This paper presents a Proportional Resonant (PR) controller design in discrete domain for regulating the active and reactive power output for a three-phase AC Micro-Grid system. The PR controller reduces the steady state error and help in synchronous d-q transformation in three phase system. It employs a Voltage Sourced Converter (VSC) which is configured to operate as a current source through an interface L-filter. The power is controlled indirectly by controlling the inverter's output current. This paper also presents a comparison of THD between Proportional Integral (PI) and Proportional Resonant (PR) controllers and indicates that the THD using Proportional Resonant (PR) controller is less than the Proportional Integral (PI) controller by more than 2%. The complete work is designed and implemented in MATLAB/SIMULINK.