Static Synchronous Series Compensator (SSSC) is an efficient member of Flexible AC Transmission Systems (FACTS) devices. SSSC is connected in series with transmission lines to control the active and reactive power flow in these lines. In this paper, Grey Wolf Optimization (GWO) algorithm is developed for solving the optimal reactive power dispatch (ORPD) problem. The ORPD problem is solved with incorporating SSSC for improving the voltage profile and enhancing voltage stability of the electric system. The optimal location and parameter setting of SSSC controller is determined under a contingency state. The developed algorithm is validated using standard IEEE 30-bus test system and the obtained results are compared with the particle swarm optimization (PSO) algorithm. The simulation results demonstrate the effectiveness of the developed algorithm for solving the ORPD problem with determining the optimal location and parameter setting of SSSC. In addition superiority results are obtained with incorporating SSSC in the power systems.