This paper presents a parameter identifying and optimizing technology based on a Prony analysis of the power system stabilizer (PSS). The technology is capable of extracting modal characteristics

especially the least damping mode from a largescale power system. Regarding the interarea model damp ratio as an objective of optimization

the PSS controller can be designed in a limited parameter space. In order to find optimal settings of PSS parameters

the simplex method is employed to complete the optimization procedure. Identified PSS parameters are designated as the initial center of simplex

which can effectively improve the convergence of the computation. In contrast to traditional eigenvalue methods

it is not necessary for the Prony method to compute the eigenvalue but it is suitable for a largescale interconnected power system and complex models. To illustrate the parameter optimizing technology proposed

a practical case study of Yunnan Power Grid under multiple operating conditions is presented. The simulation results show that the method proposed has proved valid and robust in damping interarea oscillations.