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The paper gives detailed analyses to determine the increase in production cost due to the transmission of VARS. On the basis of that and with due consideration to the cost of VARS compensation equipment, a mathematical model is developed to determine the economically justified transmission distance for VARS in electric power systems. Standard voltages and line parameters are used for computation. MATLAB computer programming is used to obtain the numerical results. The developed mathematical model and the numerical results could be useful to electric power systems engineers.