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This paper describes the effects of field mutual leakage reactance in rotor circuit (Canay reactance) on analysis of generator transient and dynamic behavior. The authors derived a detailed equivalent circuit model for generator, and analyzed sudden short circuit out-of-phase synchronization load rejection and sudden load application phenomena of the generator by simulations using the electromagnetic transients program (ATP-EMTP). Then, they compared the obtained results with the experimental data to verify the validity of the proposed equivalent circuit. In addition to these analyses, the influence of field mutual leakage reactance on analysis of power system dynamic stability was investigated.