A method of solving the preventive security-constrained reactive power VAr dispatch problem is presented. A decomposition-coordination scheme is conceived in order to take advantage of the special structure of the problem. Instead of tearing the network, the problem itself is decomposed into smaller subproblems. Techniques are presented for contingency simulation and for the handling of these contingencies in the optimization process. The computing procedure is given for the step-by-step solution for online implementation. VAr-oriented load flow and optimal power flow methods are described. Numerical testing results are reported. >