Load compensators are used for reactive power compensation as well as harmonic compensation have the disadvantage of high cost and poor efficiency due to switching losses. So it is good to use active harmonic filters for harmonic compensation and traditional methods comprising of thyristor-switched capacitors for reactive power compensation. Existing load compensators have the capability to differentiate between the fundamental reactive component and harmonic components of the load currents ,but are complex and so they are not cost effective. In order to overcome this limitation, a shunt harmonic filter, which is capable of compensating only the harmonic components of the load current and having a simple control circuitary is proposed in this paper.