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A loss formula based on the incremental power flow being a reduced form of the power flow is derived. The algorithm for its determination which utilizes the Jacobian matrix is given and the properties of the coefficients characterizing the incremental power flow are discussed. The key concept is the determination of a quadratic form such that second derivatives of the incremental power flow and of the load flow variables agree. The concept lends itself to load flow optimization, in particular for reactive dispatch for which an example (118 bus AEP system) is discussed. The results prove the expected high performance.