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By increasing electric power demand, powers systems can reach stress conditions, resulting in undesirable voltage and frequency condition. Nowadays It is well recognized that by applying the flexible AC transmission system (FACTS) controllers, the stability limits can be enhanced significantly. In this paper an optimized self tuning fuzzy PI controller (STFPIC) is proposed for the UPFC to improve system dynamic performance. The fuzzy PI controller (FPIC) is designed in the first step and then the gains of this controller are optimized by ant colony system (ACS). FPIC performs well for the base operating condition of the system, but in another operating conditions, it will not show suitable results. Thus, another controller is added to tune the output gain of the main controller and convert it to a self tuning controller. From the simulation studies it is observed that the STPIC UPFC has better performance in different conditions.