The project objective is to design, construct, install, provide operator training and start-up a circulating fluidized bed combustion system at the Lebanon, Pennsylvania Veteran`s Affairs Medical Center. This unit will co-fire coal and hospital waste providing lower cost steam for heating and possibly cooling (absorption chiller) and operation of a steam turbine-generator for limited power generation. This would permit full capacity operation of the FBC year round in spite of the VA laundry that was shut down as well as efficient destruction of both general and infectious hospital waste and steam generation. On February 3, 1995 Donlee notified Lebanon VA and DOE-METC that additional funding would be required to complete the project. This funding, in the amount of $1,140,127, is needed to complete the facility, start-up and shakedown the facility, perform the test program and write the final report. After review DOE-METC approved funding in the amount of $1,246,019 to be available August 1, 1995. This report describes each task of the project and its status.