A power system needs to be with sufficient reactive power capability to maintain system voltage stability and system reliability. Reactive power reserve can be ensured by installing var sources or optimizing the reactive power generation from the existing var sources. This work aims to optimize the total reactive power generation by adjusting the power flow pattern in a system. Generator bus voltage magnitudes, transformer tap positions and static var conpensator (SVC) settings are taken as control parameters. Total reactive power generation is taken as the objective function value. An enhanced version of PSO algorithm, the improved PSO (IPSO) is suggested for the optimization task. The likelyhood for trapping into local minima by PSO is overcome in this enhanced version. The effectiveness of the proposed algorithm is tested on the standard IEEE-30 bus system. The performance is compared with the basic version of PSO and improved results are seen.