There are ways to compensate reactive power, such as a super excited synchronous motor, active filter, single-phase reactive generator, or, in a more economic and often-used option, through the installation of a fixed and/or automatic bypass capacitor bank. Abstract—In power systems, the incorporation of capacitors offers a wide range of established advantages. These benefits encompass the enhancement of the system's power factor, optimization of voltage profiles, increased capacity for current flow through cables and transformers, and the mitigation. For the use of automatic capacitor banks in distribution and voltage profile, as well as reducing power losses In the electrical power distribution system, there reactive power which POWER does not produce useful industrial installations. 1 represents a. Capacitors are mainly used in power system for reactive power compensation. The placement of capacitors is one of the most important methods to achieve loss reduction and enhance the voltage. The next category of loads is called “Reactive” and there are only two types, shown here – Inductors and Capacitors. The solution methodology has two parts: in part. This concerns unbilled/Unaccounted energy also called Commercial Losses.