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The growth in distributed energy resources has the potential to reduce system stresses caused by transmission grid congestion by supplying power and voltage regulation closer to load centers. However, the additional voltage regulation provided by these resources can mask the onset of voltage collapse. Local voltage support flattens the slope in the upper region of the power-voltage nose curve. Coordinating voltage-regulation behavior with the droop-control scheme in distributed resources improves the observation of voltage collapse margins. Incorporating distributed resource models in the continuation power flow analysis, allows the exploration of the power transfer gains by the application of distributed resources. The analysis provides insight to the impact of droop control on the behavior of the power-voltage curve and voltage collapse. The analysis is applied to a fixed speed induction generator wind farm with separate reactive compensation and the interconnection to the local power system. Results reveal that coordinating the droop control strategy allows the distributed resource to significantly increase the voltage collapse margin without hiding the threat of voltage stability problems.