An on-line optimal environmental/economic dispatch methodology for electric power generation is developed in this paper. Aside from the conventional economic dispatch, constraints on air quality (such as those specified by the U.S. Environmental Protection Agency) are added to the minimum fuel cost problem. Using the integrated Gaussian puff model based on the statistical turbulent theory, rapid dynamic features of pollutant dispersion and its forecast surrounding the plants are emphasized. By applying a convex programming algorithm repeatedly, a set of marginal environmental imposts for the power plants at different times are obtained. Such imposts are incorporated with the fuel cost in the ordinary short-term economic dispatching program to indirectly account for the environmental impact of power generation on the quality of the ambient air. The approach is specifically taken to have little modification for existing economic dispatch programs and be implemented for real power networks. The proposed approach has been simulated in a power system with three plants and three monitoring points. Copyright © 1977 by The Institute of Electrical and Electronics Engineers, Inc.