AbstractTo make greater use of existing electric power transmission facilities, security assessment utilizing on‐line data is thought to be one of the effective measures that can be taken. To realize on‐line assessment of postfault small signal stability for a number of supposed contingencies, it is effective to identify severe contingencies to be analyzed with a precise assessment program, such as the S‐method. We developed a contingency selection method that has two indices for selection.One of the indices is postfault eigenvalue estimation based on second‐order approximation of the eigenvalue change in response to system matrix change, which is effective for relatively weak nonlinear eigenvalue change. The other one is the Nonlinearity index, which indicates the strength of nonlinearity eigenvalue change. It is effective in detecting strong nonlinear eigenvalue changes that cannot be estimated correctly by second‐order approximation.Calculation results with IEEJ Bulk Power System Models show that the proposed method can effectively decrease the number of contingencies that must be analyzed by the precise Small Signal Analysis method. © 2003 Wiley Periodicals, Inc. Electr Eng Jpn, 145(4): 20–27, 2003; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/eej.10186