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This paper presents a fuzzy PI controller as a power system stabilizer. The fuzzy PI controller has been designed in order to prepare an auxiliary signal for the excitation system of the synchronous generator. The proposed controller utilizes a combination of a fuzzy logic controller (FLC) and a PI controller, which are the most recent researches in the problem at hand. In comparison with the conventional fuzzy controllers, the proposed fuzzy PI controller takes advantage of both FLC and conventional PI controller to overcome all kind of disturbances. The damping of oscillations local modes in a power system will substantially be controlled by employing this controller as a replacement for conventional PSS. Furthermore, the presented paper considers the conventional PSS and compares its performance with respect to three proposed types of fuzzy PI controller. Correspondingly, the effects of the supplementary signals in damping oscillation have been shown. Finally, to scrutinize the effectiveness of the proposed controller in damping oscillations, a three-phase short circuit condition is studied in order to clarify the application of the developed methodology. The achieved outcomes show that the proposed controller for stabilizing power system can provide very good damping characteristic. [ABSTRACT FROM AUTHOR]