Modern smart grid designs demand reliable sensors throughout the power delivery systems, not only to monitor the quality of the electrical energy generated by different technologies (wind, solar, hydroelectric, thermoelectric, nuclear), but also as an integral part of the generation, transmission, and distribution networks control systems. Laser polarimetric interferometry is a very suitable technique for the implementation of high sensitivity measurement instruments for various physical quantities, in particular, for high-voltage sensing. However, because the polarimetric technique is extremely sensitive to small refractive indexes variations induced in electro-optic materials by the electric field or voltage to be measured, it is also sensitive to spurious environmental quantities such as temperature variations. In this work, a novel optical voltage sensor (OVS) in conjunction with an efficient real-time method for optical phase demodulation and a PI feedback control method for signal fading suppression is demonstrated. Linearity for sinusoidal voltages having amplitudes up to 8.2 kV was evaluated, with an accuracy of 0.2% in the OVS nominal operating range. The OVS bandwidth of 5 kHz is sufficient for most electrical power quality sensor applications. Nonsinusoidal signals with high harmonic content were tested resulting in a total harmonic distortion that differed by only 0.12% from that measured by an HV reference probe. Responses to transient disturbances were also determined, showing the capability of the system to detect spikes.