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Distributed generation (DG) systems should go into intentional islanding operation to back up private emergency loads when the main grid is out of electric power. Conventional utility interactive inverters which are normally operated in current mode must change their operation into voltage mode to ensure stable supply voltage for emergency loads when intentional islanding operation occurs in DG systems. During the transition between current mode and voltage mode, a serious transient problem may occur on the output terminal voltage of utility interactive inverters. This paper proposes a new inverter system and its control algorithm for seamless transfer during intentional islanding operation in DG systems. Filter design guidelines and data for LCL filters that is appropriate for the proposed control algorithm are also presented.