This paper proposes a new control method for a Unified Power Quality Conditioner (UPQC). This method is based on the load equivalent conductance approach, originally proposed by Fryze. It can be useful not only for compensation for nonactive current and for improving voltage quality, but it also allows one to perform some unconventional functions. This control method can be performed by extending the orthodox notion of ‘static’ load equivalent conductance into a time-variable signal. It may be used to characterize energy changes in the whole UPQC-and-load circuitry. The UPQC can regulate energy flow between all sources and loads being under compensation. They may be located as well for UPQC’s AC-side as DC-side. System works properly even if they switch their activity to work either as loads or generators. The UPQC can operate also as a buffer, which can store/share the in-load generated energy amongst other loads, or it can transmit this energy to the source. Therefore, in addition to performing the UPQC’s conventional compensation tasks, it can also serve as a local energy distribution center.