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Due to the significant increase in non linear loads and the worldwide trend to establish smart grids, harmonic level in the electricity grids is significantly increased. In addition to their impact on power quality, harmonic currents can have a devastating effect on power system protection performance especially on the operation of over current relays which are designed to operate efficiently at the fundamental frequency. The distorted waveform will affect the operation of the over current rely and may cause the relay to trip under normal operating conditions. To solve this problem, power passive and active filters are employed to eliminate the harmonics and purify the relay operational signal. Passive filters are not cost effective choice to solve this issue. On the other hand, active filters are more complex and need proper and complicated controller. This paper introduces a new and simple approach for adaptive filter design. This approach is economic, compact and very effective in eliminating harmonics in the grid. It can be easily attached with any protective relay to improve its performance. Application of the proposed filter design to improve the performance of over current relays in the IEEE-30 bus system with heavy penetration of non-linear loads is investigated.