This work deals with a Distribution Static Synchronous Compensator (D-STATCOM) based on a current-source converter for low and medium voltage distribution systems, specifically small and medium manufactures industries which are fined if the displacement power factor is below given limits. The D-STATCOM is analyzed using its mathematical model, showing the strong relation of the D-STATCOM power losses and its DC current level. Using the operating region of the D-STATCOM, an operating sub-region is defined such that the minimum DC current is used for a required reactive compensation, which leads to reducing the operating losses in the DSTATCOM. Also, Selective Elimination Harmonic is used to modulate the equipment to reduce the switching frequency while ensuring a desired current quality in the D-STATCOM input. As a result, a simple control strategy is proposed that uses a fixed modulation index while a phase control regulates the DC current to the lowest value required for reactive power compensation. Mathematical analysis jointly with simulated and experimental results corroborates the proposal, showing that it is possible to achieve a suitable compensation capability for improving the efficacy of the STATCOM.