JPS_V5_N2_RP3 Varaprasad Janamala Chandra Sekhar Koritala Journal on Power Systems Engineering 2322–0376 5 2 19 25 Deregulation, VAR Optimization, Strategic Bidding, Loading Capability The application of competitive market principles to the operation of power systems has resulted in stability margins being reduced to responding market pressures, which demand greater attention to reduced operating costs. As the overall stability limits can be closely associated with the voltage stability of the network, the incorporation of voltage collapse criteria and tools in the operation of power systems is becoming an essential part of new energy management systems. The possibility of uncertainties incidence in power system operation cannot be avoided in security studies. The load withdrawals and generation schedule are unpredictable in the market environment. In addition, the contingencies cause to reduce security margins further. In this paper, with the help of an illustrative example, the generation schedule, the importance of proper generator excitation, and how it will impact on reactive power control from a source is explored. May - July 2017 Copyright © 2017 i-manager publications. All rights reserved. i-manager Publications http://www.imanagerpublications.com/Article.aspx?ArticleId=13619