The Advanced Water Cooled Phosphoric Acid Fuel Cell Development program is being conducted by International Fuel Cells Corporation (IFC) to improve the performance and minimize the cost of water cooled, electric utility phosphoric acid fuel cell stacks. The program adapts the existing on-site Configuration B cell design to electric utility operating conditions and introduces additional new design features. Task 1 consists of the conceptual design of a full- scale electric utility cell stack that meets program objectives. Tasks 2 and 3 develop the materials and processes required to fabricate the components that meet the program objective. The design of the small area and two 10-ft{sup 2} short stacks is conducted in Task 4. The conceptual design also is updated to incorporate the results of material and process developments, as well as results of stack tests conducted in Task 6. Fabrication and assembly of the short stacks are conducted in Task 5 and subsequent tests are conducted in Task 6. The Contractor expects to enter into a contract with The Electric Power Research Institute (EPRI) to assemble and endurance test the second 10-ft{sup 2} short stack. This report describes the cell design and development effort that is being conducted to demonstrate by subscale stack test, the technical achievements made toward the above program objectives.