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In this paper, an improved Tabu search method is proposed and applied to reactive power optimization planning in power systems. The improvement is done mainly by changing the way that the initial value is generated, and by adding sensitivity analysis and expert knowledge to Tabu search process. The minimum sum of active power loss and the cost of reactive equipment are used as the objective function of reactive power planning. Three different load operation conditions, namely heavy, normal and light, are considered to decompose the reactive power planning into three sub-problems. The active power loss in one year is used to coordinate the three operation conditions. The statistic results of the reactive power optimization planning of a power system in a certain area demonstrate that the improved TS algorithm is more stable and reliable and faster than simple TS method in finding global optimal solution.