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Population-based incremental learning (PBIL) has been recently applied to a range of optimization problems in controller designs with promising results. It combines aspects of genetic algorithm with competitive learning. The learning rate in the standard PBIL is generally fixed which makes it difficult for the algorithm to explore the search space effectively. In this paper, the standard PBIL is improved by using a combination of adaptive and fixed learning rate that varies according to the generation. The adaptive-fixed (AF) algorithm can adjust the learning rate automatically according to the degree of evolution of the search. The objective of the power system stabilizer (PSS) design is to achieve adequate stability over a wide range of power system operating conditions. The proposed controller is compared with conventional PBIL with fixed learning rate (PBIL) and tested under various operating conditions. Simulation results show that the AFPBIL based PSS provides a more efficient search capability and gives a better damping and adequate dynamic performance of the system than the conventional PBIL based PSS.