This article presents a method for selecting the elements of a C-type filter working with a conventional LC-type filter for compensating reactive power and filtering out higher harmonics generated by arc furnaces and ladle furnaces. The study was conducted in a steel mill supplied by a 110 kV transmission system, where higher harmonic currents and nonlinear loads were measured. A series of computer simulations were performed under various operating conditions, and an algorithm for selecting the parameters of a third-order C-type filter (for suppressing the second harmonic) and two second-order LC-type filters (for suppressing the third harmonic) was proposed. The filtering system was tested in an arc furnace with the highest rated power, and harmonics in the current spectrum were evaluated. The results of the measurements were used to analyze the effectiveness of the compensation system comprising two passive C-type and LC-type filters at different system configurations. C-type filters significantly influenced current harmonics. The influence of the changes in the number of arc furnace transformers on the true Root Mean Square (RMS) of the currents injected into the 110 kV transmission system and on the voltages of the 110 kV busbars was discussed.