Harmonic pollutions are one the most considered issues in power systems because the number of nonlinear loads of industrial customers has increased in the past few decades. Harmonic distortions create numerous operational issues for the utilities and the customers. Power systems operators have always been looking for practical methods to reduce harmonic distortions caused by industrial customers. In this regard, some penalties are considered for harmonic-producing customers, in order to encourage them to control or reduce their harmonic injection into the grid. In literature, different methods have been proposed for cost allocation to the industrial harmonic-producing customers. Usually, a harmonic filter is considered for each customer to control each customer’s harmonics. Then, based on the filtering cost, the customer has been charged. Dedicating a filter to each customer has two fundamental problems. First, it is not cost-effective, and forcing all customers to install filters is not necessarily fair. The second problem is that installing a large number of filters in the grid will be led to additional operational problems. On the other hand, in most of the proposed methods, customers’ share in harmonic generatio has not been considered. Via measuring the power quality parameters at the common point of the coupling (PCC), the amount of voltage and current distortions could be determined, but determining the share of each contributing side (the customer and the grid) in this harmonic pollution is another problem. In this thesis, at the first step a traarent and practical procedure for an optimal filter siting and sizing is proposed. Optimal filters siting and sizing is performed in such a way that the harmonic distortions meet the standards, while power systems limitations and technical restrictions of filters are taken into account. Meta-heuristic Particle Swarm Optimization (PSO) algorithm is used for optimal filtering and minimizing related costs. Then, for a fair allocation of filtering costs to the customers, a participation coefficient is defined and then determined for each customer in the grid. These coefficients are calculated based on harmonic distortion contribution of each customers at PCC and their respected deviation from standard limits. In this thesis, the Previously purposed methods in harmonic contribution determination, are analyzed. According to the goals of this thesis and based on the performed analysis, the three point-method has been applied to determine the harmonic distortion contributions caused by each customer in the grid. The proposed method is implemented on the 14-bus IEEE test system. The results shows the method is fully applicable and is practical. Keywords: Harmonic distortions, Harmonic contribution determination, Optimal filtering, Cost allocatio