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This paper investigates the effect of interline power flow controller (IPFC), an advanced flexible AC transmission system (FACTS) controller, in damping low frequency oscillations via supplementary control. For this purpose, a modified linearised Phillips-Heffron model for a single machine infinite bus (SMIB) system installed with IPFC is established, and the power oscillation damping controller is designed. The effect of this damping controller on the system, subjected to wide variations in loading conditions and system parameters, is investigated. Results of simulation investigations in Matlab are presented to validate the proposed approach.