This paper gives an overview of the operating characteristics of the railway interline power flow controller (RIPFC) regarding the capability of transferring active power between two sections of an electrified railway line separated by a neutral zone and proposes its use for compensating the power factor at the substation instead of regulating the voltage level at the neutral zone. The basic analysis is based on simplified steady-state models for the energy supply architecture, while detailed time-domain simulations are used for more realistic tests. The paper mainly focus on active power balancing between two neighbouring substations and the global losses in the system. Other functionalities of the RIPFC system are also analysed, like reactive power compensation at the substations. The paper presents the main operating principles of the system, shows results for some representative scenarios (generic and reduced) and discusses the results. The most relevant conclusions are related to substation active power balancing and peak shaving, power factor compensation in the substation, voltage stability at the neutral zone and system power losses.