The main objective of power system operation is to supply the customer electricity demand with acceptable quality in an optimum way. With constantly varying demand, this objective may not be easily achieved.  An adaptable system enhancement is therefore necessary to attain the objective. One of the strategies is controlling the switchable devices in distribution system for the purpose of maintaining the system voltage within the acceptable limits and minimizing the loss with minimum control action. One of the electricity customers is industrial institution, where some type of the loads is nonlinear. This may include electrical machine and power electronic devices. Besides drawing the power from the grid, these loads may also inject distortion to the system causing destructive effects. This study proposes optimization scheme of distribution system considering the presence of nonlinear loads. In addition to control the system voltage and reduce the loss, system distortion should also be suppressed. To include the nonlinear loads into optimization, the calculation of power flow should be extended to accommodate the characteristic of the nonlinear loads. The optimal control of switchable devices is carried out using Genetic Algorithms. The significant of involving distortion injected by nonlinear loads are highlighted.