One of the major concerns in electricity industry today is power quality. It becomes especially important with the   introduction of advanced and complicated devices, whose performance is extremely dips, voltage sags, voltage flickers, harmonics and load unbalance etc. At present, a wide range of very flexible controllers, which capitalize on newly available power electronics components, are emerging for custom power applications. Among these, the distribution static compensator, dynamic voltage restorer and   unified power quality conditioner that is based on the VSC principle are used for power quality improvement. In this project, Neural Network controller and Adaptive Neuro Fuzzy Inference System with reference signal generation technique  is intended for UPQC and compared its performance with proportional integral based controller. This is used to compensate current and voltage quality problems of sensitive loads. The results are analyzed and presented using MATLAB software.