Operating strategies of solid oxide fuel cell (SOFC) combined heat and power (CHP) systems are developed and evaluated from a utility, and end-user perspective using a fully integrated SOFC-CHP system dynamic model that resolves the physical states, thermal integration and overall efficiency of the system. The model can be modified for any SOFC-CHP system, but the present analysis is applied to a hotel in southern California based on measured electric and heating loads. Analysis indicates that combined heat and. power systems can be operated to benefit both the end-users and the utility, providing more efficient electric generation as well as grid ancillary services, namely dispatchable urban power. Design and operating strategies considered in the paper include optimal sizing of the fuel cell, thermal energy storage to dispatch heat, and operating the fuel cell to provide flexible grid power. Analysis results indicate that with a 13.1% average increase in price-of-electricity (POE), the system can provide the grid with a 50% operating range of dispatchable urban power at an overall thermal efficiency of 80%. This grid-support operating mode increases the operational flexibility of the SOFC-CHP system, which may make the technology an important utility asset for accommodating the increased penetration of intermittent renewable power. (C) 2009 Elsevier B.V. All rights reserved.