Can Orcade (PSPICE) actually simulate MOV(Varistors)?
I have connected an ac source in parallel with some load. 


Most people, when they say transients, mean Voltage transients, so my guess is you've built this:







simulate this circuit &ndash; Schematic created using CircuitLab


  It should clip voltages to the maximum operating voltage of varistor when supply voltage have transients in kilo volts.


Is wrong. Your voltage source is ideal. It will maintain the voltage, no matter what.