SecProbe.io

UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

Mail Stop 3030
        February 25, 2009  VIA U.S. Mail and Facsimile (206) 743-6204  Joseph G. Mahler Chief Financial Officer Fuel Cell Energy, Inc.  3 Great Pasture Road Danbury, Connecticut  06813

Re: Fuel Cell Energy, Inc.
 Form 10-K for the fiscal year ended October 31, 2008
Filed January 14, 2009
 File No. 001-14204

Dear Mr. Mahler:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.   Please understand that the purpose of our re view 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.

Joseph G. Mahler
Fuel Cell Energy, Inc.
February 25, 2009 Page 2  Form 10-K for the fiscal year ended October 31, 2008

 Item 1. Business, page 6

 Strategic Alliances and Market Development Agreements, page 14

 1. Please provide us with your analysis as to why you do not need to file the
manufacturing and distribution agre ement with POSCO and the market
development agreement with Enbridge, refere nced in this section, as exhibits to
your filing.
 2. We note the disclosure on page 29 of your risk factors rela ting to your top two
customers.  In future descriptions of your  business, please provide clear disclosure
regarding your principal customers, incl uding the names of such customers, as
required by Item 101(c)(vii)  of Regulation S-K.
 Item 2. Properties, page 38

 3. We note your disclosure of a lease rela ting to a 38,000 square foot property in
Danbury.  Please provide us with your analys is as to why you do not need to file
this lease as an exhibit to your fili ng.  Refer to Item 601(b)(10)(ii)(D) of
Regulation S-K.
 Commitments and Significant C ontractual Obligations, page 62

 4. We see that you have a total liability fo r unrecognized tax benefits at October 31,
2008 of $15.7 million.  Please revise future f ilings to include the liability within
the contractual obligations table to th e extent that you can make reasonably
reliable estimates of the amount and timing of cash settlements.  Otherwise, these
amounts should be included within a foot note to the table or within an “other”
category along with the bases for the ex clusion.  Refer to Item 303(a)(5) of
Regulation S-K.

Consolidated Financial Statements

Management’s Discussion and Analysis – Re venues and Costs of revenues, page 54
 5. We note that cost of product sales an d revenues significantly exceeds revenues
each period. Please further discuss the reason that costs significantly exceed
revenues each period, whether you expect th is trend to continue and your efforts
to address this trend in future periods.

Joseph G. Mahler
Fuel Cell Energy, Inc.
February 25, 2009 Page 3  Consolidated Statements of Cash Flows, page 73

 6. We see that you present ending cash, cash equivalents and investment in U.S.
Treasuries.  Please tell us how this m easure complies with paragraph 7 of SFAS
95 which states that the total amounts of cash and cash equivalents at the
beginning and end of the period shown in th e statement of cash flows shall be the
same amounts as similarly titled line items or subtotals shown in the statements of
financial position as of those dates.
 7. We see from page 82 that you received $1.8 million in cash proceeds from the
sale of a power plant to the Sierra Nevada Brewing Co. during fiscal year 2007.
Please tell us why the cash proceeds are not presented as cash provided by an investing activity in the st atement of cash flows.
 Note 1.  Summary of Significan t Accounting Policies, page 74

 Nature of Business, page 74

 8. With a view toward disclosure, please revise future filings to clarify which of
your subsidiaries are wholly owned and wh ich subsidiaries are majority owned.

Warranty Costs, page 77

 9. We reference the disclosure that due to  limited operating experience, warranty
costs are currently expensed as incurred.  Since costs can not be estimated, please tell us why you should not defer revenue  recognition until either a reliable
estimate of the costs can be made or the obligation period expires. We refer you to
Question 3 of SAB Topic 13A(b).

Note 5.  Accounts Receivable, page 81

10. We see that the majority of your acco unts receivable is due to unbilled
recoverable costs from long-term contracts.  Please revise future filings to include
the disclosures required by Rule 5-02 (3)(c) of Regulation S-X.

Note 7.  Other Assets, page 83

11. We reference the $2.9 million record ed at October 31, 2008 for insurance
receivable for power plant damaged duri ng shipping.  Please tell us and revise
future filings to discuss the nature of the receivable and why you believe that this
amount is recoverable.  In addition, to th e extent that the damage impacted your
results of operations, please clarify in th e Results of Operations section of MD&A
in future filings.

Joseph G. Mahler
Fuel Cell Energy, Inc.
February 25, 2009 Page 4  Note 11.  Preferred Stock, page 85

 12. We see that you have significant accrued dividends on your Series B and Series 1
preferred shares.  Please tell us and revi se future filings to disclose where the
accrued dividends payable are recorded on your balance sheet.
 Item 9A. Controls and Procedures, page 101

Management’s annual report on internal  control over financial reporting

13. In your future filings, please include the disclosure required by Item 308(a)(4) of Regulation S-K.
 Item 11. Executive Compensation, page 103

 14. We refer to the disclosure under the caption "Annual Bonus" beginning on
page 12 of the proxy statement that you have  incorporated by reference into your
Form 10-K.  It appears that the amounts paid to your named executive officers as
bonuses should have been disclosed under the caption “Non-Equity Incentive Plan Compensation” in your Summary Compensation Table pursuant to
Item 402(e)(2)(vii) of Regulation S-K, and that the threshold, target and
maximum amounts related to those awards should have been disclosed in your “Grants of Plan Based Awards” tabl e pursuant to Item 402(d)(2)(iii) of
Regulation S-K.  Please provi de such disclosure in your future filings, to the
extent then applicable, or provide us  with your analysis as to why such
information should not have been included in  the referenced tables in accordance
with the referenced Item requirements.
 15. We refer to your disclosure unde r the caption “Long-Term Incentive
Compensation” on page 13 of the proxy st atement that you have incorporated by
reference into your Form 10-K.  We note minimal if any discussion and analysis
of the significant differences in th e amounts of awards among your named
executive officers or how the awards re flect the factors which your Compensation
Committee considers such as tenure, reten tion goals and individual performance.
In your future filings, as applicable, please include substantive analysis and
insight into how your Compensation Co mmittee made its stock option grant
determinations with respect to each named executive officer.  Refer to subparagraphs (b)(1)(iii) and (v) of Item 402 of Regulat ion S-K.  For example,
please discuss and analyze how the Compensation Committee determined the actual number of shares underlying the stoc k options that were awarded to your
named executive officers and how and why those awards varied among the named executive officers.
  16. We further note from your disclosure under “Long-Term Incentive

Joseph G. Mahler
Fuel Cell Energy, Inc.
February 25, 2009 Page 5
Compensation” on page 13 of the proxy st atement, that you award options based
upon targets between the 50
th  and 75th percentile of Russell 2000 companies.
Given that you target this element of the compensation packages for your named
executive officers, please briefly discuss in  your applicable future filings how the
option grants to the named executive officer s relate to the data you analyzed from
this group of companies and include an analysis of where actual grants fell within
the targeted range.  If any named executive officer is compensated at a level that
is materially different from the target ed levels of compensation, please also
provide discussion and analysis as to why.
 Item 15. Exhibits and Financia l Statement Schedules, page 104

 17. We refer to the certificate of designation for your Series B Preferred Stock and the
instrument governing the Series 1 Pref erred Stock issued by FuelCell Energy, Ltd.
for which you have provided related guarant ees.  It appears th at you have neither
filed these instruments as exhibits to  this filing nor incorporated them by
reference.  Please explain your reasoning for not doing so. Refer to Item 601(b)(4)
of Regulation S-K.
 18. Given your sales in Europe in the pa st two years and given the licensing
arrangements with MTU Onsite Energy, as  described on page 25 of your recent
proxy statement, please tell us why you ha ve not filed the agreements with MTU
Onsite Energy as exhibits to your filing. Re fer to Item 601(b)(10)(i) and (ii)(B) of
Regulation S-K.
 19. It appears that you entered into a lo an agreement with the Connecticut
Development Authority in 2008.  We note th at exhibit 10.57 references an earlier
loan agreement in 2000.  Please provide us  with your analysis for not filing the
2008 loan agreement as an exhibit.
 20. We note your reference to the code of et hics incorporated by reference to your
10-K for the fiscal year ended October 31, 2004.  Please note there does not appear to be such an exhib it.  Please advise or revise.
 Exhibits

21. We note that you excluded the statement “(the registrant's fourth fiscal quarter in
the case of an annual report)” after “reg istrant’s most recent fiscal quarter” in
paragraph 4(d) of the certifications fi led as Exhibits 31.1 and 31.2. In future
filings please include a certif ication with wording that is exactly as specified in
Item 601(b)(31)(i) of Regulation S-K.

22. We note that the company’s name is spelled differently in your Exhibit 31 and 32
certifications as compared to the name on the cover of your annual report on

Joseph G. Mahler
Fuel Cell Energy, Inc.
February 25, 2009 Page 6
Form 10-K and the name set forth in your certificate of inco rporation.  Please
revise the certifications in your future  filings to provide the correct name.

As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response.  Please furnish a cover letter with your
response that keys your responses to our  comments and provides any requested
information.  Detailed cover le tters greatly facilitate our re view.  Please understand that
we may have additional comments after re viewing your responses to our comments.
  We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
  In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that:
‚ the company is responsible for the adequacy  and accuracy of the disclosure in the
filing;

‚ 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 comme nts as a defense in any proceeding
initiated by the Commission or any person under the federal secu rities laws of the
United States.

In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.

Joseph G. Mahler
Fuel Cell Energy, Inc.
February 25, 2009 Page 7
You may contact Kristin Lochhead at ( 202) 551-3664 or me at  (202) 551-3676 if
you have questions regarding comments on the financial statements and related matters.
In this regard, please do not hesitate to c ontact Martin James at (202) 551-33671 with any
other questions.  Please contact Ruairi Rega n (202) 551-3255 or Tim Buchmiller at (202)
551-3635 if you have any other questions.
Sincerely,

Brian Cascio Accounting Branch Chief