This dissertation is to investigate the power system service quality of a Mass Rapid Transit (MRT) system and derive the proper transformer planning to enhance the system operation efficiency. The transformer loading factor is improved by proper capacity planning by considering the power demand according to the growth of ridership. To mitigate the harmonic distortion, the installation location and capacity of harmonic filters are designed and verified by computer simulation. In this dissertation, the software programs for the AC/DC load flow study and harmonic analysis have been developed and integrated to simulate the MRT power system. To enhance the accuracy of computer simulation for the system operation with multiple trains on the main lines, the effect of voltage fluctuation to the traction effort of a train set is considered in the AC/DC load flow analysis. The mathematical model of 12-pulse uncontrolled rectifiers without interphase transformers has been derived and implemented in the programs to obtain more accurate simulation results. To achieve better cost effective capacity planning of main transformers, the unit commitment is applied to derive the optimal transformer capacity to meet the annual peak demand and provide reserve for service reliability. The power consumption of an MRT system is varied with the train operation modes and the route gradient, curvature of MRT networks. The motion equation of train sets has been applied to find the dynamic power consumption and travel distance for each time snapshot. The AC/DC load flow analysis is performed to find the annual power loading of traction substations and whole Taipei MRT network. The energy loss, investment cost of main transformers, and the system service reliability are used to define the equivalent cost of all feasible states for each dynamic programming stage. According to the computer simulation, significant cost saving has been obtained by the proposed methodology for transformer capacity planning of Taipei MRT network. Due to the dynamic load behavior of train sets, the stochastic harmonic distortion of an MRT system is simulated. The mathematical model of the 12-pulse uncontrolled rectifiers without interphase transformers is considered in the harmonic load flow analysis to solve the power demand and harmonic injection currents at traction substations for each time snapshot. According to the mean values and standard deviation of injection harmonic currents, the stochastic harmonic load flow analysis is executed to find the average value and the confidential interval of harmonic voltage distortion for all system buses. By this method, the system voltage harmonic distortion can be evaluated more accurately to provide better guidance for the strategy of harmonic mitigation. According to the results of the stochastic harmonic load flow, different strategies of harmonic distortion mitigation are investigated. Both the fixed type and switching type of passive filters are considered to be implemented. The cost function of filter investment and the harmonic distortion are used in the objective function by considering the regulation of harmonic distortion and system voltages as the constraints. By performing the nonlinear programming, the proper capacity of harmonic filters for each harmonic order and the corresponding switching time of unit commitment is determined. To further improve the power quality, the hybrid filter is also proposed for better distortion mitigation. The analysis of distortion mitigation by harmonic filters are performed to demonstrate the effectiveness of the hybrid filters to improve the power quality of MRT systems.