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This paper presents the application of a perturbed particle swarm optimization (PPSO) technique to find optimal location and parameter setting of unified power flow controller (UPFC) for enhancing power system security under single line contingencies. A contingency analysis is first outlined to identify the most severe line outage contingencies, considering lines overload and bus voltage limit violations as a performance index. Then, the proposed algorithm is applied to find out the optimal location and parameter setting of UPFC under the determined contingency scenario. Simulations are performed on IEEE 14 bus system. The results indicate that PPSO is a powerful optimization technique and enhance the convergence of the standard PSO. Installing UPFC in the optimal location determined by the proposed approach can significantly enhance the security of power system by eliminating or minimizing the number of overloaded lines and the bus voltage limit violations.