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Dynamic voltage restorers (DVR) are now becoming more established in industry to reduce the impact of voltage sags to sensitive loads. However, DVRs spend most of their time in standby mode, since voltage sags occur very infrequently, and hence their utilization is low. In principle, it would be advantageous if the series connected inverter of a DVR could also be used to compensate for any steady state load voltage harmonics, since this would increase the power quality 'value added' benefits to the grid system. However, before this can be done, consideration must be given to the control of steady state power through the DVR, the increased losses, and the low modulation depths at which the scheme must operate to achieve acceptable harmonic compensation performance. This paper presents a selective harmonic feedback control strategy that can be easily added to medium voltage DVR systems to provide voltage harmonic compensation capabilities with minimal effect on the sag compensation performance of the basic DVR. The proposed controller has been experimentally verified on a medium voltage (10 kV) three-phase DVR prototype under a range of conditions, including distorted supply voltages, nonlinear loads, and operation during distorted voltage sags.