I would say the automatic transfer switch should be configured conservatively and go to backup power at the first hint of instability. If irregular power is the usual cause of downtime then I would expect the ATS to cope with those conditions, or it gets replaced with one that will.

Good point about the lack of variability. Not sure if the generators would take kindly to suddenly switching out a 1 mw dummy load to free capacity for real load.

On the other hand, it's not like these engines have fixed RPM throttles, and they should be able to handle a wide range of loads, albeit not at peak efficiency. Something doesn't fully make sense about that story. Maybe the generators were sized for their ultimate planned capacity and thus way too much for their deployment at the time.