Reactive compensation in distribution networks is a typical optimization problem of great technical and economic importance, which has been faced over five decades. It consists of determining installation points and operation control program of a certain number of capacitor banks in order to maximize the profits obtained from system losses reduction. The extent of the benefits from capacitor banks installation depends on electrical network configuration and its load states. Therefore, on this book, a great deal of attention has been focused on introducing methods to determine the size and location of shunt capacitor banks on distribution systems. The primary objective of this book is not based only on introducing new strategies but also to introduce and study the application of fuzzy set theory (FST) to the capacitor allocation problem. In addition, two methods are proposed in this book to study the impact of harmonics, which may exist in the distribution system on the capacitor allocation problem.