This paper presents an optimal allocation method of Step Voltage regulators (SVRs) in case distributed generators are connected to distribution networks. ln the proposed method，the reactive tabu search (RTS) and the enumeration method have been combined as two-step procedures. In the first step，the optimal locations of SVRs are decided based on the reactive tabu search (RTS). In the second one，the parameter for SVRs is optimized by the enumeration method by taking consideration of controllable regions of the voltage regulators obtained by a voltage sensitivity analysis. The proposed method enables us to incorporate the installation costs of SVR as an economic criterion，the upper and lower limit of voltage at each node and also the upper limit of line currents as constraints. By applying the proposed method to a practical distribution test system，it is verified that this method is efficient to allocate SVRs at the minimum cost and regulate the system voltage within an appropriate value even after installing distributed generators into distribution systems.

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