This paper concentrates on compensating the power quality issues which have been increased in day-to-day life due to the enormous usage of loads with power electronic control. One such solution is compensating devices like Pension Protection Fund (PPF), Active power filter (APF), hybrid power filter (HPF), etc., which are used to overcome Power Quality (PQ) issues. The proposed method used here is an active compensator called unified power quality conditioner (UPQC) which is a combination of shunt and series type active filter connected via a common DC link. The primary objective is to investigate the behavior of the compensators in the distribution networks. The performance of two configurations of UPQC, Right Shunt UPQC (RS-UPQC) and Left Shunt UPQC (LS-UPQC) are tested in the distribution networks under various load conditions by connecting them at the source side of harmonic generation using a specially constructed transformer called inductively filtered converter transformer which adopts special wiring scheme at the secondary side. PSCAD (Power Systems Computer Aided Design)/EMTDC (Electromagnetic Transients with DC Analysis) software is used to model the compensators connected to the nonlinear load. Both RS-UPQC and LS-UPQC are tested at the distribution side of the supply system with Hysteresis current controller for shunt and Sinusoidal pulse with modulation controller for series at various locations of power system network and their results are compared.