This paper presents an improved controller for the dual topology of the unified power quality conditioner (iUPQC) extending its applicability in power quality compensation, as well as in microgrid applications. By using this controller, beyond the conventional UPQC power quality features, including voltage sag/swell compensation, the iUPQC will also provide reactive power support to regulate not only the load-bus voltage but also the voltage at the grid-side bus. In other words, the iUPQC will work as a static synchronous compensator (STATCOM) at the grid side, while providing also the conventional UPQC compensations at the load or microgrid side. Experimental results are provided to verify the new functionality of the equipment.