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Industrial distribution systems have been designed in the USA, considering prevalent standards, i.e., American National Standards Institute (ANSI), IEEE, National Electrical Code (NEC), Occupational Safety and Health Administration (OSHA), etc., and arc flash was not a consideration for designing electrical power systems in the industry. Functionality and economics were the important factors, and will always be so. However, the arc flash analysis and limiting the incident energy will usher a new parameter in system design. It can be demonstrated that in many current installations and new installations designed without considerations of limiting the arc flash energy, the hazard risk category exceeds the highest Class 4 personal protective equipment (PPE), i.e., an arc thermal performance exposure value (ATPV) of 40 cal/cm2. This paper discusses typical industrial distribution systems at low-voltage and medium-voltage levels and demonstrates the impact of system design decisions and protection on the incident energy and arc flash hazard reduction.