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This paper presents a novel combined algorithm based on particle swarm optimization (PSO) and simulated annealing algorithm(SA) for power system reactive optimization. According to the characteristics of PSO and SA, the proposed method which combined PSO and SA efficiently makes good use of easily implementing performance and fast convergence performance of PSO and global convergence performance of SA, and makes them search in phase. This paper detailed explains coding of control variables, selecting of parameters and material steps of combined algorithm for optimizing reactive power. Taking the IEEE 14-bus system, IEEE 57-bus system and IEEE 118-bus system for example, the simulation results demonstrate that the proposed method is simple and easy to implement, and has high computing efficiency and comparing with conventional PSO it can obtain higher quality solutions.