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The paper proposes an enhanced power management achieved for a smart micro-grid, by a power electronic transformer (PET), at the point of common coupling (PCC). The smart micro-grid is a set of controllable loads and distributed energy resources (DER), which supply demand of a group of customers. The proposed decentralized control strategy for the micro-grid components, utilizes the change in local grid frequency to control the active power generation and consumption within the micro-grid. The PET allows restricted active power flow to the micro-grid, at the PCC, at a desired value determined by the utilities. The simulation results are obtained to verify the operation and claims of the PET as stated below: 1) For a step disturbance within the micro-grid, the utility grid frequency is not affected. 2) For a sudden reduction in grid power, the micro-grid DERs regulate their generation, utilizing the resulting drop in the local grid frequency as a signal. 3) With a resulting reduction in total power supply to the micro-grid loads, the controllable loads within the micro-grid are able to regulate their consumption and return back to normal operation once the local grid frequency stabilizes. 4) Smooth transition from islanded mode to grid connected mode can be achieved.