The main function of the regulating transformer is to control the magnitude of voltage and power flow of the transmission line. They provide the small component of voltage between the line or phase voltage. Over all control of transformer is in our hand that is we can control current, voltage and phase angles as well.

The transformer which changes the magnitude and phase angle at the certain point in the power system is known as the regulating transformer. It is mainly used for controlling the magnitude of bus voltage and for controlling the power flow, which is controlled by the phase angle of the transformer. 

The regulating transformer is of two types. One is used for changing the magnitude of voltage which is called online tap changing transformer and the other is called phase shifting transformer. The regulating transformer compensates the fluctuation of voltage and current.