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This brief presents a controller for an active filter to compensate reactive power and current harmonic distortion in a single phase system, i.e., to guarantee a power factor close to unity. The proposed controller considers the deleterious effects caused by the interaction between load and line impedances, which may lead to instabilities when the controller is enabled. The rationale behind the solution consists in the introduction of a lead compensator with a gain that is adjusted by adaptation, which replaces the conventional proportional term. This modification improves the stability conditions when the load and source impedances are non-negligible. In particular, the scheme provides a solution in the critical scenario, when the load is composed by a capacitor connected in parallel to a distorted current source. Special attention is given to the current control loop because it is precisely in this loop where the instability problems are generated. Realistic numerical results are provided to illustrate the benefits of the proposed solution.