This research work is done on the founding hypothetical fact that the lack of adequate treatment of reactive power generated by the commercial loads at the secondary distribution sub system causes the continuous overloading effect and leads this particular section to operate in un acceptable efficiency resulting from the considerable losses. The drawback of implementing power factor correction at the substations is that the reactive power sustaining in the downstream of the secondary distribution system being not serviced by those capacitors induces thermal loss. Furthermore the distribution system with its lower voltages and higher current already accounts for the majority of the power system loss. This thesis work starts assessing the existing level oftreatmentofreactivepower.Data is collected from the rating plates of the selected loads of induction motors and measurements making use of suitable measurement. The main instruments used in this research work are FLUK-125and 8230 power quality analyzer and industrial scope metersand UNITEST ac clamp meter which are designed to facilitate research works and conduct continuous assessment to maintain the state of power system A load flow analysis software ,ETAP ,is also used as analysis tool . A case study has been made on selected commercial sites which comprises induction motorsheavily ,which are the potential sources of reactive power. As the maximum load demand allowed by EEU regulation for consumers of commercial area, is limited to a maximum of135 KW per consumers, a 100 Kw load from two commercial areas are taken and also the data of the utility transformer is recorded. Data analysis has been made and the amount of reactive power generated from two sites of the commercial loads during operation at their full loadare determined. The aggregate of KVA,KW and Kvarare determined and the equivalent p.f is calculated as 0.81 . With this result the size of required capacitor bank to raise the power factor to an economic level of 0.95 is determined . After the deployment of the capacitor bank all the previous parameters are again recorded. Finally, data after the placement of the capacitor bank is collected through measurement of KVA,KW and Kvar and the p.f is again calculated resulting 0.95.The result of measurement and calculation is compared with the result of the load flow analysis using ETAP software and a conclusion has been drawn from the research work and possible recommendations are given.