A decomposition methodology based on the concept of "thermoeconomic isolation" applied to the synthesis/design and operational optimization of a stationary cogeneration proton exchange membrane fuel cell (PEMFC) based total energy system (TES) for residential/commercial applications is the focus of this work. A number of different configurations for the fuel cell based TES were considered. The most promising set based on an energy integration analysis of candidate configurations was developed and detailed thermodynamic, kinetic, geometric, and economic models at both design and off-design were formulated and implemented. A decomposition strategy called Iterative Local-Global Optimization (ILGO) developed by Muñoz and von Spakovsky was then applied to the synthesis/design and operational optimization of the fuel cell based TES. This decomposition strategy is the first to successfully closely approach the theoretical condition of "thermoeconomic isolation" when applied to highly complex, non-linear systems. This contrasts with past attempts to approach this condition, all of which were applied to very simple systems under very special and restricted conditions such as those requiring linearity in the models and strictly local decision variables. This is a major advance in decomposition and has now been successfully applied to a number of highly complex and dynamic transportation and stationary systems. This thesis work presents the detailed results from one such application.