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Directional relays use voltage as the polarizing quantity. When three-phase faults occur close to the relay bus, the available voltage becomes nearly zero and this creates a problem in estimation of the fault direction. The capacitor coupling voltage transformer subsidence transients add to this problem. The memory voltage used as the polarizing quantity at these situations is a compromise. This paper highlights these issues and proposes a simple solution using the power-flow direction in addition to other information. The performance of the technique is evaluated through simulation in Power System Computer Aided Design. [ABSTRACT FROM AUTHOR]