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The authors have proposed Flexible, Reliable and Intelligent ENergy Delivery System (FRIENDS) as a future power distribution system. In the FRIENDS, new facilities called quality control centers (QCCs), which consist of power electronics devices, distributed generators (DGs), energy storage systems (ESSs), etc., are installed between distribution substations and customers. By controlling and operating those devices in QCCs adequately, various functions can be realized. Particularly, when a power supply from the transmission network is interrupted, isolated local networks which consist of some QCCs are composed in order to realize uninterruptible power supply. In the isolated local network, the DG and ESS in QCCs are employed as backup generators. This paper proposes a novel distributed and autonomous method for balancing the supply and demand during isolated operation. This paper also investigates the effectiveness of the proposed method through some computational simulations using PSCAD/EMTDC. [ABSTRACT FROM AUTHOR]