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Turbine-generator Units #1 and #2 at the Texas Utilities Monticello Station were found to be dynamically unstable when operating near full load and connected to the power system by a single transmission line. Power system stabilizers (PSS) were applied to the excitation systems to provide stable operation under these conditions. Suitable settings for the PSS were predetermined analytically by frequency response and root locus analysis of a single machine-infinite bus configuration. A 3rd order generator model is shown to be adequate for this type of analysis. Dynamic performance measured in field tests is in close agreement with calculated performance.