This paper presents a new approach for power quality analysis using a phase corrected wavelet transform (PCWT) known as S-transform. The local spectral information of the wavelet transform can, with slight modification, be used to perform local cross-spectral analysis with very good time resolution. The 'phase correction' absolutely references the phase of the wavelet transform to the zero time point, thus assuring that the amplitude peaks are regions of stationary phase. The excellent time-frequency resolution characteristic of the PCWT makes it an attractive candidate for analysis of power system disturbance signals. Several power quality problems are analyzed using PCWT and it clearly demonstrates the advantages of PCWT in detecting, localizing and classifying the power quality problems. The features extracted by using PCWT are trained by a radial basis functional link net to classify the PQ events.