The particle swarm optimization(PSO) has been shown to converge rapidly during the initial stages of a global search, but around global optimum, the search process becomes very slow. On the other hand, the genetic algorithm is very sensitive to the initial population. In fact, the random nature of the GA operators makes the algorithm sensitive to initial population. This dependence to the initial population is in such a manner that the algorithm may not converge if the initial population is not well selected. In this paper, we have proposed a new algorithm which combines PSO and GA in such a way that the new algorithm is more effective and efficient and can find the optimal solution more accurately and with less computational time. Optimal location of SVC using this hybrid PSO-GA algorithm is found. We have also found the optimal place of SVC using GA and PSO separately and have compared the results. It has been shown that the new algorithm is more effective and efficient. An IEEE 68 bus test system is used for simulation.