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This paper presents a new concept for controlling static VAr compensators (SVC) in power systems. It allows thyristor controlled VAr compensators to effectively damp subsynchronous resonance (SSR) oscillations besides controlling the system voltage. Eigenvalue analysis and digital time simulations for the IEEE SSR benchmark system are utilized to investigate the role of the main voltage regulator of the SVC in stabilizing the system and alleviating the SSR modal interactions that may be introduced by the auxiliary speed signal alone. Stability zones are identified to optimize the compensator parameters for economical application.