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Relatively small projects for generating electrical power at or near the point of use--distributed generation (DG)--offer unique opportunities for enhancing the U.S. electric system. This report finds that current air quality regulatory practices are inappropriately inhibiting the development of DG through a failure to recognize the environmental benefits offered by DG or by imposing requirements designed for larger systems that are not appropriate to DG systems. The report recommends that air quality regulation be made more efficient and appropriate for DG by establishing national standards for DG equipment. This report also recommends that DG projects be evaluated on a''net'' emissions basis by being given credit for any emission sources that they displace. Air quality regulation should also recognize the benefits of combined heat and power (CHP).

Impact of Air Quality Regulations on Distributed Generation