It is important to search for the optimum method to compensate the system reactive power in power systems. The capacitor bank is considered as one of the efficient methods to compensate for the reactive power with a low running cost. Optimal capacitor placement and sizing are key issues to improve the impact of the capacitor bank for enhancing the quality and reliability of the distribution system. Particle swarm optimization (PSO) algorithm has been used in this chapter to select the optimal busbar to add the capacitor and to design the optimal size of this capacitor bank to the distribution network. This chapter discusses the importance of using the shunt capacitor bank for reactive power compensation in terms of improving reliability, loadability, and reduction of power losses. Moreover, this research discusses the ability of automatic capacitor control scheme (ACCS) to add the optimal value 206online of the shunt capacitors. The proposed method in this chapter has been validated with the IEEE 15-buses power system at 11.0 kV as an example to select the optimal placement and sizing of capacitor banks by using a PSO algorithm automated by the ACCS module for enhancing the quality of the power system.