Course Outline: It starts with discussion about the structure of power systems from a power plant to the customer, and typical power system voltages in different parts of the system. This is followed by the chapter explaining how power losses and voltage drops in the power system may be reduced through compensation of reactive power either by shunt capacitors for an inductive load or shunt reactors for a capacitive load. Arrangement of shunt capacitor bank and a sequence of it’s design is considered as well. Explanations are supported by numerous drawings, photos of actual equipment and the example showing how to design a 230 kV shunt capacitor bank. The final chapter is discussing reasons for voltage regulation in power systems and means to perform it is then presented. Explanations are supported by photos and example showing how transformer winding taps may be selected.