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Summary form only given: The "Sen" transformer (ST) is made out of a transformer and tap changers and is capable of regulating the active and the reactive power flow selectively in an electric transmission line. This paper focuses on the development of a novel algorithm capable of selecting the best combination of tap-settings for the compensating windings of the ST. Digital simulation model of the ST including a detailed tap-changer model has been developed in the PSCAD/EMTDC software package. The tap-changing algorithm of the ST has been implemented through a FORTRAN code that is interfaced with the rest of the model. Should there be any change in the magnitude of the compensating voltage and its phase angle, the tap-positions are readjusted accordingly. The results obtained from the simulation of the ST are compared with the simulation results of the UPFC which is a power electronics-based power-flow controller. The comparison shows good agreement between the results and hence validates the effectiveness of the proposed algorithm and the performance of the ST.