An integrated technique for solving transmission network expansion planning considering the allocation of reactive power sources using an AC model is presented in this paper. Embedding reactive power management in TNEP is a challenging task since AC load flow may not converge in absence of proper reactive power allocation. Usually transmission expansion planning and reactive power planning are considered as two distinct problems, but in this paper both problems are investigated concurrently. These two problems can be integrated because there is an inherent interaction between transmission line capacity and reactive power sources. In power systems, transferring reactive power may engage line capacity which requires more new transmission lines, while allocating reactive power sources close to the load centers may prevent the addition of new transmission lines. On the other hand, if reactive power sources are not included, real power losses will increase considerably and thereby reduce transmission line capacities. The main objective of this study is to show that both active and reactive power planning can be handled simultaneously. This non-convex combinatorial optimization problem is solved here using a real genetic algorithm (RGA). Significant results through case studies of two test systems show the advantages of the proposed integrated network planning.