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This paper presents the severity of over load index (SOL) technique to find the optimal location of FACTS controller to achieve optimal power flow solution. The proposed method estimates the SOL index of transmission line to locate the FACTS device. Main objective of optimal power flow is to minimize the overall cost function which includes total active and reactive power production cost under constraints. Among various FACTS devices thyristor controlled phase shifters (TCPST), thyristor controlled series compensator (TCSC) and static synchronous series compensators (SSSC) are considered to control active power flow through transmission line and also to reduce active power loss. Different operating conditions of the power system are considered for finding the optimal location of FACTS controllers. The proposed technique is an effective method for the optimal location of FACTS controllers.