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Increased emphasis on energy conservation and reduction of purchased electric power bills have resulted in an increased awareness of the importance of capacitors on industrial systems. Larger banks of capacitors are being considered for installation and many questions relating to the application must be answered. Most of the commonly encountered factors relating to equipment selection, location on the system, protection, and switching criteria are reviewed. Motor terminal capacitor applications are also discussed. Economic justification for the purchase of the capacitors and harmonic resonance, as it relates to capacitor selection and application, are not included.