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The use of capacitors to correct for poor power factor is a well-established and cost-effective means of reducing demand and system losses. Utilities routinely apply capacitors on transmission and distribution systems. Additional gains may be made by installing capacitors in customer facilities and many utilities are encouraging such installations for demand-side management (DSM) purposes. Unfortunately, many industrial customers have serious problems with capacitor installations because of interactions with harmonic distortion from plant loads. Capacitors may cause one or more harmonics to be accentuated through resonance. The capacitors themselves may be damaged or the resulting voltage distortion may make it impossible to operate some process equipment. It is often difficult to predict which capacitor installations will be troublesome, particularly when there are numerous capacitors and harmonic-producing loads scattered over a plant's power system. A simplified approach that depends on less input data is described. The method is based on the voltage distortion at the main bus and the currents in the capacitors. Two test cases are presented.