The design of local H∞-based power system stabilizer (PSS) controllers, which uses widearea or global signals as additional measuring information from suitable remote network locations, where oscillations are well observable, is developed in this dissertation. The controllers, placed at suitably selected generators, provide control signals to the automatic voltage regulators (AVRs) to damp out inter-area oscillations through the machines’ excitation systems. A long time delay introduced by remote signal transmission and processing in wide area measurement system (WAMS), may be harmful to system stability and may degrade system robustness. Three methods for dealing with the effects of time delay are presented in this dissertation. First, time delay compensation method using lead/lag compensation along with gain scheduling for compensating effects of constant delay is presented. In the second method, Pade approximation approach is used to model time delay. The time delay model is then merged into delay-free power system model to obtain the delayed power system model. Delay compensation and Pade approximation methods deal with constant delays and are not robust regarding variable time delays. Time delay uncertainty is, therefore, taken into account using linear fractional transformation (LFT) method. The design of local decentralized PSS controllers, using selected suitable remote signals as supplementary inputs, for a separate better damping of specific inter-area modes is also presented in this dissertation. The suitable remote signals used by local PSS controllers are selected from the whole system. Each local PSS controller is designed separately for each of the inter-area modes of interest. The PSS controller uses only those local and remote input signals in which the assigned single inter-area mode is most observable and is located at a generator which is most effective in controlling that mode. The local PSS controller, designed for a particular single inter-area mode, also works mainly in a frequency band given by the natural frequency of the assigned mode. The locations of the local PSS controllers are obtained based on the amplitude gains of the frequency responses of the best-suited measurement to the inputs of all generators in the interconnected system. For the selection of suitable local and supplementary remote input signals, the features or measurements from the whole system are preselected first by engineering judgment and then using a clustering feature selection technique. Final selection of local and remote input signals is based on the degree of observability of the considered single mode in them. Finally, this dissertation presents the extension of the scheme, described in the above paragraph, to very large power systems. The suitable remote signals used by local PSS controllers are selected from the whole system. The approach uses system identification technique for deriving an equivalent lower order state-space linear model suitable for control design. An equivalent lower order system of the actual system is determined from time-domain simulation data of the latter. The time-domain response is obtained by applying a test probing signal (input signal), used to perturb the actual system, to the AVR of the excitation system of the actual system. The measured time-domain response is then transformed into frequency domain. An identification algorithm is then applied to the frequency response data to obtain a linear dynamic reduced order model which accurately represents the system. Lower-order equivalent models have been used for the final selection of suitable local and remote input signals for the PSS controllers, selection of suitable locations of the PSS controllers and design of the PSS controllers.