The problem of the reactive energy optimal planning can be solved in a fast and efficient way using heuristic techniques. The latter reduce the number of the control variables to be determined and lead to a near global optimal solution. The capacitor appropriate locations are firstly determined by decisive indices then, their optimal sizes are calculated. In this paper a stability-index based method is presented. The nodes stability-indices are calculated for identifying the most sensitive nodes to be candidate for receiving near optimal standard capacitors that, reduce the feeder power losses, improve the voltage profile and maximise the economic saving (objective function). In this multi-objective optimisation problem, the commonly used voltage constraint is substituted by a new constraint on the branch reactive currents. This new constraint, allows overcoming the over compensation phenomenon by setting positive branch reactive currents. The solution is further improved by regulating the source node voltage. The proposed approach has been tested on several feeder examples and its effectiveness has been demonstrated through comparative studies. The obtained results have shown that the proposed approach leads to a promising and feasible solution. (C) 2010 Elsevier Ltd. All rights reserved.