M-C Power Corporation will design, fabricate, install, test and evaluate a 250 kW Proof-of-Concept Molten Carbonate Fuel Cell (MCFC) Power Plant. The plant is to be located at the Naval Air Station Miramar in San Diego, California. This report summarizes the technical progress that has occurred in conjunction with this project in 1994. M-C Power has completed the tape casting and sintering of cathodes and is proceeding with the tape casting and sintering of anodes for the first 250 cell stack. M-C Power and San Diego Gas and Electric relocated the fuel cell demonstration project to an alternate site at the Naval Air Station Miramar. For the new project location at the Naval Air Station Miramar, an Environmental Assessment has been prepared by the Department of Energy in compliance with the National Environmental Policy Act of 1969. The Environmental Assessment resulted in a categorical exclusion of the proposed action from all environmental permit requirements. Bechtel Corporation has completed the reformer process design coordination, a Process Description, the Pipe and Instrumentation Diagrams, a Design Criteria Document and General Project Requirement Document. Bechtel developed the requirements for soils investigation report and issued the following equipment bid packages to the suppliers for bids: Inverter, Reformer, Desulfurization Vessels, Hot Gas Recycle Blower, Heat Recovery Steam Generator, and Recycle Gas Cooler. SDG and E has secured necessary site permits, conducted soils investigations, and is working on the construction plan. They are in final negotiations with the US Navy on a site agreement. Site drawings are required for finalization of the agreement.