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Power systems are high order nonlinear large-scale systems with randomly changing operating conditions. Due to that an appropriate model order reduction technique is a must in power system analysis. Most of the existing methods are suitable only for linear systems. The main problem is that linearized models of power systems could be non-minimum phase, unstable or improper. Therefore, not all model order reduction techniques could be used for power systems. In this paper, Particle Swarm Optimization (PSO) method is used for model reduction of power systems. The main advantage of the developed method in this paper is that it is applicable for all systems and not restricted to only stable or strictly proper systems. Therefore, it is most suitable for power systems. Simulation results show the effectiveness of the proposed method.