This paper presents a methodology for automatic reactors allocation on medium voltage distribution lines to reduce energy loss. In Brazil, some feeders are distinguished by their long lengths and very low load, which results in a high influence of the capacitance of the line on the circuit’s performance, requiring compensation through the installation of reactors. The automatic allocation is accomplished using an optimization meta-heuristic called Global Neighbourhood Algorithm. Given a set of reactor models and a circuit, it outputs an optimal solution in terms of reduction of energy loss. The algorithm is also able to verify if the voltage limits determined by the user are not being violated, besides checking for energy quality. The methodology was implemented in a software tool, which can also show the allocation graphically. A simulation with four real feeders is presented in the paper. The obtained results were able to reduce the energy loss significantly, from 50.56%, in the worst case, to 93.10%, in the best case.