As two individual components in a signal with frequencies within an octave is usually indecomposable by the normal empirical mode decomposition（EMD） method， to improve the frequency resolution， a method based on frequency shift EMD capable of enlarging the component frequency difference to reach the EMD identifying level is presented. In its application to extracting model parameters of low frequency oscillation in the power system， this method proves fairly effective in extracting model parameters in a signal with frequencies within an octave， such as， instantaneous frequency， instantaneous amplitude， phase and damping ratio， etc， as shown by numerical simulation and case analysis results.