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System of electrical energy is composed of three working blocks; generating system, transmission system and distribution system. For system to be reliable, generating station must generate adequate power to meet demand of customer. Transmission system must transport sufficient power without overloading and loosing stability over long distances. Distribution system is directly connected to the consumer and it at the far end of power system. In earlier days main concern for reliability of electrical supply was on generating system and transmission system but now distribution system is gaining much attention for assessment of reliability. Now a day for power industries and consumers quality of power has become major concern. In India, electrical power allocation networks are being critically affected by defects of electrical power quality. Main reasons for poor quality of power (Santoso et al., 2003) are increasing use of computers, inverters, variable speed drives using technology of power electronics, UPS, etc. All these devices are highly non-linear in characteristics, increase in demand which in turn weaken the supply system and Increase in thrust on energy conservation actions results in rapid growth of Compact Fluorescent Lamps (CFLs), electronic chokes, electronic energy controllers for motors, solid-state fan regulators, etc. which all produce harmonics in the power system. Power Quality problems depend on the quality of the types of loads in system, the voltage supplied by utility and the sensitivity of the devices to different kinds of disturbances. For obtaining an optimum techno- economic solution while designing the system, the above three interacting factors has to be considered.
