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This paper introduces a novel technique for modeling, in the time domain, a power transformer with nonlinear and hysteretic behavior. The model is particularly suitable for harmonic or protection studies where the transformer is driven into the nonlinear regime. The technique uses a single-phase two-winding transformer model based on the Jiles-Atherton model of ferromagnetic hysteresis. It includes eddy-current loss by adding an extra single-turn winding so that the transients are modeled as fully as possible.