The stability of frequency and voltage in micro hydro power plants (MHPP) depends on the ability to maintain balance between active and reactive power while managing load variations. Active power is typically regulated by an Electronic Load Controller (ELC), while reactive power is managed by a Voltage Source Inverter (VSI), with the VSI specifically compensating for reactive power induced by inductive loads. This study aims to enhance the control of active and reactive power in an MHPP system under varying load conditions by improving the ELC and VSI using Fuzzy-PI controller. The Fuzzy-PI controller applied in the ELC ensures a more precise TRIAC firing angle, enabling accurate control of the ballast load to balance the active power. Similarly, Fuzzy-PI controller applied in the VSI provides precise reactive power compensation to counteract inductive load effects. The performance of the proposed Fuzzy-PI-based ELC and VSI was evaluated using a complete MHPP model simulated in Matlab. Results demonstrated that the improved ELC and VSI effectively enhanced the system performance. Specifically, the Fuzzy-PI controller enabled the ELC to achieve accurate active power balance, while the VSI delivered suitable reactive power compensation. Consequently, the system achieved improved frequency and voltage stability under load variations, leading to enhanced power quality in the MHPP.