Two interconnected AC microgrids are proposed based on three renewable energy sources (RESs): wind, solar, and biogas. The wind turbine drives a permanent magnet synchronous generator (PMSG). A solar photovoltaic system (SPVS) with an appropriate inverter was incorporated. The biogas genset (BG) consists of a biogas engine coupled with a synchronous generator. Two interconnected AC microgrids, M₁ and M₂, were considered for study in this work. The microgrid M₂ is connected to a diesel engine (DE) characterized by a continuous power supply. The distribution power loss of the interconnected AC microgrids comprises in line loss. The M₁ and M₂ losses are modeled as an objective function (OF). The power quality enhancement of the interconnected microgrids will be achieved by minimizing this OF. This research also created a unique frequency control method called virtual inertia control (VIC), which stabilizes the microgrid frequency using an optimal controller. In this paper, the following five controllers are studied: a proportional integral controller (PI), a fractional order PI controller (FOPI), a fuzzy PI controller (FPI), a fuzzy fractional order PI controller (FFOPI), and a VIC based on FFOPI controller. The five controllers were tuned using particle swarm optimization (PSO) to minimize the (OF). The main contribution of this paper is the comprehensive study of the performance of interconnected AC microgrids under step load disturbances, step changes in wind/solar input power, and eventually grid following/forming contingencies as well as the virtual inertia control of renewable energy resources used in the structure of the microgrids.