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Recently, the electronic tapchanger has received increasing attention because of its quick response, better performance and cheaper maintenance compared to the mechanical tapchanger. The capability of a distribution transformer equipped with an electronic tapchanger for sag mitigation is presented. To this end, the analytical computation for determining the compensating of sag limit of the electronic tapchanger is given. The system is then simulated to show its capabilities for sag mitigation and power quality enhancement. The performance and economic aspects of the electronic tapchanger is also compared to that of other custom power tools.