If you think the frequency is changing, but the engine speed is decreasing review this article instead, or if you think the engine speed is constant continue reading. You will be able to hear what the engine speed is doing, so listen and decide what is happening in your case.
The fundamental frequency is always directly proportional to the speed of the engine. If you find that the frequency is low, while the engine speed remains constant, the effect is caused by harmonic distortion. Harmonic currents are caused by non-linear loads connected to the distribution system. A load is said to be non-linear when the current it draws does not have the same waveform as the supply voltage. The flow of harmonic currents through system impedance's in turn creates voltage harmonics, which distort the supply voltage. You can read more about harmonic distortion here.
You might want to see how engine speed and the alternator frequency are related - just two mins long.
Why is it happening? it doesn't happen on the mains!
The mains is a huge beast compared to even the largest generator - you also don't have the same protections on the mains as you do on a generator. Harmonic distortion can be countered however there are three key ways:
You should note that harmonics cause additional current to flow through the winding's of the alternator and therefore additional heating occurs. For this reason you should primarily tackle the harmonics if possible to reduce them to an acceptable level. If you have harmonics of significant quantities in the system, you will need to over-size the generator to ensure you are running within limits.
1) Over-size the generator
Over-sizing the generator (specifically the alternator, rather than the engine) will reduce the harmonics as the THD as a percentage will be less compared to the overall power produced by the alternator.
2) Add some more resistive load
Resistive loads act as a 'break' on the harmonics, countering their effects in the system and therefore adding additional restive load can counter the problem of harmonics within a generator system (assuming you have sufficient capacity to add these loads).
3) Monitor from the Speed, Not the frequency
You may turn off the frequency monitoring, if you have another way of monitoring the speed of the engine. As speed is always proportional to the fundamental frequency, your fundamental frequency will not be low if your engine speed doesn't fall.
Most generators of standard design not using CANBUS to communicate with the engine calculate speed from the alternator frequency. in this case adding a magnetic pickup to the system will allow monitoring of engine speed.