One of the main benefits of applying capacitors is that they can reduce distribution line losses.
Losses come from current through the resistance of conductors. Some of that current transmits real power, but some flows to supply reactive power.
Reactive power provides magnetizing for motors and other inductive loads. Reactive power does not spin kWh meters and performs no useful work, but it must be supplied.Using capacitors to supply reactive power reduces the amount of current in the line.