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A new algorithm is introduced for motor current signature analysis of induction machines operating during transients. The algorithm is able to extract the amplitude, phase and frequency of a single sinusoid embedded in a nonstationary waveform. The algorithm is applied to the detection of broken rotor bars in induction machines during startup transients. The fundamental component of current, which varies in amplitude, phase, and frequency, is extracted using the algorithm. The residual current is then analyzed using wavelets for the detection of broken rotor bars. This method of condition monitoring does not require parameters such as speed or number of rotor bars, is not load dependent and can be applied to motors that operate continuously in the transient mode, e.g., wind generators or motor-operated valves.