A novel power flow controller (PFC), which combines modular multilevel converter (MMC) with balancing transformer, can save the matching transformer in traditional traction power supply system and meet the requirement in high-voltage and high-power application. Firstly, this paper introduces the operating principle of the system, especially the desired compensating currents of single-phase back-to-back converter. Then it puts forward an integrated control strategy, which includes the algorithm of extracting the compensation current, the control of the capacitor voltage of the sub module, circulating current suppression strategy, and the PWM method. Finally, a simulation model is constructed in Matlab/Simulink, AC-DC-AC electric locomotive at traction/braking mode are simulated respectively. The simulation results verify its effectiveness.