Hybrid DER technologies interconnected with the grid can provide improved performance capabilities compared to a single power source, and, add value, when matched to appropriate applications. For example, in a typical residence, the interconnected hybrid system could provide power during a utility outage, and also could compensate for voltage sags in the utility service. Such a hybrid system would then function as a premium power provider and eliminate the potential need for an uninterruptible power supply. In this research project, a proton exchange membrane (PEM) fuel cell is combined with an asymmetrical ultracapacitor to provide robust power response to changes in system loading. This project also considers the potential of hybrid DER technologies to improve overall power system compatibility and performance. This report includes base year accomplishments of a proposed 3-year-option project.