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The use of a series compensator (SC) to improve power quality is investigated. The role of the compensator is not only to mitigate the effects of voltage sag and swell, but also to control the level of harmonic distortions in the network. This is accomplished through extension of the voltage injection scheme of the SC by the incorporation of load current feedback and an external inductive filter. The compensation process is accompanied by an exchange of energy between the SC and the external network. Through a phase adjustment technique, it is shown that the voltage quality across the terminals of the protected load can be controlled. Simulation studies, supported by laboratory experiments, show that the resulting series compensation scheme is effective in improving the supply quality of the power system.