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This paper proposes the concept of combining the functions of an unified power line conditioner with the compensation of short-term voltage disturbances. The equipment based on this concept is called universal power quality controller. It is intended to compensate major power quality problems (harmonics and voltage sags) originated both from the load side and from the supply source side and does not require more power rating of converters than the original unified power line conditioner. A unified control scheme for this universal power quality controller is proposed, which is very simple compared to other multiple-function compensators and can coordinate the functions and control of the two PWM converters and maintain the DC link capacitor voltage at the same time. The respective control algorithms for these two converters are also proposed and discussed in detail,. For the series PWM converter, different from the traditional feed forward control algorithm, a composite control algorithm combining the feed forward control and feed back control is proposed through which better compensation performance can be achieved. For the parallel PWM converter, a control algorithm based on the instantaneous reactive power theory is used, which guarantees the fast detection and compensation of the load current harmonics and easy realization of the DC capacitor voltage control. Simulation and prototype experimental results are presented to validate these control strategies and corresponding performance of the universal power quality controller.