To reinforce its Inez network, which was operated close to its stability limits, American Electric Power (AEP) undertook two major developments, one being the installation of a Static Var Compensator (SVC) in November, 1980 and the other one being the installation of the world's first Unified Power Flow Controller (UPFC) in 1998. The controllers in the system include the Automatic Voltage Regulators (AVRs) of the generators, the controllers of the SVC, and UPFC. To coordinate the control actions of these controllers and prevent voltage instability resulting from their fighting against each other, a two level hierarchical control scheme using fuzzy logic has been developed and its performance was assessed via simulations. The second level of the hierarchy determines the set points of the local controllers of the AVRs, SVC, and UPFC and defines the switching sequences of the capacitor banks, the goal being to maximize the reactive reserve margins of the Inez subsystem. Numerous simulations were carried out on this system to determine the actions of the fuzzy controller required to prevent the occurrence of voltage collapse under double contingency. Simulations have revealed the occurrence of nonlinear interactions between the machines resulting in stable limit cycles, nonlinear oscillations undergoing period doubling leading to chaos and possible voltage collapse. The proposed fuzzy scheme provides a fast, simple and effective way to stretch the stability limit of the system for double contingency conditions, up to 175 MW in some cases. This is a significant increase in the system capacity.