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With the increasing penetration of renewable energies as distributed generation (DG) in power systems, technical problems arise in both distribution and transmission system level. Voltage rise is the main barrier for connection of DGs in rural areas, while excessive reactive power demand from transmission system is the major concern for Transmission System Operators (TSO). Here, a centralized control scheme based on the Smart Grid is proposed to reduce the impact on the transmission system voltages and improve its stability, while mitigating the voltage rise issue in the distribution network. Reactive power output of DGs, substation capacitors and tap setting of transmission transformer are determined by Genetic Algorithm (GA). The method is implemented on IEEE 24-bus test system and the results show the improvement of voltage stability margin of the test system.