With the continuous construction of energy internet, in order to realize the accurate regulation of voltage and power flow, modular multilevel converter (MMC) based unified power flow controllers (UPFCs) are adopted in the urban power grid, such as Nanjing 220 kV UPFC project and Sunan 500 kV UPFC project. However, the reactive power distribution between the parallel side MMC and series side MMC of UPFC is not clear in existing projects, which leads to the problem of high power loss of the parallel side MMC. Therefore, the power operation range of MMC-UPFC is analyzed in detail. And then, the power loss mathematical model of MMC-UPFC is proposed. Based on the theory, a power distribution method is proposed. With the proposed method, the MMC-UPFC can achieve minimum power loss. The proposed method provides a power design reference for other MMC-UPFC projects.