Nowadays, the electrical systems require new flexible AC transmission systems; they allow the implementation of new reactive control and flexibility with the short circuit currents, with modern control systems. This paper develops the design of a magnetically controlled reactor (MCR) system, with a case study for design and application in the Peruvian power system. The dynamics analysis and faults considerations are important points for new projects in a real power system. The MCR could be applied in the power systems, instead of a static var compensator (SVC) or static synchronous compensator (STATCOM), besides the Transient Restoration Voltage is eliminated in the case of shunt reactors in power lines for the circuit breakers degradation. The main characteristics, constraints and benefits are developed in this research.