that may need to be bifurcated
under SFAS 133 from the host instrument if the preferred shares
are
not classified as equity.

4. If it is appropriate to classify the subsidiary preferred stock
within equity in the parent`s consolidated financial statements,
please provide us with your analysis under EITF Topic D-98 of
whether
the preferred shares should be classified in temporary equity as a
result of the variable rate conversion feature in 2020.  That is,
as
a result of this feature, it appears that the number of shares
issuable is indeterminate and therefore it is possible that the
company may need to seek shareholder approval to increase the
number
of authorized and unissued shares necessary to settle the
conversion
option.

5. Please provide a thorough analysis that helps us understand why
it
was appropriate to conclude that the fair value of the Series 1
preferred equaled the historical carrying value of the Global
preferred shares, both as of the date the Series 1 preferred
shares
were issued.  In your response, please consider the need to
address
the following points.

* Please tell us the significant terms of each instrument.  In
your
discussion, please be sure to address similarities as well as
differences.  You may refer to prior responses as appropriate.
* Please discuss the underlying rights of the holder of the
preferred
shares and compare those rights as they related to Global vs.
FuelCell, Ltd.  For example, we note that the preferred shares of
Global represented preferred shares of an entity with ongoing
operations and assets while the preferred shares of FuelCell Ltd.
represented preferred shares in a research and development entity.
* Please discuss the parent`s guarantee and when the guarantee was
issued.  Tell us whether there was an identical guarantee for the
preferred shares of Global.
* Please consider whether there are any other rights, whether
conveyed through the preferred stock instrument itself or through
other agreements, oral or written, that should be evaluated in
determining the valuation of the Series 1 preferred shares.
* Please discuss how you derived the discount rate of 13% used in
your initial valuation of the preferred shares of Global as of the
business combination acquisition date and why that same rate was
appropriate for valuing the preferred stock of FuelCell, Ltd at
the
date it issued the Series 1 preferred stock.  Explicitly identify
the
implicit risk premium in your response and explain why it is
appropriate.
* Please tell us what the 15% discount to the cumulative cash
flows
of your dividend stream represent in the valuation and why you
applied this discount.  Discuss whether or not this discount
essentially represents a probability weighting of the cash flow
stream.  That is, applying it as a reduction to the gross
contractual
cash flows of the preferred stock appears to suggest that the
company
believes there are possible scenarios under which it may not need
to
pay all of the contractual cash flows of the preferred stock.

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested information.  Detailed cover
letters greatly facilitate our review.  Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.

	You may contact me at 202.551.3604 if you have any questions.
You may also contact Angela Crane, Branch Chief, at 202.551.3554.

      Sincerely,

      Kate Tillan
      Assistant Chief Accountant

Joseph G. Mahler
FuelCell Energy Inc.
June 26, 2006
Page 5

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