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As certain electric power facilities have been used for a long time, some of these facilities have to be replaced due to age. Meanwhile, as the deregulation of the electric power industry has been prevailing, cost reduction and effective use of existing facilities are required in addition to ensuring stability. In this paper, we propose a new technique for optimal shunt capacitor (SC) reallocation. A feature of the technique is that not only the steady state but also all the N-l contingencies are considered as constraints of an objective function. In the formulated objective function, the voltage stability index VMPI is included to consider the upper and lower limits of voltage. Moreover, the issue of finding an optimal solution for the objective function is a combinatorial optimization problem. Therefore, we solve the problem by using genetic algorithm, which is one of the methodologies involved in meta-heuristics. Simulations are carried out by using a 22 bus system to verify the proposed method.