Based on the principle of power system voltage regulator（PSVR）， this paper analyzes the compensation function of the PSVR to reduce the impedance of generator main transformer. The relationship between PSVR and automatic voltage control（AVC） is also developed. The PSVR has been realized during the excitation system modification of the Jinshuitan Hydropower Plant. The results of dynamic simulation test and field test show that the PSVR can help generator improve the reactive power responding speed， consequently the transient voltage can be recovered faster. In the cases of system failure， PSVR can take full advantage of the potential of generating reactive power to improve the power system dynamic reactive power support.