Various problems such as increase of power loss and voltage instability may often occur in the case of low load power factor. The demand of reactive power increases continuously with the growth of active power and restructuring of electric power companies makes the comprehensive management of reactive power a troublesome problem, so that the systematic control of load power factor is required. In this paper, the load power factor sensitivity of generation cost is derived and it is used for effectively determining the locations of reactive power compensation devices and for enhancing the load power factor appropriately. In addition, voltage variation penalty cost is introduced and integrated costs including voltage variation penalty cost are used for determining the value of load power factor from the point of view of economic investment and voltage regulation. It is shown through application to a large-scale power system that the load power factor can be enhanced effectively using the load power factor sensitivity and the integrated cost.