This paper introduces a new scheme to balance the DC bus voltages of a cascaded H-bridge converter which is used as a Distribution Static Synchronous Series Compensator (D-SSSC) in electrical distribution network. The aim of D-SSSC is to control the power flow between two feeders from different substations. As a result of different cell losses and capacitors tolerance the cells DC bus voltage can deviate from their reference values. In the proposed scheme, by individually modifying the reference PWM signal for each cell, an effective balancing procedure is derived. The new balancing procedure needs only the line current sign and is independent of the main control strategy, which controls the total DC bus voltages of cascaded H-bridge. The effect of modulation index variation on the capacitor voltage is analytically derived for the proposed strategy. The proposed method takes advantages of phase shift carrier based modulation and can be applied for a cascaded H-bridge with any number of cells. Also the system is immune to loss of one cell and the presented procedure can keep balancing between the remaining cells. Simulation studies and experimental results validate the effectiveness of the proposed method in the balancing of DC bus voltages.