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This paper deals with the design of an H∞-based decentralized power system stabilizer (PSS) controller, which uses selected suitable wide area PMU signals as supplementary inputs to achieve a better damping of specific inter-area modes. The wide area or global signals are taken from network locations where the oscillations are well observable, and the PSS controller uses only those local and remote input signals in which the assigned single inter-area mode is most observable, and it is located at a generator most effective in controlling that mode. The PSS controller works mainly in a frequency band given by the natural frequency of the assigned mode. Pade approximation approach is used to model the time delay and uncertainty with regard to its value. This model is then merged with the delay-free power system model to obtain the overall power system model. Finally, the controllers are redesigned for the delayed-input system considering delay uncertainty. The effectiveness of the resulting PSS controllers in achieving improved damping of inter-area modes is demonstrated through simulation studies conducted on a test power system.