The present study examines and evaluates the applicability and production cost analysis of dispersed generation (DG) resources in a transmission-constrained load pocket of a two-area interconnected system with limited transfer capability. The types of DG technologies considered in the study are photovoltaics (PV), fuel cells, and microturbine units. The rationale for the study is that the electric power systems of today are experiencing a difficulty of constrained transmission lines, which have severely limited transfer capability between interconnected regions. The problem is more compounded by such factors as difficulty in obtaining rights-of-way, the strong environmental movement, public protest against the construction of additional transmission facilities, and the resulting inability to expand the constrained system. All of these factors are forcing the utility planners and third parties alike to search for other viable alternatives to meet the uncertainly growing load in their planning regions or at least to be able to compete effectively in the growing electricity market.