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Voltage sags are major power quality problems encountered by industries. Especially for high-tech companies which reside within inside industry park, any voltage sag event in the distribution system could affect many manufacturers and inflict significant losses. The voltage sag compensator, based on transformer-coupled series-connected voltage source inverter, is among the most cost-effective solution to protect sensitive loads. For the off-line sag compensator, one important issue is the transformer inrush at the start of sag compensation. The inrush current may trigger the over-current protection of the compensator inverter, and the transformer output voltage is greatly reduced due the magnetics saturation. Oversizing the transformer is a common approach to avoid the inrush current However, this would dramatically increase the size and weight of the sag compensation system. This paper proposes a new technique for mitigating the inrush of the coupling transformer and preserving the output voltage for effective sag compensation. Detailed explanations of the proposed inrush mitigation technique are presented, and the effectiveness of the proposed scheme is verified by laboratory test results. The inverter-assisted commutation sequence of the bypass thyristors for fast start of the compensator is also presented and verified by test results.