Southern California Edison (SCE) is actively assessing how to maximize the benefits from fuel cell power systems and other distributed generation (DG) technologies deployed along existing distribution level circuits. From a utility perspective, the viability of DG fuel cell systems increase as the technology matures and more "value-added" features are incorporated. As the number of DG projects grows in SCE's service territory and optimism increases about the potential uses, so does the need to better understand the impact wide-scale deployment may have on the performance of California's energy system. Understanding how DG technologies affect distribution level circuits and devising effective deployment strategies is essential for the technology to gain widespread acceptance and become an integral part of SCE's Transmission and Distribution (T&D) system planning. Simulation results are presented in this paper that indicate fuel cell systems combined with electronically switched power inverters capable or providing reactive power (a.k.a. VAR) support are more advantageous than fuel cell systems without such inverter features. In fact, for the SCE circuit analyzed, a strategically placed 2.5 MW fuel cell system with VAR support capabilities has a greater affect on circuit performance than a 3 MW fuel cell system without VAR support. Even though the 2.5 MW fuel cell system with VAR support inverter possesses 16.7% less power rating than the 3 MW system without VAR support, it was more effective in reducing circuit current flows, reducing distribution line losses, and maintaining circuit voltage within 5% of 12.47 kilovolts (kV). (c) 2006 Published by Elsevier B.V.