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Microprocessor-based signal processing equipment for frequencies up to 20 kHz have become compact and fast enough to allow direct on-line real-time analysis on power systems to determine behavior. A case study is presented for a small steelworks operating a 25-MVA open arc furnace, installing 6.5 MVA of thyristor control equipment and further power factor correcting equipment and harmonic filters on a system with ill-defined parameters, low short- circuit capacity, and already containing power factor correcting capacitors tuned at the third harmonic. Discrete spectrum analysis equipment, microprocessor-based and coupled via IEEE-bus to a microcomputer system, was used to do on-line analysis at various points in the system. The high-speed system enabled sophisticated signal processing to yield even and uneven harmonics, stochastic components, system parameters and resonances and mutual interference. It is shown how this is used to rectify problems in the system, adapt equipment, and design power factor and filter equipment.