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The paper presents a new control method based on Neural Network technique to damp out the power system low frequency oscillations using STATCOM controller. The main objective of this paper is to investigate the power system dynamic stability enhancement by using neural network based FACTS (STATCOM) Controller. This study includes Proportional feedback, lead-lag, Radial basis function Neural Network controller. The effectiveness of the new controller is demonstrated through time domain simulation studies. The results of these studies show that the designed controller has an excellent capability in damping power system oscillations.