This paper proposes a novel distributed compensation method with centralized control for harmonicfiltering and phase balancing, aiming to enhance power quality in power grids. The proposed solutionis particularly well-suited for industrial applications employing large three-phase induction motors.Through a comprehensive analysis of power quality factors and voltage enhancement strategies, the paperadvocates for a distributed compensation approach with centralized control, emphasizing concomitantimprovements in motor performance within the system. The proposed compensation system comprisesdistributed compensators at each load, coordinated by a central compensator governed by a singlecontroller. The paper outlines a strategy for enhancing voltage quality that utilizes a combination ofphase balancing, high-order harmonic filtering, and hybrid reactive power compensation. This strategyaims to optimize total active power losses across the entire facility and elevate the system’s voltagequality. The effectiveness and applicability of the proposed solution are validated through simulationand experimental results.