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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 heiger harmonic compensation characteristic, since there are no problem 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. After determination of classical active filtering drawbacks, UPQS converter and control analysis is presented, together with results showings the UPQS modes of operation.