Chapter 2 covers the fundamentals of phasor analysis for AC systems, highlighting the simplification of constant frequency systems through phasor representation and the significance of root mean square (RMS) voltage. It discusses complex power, conservation of power, and the impact of reactive compensation in power systems, including examples and calculations for reactive power needed to adjust power factor. Additionally, it explores balanced three-phase systems, advantages of three-phase power, and connections like wye and delta.