Most of the pollution issues created in power systems are due to the non-linear characteristics and fast switching of power electronic equipment. Power quality issues are becoming stronger because sensitive equipment will be more sensitive for market competition reasons, equipment will continue polluting the system more and more due to cost increase caused by the built-in compensation and sometimes for the lack of enforced regulations. Efficiency and cost are considered today almost at the same

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... level. Active power filters have been developed over the years to solve these problems to improve power quality. Among which shunt active power filter is used to eliminate and load current harmonics and reactive power compensation. In this paper the study is carried out on both PI controller based and Artificial Neural Network (ANN) controlled, three-phase shunt active power filter to compensate harmonics and reactive power by nonlinear load to improve power quality is implemented for three-phase three wire systems.