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Many static synchronous compensators (STATCOMs) utilize multilevel converters due to the following: 1) lower harmonic injection into the power system; 2) decreased stress on the electronic components due to decreased voltages; and 3) lower switching losses. One disadvantage, however, is the increased likelihood of a switch failure due to the increased number of switches in a multilevel converter. A single switch failure, however, does not necessarily force an (2n + 1)-level STATCOM offline. Even with a reduced number of switches, a STATCOM can still provide a significant range of control by removing the module of the faulted switch and continuing with (2n - 1) levels. This paper introduces an approach to detect the existence of the faulted switch, identify which switch is faulty, and reconfigure the STATCOM. This approach is illustrated on an eleven-level STATCOM and the effect on the dynamic performance and the total harmonic distortion (THD) is analyzed.