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In steel making industries, the electrical arc furnaces (EAFs) present the main non linear loads connected to the power supply. One of the problems associated with this and needed to be studied and solved is the harmonics produced by those furnaces. The solution of the problems requires study and analysis of the harmonics. This can be done by working a model for the furnace circuit. This model is used for studding real practical case in steel plant of Libyan Iron & Steel Company (LISCO), in Misurata , where six arc furnaces are available. There are some problems reported and observed for filter banks of SVC system of the furnaces . One of these problems is a failure of capacitor units in 5th and 7th harmonic filter banks due to the overvoltages produced by the harmonics. These overvoltages shorten the life-time of the capacitor. To solve the problem; a redesign of shunt passive filters (filter substation) has been done to reduce the amount of harmonics and save the capacitor banks from the over voltages.