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The aim of this paper is to present a universal power quality conditioning system (UPQS) which consists of a unified power quality conditioner (UPQC) extended by adding a shunt active filter at the load side. Such system has higher harmonic compensation characteristic, since there are no problems associated with passive filter operation. Its main purpose is to compensate for supply voltage and load current imperfections, such as: sags, swells, interruptions, imbalance, flicker, harmonics, reactive currents and current unbalance. Converter and control analysis is presented, together with results showing the UPQS modes of operation.