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The use of Interline Power Flow Controller (IPFC) for maximizing voltage-stability limited power transfer and damping power swings is investigated. An IPFC consist of two voltage-sourced converters inserted in series in transmission lines, whose DC capacitors are coupled. This paper discusses the regulation modes of an IPFC and its control strategies at rated capacity. The rated-capacity operation is important in determining the maximum power transfer capability under voltage stability condition. Also, IPFC can improve small-signal stability by providing damping control supplemental to its regulation control. A modal decomposition approach is proposed to select the best damping control input signals. The results are illustrated on a 20-bus test system. Index Terms-voltage-sourcedconverters, flexible AC transmission systems, interline power flow controllers, voltage stability, damping controller design, Xia Jiang received her B.S. and M.S. degree in Electrical Engineering from

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