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In this paper, the dominant spectral-zero method (dominant SZM) is presented, a new passivity-preserving model-reduction method for circuit simulation. Passivity is guaranteed via spectral-zero interpolation, and a dominance criterion is proposed for selecting spectral zeros. Dominant SZM is implemented as an iterative eigenvalue-approximation problem using the subspace-accelerated dominant-pole algorithm. Passive circuits are reduced automatically irrespective of how the original system equations are formulated (e.g., circuit models containing controlled sources or susceptance elements). Dominant SZM gives comparable and often more accurate reduced models than known techniques such as PRIMA, modal approximation, or positive real balanced truncation.