Obtaining optimal power flow solution is a strenuous task for any power system engineer. The inclusion of FACTS devices in the power system network adds to its complexity. The dual objective of OPF with fuel cost minimization along with FACTS device location for IEEE 30 bus is considered and solved using proposed Enhanced Bacterial Foraging algorithm (EBFA). The conventional Bacterial Foraging Algorithm (BFA) has the difficulty of optimal parameter selection. Hence, in this paper, BFA is enhanced by including Nelder-Mead (NM) algorithm for better performance. A MATLAB code for EBFA is developed and the problem of optimal power flow with inclusion of FACTS devices is solved. After several run with different initial values, it is found that the inclusion of FACTS devices such as SVC and TCSC in the network reduces the generation cost along with increased voltage stability limits. It is also observed that, the proposed algorithm requires lesser computational time compared to earlier proposed algorithms. © 2013 ISA.