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Power system stabilizer are used to provide damping torque for the synchronous generators, to suppress the low frequency oscillations present in the power system, by generating supplementary control signals for the excitation system. Numerous techniques have been proposed to design PSS. The main difficulty in PSS design is that power system encounter continuous variation in the load patterns and consequently the nominal model design does not guarantee satisfactory performance at all operating points. In this paper a different technique is used for model reduction this methods yield encouraging results for the design of power system stabilizers. Using Balance Truncation technique, lower order model is obtained from the higher order model and for this reduced model a stabilizing state feedback gain is obtained. This method is applied to a nonlinear plant model of ten machines at different operating points.