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A method combining the improved R- Psi method (in which the electrical vector potential R only exists in the conducting region) and the IEM (integral equation method) is described which synthesizes the advantages of the two methods and reduces the CPU time and the storage space required to solve 3-D eddy-current problems in open regions. The IEM is used to compute the magnetic field and losses due to heavy-current leads and the improved R- Psi method is used to calculate the magnetic field and losses due to windings. The coupled method is used to calculate the three-dimensional sinusoidal eddy-current field related to the open region in a 360 MVA/500 kV power transformer. The eddy current and loss computation and the estimation of the local hot spots makes it possible to prevent a large transmitter from local overheating.