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Recently, power quality issues have captured more attention. It is necessary to monitor power quality in order to analyze and evaluate it. The monitors will record huge data during disturbance. It is inconvenient for data storage and transmission. Compression of power quality disturbance data will save storage space efficiently and accelerate transmission speed. This paper proposes energy threshold method based on wavelet transform, and then integrates adaptive arithmetic encoding to compress disturbance data. The compression ratio is improved and performance is better. Four typical power quality disturbances including voltage sag, swell, interruption and transient impulse are used to test the proposed method, the validity is verified by simulation results.