This paper proposes a procedure for preventing saturation in series transformers from Dynamic Voltage Restorer (DVR) systems. Power quality has been an issue that is becoming increasingly pivotal in modern industrial and commercial applications. Voltage disturbances especially the voltage sag and swell are the most common power quality problems due to increased use of a large numbers of sophisticated and sensitive electronic equipment in industrial systems. The method consists in correcting the

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... voltage which is injected through the transformers into the power system to compensate voltage sags. To overcome this problem, custom power devices are used. One of the devices is the Dynamic Voltage Restorer (DVR), which is the most efficient and effective modern custom power device used in power distribution networks. It is a series connected power electronic based device that can quickly mitigate the voltage sags in the system and restore the load voltage to the pre-fault value. Moreover, the technique allows a certain level of sag compensation even when the estimated flux is expected to exceed the saturation limit. The voltage sag level and phase are computed through an adaptive Recursive Least Squares (RLS). In RLS Method we have to use 4-leg voltage source inverter and it can be slow process to compensate the voltage sag occur in the power system. In extension method, the Adaptive Network based Fuzzy Inference System (ANFIS) is used to reduces the voltage sag in the power system network. In these method, the 3-leg voltage source inverter as comparing to the RLS algorithm. The ANFIS system is faster and accurate to compensate voltage sags in power system. Total harmonics distortions is half of the deduced in the system.