This paper describes the application of particle swarm optimization (PSO) technique to find the optimal setting of thyristor-controlled series capacitors (TCSCs) in order to eliminate or minimize line overloads under single contingency or critical double contingency and to minimize the installation cost of TCSCs. The proposed approach uses Contingency Sensitivity Index (CSI) to rank the system branches according to their suitability for installing a TCSC. Once the locations are determined, PSO technique is used to find the best settings for the installed TCSCs to eliminate or minimize the line overloads in case of all the possible single contingencies or critical double contingencies and to minimize the installation cost of TCSCs. The voltage magnitude at each bus and the line flow through each branch for all the buses and branches respectively, have been considered as inequality and equality constraints. The proposed approach enhances the static security of the power system with minimum installation cost of TCSC. The IEEE 6-bus and 30-bus systems are used to validate the proposed approach