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An optimisation criterion is presented which allows proper calculation of optimum fixed LC combination in a power factor installation. Optimisation maximises the harmonic-adjusted power factor. In the paper, it is assumed that the load harmonics are not sufficiently serious to suggest tuned filters, but, when combined with source harmonics, the use of a pure capacitive compensator would degrade power factor and overload equipment. Consequently, an LC compensator is selected. It appears that this approach is practical, justifiable, compatible with existing rate structures and relatively easy to implement. The contribution of the developed method is demonstrated in examples taken from previous publications.