I'm reading through the excellent free online book "Marks Pages", which deals with all sorts of powerline things, and I came across this:

"Taking this a little further; How many times are filters installed to rid the network of certain harmonics? It is, personally speaking, a totally ludicrous idea as all one is doing is asking a passive device to 'work against' a portion of the current curve of an imperfect load. This has two serious consequences. The first is the amount of heat generated through this (which increases should the frequency be slightly off), but the worst is the current associated with the harmonic will at least double through the network ahead of the filter (for every action there is an equal but opposite reaction!)."

http://www.marcspages.co.uk/pq/3240.htm

And this is true, there is extra harmonic energy generated by the filter. So basically, the filter needs to be installed as close to the offending device as possible, and then the extra current is limited to a smaller bit of powerline.

Do the benefits ("cleaner" powerline) outweigh the cons? (locally "dirtier" powerline, possibly higher power usage)?

Also here:

"Capacitors will, however, naturally shunt any harmonic content present on the electrical system. In doing so, they will intensify the high-frequency current on the electrical distribution system between the capacitor and non-linear load. This means installing power factor correction may lead to the need to increase the ratings of electrical switchboards to cope with the increased high-frequency current!"

http://www.marcspages.co.uk/pq/3241.htm

I'm going to think about this.