In this paper, dynamic and power quality aspects of wind turbine which is connected to utility at distribution level are presented. In order to power quality improvement and power flow control, a well-known structure, Universal Custom Power Conditioner (UCPC), is used. As a result of using instantaneous p-q theory as a control scheme, the multi-function operation such as harmonic elimination, reactive power control, voltage sags compensation and uninterruptible power supply, will be achieved. Dynamic modeling of wind turbine components and custom power conditioner are simulated in PSCAD/EMTDC environment. And the simulation results prove the efficiency of using the presented method on power flow controlling and power quality improvement.