Because there is a time lag among power grid construction, power sources construction, and load development, the existing power grid structure and regional power consumption load may not meet the demands of outward power transmission by some new large-scale power plants. In order to solve this problem, a parameters optimization scheme of power system stabilizer (PSS) was presented. Based on the comprehensive consideration of the grid demands and generator stability, the frequency characteristic of PSS has been improved through adding a lead-lag link in compensation section, founding out the oscillation mode which restricted the ability of power transmission, as well as particularly implementing phase compensation for unit’ s excitation system under this oscillation mode. The optimized PSS has better frequency characteristic and larger gain. Through time-domain simulation and field testing, it has been verified that the ultimate power during the station starting up process can be increased from 1 765 MW to 2 900 MW in the wet season in 2010 summer, based on the power system analysis software package (PSASP). The research results show that parameters optimization of grid-connected unit’s PSS can improve the dynamic stability level of system and enhance the capacity of power transmission .